FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     of the Securities Exchange Act of 1934


For Quarter ended July 31, 1998
Commission file number 0-8006

                             COX TECHNOLOGIES, INC.
                            FKA: Energy Reserve, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           ARIZONA                                               86- 0220617
(State or other jurisdiction of                                 (IRS Employer
 incorporation or organization)                              Identification No.)

69 McAdenville Road, Belmont, North Carolina 28012

Registrant's telephone number, including area code (704) 825-8146

Former name, former address and former fiscal year, if changed since last report

Indicated  by check  mark  whether  the  registrant  (1) has filed  all  reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.
                                                                 Yes X   No
                                                                    ----   ----
                       APPLICABLE ONLY TO ISSUERS INVOLVED
                        IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS:

Indicated  by check mark  whether the  registrant  has filed all  documents  and
reports  required  to by filled by Sections  12, 13, or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                                                 Yes     No
                                                                    ----   ----

                       APPLICABLE ONLY TO CORPORATE USERS:

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class - Common Stock, without Par Value
23,280,922 Shares Outstanding at August 31, 1998
<PAGE>

                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES

                                      INDEX


FACE SHEET                                                              1

INDEX                                                                   2

PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS                                            3
      Consolidated Balance Sheets
           July 31, 1998 and April 30, 1998

      Consolidated Statements of
           Operations and Accumulated Deficit
           Three Months Ended July 31, 1998 and 1997                    5

      Statement of Cash Flows
            Three Months Ended July 31, 1998 and 1997               6 - 7

      Notes to Consolidated Financial Statements                        8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS                                               9 - 11

PART II. OTHER INFORMATION AND SIGNATURE                               12


                                        2
<PAGE>
                                                                       FINANCIAL
                                                                     INFORMATION

                     COX TECHNOLOGIES, INC. AND SUBSIDIARIES


PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Cox Technologies,  Inc. and its subsidiaries,  Twin Chart,  Inc., its subsidiary
Transit Services,  Inc.,  Vitsab, AB, Sweden,  Vitsab,  USA, Inc. Energy Reserve
Holdings,  Inc.,  and Energy Reserve  Financial  Corporation  (collectively  the
Company),   engage  in  the  business  of  producing  and  distributing  transit
temperature  recording  instruments,  both  domestically  in United  States  and
internationally.  The  company  also  engages  in  the  business  of  acquiring,
developing and selling oil properties and of producing and selling crude oil for
its own  account  in United  States.  As such the  Company  has not and does not
engage in petroleum refining or retail marketing.

The Consolidated  Financial Statements included herein have been prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations,  although the Company believes that the disclosures are adequate to
make the  information  presented  not  misleading.  It is  suggested  that these
condensed  financial  statements  be  read in  conjunction  with  the  financial
statements  and data notes thereto  included in the  Company's  annual report on
Form 10-K, for the year ended April 30, 1998.

In the opinion of the Company,  all  adjustments  have been  included  which are
necessary for the preparation of the balance sheets of Energy Reserve,  Inc. and
consolidated  subsidiaries  at July 31,  1998 and April  30,  1998 and to a fair
statement of the results of operations  for the three months ended July 31, 1998
and 1997.


                                        3
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JULY 31, 1998 AND APRIL 30, 1998

                                                      Three Months Ended
                                                -------------------------------
                                                July 31, 1998    April 30, 1998
                                                -------------    --------------
ASSETS
CURRENTS ASSETS:
 Cash and cash equivalents (Note A)             $  2,260,256     $  2,575,945
  Accounts receivable, less allowance for          1,788,924        1,627,074
    doubtful accounts of $29,527 at
    July 31,1998 and April 30, 1998
  Inventory (Note B)                               1,099,800        1,043,531
  Investment in securities                            41,000           39,500
  Notes receivable-current portion                    19,290           33,503
  Prepaid expenses                                    63,573          352,143
  Deferred income taxes (Note C)                          --           30,000
                                                ------------     ------------
       TOTAL CURRENT ASSETS                        5,272,843        5,701,696

  Property and equipment (Net)                     6,242,049        3,704,243
  Investment in securities                                --          300,000
  Deposits                                             3,890            5,290
  Goodwill (Note A)                                  863,236           48,479
  Notes receivable - non-current portion              22,235            6,828
                                                ------------     ------------

       TOTAL ASSETS                             $ 12,404,253     $  9,766,536
                                                ============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued expenses         $    267,298     $    356,811
  Income taxes payable (Note C)                       42,500           52,270
  Current portion of long-term debt (Note A)       1,887,965          510,369
                                                ------------     ------------
       TOTAL CURRENT LIABILITIES                   2,197,763          919,450

  Long-term debt                                     622,149          280,706
  Minority interest payable                               --              669
                                                ------------     ------------
COMMITMENTS AND CONTINGENCIES (Note D)             2,819,912        1,200,825
                                                ------------     ------------
STOCKHOLDERS' EQUITY
   Common stock, no par value: authorized
    100,000,000 shares; issued and outstanding
    23,280,922 shares at July 31, 1998
    and 19,905,188 at April 30, 1998 (Note A)     20,885,495       20,041,562
  Common stock subscribed                             58,100           58,100
  Contributed Capital                                220,872          220,872
  Treasury stock                                     (45,920)         (45,920)
  Accumulated deficit                            (10,425,450)     (10,598,719)
  Unrealized loss on available-for-sale 
    securities                                      (180,500)        (180,500)
  Less - notes receivable for common 
    stock issued                                    (875,650)        (875,650)
                                                ------------     ------------

TOTAL STOCKHOLDERS' EQUITY                         9,584,341        8,565,711
                                                ------------     ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $ 12,404,253     $  9,766,536
                                                ============     ============

                        See notes to Financial Statements

                                        4
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF INCOME
JULY 31, 1998 AND APRIL 30, 1998


                                                    Three Months Ended July 31
                                                  -----------------------------
                                                      1998             1997
                                                      ----             ----
REVENUE
   Sales                                          $  2,372,863     $  2,143,181
                                                  ------------     ------------
COSTS AND EXPENSES
   Cost of sales                                     1,178,226        1,006,005
   General and administrative expenses                 611,083          498,412
   Sales expense                                       372,747          280,578
   Interest expense                                     31,867           18,288
   Depreciation and depletion                           25,092           10,231
                                                  ------------     ------------
   TOTAL EXPENSE                                     2,219,015        1,813,514
                                                  ------------     ------------
          INCOME FROM OPERATIONS                       153,848          329,667
                                                  ------------     ------------
OTHER INCOME (EXPENSE)
   Other income (expense)                               19,421          (17,010)
                                                  ------------     ------------

Earnings before income taxes                           173,269          312,657

Provisions for income taxes (note C)                        --           26,390
                                                  ------------     ------------

NET EARNINGS                                           173,269          286,267

ACCUMULATED DEFICIT, beginning of period           (10,598,719)     (13,665,287)
                                                  ------------     ------------
ACCUMULATED DEFICIT, end of period                $(10,425,450)    $(13,379,020)
                                                  ============     ============
EARNINGS PER SHARE:
   Net earnings (loss)                            $       0.01     $       0.02
                                                  ============     ============


                        See notes to Financial Statements


                                        5
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
JULY 31, 1998 AND APRIL 30, 1998


                                                     Three Months Ended July 31
                                                     --------------------------
                                                          1998         1997
                                                          ----         ----
CASH FLOW FROM OPERATING ACTIVITIES
  Net earnings
  Adjustments to reconcile net earnings               $  173,269    $ 286,267
      to net cash used by operating activities:
  Depreciation, depletion and amortization                25,092       10,231

CHANGES IN CURRENT ASSETS AND CURRENT LIABILITIES
(Increase) decrease in current assets:
  Accounts receivable                                   (161,850)      34,693
  Inventory                                              (52,269)     155,510
  Prepaid expenses                                       288,570         (206)
  Notes receivable and investments                        12,713        2,159

(Increase) decrease in non-current assets
  Deposits                                                 1,400           --
  Deferred taxes                                          30,000
  Notes receivable - long term                           (15,407)
  Goodwill                                                    --       27,973
 Increase (decrease) in current liabilities:
  Accounts payable and accrued expenses                  (89,513)     (51,189)
  Income Taxes payable                                    (9,770)      25,235
                                                      ----------    ---------
NET CASH PROVIDED (USED) BY  OPERATING ACTIVITIES        198,235      490,673
                                                      ----------    ---------
CASH FLOW FROM INVESTING ACTIVITIES
  Investment in securities                               300,000
  Issuance of common stock                               843,933
  Property and equipment                              (2,562,898)      45,702
  Acquisition of goodwill                               (814,757)
                                                      ----------    ---------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES      (2,233,722)      45,702

CASH FLOW FROM FINANCING ACTIVITIES
  Repayment on notes payable                             (30,961)    (143,623)
   Repayment on subscriptions receivable                   1,428
   Minority interest                                        (669)
   Amounts borrowed under notes payable                1,750,000
                                                      ----------    ---------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES       1,719,798     (143,623)
                                                      ----------    ---------

                        See notes to Financial Statements

                                        6
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
JULY 31, 1998 AND APRIL 30, 1998



                                                    Three Months Ended July 31
                                                   -----------------------------
                                                      1998                1997
                                                      ----                ----
NET INCREASE (DECREASE) IN CASH                       (315,689)          392,752
CASH, beginning of period                            2,575,945         1,118,019
                                                   -----------        ----------
CASH, end of period                                $ 2,260,256        $1,510,771
                                                   ===========        ==========





                        See notes to Financial Statements

                                        7
<PAGE>
COX TECHNOLOGIES, INC. AND SUBSIDIARIES
(FORMERLY ENERGY RESERVE, INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
QUARTER ENDED JULY 31, 1998


NOTE A - CASH, NOTES PAYABLE AND COMMON STOCK

In June 1998, the Company acquired Vitsab, AB, a Swedish corporation in exchange
for  3,375,734  shares of the  Company's  unregistered  common  stock  valued at
$843,933  or $0.25 per share and 950,000  shares of the common  stock of VITSAB,
USA,  Inc., a previously  wholly-owned  subsidiary of the Company with 4,750,000
issued shares of common stock  outstanding and the assumption of certain debt in
the amount of $2,300,000 owed by VITSAB, AB to an unrelated company. The Company
borrowed  $1,750,000  from a bank under two notes and  security  agreements  and
liquidated the referenced $2,300,000 debt for the discounted sum of $1,750,000.

The Company has pledged a  $1,000,000  certificate  of deposit  with the lending
bank as collateral for the $1,750,000  borrowed funds. The loans are all due and
payable  within  one year  from  June  1998.  Under  the  terms of the notes and
security  agreements  the  Company is  obligated  to make  eleven  (11)  monthly
payments of $19, 258.01 and one (1) final payment of all  outstanding  principal
and accrued interest due June 17, 1999.


NOTE B - INVENTORY

Inventory at July 31, 1998 and April 30, 1998 consists of the following:

                                                     1998
                                      --------------------------------
                                        July 31,             April 30,
                                      --------------------------------
Raw materials                            434,853               170,216
Work-in-progress                         250,101               138,749
Finished goods                           412,390               290,561
Crude oil                                  2,456                 2,456
                                      ----------            ----------
                                      $1,099,800            $1,043,531
                                      ==========            ==========

NOTE C - INCOME TAXES

The Company and its subsidiaries  file  consolidated  Federal income tax returns
and separate State income tax returns.

NOTE D - COMMITMENTS AND CONTINGENCIES

There have been no changes in the disclosures of commitments,  contingencies and
litigation  as contained in the  Company's  annual report Form 10-K for the year
ended April 30, 1998.

                                        8
<PAGE>
                                                                       FINANCIAL
                                                                     INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS


LIQUIDITY AND CAPITAL RESOURCES

At July 31,  1998 the  Company had a working  capital of  $3,075,080.  This is a
decrease  of  $1,707,166  for the first  quarter  period May 1, 1998 to July 31,
1998.  This was  primarily  due to the debt of  $1,750,000  incurred  to acquire
Visual Indicator  Systems,  AB of Sweden (Vitsab, AB) in June 1998.

The  Company  did not incur any  long-term  debt  during  this  period,  however
investment in property and equipment increased  significantly by the acquisition
of Vitsab,  AB. At present,  cash flow from  operations  is adequate to meet the
cash requirements and commitments of the Company.  However, the Company plans to
enter  into  equity,  debt or other  financing  arrangements  to meet its future
financial needs for expansion and:

          (a)  To provide  for  general  working  capital  needs  including  the
               servicing of the Vitsab, AB acquisition debt

          (b)  To repay outstanding liabilities.


COMPARISON OF OPERATIONS FOR QUARTER ENDED JULY 31, 1998 AND 1997

Net earnings for the first fiscal quarter ended July 31,1998 were $173,269 which
is a decrease of $112,998  from the  $286,267  net  earnings for the same period
last year.  Earnings  from  operations  for 1998 were  $153,848,  a decrease  of
$175,819 from the 1997 first fiscal quarter earnings from operations.


                                        9
<PAGE>
COMPARISON OF OPERATIONS FOR QUARTER ENDED - CONTINUED

The following  schedule  reflects the operations of the two industry segments of
the Company for the three months ended July 31, 1998 and 1997

                                        Three Months Ended July 31,1998
                                ------------------------------------------------
                                          1998                    1997
                                -----------------------  -----------------------
                                   Oil      Temperature     Oil      Temperature
                                Production   Recorders   Production   Recorders
                                ----------   ---------   ----------   ---------

Sales                           $      --    $2,372,863   $ 14,147    $2,129,007

Cost of sales                         839     1,177,387      7,250       998,755
General & Administrative           31,063       580,020     35,311       463,101
Sales expense                                   372,747                  280,578
Interest                            9,857        22,010      8,258        10,030
Depreciation/Amortization                        25,092                   10,231
                                ---------    ----------   --------    ----------

Income (loss) operations          (41,759)      195,607    (36,645)      366,312
Other income (loss)                15,743         3,678    (31,919)       14,909
 Income taxes                          --            --      1,155        25,235
                                ---------    ----------   --------    ----------
Net earnings (loss)             $ (26,016)   $  199,285   $(69,719)   $  355,986
                                =========    ==========   ========    ==========

OIL PRODUCTION OPERATIONS:

For 1998 the cost of sales represents oil field maintenance and operations which
have been restricted pending higher crude oil prices.

For 1997, the oil production operations include the operations of the subsidiary
check cashing  operations  of National  On-site  Check  Cashing,  Inc. The three
months period of 1998 does not include such operations.  There were no crude oil
sales for either 1998 or 19967.  The sales income in 1997 was derived from check
cashing  operations  and  $15,660  of general  and  administrative  expense  was
incurred by that operations.

As of July 31, 1997 the Company  liquidated  the National  On-Site Check Cashing
subsidiary  at a loss of  $31,919,  which is shown  as other  loss in the  above
industry segment analysis.

Adjusting  1997 general and  administrative  expense by $15,660 to eliminate the
discontinued check cashing operations results in a $19,651 expense attributed to
continuing operations.  Such expenses for 1998 were $31,063 which is an increase
of $11,412 as  compared to 1997.  This  increase is  attributable  to  increased
wages,  rent and equipment lease expenses.  The increase in interest expense was
due to  compounding  of interest on notes  payable.  Other income in1998 $15,743
resulted from interest earnings on the PG&E settlement proceeds.

                                       10
<PAGE>
COMPARISON OF OPERATIONS - CONTINUED

TEMPERATURE RECORDER OPERATIONS

Sales  increased  $243,856 for the 1998 first quarter  period over the same 1997
period.

All categories of cost and expenses were up in 1998 as compared to 1997. Cost of
sales was 49.6% of sales for 1998 as  compared  to 46.9% for 1997.  This was due
primarily to increased  labor and material costs including those for the Vitsab,
Sweden operations.

General and administrative expense increased $116,919 or 25% in 1998 as compared
to 1997. As a percent of sales,  such expenses were 24.4% in 1998 as compared to
21.8% in 1997. Research and development on new products,  including  out-sourced
and in-company costs accounted for  approximately  $70,000 of the increase.  The
balance of the increase was primarily  due to wages,  travel,  professional  and
computer system expenses.

Sales  expenses  increased  $92,169 or 32.8% in 1998 as compared  to 1997.  As a
percent of sales,  such  expenses  were 15.7% for 1998 and 13.2% for 1997.  This
increase was due  primarily to trade shows and sales  promotional  activities of
the visual indicator tag products.

Interest  expense  was  $11,980  greater  for 1998  than  1997 due to  increased
indebtedness incurred in the Vitsab, AB acquisition.

The increase in depreciation/amortization is the result of  additional equipment
and goodwill amortization in the Vitsab, AB acquisition.



                                       11
<PAGE>
                                                                           OTHER
                                                                     INFORMATION
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference  is made to the annual  report  Form 10-K of the  Company for the year
ended April 30, 1998,  relative to legal proceedings and litigation.  No charges
or determinations  have occurred on such proceedings  during the quarter covered
by this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

        (a)  No exhibits are filed as a part of this report.

        (b)  There were no Form 8-K's filed by the Company during 
             the quarter ended July 31, 1998

                                   SIGNATURES

Pursuant  to the  requirements  of the  securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                COX TECHNOLOGIES, INC.



Date  10-21-98                By /s/ James L Cox
    -----------               --------------------------------------------------
                              James L Cox, President and Chief Executive Officer



Date  10-21-98                By /s/ R. W. Dupree
    -----------               --------------------------------------------------
                                     Robert W. Dupree, Chief Financial Officer


                                       12