UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549





FORM 10-Q





(Mark
One)





xQUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
quarterly period ended June 30,
2008




or





 ̈TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the
transition period from 
to





Commission File Number:
000-53138





QUERYOBJECT
      SYSTEMS CORPORATION(Exact
      name of registrant as specified in its
charter)





Delaware
            94-3087939(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)





c/o
      Olshan Grundman Frome Rosenzweig & Wolosky LLP
              65
      East 55th Street, Third Floor
              New
      York, New York
            10022(Address
      of principal executive offices)
            (Zip
      Code)





(212)
      451-2300(Registrant’s
      telephone number, including area code)(Former
      name, former address and former fiscal year, if changed since last
      report)





Indicate
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  ̈     No
 ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 
(Check one):




Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈ (Do
      not check if a smaller reporting company)
              Smaller
      reporting company x
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).     Yes x     No
 ̈





There
were 42,861,328 shares of the Registrant’s Common Stock, par value $.003,
outstanding on August 8, 2008.










QUERYOBJECT
SYSTEMS CORPORATION
 
 FORM
10-Q
 
 Quarter
ended June 30, 2008
 
 TABLE OF CONTENTS
 
 
 PagePART IFINANCIAL INFORMATIONItem 1.
                  Condensed Financial Statements
                  4Notes to Condensed Financial Statements
                  8Item 2.
                  Management's Discussion and Analysis of Financial Condition
      and Results of Operations
                  13Item 3.
                  Quantitative and Qualitative Disclosures About Market
      Risk
                  15Item 4T.
                  Controls and Procedures
                  15PART IIOTHER INFORMATIONItem 1.
                  Legal Proceedings
                  15Item 1A.
                  Risk Factors
                  15Item 2.
                  Unregistered Sales of Equity Securities and Use of
      Proceeds
                  16Item 4.
                  Submission of Matters to a Vote of Security
      Holders
                  16Item 5.
                  Other information
                  16Item 6.
                  Exhibits
                  16Signature
                  16Exhibit Index
                  19
 
 
 2
 CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This
report, and the information incorporated by reference in it, include “forward
looking statements” within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”).  Our forward-looking statements
include, but are not limited to, statements regarding our or our management’s
expectations, hopes, beliefs, intentions or strategies regarding the
future.  In addition, any statements that refer to projections,
forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking
statements.  The words “anticipates,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predicts,” “project,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking.  Forward-looking
statements in this report may include, for example, statements about
our:
  *
                    ability
      to complete a business combination;
  *
                    success
      in retaining or recruiting, or changes required in, our officers, key
      employees or directors following a business
  combination;
  *
                    officers
      and directors allocating their time to other businesses and potentially
      having conflicts of interest with our business or in approving a business
      combination, as a result of which they would then receive expense
      reimbursements;
  *
                    potential
      ability to obtain additional financing to complete a business
      combination;
  *
                    ability
      of our officers and directors to generate a number of potential investment
      opportunities;
  *
                    potential
      change in control if we acquire one or more target businesses
      for  stock;
  *
                    our
      public securities’ potential liquidity and trading;
  or
  *
                    financial
      performance.
 The
forward-looking statements contained or incorporated by reference in this report
are based on our current expectations and beliefs concerning future developments
and their potential effects on us.  There can be no assurance that
future developments affecting us will be those that we have
anticipated.  These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements.  These
risks and uncertainties include, but are not limited to, those factors described
under the heading “Risk Factors.”  Should one or more of these risks
or uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these
forward-looking statements.  We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable
securities laws.
  References
in this report to “we,” “us” or “the Company” refer to QueryObject Systems
Corporation.
  3
  PART 1.  FINANCIAL INFORMATION
  Item 1. Financial Statements and Supplementary Data.
 
 INDEX
TO UNAUDITED FINANCIAL STATEMENTS
  PageBalance Sheets as of June 30, 2008 (Unaudited) and December 31,
      2007
                    5Statements of Operations for the three months and six months
      ended June 30, 2008 and  June 30, 2007
      (Unaudited)
                    6Statements of Cash Flows for the six months ended June 30, 2008
      and June 30, 2007 (Unaudited)
                    7Notes to the Condensed Financial Statements
      (Unaudited)
                    8
 4
 QueryObject
Systems Corporation
  Condensed Balance Sheets
  AssetsJune
      30, 2008
                    
                    
                    December
      31, 2007(Unaudited)
                    
                    
                    AuditedCurrent
      AssetsCash
                    
                    $
                    15,922
                    
                    
                    $
                    51,066Total
      Assets
                    
                    $
                    15,922
                    
                    
                    $
                    51,066Liabilities
      and Stockholders' DeficitCurrent
      LiabilitiesAccounts
      payable and accrued expenses
                    
                    $
                    844
                    
                    
                    $
                    32,077Convertible
      notes payable, less $54,700 and $18,634 unamortizeddiscount at
      June 30, 2008 and December 31, 2007 respectively
                    
                    
                    105,300
                    
                    
                    
                    81,366Total
      Current Liabilities
                    
                    
                    106,144
                    
                    
                    
                    113,443Stockholders'
      DeficitPreferred
      stock, $.001 par value; 4,000,000 share authorized none issued and
      outstanding
                    
                    
                    -
                    
                    
                    
                    -Common
      stock, $.003 par value; 250,000,000 shares authorized;
      42,861,328 and  39,854,012 issued and outstanding at June 30,
      2008 and December 31, 2007 respectively
                    
                    
                    128,584
                    
                    
                    
                    119,562Additional
      paid-in-capital
                    
                    
                    59,568,187
                    
                    
                    
                    59,508,187Accumulated
      deficit
                    
                    
                    (59,786,993
                    )
                    
                    
                    (59,690,126
                    )Total
      Stockholders' Deficit
                    
                    
                    (90,222
                    )
                    
                    
                    (62,377
                    )Total
      Liabilities and Stockholders' Deficit
                    
                    $
                    15,922
                    
                    
                    $
                    51,066
 
  See notes
to condensed unaudited financial statements
  5
 QueryObject
Systems Corporation
  Condensed Statements of Operations
  For
      the Six Months ended
                      June
      30,
                    
                    
                    For
      the Three Months ended
                      June
      30,2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007Revenues
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    -Cost
      and ExpensesGeneral
      and administrative
                    
                    
                    68,493
                    
                    
                    
                    22,500
                    
                    
                    
                    55,485
                    
                    
                    
                    22,500Interest
      expense
                    
                    
                    28,551
                    
                    
                    
                    106
                    
                    
                    
                    16,987
                    
                    
                    
                    -Loss
      before other income
                    
                    
                    97,044
                    
                    
                    
                    22,606
                    
                    
                    
                    72,472
                    
                    
                    
                    22,500Interest
      income
                    
                    
                    177
                    
                    
                    
                    -
                    
                    
                    
                    93
                    
                    
                    
                    -Net
      loss
                    
                    $
                    (96,867
                    )
                    
                    $
                    (22,606
                    )
                    
                    $
                    (72,379
                    )
                    
                    $
                    (22,500
                    )Net
      Loss per Common Share - Basic and Diluted
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.00
                    )
                    
                    $
                    (0.00
                    )Weighted
      Average Number of Shares - Basic and Diluted
                    
                    
                    40,070,007
                    
                    
                    
                    39,854,012
                    
                    
                    
                    40,283,629
                    
                    
                    
                    39,854,012
 
 
  See notes
to condensed unaudited financial statements
  6
 QueryObject
Systems Corporation
  Condensed Statements of Cash Flows
 
 For
      the Six Months ended June 30,2008
                    
                    
                    2007CASH
      FLOWS FROM OPERATING ACTIIVITIES:Net
      loss
                    
                    $
                    (96,867
                    )
                    
                    $
                    (22,606
                    )Adjustments
      to reconcile net loss tonet
      cash used in operating activities:Shares
      issued for interest
                    
                    
                    9,022
                    
                    
                    
                    -Amortization
      of beneficial conversion feature
                    
                    
                    23,934
                    
                    
                    
                    -Change
      in assets and liabilities:Accounts
      payable and accrued expenses
                    
                    
                    (31,233
                    )
                    
                    
                    22,500NET
      CASH USED IN OPERATING ACTIVITIES
                    
                    
                    (95,144
                    )
                    
                    
                    (106
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of convertible note
                    
                    
                    60,000
                    
                    
                    
                    100,000NET
      CASH FROM FINANCING ACTIVITIES
                    
                    
                    60,000
                    
                    
                    
                    100,000INCREASE
      IN CASH
                    
                    
                    (35,144
                    )
                    
                    
                    99,894CASH
      - BEGINNING OF PERIOD
                    
                    
                    51,066
                    
                    
                    
                    106CASH
      - END OF PERIOD
                    
                    $
                    15,922
                    
                    
                    $
                    100,000SUPPLEMENTAL
      NONCASH FINANCING ACTIVITIES:Beneficial
      conversion feature
                    
                    $
                    60,000
                    
                    
                    $
                    37,634
 
 
 
 See notes
to condensed unaudited financial statements
  7
 
  QueryObject
Systems Corporation
 
 Notes to the Unaudited Financial Statements
 1  Organization
and Summary of Significant Accounting Policies
  Organization
 QueryObject
Systems Corporation (the “Company”) was originally incorporated in California in
February 1989.  In November 1997, pursuant to a plan of corporate
reorganization, the Company merged with its wholly owned Delaware
subsidiary.  The Company developed and marketed proprietary business
intelligence software and application services solutions that enabled business
managers to leverage existing corporate data in making strategic
decisions.
  Discontinued
operations
 On
December 12, 2001 the Company entered into an agreement to sell substantially
all of its assets to an unaffiliated third party (the “Sale”).  The
purchase price was $900,000 in cash and the forgiveness of $271,404 of accounts
receivable due from the purchaser (see Note 3.).  The Sale received
stockholder approval on March 13, 2002.
  Summary
of significant accounting policies
  Basic
and diluted net loss per share
 Basic net
loss per share is computed by dividing the net loss by the sum of the weighted
average number of shares of common stock outstanding.  The weighted
average number of shares of common stock outstanding includes the number of
common shares issued upon the exercise of options and warrants, as of the date
of exercise.
  Diluted
earnings per share are based on the potential dilution that would occur on
exercise or conversion of securities into common stock.  Outstanding
options and warrants to purchase shares of common stock that could potentially
dilute basic earnings per share in the future were not included in the
computation of diluted net loss per share because to do so would have had an
antidilutive effect for the periods presented.  As a result, the basic
and diluted per share amounts are identical for all periods
presented.  As of June 30, 2008, the Company has outstanding Senior
Convertible Notes (see Note 4.) that are convertible into 53,333,333 common
shares and warrants outstanding to purchase an additional 80,000,000 common
shares.
  Cash
and cash equivalents
 The
Company considers all highly liquid investments with original maturities of
three months or less to be cash equivalents.
  Income
taxes
 The
Company provides for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”), as
amended.  Income taxes are computed using the asset and liability
method.  Under the asset and liability method specified by SFAS 109,
deferred income tax assets and liabilities are determined based on the
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the currently enacted tax rates and
laws.  In addition, valuation allowances are established when
necessary to reduce deferred tax assets to the amounts expected to be
realized.
  Use
of estimates
 These
financial statements have been prepared in conformity with generally accepted
accounting principles that require management to make reasonable estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at the date of the consolidated financial
statements.  Actual results could differ from those
estimates.
  Fair
value of financial instruments
 The
carrying value of cash and cash equivalents and accounts payable and accrued
expenses approximates fair value, due to the relatively short-term nature of
these instruments.
  8
  QueryObject
Systems Corporation
 
 Notes
to the Unaudited Financial Statements
 Share-Based
Compensation
 The
Company accounts for the grant of stock options and restricted stock awards in
accordance with SFAS 123R, “Share-Based Payment Amendment of FASB Statements No.
123” (“SFAS 123R”). SFAS 123R requires companies to recognize in the statement
of operations the grant-date fair value of stock options and other equity based
compensation.
  RECENT
ISSUED ACCOUNTING STANDARDS
  FASB
141(revised 2007) – Business Combinations
 In
December 2007, the FASB issued FASB Statement No. 141 (revised 2007), Business
Combinations.  This Statement replaces FASB Statement No. 141,
Business Combinations.  This Statement retains the fundamental
requirements in Statement 141 that the acquisition method of accounting (which
Statement 141 called the purchase method) be used for all business combinations
and for an acquirer to be identified for each business
combination.  This Statement defines the acquirer as the entity that
obtains control of one or more businesses in the business combination and
establishes the acquisition date as the date that the acquirer achieves
control.  This Statement’s scope is broader than that of Statement
141, which applied only to business combinations in which control was obtained
by transferring consideration.  By applying the same method of
accounting—the acquisition method—to all transactions and other events in which
one entity obtains control over one or more other businesses, this Statement
improves the comparability of the information about business combinations
provided in financial reports.
  This
Statement requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree at the acquisition
date, measured at their fair values as of that date, with limited exceptions
specified in the Statement.  That replaces Statement 141’s
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.
  This
Statement applies to all transactions or other events in which an entity (the
acquirer) obtains control of one or more businesses (the acquirer), including
those sometimes referred to as “true mergers” or “mergers of equals” and
combinations achieved without the transfer of consideration, for example, by
contract alone or through the lapse of minority veto rights.  This
Statement applies to all business entities, including mutual entities that
previously used the pooling-of-interests method of accounting for some business
combinations.  It does not apply to: (a) The formation of a joint
venture, (b) The acquisition of an asset or a group of assets that does not
constitute a business, (c) A combination between entities or businesses under
common control, (d) A combination between not-for-profit organizations or the
acquisition of a for-profit business by a not-for-profit
organization.
  This
Statement applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008.  An entity may not
apply it before that date.  Management believes this Statement will
have no impact on the financial statements of the Company once
adopted.
  FASB
      160 – Noncontrolling Interests in Consolidated Financial Statements –
      an
      amendment of ARB No. 51
  In
December 2007, the FASB issued FASB Statement No. 160 – Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51.  This Statement applies to all entities that prepare consolidated
financial statements, except not-for-profit organizations, but will affect only
those entities that have an outstanding noncontrolling interest in one or more
subsidiaries or that deconsolidate a subsidiary.  Not-for-profit
organizations should continue to apply the guidance in Accounting Research
Bulletin No. 51, Consolidated Financial Statements, before the amendments made
by this Statement, and any other applicable standards, until the Board issues
interpretative guidance.
  9
  QueryObject
Systems Corporation
 
 Notes
to the Unaudited Financial Statements
  This
Statement amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary.  It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  Before
this Statement was issued, limited guidance existed for reporting noncontrolling
interests.  As a result, considerable diversity in practice
existed.  So-called minority interests were reported in the
consolidated statement of financial position as liabilities or in the mezzanine
section between liabilities and equity.  This Statement improves
comparability by eliminating that diversity.
  A
noncontrolling interest, sometimes called a minority interest, is the portion of
equity in a subsidiary not attributable, directly or indirectly, to a
parent.  The objective of this Statement is to improve the relevance,
comparability, and transparency of the financial information that a reporting
entity provides in its consolidated financial statements by establishing
accounting and reporting standards that require: (a) The ownership interests in
subsidiaries held by parties other than he parent be clearly identified,
labeled, and presented in the consolidated statement of financial position
within equity, but separate from the parent’s equity, (b) The  amount
of consolidated net income attributable to the parent and to the noncontrolling
interest be clearly identified and presented on the face of the consolidated
statement of income, (c)  Changes in a parent’s ownership interest
while the parent retains its controlling financial interest in its subsidiary be
accounted for consistently. A parent’s ownership interest in a subsidiary
changes if the parent purchases additional ownership interests in its subsidiary
or if the parent sells some of its ownership interests in its
subsidiary.  It also changes if the subsidiary reacquires some of its
ownership interests or the subsidiary issues additional ownership
interests.  All of those transactions are economically similar, and
this Statement requires that they be accounted for similarly, as equity
transactions, (d) When a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value.  The gain or loss on the deconsolidation of the
subsidiary is measured using the fair value of any noncontrolling equity
investment rather than the carrying amount of that retained investment, (e)
Entities provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the noncontrolling
owners.
  This
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008 (that is, January 1, 2009, for
entities with calendar year-ends).  Earlier adoption is
prohibited.  This Statements hall be applied prospectively as of the
beginning of the fiscal year in which this Statement is initially applied,
except for the presentation and disclosure requirements.  The
presentation and disclosure requirements shall be applied retrospectively for
all periods presented.  Management believes this Statement will have
no impact on the financial statements of the Company once adopted.
    FASB
      161 - Disclosures about Derivative Instruments and Hedging Activities,
      an amendment of FASB statement No.
133
 In March
2008, the FASB issued Statement of Financial Accounting Standards (“SFAS”)
No. 161, Disclosures
about Derivative Instruments and Hedging Activities, an amendment of FASB
Statement No. 133,which requires additional disclosures about the
objectives of the derivative instruments and hedging activities, the method of
accounting for such instruments under SFAS No. 133 and its related
interpretations, and a tabular disclosure of the effects of such instruments and
related hedged items on our financial position, financial performance, and cash
flows. SFAS No. 161 is effective for the Company beginning January 1,
2009. Management believes that, for the foreseeable future, this Statement will
have no impact on the financial statements of the Company once
adopted.
  Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the financial statements upon
adoption.
  10
  QueryObject
Systems Corporation
 
 Notes
to the Unaudited Financial Statements
  2.          
 Going Concern
  The
Company has incurred operating losses since inception.  The Company
currently has no material assets and has been inactive since December
2001.  The Company has insufficient cash to maintain commercially
reasonable operations.  In addition, the Company has no product to
sell and has no revenue.  After giving effect to the Company’s sale of
a total of $160,000 of Senior Convertible Notes (see Note 4.), the Company’s
cash and cash equivalent balance is still insufficient to satisfy its cash flow
requirements on an operating basis for more than twelve months.  The
Company may seek to sell additional equity or debt securities in the future;
however, there can be no assurance that the Company would be successful in
raising sufficient additional funds.  The sale of additional equity or
debt securities would result in additional dilution to the Company’s
stockholders’.
  3.           
Discontinued Operations
  On
December 12, 2001 the Company received the first installment on the Sale
totaling $250,000.  During January 2002 the Company received the
second installment on the Sale totaling $250,000 and received the balance
remaining of $400,000 in March 2002 after the stockholders approved the
Sale.  The Company transferred certain property and equipment to the
purchaser with a net book value of $967,760 and forgave $271,414 of accounts
receivable from the purchaser.  This resulted in a loss on sale of
discontinued operations of $339,174.
  4.           
Senior Convertible Notes Payable
  On June
28, 2007, the Company sold $100,000 of Senior Convertible Notes (the “2007
Notes”) to stockholders of the Company.  The 2007 Note bears interest
at 8% and was originally due on June 28, 2008.  The 2007 Notes are
convertible at the option of the holders into 33,333,333 shares of the Company’s
common stock.  The proceeds of the 2007 Notes were used primarily to
pay legal and professional fees to regain reporting status with the Securities
and Exchange Commission.  The Company also issued common stock
purchase warrants exercisable for 10 years into 50,000,000 shares of the
Company’s common stock at an exercise price of $.003 per share.
  On June
17, 2008, the Company issued a total of 3,007,316 shares of common stock to
holders of the 2007 Notes in payment of $9,022 in interest that had accrued
through such date.  In addition, the Company entered into an amendment
to the 2007 Notes extending the expiration date thereof to May 19,
2009.
  The fair
value of the warrants and the beneficial conversion feature was $35,484 using
the Black-Scholes option-pricing model with the following assumptions; no
dividends; risk-free interest rate of 5%; an expected life of five years and
volatility of 75%.  Accordingly, the fair value of the amount
allocated to the beneficial conversion feature is being amortized over the life
of the Note (originally one year) and is reported as
interest.  Amortization of $9,409 and $9225 was included as interest
expense for the three months and six months ended June 30, 2008.
  On May
19, 2008, the Company sold $60,000 of Senior Convertible Notes (the “2008
Notes”) to stockholders and certain Board members of the Company.  The
2008 Notes bears interest at 8% and are due on May 19, 2009.  The 2008
Notes are convertible at the option of the holders into 20,000,000 shares of the
Company’s common stock.  The proceeds of the 2008 Notes are being used
primarily to pay legal and professional fees to remain in reporting status with
the Securities and Exchange Commission.  The Company also issued
common stock purchase warrants exercisable for 10 years into 30,000,000 shares
of the Company’s common stock at an exercise price of $.003 per
share.
  11
  QueryObject
Systems Corporation
 
 Notes
to the Unaudited Financial Statements
 The fair
value of the warrants and the beneficial conversion feature was $60,000 using
the Black-Scholes option-pricing model with the following assumptions; no
dividends; risk-free interest rate of 5%; an expected life of five years and
volatility of 75%.  Accordingly, the fair value of the amount
allocated to the beneficial conversion feature will be amortized over the life
of the 2008 Notes (one year) and will be reported as
interest.  Amortization of $6,300 was included as interest expense for
both the three months and six months ended June 30, 2008.
  5.     
      Description of Securities
  Increase
in Authorized Capital Stock
 On March
14, 2008, the Company increased the authorized capital stock, specifically the
common stock, par value $0.003, by 50,000,000 shares to 150,000,000 authorized
shares of common stock.  On May 16, 2008, the Company further
increased the authorized capital stock, specifically the common stock, par value
$0.003, by 100,000,000 shares to 250,000,000 authorized shares of common
stock.  The Company’s authorized preferred stock continues to be
4,000,000 shares.
  As of
June 30, 2008, there are 42,861,328 issued and outstanding shares of Common
Stock and 4,000,000 shares of preferred stock, par value $0.001 per share, of
which none have been designated or issued.  The following summarizes
the important provisions of the Company’s capital stock.
  Common
Stock
 The
holders of shares of common stock are entitled to one vote for each share held
of record on all matters to be voted on by stockholders.  There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voted can elect all of the
directors then being elected.  The holders of common stock are
entitled to receive dividends when, as and if declared by the board of directors
out of funds legally available therefor.  In the event of liquidation,
dissolution or winding up of the Company, the holders of common stock are
entitled to share ratably in all assets remaining available for distribution to
them after payment of liabilities and after provision has been made for each
class of stock, if any, having preference over the common
stock.  Holders of shares of common stock, as such, have no
redemption, preemptive or other subscription rights, and there are no conversion
provisions applicable to the common stock.  All of the outstanding
shares of common stock are fully paid and non-assessable.
  Preferred
Stock
 The
Company’s authorized shares of Preferred Stock may be issued in one or more
series, and the board of directors is authorized, without further action by the
stockholders, to designate the rights, preferences, limitations and restrictions
of and upon shares of each series, including dividend, voting, redemption and
conversion rights.  The board of directors also may designate par
value, preferences in liquidation and the number of shares constituting any
series.  The Company believes that the availability of Preferred Stock
issuable in series will provide increased flexibility for structuring possible
future financings and acquisitions, if any, and in meeting other corporate
needs.  It is not possible to state the actual effect of the
authorization and issuance of any series of Preferred Stock upon the rights of
holders of common stock until the Board of Directors determines the specific
terms, rights and preferences of a series of Preferred
Stock.  However, such effects might include, among other things,
restricting dividends on the common stock, diluting the voting power of the
common stock, or impairing liquidation rights of such shares without further
action by holders of the common stock.  In addition, under various
circumstances, the issuance of Preferred Stock may have the effect of
facilitating, as well as impeding or discouraging, a merger, tender offer, proxy
contest, the assumption of control by a holder of a large block of the Company’s
securities or the removal of incumbent management.  Issuance of
Preferred Stock could also adversely affect the market price of the common
stock.  The Company has no present plan to issue any shares of
Preferred Stock.
  12
  ITEM 2. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Forward
Looking Statements
  All
statements other than statements of historical fact included in this report
including, without limitation, statements under “Management's Discussion and
Analysis of Financial Condition and Results of Operations” regarding our
financial position, business strategy and the plans and objectives of management
for future operation, are “forward looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934.  When used in this report, words such as
"anticipate," "believe," "plan," "expect," "future," "intend" and similar
expressions, as they relate to us or our management, identify forward looking
statements.  Such forward-looking statements are based on the beliefs
of management, as well as assumptions made by, and information currently
available to, our management.  Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors detailed in our filings with the Securities and Exchange Commission (the
“SEC”).  All subsequent written or oral forward looking statements
attributable to us or persons acting on our behalf are qualified in their
entirety by this paragraph.
  Overview
  The
Company intends to seek to acquire assets or capital stock of an entity engaged
in a business that generates, or has the potential of generating revenues, in
exchange for securities of the Company (which we refer to as a “Business
Combination”).
  The
Company intends to remain a shell company until a Business Combination is
consummated, and it is anticipated that during that time frame the Company’s
cash requirements will be minimal. We believe that we will need additional
financing to pay accounting and professional fees and other expenses to fulfill
our reporting obligations under the Exchange Act until we commence business
operations. Our failure to secure additional financing could have a material
adverse affect on our ability to pay the accounting and other fees required in
order to continue to fulfill our reporting obligations and pursue our business
plan.
  The
Company intends to seek to carry out its business plan as discussed
herein.  In order to do so, the Company needs to pay ongoing expenses,
including particularly legal and accounting fees incurred in conjunction with
future compliance with its on-going reporting obligations under the Exchange
Act.  The Company has limited capital with which to pay these
anticipated expenses, and there is substantial doubt about the Company’s ability
to continue as a going concern.  We believe that we may need
additional funds to pay accounting and professional fees and other expenses to
fulfill our reporting obligations under the Exchange Act until we commence
business operations.
  The
Company has no employees and does not expect to hire any prior to effecting a
Business Combination.  The Company’s President has agreed to allocate
a portion of his time to the activities of the Company, without
compensation.  The President anticipates that the business plan of the
Company can be implemented by his devoting a portion of his available time to
the business affairs of the Company.
  Results
of Operations
  The
following discussion and analysis should be read in conjunction with the
Financial Statements and related notes to the Financial Statements, which are
included as part of Item 1 of this Form 10-Q.
  Overview
  Prior to
October 2001, the Company operated in two business segments; software sales and
support and application services.  Software sales and support included
software sales to third parties on a direct basis or through a business partner,
and included related support in the form of maintenance agreements and
consulting.  Application services were provided by the Company’s
subsidiary IQO and included design, implementation and hosting services provided
to third parties, in some cases utilizing the QueryObject
technology.  While the Company commenced operations in February 1989,
the Company had a limited operating history as a software product and
application services company and had made only limited sales of both its
QueryObject System and application services.
  13
  The
Company experienced a drop-off in sales activities in September 2001 and was not
successful in raising the additional capital necessary to continue
operating.  As a result, in October 2001, the Company laid off
significantly all of its employees and began exploring a number of options
including the sale of all or part of its assets.
  Discontinued
Operations
  On
December 12, 2001 the Company entered into an agreement to sell substantially
all of its assets to an unaffiliated third party (the “Sale”).  The
purchase price was $900,000 in cash and the forgiveness of $271,404 of accounts
receivable due from the purchaser.  The Sale was contingent upon
receiving stockholder approval, which was received on March 13,
2002.  As a result, effective December 12, 2001, the Company ceased
operations, maintaining a small group of employees to facilitate the transition
of the Company.
  On the
day of the Sale the Company received the first installment totaling
$250,000.  During January 2002 the Company received the second
installment on the Sale totaling $250,000 and received the balance remaining of
$400,000 in March 2002 after the stockholders approved the Sale.  The
Company transferred certain property and equipment to the purchaser with a net
book value of $967,760 and forgave $271,414 of accounts receivable from the
purchaser.  As a result, the Company has sold all its material
assets.
  Liquidity
and Capital Resources
  Since
January 1, 2000, the Company received net proceeds of approximately $11,554,000
from various financings and the exercise of options and warrants.  The
Company experienced a drop-off in sales activities in September 2001 and was not
successful in raising the additional capital necessary to continue
operating.  As a result, in October 2001, the Company laid off
significantly all of its employees and began exploring a number of options
including the sale of all or part of its assets.
  As of
December 31, 2001, the Company had $169,420 in cash and cash
equivalents.  This cash was used for the wind-down of the Company’s
operations.
  On June
28, 2007, the Company issued a one-year convertible note in the face amount of
$100,000 with an interest rate of 8%.  The note is convertible into
33,333,333 share of our common stock.  In connection with the issuance
of the note, the Company issued warrants to purchase 50,000,000 shares of common
stock.
  On May
19, 2008, the Company issued one-year convertible notes in the face amount of
$60,000 with an interest rate of 8%.  The notes are convertible into
an aggregate of 20,000,000 shares of our common stock.  In connection
with the issuance of these notes, the Company issued warrants to purchase
30,000,000 shares of common stock.
  Critical
Accounting Policies
  The
Company’s significant accounting policies are more fully described in Note 1 to
the financial statements.  However, certain accounting policies are
particularly important to the portrayal of financial position and results of
operations and require the application of significant judgments by
management.  As a result, the condensed financial statements are
subject to an inherent degree of uncertainty.  In applying those
policies, management used its judgment to determine the appropriate assumptions
to be used in determination of certain estimates.  These estimates are
based on the Company’s historical experience, terms of existing contracts,
observance of trends in the industry and information available from outside
sources, as appropriate.
  14
  ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
 
 Due to
the Company’s limited capitalization and the short term nature of its
investments, we believe the Company does not currently have any material
exposure to interest rate risk.
  ITEM 4T. CONTROLS AND PROCEDURES
 
 Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission’s rules and forms. Disclosure controls
and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in company reports filed or
submitted under the Exchange Act is accumulated and communicated to
management.
  As
required by Rules 13a-15 and 15d-15 under the Exchange Act, our President and
Treasurer carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls as of June 30, 2008. Based on his
evaluation, he concluded that our disclosure controls and procedures (as defined
in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were
effective.
  Our
internal control over financial reporting is a process designed by, or under the
supervision of, our President and Treasurer and effected by our board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation of our
financial statements for external purposes in accordance with United States
generally accepted accounting principles (GAAP). Internal control over financial
reporting includes policies and procedures that pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of our assets, provide reasonable assurance that transactions
are recorded as necessary to permit preparation of our financial statements in
accordance with GAAP, and that our receipts and expenditures are being made only
in accordance with the authorization of our board of directors and management,
and provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of our assets that could have a
material effect on our financial statements.
  During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
  PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 
 None.
  ITEM1A. RISK FACTORS
 
 Factors
that could cause our actual results to differ materially from those in this
report are any of the risks described in our Form 10 filed with the SEC on May
30, 2008. Any of these factors could result in significant or material adverse
effect on our results of operations or financial condition. Additional risk
factors not presently known to us or that we currently deem immaterial may also
impair our business or results of operations.
  15
  As of
June 30, 2008, there have been no material changes to the risk factors disclosed
in our Form 10 filed with the SEC on May 30, 2008, except we may disclose
changes to such factors or disclose additional factors from time to time in our
future filings with the SEC.
  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 On May
19, 2008, in consideration of loans of $28,000, $16,000 and $16,000 from BRMR
LLC, the Isaac Kier Revocable Trust and the Tarsier Nanocap Value Fund,
respectively, the Company issued BRMR, LLC, the Isaac Kier Revocable Trust and
the Tarsier Nanocap Value Fund (i) convertible notes convertible into 9,333,333,
5,333,333, and 5,333,333 shares of Common Stock, respectively and (ii) related
warrants to purchase 14,000,000, 8,000,000 and 8,000,000 shares of Common Stock,
respectively.
  On June
17, 2008, the Company issued to Dalewood Associates LP (“Dalewood”) 1,924,683
shares of common stock in payment of $5,774.05 in interest that had accrued
through such date on that certain Senior Convertible Promissory Note, dated as
of May 19, 2008 (the “Dalewood Note”) made by the Company in favor of Dalewood.
In addition, the Company entered into an amendment to the Dalewood Note
extending the expiration date thereof to May 19, 2009.
  On
June 17, 2008, the Company issued to BRMR LLC (“BRMR”) 1,082,633 shares of
Common Stock in payment of $3,247.90 in interest that had accrued through such
date on that certain Senior Convertible Promissory Note, dated as of May 19,
2008 (the “BRMR Note”) made by the Company in favor of BRMR. In addition, the
Company entered into an amendment to the BRMR Note extending the expiration date
thereof to May 19, 2009.
  The
securities in the transaction set forth above were issued pursuant to Securities
Act Section 4(2) as transactions not involving a public offering.
  ITEM 3.  DEFAULTS UPON SENIOR
SECURITIES
 
 None.
 
 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
 
 In May
2008, the holders of a majority of the outstanding shares of Common Stock, by
written consent in accordance with Section 228 of the Delaware General
Corporation Law, ratified a private placement whereby the Corporation received
an aggregate of $60,000 and in consideration thereof granted to entities
affiliated with Paul Sonkin and Ike Kier, both current Directors of the Company,
as well as certain stockholders, warrants to purchase an aggregate of 30,000,000
shares of Common Stock at an exercise price of $.003 per share and issued
promissory notes convertible into 20,000,000 shares of Common Stock at a
conversion price of $ 0.003 per share.  As part of this transaction,
the Corporation obtained approval to increase the authorized common stock of the
Corporation to 250 million shares of authorized Common Stock and to make any
filings as required by federal or state securities laws and state corporate law.
Each of the above actions was approved by stockholders representing 53% of the
Common Stock outstanding.
  ITEM 5. OTHER INFORMATION
 
 None.
  ITEM6. EXHIBITS
 
 An index
of exhibits filed as part of this Report is on page 18.
  16
 SIGNATURE
 
 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.
  
 QueryObject
      Systems CorporationBy:
                  /s/
      Daniel PessName:
                  Daniel
      PessDated:
      August 19, 2008
                  
                  Title:
                  President
  17
 EXHIBIT INDEX
 
 Exhibit
      Number
                  Description31.1
                  Certification
      of Principal Executive, Principal Financial and Principal Accounting
      Officer, pursuant to Rule 13a -14 and 15d-14 of the Securities Exchange
      Act of 1934.32.1
                  Certification
      Principal Executive, Principal Financial and Principal Accounting Officer
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
 
 
 18