SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


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

                For the quarterly period ended September 30, 2000


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

                         Commission file number 1-13587


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

                Delaware                                94-3087939
       (State or other jurisdiction of      (IRS Employer Identification Number)
       incorporation or organization)


                        One Expressway Plaza - Suite 208
                         Roslyn Heights, New York 11577
                    (Address of principal executive offices)


                                 (516) 228-8500
              (Registrant's telephone number, including area code)



            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 / /

            As  of  October  31,  2000  there  were  9,850,654   shares  of  the
Registrant's common stock outstanding.

Transitional Small Business Disclosure Format.  Yes / /   No / /



<PAGE>

                         QUERYOBJECT SYSTEMS CORPORATION

                                   FORM 10-QSB

                                      INDEX




PART I.    FINANCIAL INFORMATION                                           PAGE
                                                                           ----

Item 1.    Financial Statements

           Condensed Consolidated Balance Sheet
           As of September 30, 2000 (unaudited)..............................3

           Condensed Consolidated Statements of Operations
           For the three months and nine months ended September
           30, 2000 and 1999 (unaudited).....................................4

           Condensed Consolidated Statements of Cash Flows
           For the nine months ended September 30, 2000 and 1999 (unaudited).5

           Notes to the Condensed Consolidated Financial Statements..........6

Item 2.    Management's Discussion and Analysis or Plan of Operation.........8

PART II.   OTHER INFORMATION

Item 5.    Other Information................................................18

Item 6.    Exhibits and Reports on Form 8-K.................................18

SIGNATURES .................................................................19


                                       2

<PAGE>


Part I.

FINANCIAL INFORMATION

Item 1.      Financial Statements


                         QUERYOBJECT SYSTEMS CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                        September 30,
                                                                            2000
ASSETS
<S>                                                                     <C>
Current assets
    Cash and cash equivalents .......................................   $ 5,744,804
    Accounts receivable, net of allowance for doubtful
       accounts of $54,587 ..........................................       750,782


    Prepaid expenses and other current assets .......................       340,042
                                                                        -----------

       Total current assets .........................................     6,835,628

Property and equipment, net .........................................     1,231,917
Deposits and other assets ...........................................       204,614
                                                                        -----------

       Total assets .................................................   $ 8,272,159
                                                                        -----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
    Accounts payable ................................................   $   267,930
    Accrued expenses ................................................       431,363
    Deferred revenue ................................................       148,167
    Deferred rent ...................................................        35,898
    Capital lease obligations .......................................        25,157
                                                                        -----------

       Total current liabilities ....................................       908,515

Deferred rent .......................................................       259,751
                                                                        -----------

       Total liabilities ............................................     1,168,266
                                                                        -----------

Minority interest (Note 5) ..........................................     6,534,993
                                                                        -----------

Stockholders' equity
    Preferred stock, $.001 par value: 4,000,000 shares authorized;
        none issued and outstanding .................................            --
    Common stock, $.003 par value:  60,000,000 shares
        authorized; 9,850,654 shares issued and outstanding .........        29,552
    Additional paid-in capital ......................................    48,630,759
    Accumulated deficit .............................................   (48,091,411)
                                                                        -----------

        Total stockholders' equity ..................................       568,900
                                                                        -----------

        Total liabilities and stockholders' equity ..................   $ 8,272,159
                                                                        -----------
</TABLE>

      See accompanying Notes to Condensed Consolidated Financial Statements

                                       3

<PAGE>

                         QUERYOBJECT SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                    Three Months Ended           Nine Months Ended
                                                       September 30,               September 30,
                                                    2000          1999          2000           1999
Revenues
<S>                                           <C>            <C>            <C>            <C>
    Software licenses .....................   $   222,000    $   525,200    $ 1,078,650    $ 1,078,400
    Maintenance and services ..............       154,711         29,365        320,022         82,459
                                              -----------    -------------  -----------    -----------

             Total revenues ...............       376,711        554,565      1,398,672      1,160,859

Cost of revenues
    Software licenses .....................         8,880         20,004         43,652         42,182
    Maintenance and services ..............        70,556         18,949        110,340         56,807
                                              -----------    -----------    -----------    -----------

             Total cost of revenues .......        79,436         38,953        153,992         98,989
                                              -----------    -----------    -----------    -----------

Gross profit ..............................       297,275        515,612      1,244,680      1,061,870
                                              -----------    -----------    -----------    -------------

Operating expenses
    Sales and marketing ...................     2,020,391        877,889      5,045,948      2,727,863
    Research and development ..............       693,640        507,827      1,916,024      1,747,454
    General and administrative ............       380,465        326,368      1,317,450      1,018,884
                                              -----------    -----------    -----------    -----------

             Total operating expenses .....     3,094,496      1,712,084      8,279,422      5,494,201
                                              -----------    -----------    -----------    -----------

Loss from operations ......................    (2,797,221)    (1,196,472)    (7,034,742)    (4,432,331)

Interest income ...........................       110,658         14,165        295,148         25,477
Interest expense ..........................        (1,293)        (7,896)       (11,390)       (34,918)
Other income (expense) ....................         1,286           --           (2,380)        (1,288)
                                              -----------    -----------    -----------    ------------

Net loss ..................................   $(2,686,570)   $(1,190,203)   $(6,753,364)    (4,443,060)
                                              -----------    -----------    -----------    ------------

Basic and diluted net loss per common share   $      (.27)   $      (.51)   $      (.72)   $     (2.11)
                                              -----------    -----------    -----------    ------------

Weighted average shares used in per share .
    computation (Note 2) ..................     9,844,960      2,336,130      9,325,154      2,108,541
                                              -----------    -----------    -----------    ------------
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.

                                       4

<PAGE>

                         QUERYOBJECT SYSTEMS CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                                             Nine Months Ended
                                                                                September 30,
                                                                             2000            1999
Cash flows from operating activities
<S>                                                                      <C>            <C>
     Net loss ........................................................   $(6,753,364)   $(4,443,060)
     Adjustments to reconcile net loss to net cash used in operating
        activities
          Depreciation and amortization ..............................       341,367        319,808

          Loss on disposition of equipment ...........................         9,033          1,288
                      Options issued for consulting services .........       436,551        380,565
                      Changes in assets and liabilities
                             Accounts receivable, net ................       480,765       (615,905)
                             Prepaid expenses and other current assets      (191,808)      (232,221)
                             Deposits and other assets ...............       (47,567)       (23,457)
                             Accounts payable and accrued expenses ...      (212,607)      (148,731)
                             Deferred rent ...........................         3,358        (15,371)
                             Deferred revenue ........................       (21,588)        56,215
                                                                          ----------      ---------

                             Net cash used in operating activities ...    (5,955,860)    (4,720,869)
                                                                          ----------      ---------

Cash flows from investing activities
           Acquisitions of property and equipment ....................      (736,017)      (184,158)
           Repayment of stockholder note receivable ..................          --           65,000
                                                                          ----------      ---------

                             Net cash used in investing activities ...      (736,017)      (119,158)
                                                                          ----------      ---------

Cash flows from financing activities
           Proceeds from exercise of  common stock warrants ..........     1,456,250        719,331
           Proceeds from exercise of common stock options ............       102,618           --
           Proceeds from issuance of preferred stock, net ............          --        4,089,791
           Proceeds from issuance of IQO preferred stock, net ........     6,534,993           --
           Collection of stock subscriptions receivable, net .........          --        1,397,004
           Repayment of loans payable to stockholders ................          --         (700,000)
           Proceeds from loans payable to stockholders ...............          --          400,000
           Payments of capital lease obligations .....................      (146,034)      (130,247)
                                                                          ----------      ---------

                             Net cash provided by financing activities     7,947,827      5,775,879
                                                                          ----------      ---------

Net increase in cash and cash equivalents ............................     1,255,950        935,852

Cash and cash equivalents at beginning of year .......................     4,488,854        854,018
                                                                          ----------      ---------

Cash and cash equivalents at end of period ...........................   $ 5,744,804    $ 1,789,870
                                                                          ----------      ---------
</TABLE>


     See accompanying Notes to Condensed Consolidated Financial Statements.

                                       5

<PAGE>

                         QUERYOBJECT SYSTEMS CORPORATION
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.          BASIS OF PRESENTATION

            The unaudited condensed  consolidated  financial statements included
herein reflect all adjustments, consisting only of normal recurring adjustments,
which in the opinion of  management  are necessary to fairly state the Company's
financial  position,  results  of  operations  and cash  flows  for the  periods
presented.  These financial  statements  should be read in conjunction  with the
Company's audited financial  statements  included in the Company's Annual Report
on Form 10-KSB for the year ended  December 31, 1999,  and have been prepared on
the basis that the Company will continue as a going concern,  which contemplates
the  realization  of assets and the  satisfaction  of  liabilities in the normal
course of business.  The results of operations  for the periods ended  September
30, 2000 are not  necessarily  indicative  of the results to be expected for any
subsequent  quarter,  or for the entire fiscal year ending December 31, 2000, or
for any future period.

            The condensed consolidated financial statements include the accounts
of QueryObject  Systems  Corporation and its  subsidiaries,  internetQueryObject
Corporation  ("IQO"),  QueryObjectexchange  Corporation and QueryObject  Systems
Corporation, Ltd. All significant intercompany transactions have been eliminated
in consolidation.

            On  January  27,  2000,  the  Company's   stockholders   approved  a
one-for-three  reverse  stock  split  of  all  common  stock  outstanding.   The
one-for-three  reverse stock split also affects options and warrants outstanding
as well as the  conversion  ratio of  Convertible  Preferred  Stock into  common
stock.  All share and per share amounts  affecting net loss per share,  weighted
average number of common and common equivalent shares outstanding,  common stock
and all other stock  transactions  presented in these financial  statements have
been restated to reflect the one-for-three reverse stock split.

            Certain prior period  amounts have been  reclassified  to conform to
their 2000 presentation.

2.          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  conversion  of  Convertible  Preferred
Stock, as of the date of conversion, and the number of common shares issued upon
the exercise of options and warrants, as of the date of exercise.

            Diluted  earnings per share is 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.  In addition,  the  Convertible
Preferred  Stock  issued  during  1999 and 1998 has been  excluded  prior to its
conversion to common shares,  due to the

                                       6

<PAGE>

antidilutive  effect.  As a result,  the basic and diluted per share amounts are
identical for all periods presented.

3.          USE OF ESTIMATES

            The  preparation  of the financial  statements  in  conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

4.          LIQUIDITY AND BUSINESS RISKS

            The Company has  incurred  operating  losses  since  inception,  has
incurred  negative cash flows from  operating  activities and has an accumulated
deficit of $48,091,411 and $41,338,047 as of September 30, 2000 and December 31,
1999,  respectively.  The  Company  has had a  limited  operating  history  as a
software  product  company and has not made  significant  sales of its products,
therefore,  revenues are difficult to predict.  It is anticipated  that the cash
and cash  equivalent  balance of IQO at September 30, 2000 will be sufficient to
satisfy its cash flow requirements for more than 12 months.  QueryObject Systems
Corporation  anticipates that its cash and cash equivalent  balance at September
30,  2000 will be  insufficient  to satisfy  its cash flow  requirements  beyond
December 2000. The Company is seeking to sell  additional  equity or convertible
debt  securities,  however,  there can be no assurance that the Company would be
successful  in  raising  additional  funds.  The sale of  additional  equity  or
convertible debt securities would result in additional dilution to the Company's
stockholders.

5.          IQO PREFERRED STOCK

            In April 2000,  IQO sold 70 Units,  at a purchase  price per Unit of
$100,000  (the  "Units"),  each Unit  consisted  of  125,000  shares of Series A
Preferred Stock and a Common Stock Purchase  Warrant to purchase  125,000 shares
of IQO's Common Stock (the "IQO Private  Placement").  IQO received net proceeds
of $6,534,993.  Each share of Series A Preferred  Stock is  convertible,  at the
option of the holder,  into one share of IQO Common Stock  (8,750,000  shares in
total).  The Series A Preferred  Stock ranks senior to all other  classes of IQO
capital stock and has a liquidation  preference  equal to its purchase  price of
$.80  per  share.  The  Series A  Preferred  Stock is not  entitled  to  receive
dividends  unless  dividends are declared on a junior security with the approval
of the Series A holders.  The Common Stock  Purchase  Warrants  are  exercisable
until April 17, 2001 at an exercise price of $1.00 per share.

            IQO granted the  placement  agent in the IQO  Private  Placement  an
option to purchase 492,500 shares of its Common Stock and paid commissions and a
non-accountable  expense allowance of $394,000.  The securities offered and sold
in the IQO Private  Placement  were not  registered  under the Securities Act of
1933,  as  amended,  and may not be offered or sold in the United  States by the
holders thereof absent registration or an applicable exemption from registration
requirements.

                                       7

<PAGE>

            As of September 30, 2000, the Company owns all the  outstanding  IQO
Common Stock.  Assuming the  conversion  of all of the Series A Preferred  Stock
into IQO Common Stock, the Company would own 53.3% of the outstanding IQO Common
Stock.  The Company has reported the  proceeds  from the IQO Private  Placement,
less  professional  expenses and fees associated with the offering,  as Minority
Interest in the accompanying Condensed Consolidated Balance Sheet.

6.          RECENT ACCOUNTING PRONOUNCEMENT

            In December 1999, the  Securities  and Exchange  Commission  ("SEC")
issued Staff Accounting  Bulletin No. 101 ("SAB 101"),  "Revenue  Recognition in
Financial Statements." SAB 101 summarizes certain of the SEC's views in applying
generally  accepted  accounting  principles to revenue  recognition in financial
statements.  In June 2000,  the SEC issued SAB No.  101B to defer the  effective
date of  implementation  of SAB No. 101 until the fourth quarter of fiscal 2000.
The Company is in the process of evaluating the impact of SAB 101.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

            The   discussion   in   this   report   on  Form   10-QSB   contains
forward-looking  statements that involve risks and uncertainties.  The Company's
actual results may differ materially from those discussed  herein.  Factors that
could cause or contribute to such differences  include,  but are not limited to,
those  discussed  in  "Risk  Factors"  in this  Part I,  Item 2 as well as those
discussed in this section and elsewhere in this Report,  and the risks discussed
in "Risk Factors" in Part I, Item 1 - Business, included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999.

            The discussion and analysis below should be read in conjunction with
the  Condensed  Consolidated  Financial  Statements of the Company and the Notes
thereto, included elsewhere herein.

OVERVIEW

            The Company commenced operations in February 1989, but has a limited
operating  history as a software product company and has made only limited sales
of its QueryObject System.

            During April 2000, the Company began  staffing and incurred  initial
marketing and product-related  expenses and general and administrative  expenses
with  respect to IQO. As of October 31,  2000,  IQO has 18 full time  equivalent
employees.  Total expenses for the three and nine month periods ended  September
30,  2000 were  $955,422  and  $2,023,793,  respectively.  IQO will  resell  the
Company's database,  data streaming and data distribution technology to Internet
based businesses.  IQO is developing  applications that capture,  store, manage,
distribute and analyze data for CRM (Customer Relationship Management).

            To  date,   the  Company  has  incurred   substantial   losses  from
operations,   and  at  September  30,  2000,  had  an  accumulated   deficit  of
$48,091,411.  The Company expects to incur substantial

                                       8

<PAGE>

operating  expenses  in the future to support its  product  development  efforts
(including  those of IQO),  establish and expand its domestic and  international
sales and  marketing  capabilities,  including  recruiting  additional  indirect
channel partners,  and support and expand its technical and management personnel
and organization.

            Revenues  from the sales of the  Company's  products  are  generally
recognized upon the execution of a software licensing  agreement and shipment of
the product,  provided that no  significant  vendor  obligations  remain and the
resulting  receivable is deemed collectible by management.  In instances where a
significant vendor obligation exists, revenue recognition is deferred until such
obligation has been satisfied.

RESULTS OF OPERATIONS

            The  following  table  sets  forth  certain  items in the  Company's
consolidated statements of operations for the three and nine month periods ended
September 30, 2000 and 1999 ($ in thousands):

<TABLE>
<CAPTION>

                                              Three Months Ended    Nine Months Ended
                                                  September 30,       September 30,
                                                2000        1999     2000        1999
Revenues
<S>                                           <C>        <C>        <C>        <C>
           Software licenses ..............   $   222    $   525    $ 1,079    $ 1,078
           Maintenance and services .......       155         30        320         83
                                              -------    -------    -------    -------

                   Total revenues .........       377        555      1,399      1,161
                                              -------    -------    -------    -------

Cost of revenues
           Software licenses ..............         9         20         44         42
           Maintenance and services .......        71         19        110         57
                                              -------    -------    -------    -------

                   Total cost of revenues .        80         39        154         99
                                              -------    -------    -------    -------

Gross profit ..............................       297        516      1,245      1,062
                                              -------    -------    -------    -------

Operating expenses
           Sales and marketing ............     2,020        878      5,046      2,728
           Research and development .......       694        508      1,916      1,747
           General and administrative .....       380        326      1,318      1,019
                                              -------    -------    -------    -------

                   Total operating expenses     3,094      1,712      8,280      5,494
                                              -------    -------    -------    -------

Loss from operations ......................    (2,797)    (1,196)    (7,035)    (4,432)

  Interest income .........................       110         14        295         25
  Interest expense ........................        (1)        (8)       (11)       (35)
  Other income (expense) ..................         1       --           (2)        (1)
                                              -------    -------    -------    -------

Net loss ..................................   $(2,687)   $(1,190)   $(6,753)   $(4,443)
                                              -------    -------    -------    -------
</TABLE>

                                       9

<PAGE>

REVENUES

            The Company's  license  revenues have been  generated  from sales of
QueryObject System.  Maintenance revenues consist of ongoing support and product
updates that are recognized ratably over the term of the contract,  typically 12
months. Service revenues consist primarily of paid  proof-of-concepts  performed
for customers on a project or contract basis and are recognized over the term of
the respective agreements.

            Total revenues  decreased by $178,000,  or 32%, from $555,000 in the
third  quarter of 1999 to $377,000 in the third  quarter of 2000.  For the first
nine months,  total revenues increased $238,000,  or 20% from $1,161,000 in 1999
to $1,399,000 in 2000.  The increase for the first nine months was primarily due
to service  revenue of IQO and the  decrease  for the third  quarter  was due to
decreased license revenue,  partially offset by IQO service revenue. The Company
recorded  license  revenue from the sale of two licenses in the third quarter of
2000  compared to the sale of five  licenses in the third  quarter of 1999.  The
Company recorded license revenue from the sale of 13 licenses for the first nine
months of 2000  compared to the sale of 11 licenses for the first nine months of
1999.  The decrease in license  revenues for the third quarter  compared to 1999
was  primarily due to a lack of sales in Europe.  Revenues  from European  sales
decreased by 98% during the third quarter,  which was partially offset by a 149%
increase  in North  America  revenues.  For the first nine  months,  revenues in
Europe  decreased by 66%, which was more than fully offset by a 176% increase in
North America  revenues.  Maintenance and service revenue increased by $125,000,
or 417%,  from  $30,000 in the third  quarter of 1999 to  $155,000  in the third
quarter of 2000.  For the first nine  months,  maintenance  and service  revenue
increased by $237,000,  or 286% from $83,000 in 1999 to $320,000 in 2000.  These
increases  were  primarily the result of IQO service  revenue.  Maintenance  and
service  revenues  are  expected to increase  as the  Company  sells  additional
licenses and as IQO introduces its product offering.

COST OF REVENUES

            Cost of software  license  revenues  consists  primarily  of royalty
payments to third  parties,  product  packaging,  documentation  and  production
costs.  Cost of software  license  revenues as a percentage of software  license
revenues was 4% for all periods presented.

            Costs of  maintenance  and services  revenues  consist  primarily of
customer   support   costs  and   direct   costs   associated   with   providing
proof-of-concept  services.  Cost of  maintenance  and  services  revenues  as a
percentage of maintenance and services revenues were 46% and 34%,  respectively,
for  the  three  and  nine-month  periods  ended  September  30,  2000.  Cost of
maintenance  and services  revenues as a percentage of maintenance  and services
revenues were 63% and 69%,  respectively,  for the three and nine-month  periods
ended September 30, 1999. These decreases in the 2000 periods were primarily due
to  increased  service  revenues of IQO for which the related  direct costs were
lower  as a  percentage  of  service  revenues  than  maintenance  revenues.  In
addition,  higher  maintenance  revenues  for the 2000  periods  did not require
additional personnel costs related to customer support.

                                       10

<PAGE>

OPERATING EXPENSES

            Sales and Marketing.  Sales and marketing expenses consist primarily
of personnel costs, including sales commissions and incentives, of all personnel
involved  in the sales and  marketing  process,  as well as  related  recruiting
costs,  public relations,  advertising  related costs,  collateral  material and
trade shows. Sales and marketing expenses  increased  $1,142,000,  or 130%, from
$878,000  in the third  quarter of 1999 to  $2,020,000  in the third  quarter of
2000.  For the  first  nine  months,  sales  and  marketing  expenses  increased
$2,318,000,  or 85%,  from  $2,728,000  in 1999 to  $5,046,000  in  2000.  These
increases in the 2000 periods were primarily due to personnel  related costs and
marketing and sales costs of IQO ($712,000 and $1,445,000 for the three and nine
month periods ended in 2000,  respectively)  and a general increase in marketing
expenses of the Company.  The Company believes its sales and marketing  expenses
will increase in absolute dollars as the Company continues to increase promotion
and other marketing expenses.

            Research and Development.  Research and development expenses consist
primarily of salaries and other personnel  related  expenses,  recruiting  costs
associated  with  the  hiring  of  additional  software  engineers  and  quality
assurance personnel, consultant costs and depreciation of development equipment.
Research and development  expenses increased $186,000,  or 37%, from $508,000 in
the third  quarter of 1999 to  $694,000  in the third  quarter of 2000.  For the
first nine months, research and development expenses increased $169,000, or 10%,
from  $1,747,000  in 1999 to  $1,916,000  in 2000.  These  increases in the 2000
periods were  primarily  due to increased  personnel  related  costs of IQO. The
Company  believes a  significant  level of investment  for product  research and
development  is required to remain  competitive  and,  accordingly,  the Company
anticipates it will continue to devote substantial resources to product research
and development  (including  those of IQO) and that these costs will increase in
absolute dollars. To date, all research and development costs have been expensed
as incurred.

            General  and  Administrative.  General and  administrative  expenses
consist primarily of personnel costs for finance and accounting, human resources
and general management, as well as insurance and professional expenses.  General
and  administrative  expenses  increased  $54,000,  or 17%, from $326,000 in the
third  quarter of 1999 to $380,000 in the third  quarter of 2000.  For the first
nine months,  general and administrative  expenses increased  $299,000,  or 29%,
from  $1,019,000  in 1999 to  $1,318,000  in 2000.  These  increases in the 2000
periods were  primarily  due to higher legal and  professional  expenses,  costs
relating to IQO and higher bad debt  expense,  offset in part by a reduction  in
personnel  related costs.  The Company  believes its general and  administrative
expenses (including those of IQO) will increase in absolute dollars.

INTEREST INCOME AND INTEREST EXPENSE

            Interest income  represents  income earned on the Company's cash and
cash  equivalents.  Interest income increased  $96,000 from $14,000 in the third
quarter of 1999 to  $110,000  in the third  quarter of 2000.  For the first nine
months,  interest income increased  $270,000 from $25,000 in 1999 to $295,000 in
2000.  These  increases in the 2000 periods were primarily due to a higher level
of cash and cash  equivalents  on deposit during 2000 as a result of the closing
of  the  IQO  Private  Placement  in  April  2000.


                                       11

<PAGE>

            Interest expense generally  represents interest on capital equipment
leases.  Interest  expense  decreased $7,000 from $8,000 in the third quarter of
1999 to $1,000 in the third quarter of 2000. For the first nine months, interest
expense  decreased  $24,000  from  $35,000  in 1999 to  $11,000  in 2000.  These
decreases in the 2000 periods were primarily due to a lower outstanding  balance
on capital lease obligations.

PROVISION FOR INCOME TAXES

            The Company  accounts for income taxes in accordance  with Statement
of Financial  Accounting  Standards No. 109,  "Accounting for Income Taxes." The
Company incurred net operating losses in 1999 and 1998 and consequently  paid no
federal or state  income  taxes.  At  December  31,  1999,  the  Company had net
operating  losses and  research and  experimental  tax credit  carryforwards  of
$37,705,000  and  $259,000,  respectively,  available to offset  future  federal
taxable income and tax. These net operating loss carryforwards expire at various
dates through 2019.  Although the  determination  of whether an ownership change
has occurred is subject to factual and legal uncertainties, the Company believes
that an ownership change occurred upon the completion of previous financings and
such "ownership  change" will materially limit the Company's  ability to utilize
its NOL carryforward.  Moreover,  while such loss carryforwards are available to
offset  future  taxable  income of the  Company,  the Company does not expect to
generate sufficient taxable income so as to utilize all or a substantial portion
of such loss carryforwards prior to their expiration.

LIQUIDITY AND CAPITAL RESOURCES

            Since  January  1,  1999,  the  Company  has   consummated   several
financings to fund operations as follows:

               (a) In April 2000, IQO received $6,534,993 in net proceeds from a
private  placement  of  Series A  Preferred  Stock  and  Common  Stock  Purchase
Warrants. See Note 5 of Notes to Condensed Consolidated Financial Statements.

               (b)  Between  June and August  1999,  the  Company  received  net
proceeds of $4,089,791  from a private  placement of  securities  that have been
converted or exercised into an aggregate of 3,239,169 shares of Common Stock.

               (c) Between October 1998 and February 1999, the Company  received
net proceeds of $3,995,000  (of which  $1,397,004  was received after January 1,
1999) from two private  placements  of  securities  that have been  converted or
exercised into an aggregate of 4,834,103 shares of Common Stock.

            During the year ended  December 31,  1999,  the exercise of Warrants
granted  in the  private  placements  noted  in (b) and (c)  above  resulted  in
proceeds to the Company of  $5,213,908.  In January  2000,  the  exercise of the
remaining outstanding Warrants from such private placements resulted in proceeds
to the Company of $1,456,250.

                                       12

<PAGE>

            As of September  30, 2000,  the Company had  $5,744,804  in cash and
cash  equivalents  and working  capital of $5,927,113.  The Company has incurred
operating  losses  since  inception,  has  incurred  negative  cash  flows  from
operating activities and had an accumulated deficit as of September 30, 2000 and
December 31, 1999 of $48,091,411 and $41,338,047, respectively.

            Net cash used in operating  activities was $5,956,000 and $4,721,000
for the nine-month  periods ended in 2000 and 1999,  respectively.  For the nine
months ended  September  30, 2000,  net cash used in  operating  activities  was
primarily  attributable  to  a  net  loss  of  $6,753,000,   less  depreciation,
amortization and consulting option expenses of $778,000. For 1999, net cash used
in operating  activities was primarily  attributable to a net loss of $4,443,000
and  an  increase  in  accounts  receivable  of  $616,000,   less  depreciation,
amortization  and consulting  option  expense of $700,000.  Net cash provided by
financing  activities was  $7,948,000 and $5,776,000 for the nine-month  periods
ended in 2000 and 1999, respectively, primarily as a result of proceeds from the
IQO Private  Placement  and from the  exercise  of Warrants  during 2000 and the
collection of stock subscription receivables,  exercise of Warrants and the sale
of convertible  securities during 1999. It is anticipated that the cash and cash
equivalent  balance of IQO at September  30, 2000 will be  sufficient to satisfy
its cash flow requirements for at least the next 12 months.  QueryObject Systems
Corporation  anticipates that its cash and cash equivalent  balance at September
30,  2000 will be  insufficient  to satisfy  its cash flow  requirements  beyond
December 2000. The Company is seeking to sell  additional  equity or convertible
debt  securities,  however,  there can be no assurance that the Company would be
successful  in  raising  additional  funds.  The sale of  additional  equity  or
convertible debt securities would result in additional dilution to the Company's
stockholders.

            The  Company  does  not  currently  have a  line  of  credit  with a
commercial bank. As of September 30, 2000, the Company's  principal  commitments
consisted of  obligations  under  operating  and capital  leases and  employment
agreements.  At September  30, 2000,  the Company had  approximately  $25,000 in
outstanding  borrowings  under capital  leases,  which are payable through 2001.
Pursuant to employment  agreements with executive officers of the Company, as of
September 30, 2000,  the Company's  remaining  obligation is to pay $107,500 and
$430,000  in  salaries  for  the  years  ended   December  31,  2000  and  2001,
respectively.  Subsequent  to September  30, 2000,  the Company  entered into an
employment  agreement with a new President which will require it to pay $200,000
in salary for a one year period.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

            The Company operates in a rapidly changing environment that involves
a number of risks, some of which are beyond the Company's control. The following
discussion highlights the most material of the risks.

WE NEED FURTHER FINANCING TO CONTINUE OUR OPERATIONS.

            We have  had a  limited  operating  history  as a  software  product
company,  have not made  significant  sales of our products and our revenues are
difficult to predict. Our total revenues for the nine months ended September 30,
2000 and for the year ended December 31, 1999 were  $1,398,672  and  $1,774,109,
respectively. Given our continued operating losses, our cash and

                                       13

<PAGE>

cash  equivalent   balance  will  be  insufficient  to  satisfy  our  cash  flow
requirements  beyond  December  2000 and we will need  additional  financing  to
continue  operations.  We are seeking to sell  additional  equity or convertible
debt securities, however, we are unable to predict whether we will be successful
in  raising   additional   funds.   We  have  no   commitments,   agreements  or
understandings  regarding  additional  financings and we may be unable to obtain
additional financing on satisfactory terms or at all.

WE HAVE HAD A HISTORY OF OPERATING  LOSSES AND PROJECT FUTURE LOSSES;  THEREFORE
WE HAVE DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

            At September 30, 2000, our accumulated deficit was $48,091,411.  For
the nine months ended September 30, 2000 and for the fiscal years ended December
31,  1999 and 1998,  we  incurred  net  losses  of  $6,753,364,  $5,925,591  and
$7,294,032,  respectively.  We have  incurred  a net  loss  in each  year of our
existence,  and have financed our operations  primarily  through sales of equity
and debt securities.  Our expense levels are high and our revenues are difficult
to predict. The independent  accountants' report on our financial statements for
the year  ended  December  31,  1999  states  that  our  recurring  losses  from
operations  and negative cash flow from operating  activities  raise doubt about
our ability to continue as a going concern.

            We expect to incur net losses  for the  foreseeable  future.  We may
never achieve or sustain significant revenues or profitability on a quarterly or
annual  basis in the future.  Our future  operating  results will depend on many
factors, including:

            o    product demand
            o    product and price competition in our industry
            o    our   success  in   expanding   our  direct   sales  force  and
                 establishing indirect channel partners
            o    our ability to develop and market products and control costs
            o    the  percentage  of our revenues  that is derived from indirect
                 channel partners

OUR  REVENUES  DEPEND  ON  SALES  OF  QUERYOBJECT   SYSTEM  AND  THE  SUCCESSFUL
DEVELOPMENT OF THE IQO SERVICE OFFERING.  WE ARE UNCERTAIN WHETHER THERE WILL BE
BROAD MARKET ACCEPTANCE OF THESE PRODUCTS.

            Substantially  all of our  revenues for the  foreseeable  future are
expected to be derived from sales of  QueryObject  System and from IQO services.
Through  September  30,  2000,  we had  software  product  revenue  from only 45
QueryObject  System  installations,  including  those sold  pursuant to reseller
agreements  for the resellers' own use. Our future  financial  performance  will
depend upon the successful  introduction and customer  acceptance of QueryObject
System and the  development of new and enhanced  versions of the product.  If we
fail to  achieve  broad  market  acceptance  of  QueryObject  System  or fail to
successfully   develop  the  IQO  service  offering  and  achieve  broad  market
acceptance,  it would have a material adverse effect on our business,  operating
results and financial condition.

                                       14

<PAGE>

WE ARE  SEEKING TO DEVELOP  ADDITIONAL  STRATEGIC  RELATIONSHIPS  WITH  INDIRECT
CHANNEL  PARTNERS TO INCREASE SALES,  BUT WE MAY BE UNABLE TO ATTRACT  EFFECTIVE
PARTNERS AND WE WILL HAVE LOWER GROSS MARGINS FOR SALES THROUGH INDIRECT CHANNEL
PARTNERS.

            As part of our  sales  and  marketing  efforts,  we are  seeking  to
develop additional strategic  relationships with indirect channel partners, such
as original equipment  manufacturers and value-added resellers,  to increase the
number of our customers.  We currently are investing,  and intend to continue to
invest,  significant resources to develop indirect channel partners. Our results
of operations  will be adversely  affected if we are unable to attract  indirect
channel partners to market our products  effectively and provide timely and cost
effective customer support and service. If we successfully sell products through
these sales channels,  the lower unit prices we expect to receive for such sales
will result in our gross margins being lower than if we had sold those  products
through our direct sales force.

WE ARE  DEPENDENT  ON A FEW  SIGNIFICANT  CUSTOMERS  AND THE  LOSS  OF A  SINGLE
CUSTOMER COULD ADVERSELY EFFECT OUR BUSINESS.

            For the nine  months  ended  September  30, 2000 and the fiscal year
ended December 31, 1999,  four customers  accounted for 60% and 72% of our total
revenues,  respectively.  We are unsure if we will  realize  significant  future
revenues from any of these customers.  We also expect for the foreseeable future
a relatively  small number of customers and value added  resellers  will account
for a  significant  percentage  of our  revenues.  The loss of any such customer
would have a material  adverse  effect on our  operating  results and  financial
condition.

WE ARE DEPENDENT ON A FEW KEY PERSONNEL AND WE NEED TO ATTRACT AND RETAIN HIGHLY
QUALIFIED TECHNICAL, SALES, MARKETING, DEVELOPMENT AND MANAGEMENT PERSONNEL.

            Our  future  performance   depends  in  significant  part  upon  the
continued service of key technical,  sales and senior management personnel.  The
loss of the services of one or more of our key employees, in particular,  Robert
Thompson, our Chief Executive Officer,  Joseph M. Valley, Jr., our new President
and Chief  Operating  Officer and Daniel M. Pess, our Chief  Financial  Officer,
could have a material  adverse  effect on our  business,  operating  results and
financial  condition.  We have  employment  agreements with Mr. Thompson and Mr.
Pess that expire in December  2001 and an employment  agreement  with Mr. Valley
that expires November 2001.

            Our  future  success  also  depends  on our  continuing  ability  to
attract,  train  and  retain  highly  qualified  technical,   sales,  marketing,
development and managerial personnel. Competition for such personnel is intense,
and we may be unable to retain key technical,  sales, development and managerial
employees or attract,  assimilate  or retain other highly  qualified  technical,
sales,  development and managerial  personnel in the future. If we are unable to
hire such  personnel on a timely  basis,  our  business,  operating  results and
financial condition could be materially adversely affected.

                                       15

<PAGE>

WE  LACK  PROPRIETARY  TECHNOLOGY  PROTECTION  OF  OUR  PRODUCTS  AND  MAY  RISK
INFRINGEMENT UPON TECHNOLOGY DEVELOPED BY OTHERS.

            We rely primarily on a combination of trade secrets, confidentiality
agreements and contractual provisions to protect our proprietary technology.  We
license  rather  than sell our  software  and  require  licensees  to enter into
license agreements that impose certain  restrictions on their ability to utilize
the software.  In addition,  we seek to avoid  disclosure of our trade  secrets,
including  but not  limited  to  requiring  those  persons  with  access  to our
proprietary  information to execute  confidentiality  agreements and restricting
access to our source code. These steps afford only limited protection.  While we
have applied for a patent for our Internet streaming  technology,  we are unable
to predict  whether we will receive such patent and we have no other  patents or
patent  applications  pending.  Despite our  efforts to protect our  proprietary
rights,  unauthorized  parties  may attempt to copy  aspects of our  products or
obtain and use information that we regard as proprietary.  Policing unauthorized
use of our products may be difficult and costly,  and software piracy may become
a persistent  problem.  In addition,  the laws of some foreign  countries do not
protect our  proprietary  rights to as great an extent as the laws of the United
States.  We are  unable to  predict  whether we have  adequately  protected  our
proprietary  rights  or if  competitors  will  independently  develop  the  same
technology.

            From time to time,  third parties may assert  patent,  copyright and
other  intellectual  property  claims  against  us. If we are  unable to license
protected  technology  that may be used in our products,  we could be prohibited
from manufacturing and marketing such products.  We also could incur substantial
costs to redesign our  products,  to defend any legal action taken against us or
to pay  damages  to any  infringed  party.  Litigation,  which  could  result in
substantial cost to and diversion of our resources,  may be necessary to enforce
our  other  intellectual  property  rights  or  to  defend  us  against  claimed
infringement of the rights of others.

WE INTEND TO EXPAND OUR  INTERNATIONAL  SALES,  BUT THERE ARE SUBSTANTIAL  RISKS
INVOLVED,  INCLUDING EFFECTIVELY  ESTABLISHING ADDITIONAL FOREIGN OPERATIONS AND
FOREIGN REGULATORY CONCERNS.

            Our international sales for the nine months ended September 30, 2000
and for fiscal year ended December 31, 1999, were  approximately  21% and 49% of
our total revenue,  respectively. We may expand our international operations and
enter  additional   international   markets,  which  would  require  significant
management  attention and financial  resources  and could  adversely  affect our
business,  operating  results or financial  condition.  To expand  international
sales  successfully,  we  may  establish  additional  foreign  operations,  hire
additional  personnel  and  recruit  additional   international   resellers  and
distributors.  If we are unable to do so in a timely manner, our growth, if any,
in international sales may be limited,  and our business,  operating results and
financial  condition  could be  adversely  affected.  Our revenues for the three
months  ended  September  30,  2000  declined  32% from the three  months  ended
September  30, 1999  primarily  due to a decrease  in  international  sales.  We
anticipate  that expanded  international  sales,  if any, will be denominated in
U.S.  dollars.  An increase in the value of the U.S.  dollar relative to foreign
currencies  could make our products more expensive and,  therefore,  potentially
less  competitive  in those  markets.  Additional  risks  inherent in our future
international business activities generally include:

                                       16

<PAGE>

            o    unexpected changes in regulatory requirements
            o    tariffs and other trade barriers
            o    costs of localizing products for foreign countries
            o    longer accounts receivable payment cycles

THE MARKET PRICE OF OUR COMMON STOCK IS VOLATILE.

            The market price of our common  stock has in the past been,  and may
in the future continue to be,  volatile.  For instance,  between January 1, 1999
and September 30, 2000, the closing price of our common stock has ranged between
$1.41 and $10.94.  A variety of events may cause the market  price of our common
stock to fluctuate significantly, including:

            o    quarter to quarter variations in operating results
            o    adverse news announcements
            o    the introduction of new products
            o    market conditions in the industry

            In  addition,  the  stock  market in  recent  years has  experienced
significant price and volume  fluctuations  that have particularly  affected the
market prices of equity  securities of many  companies that service the software
industry and that often have been unrelated to the operating performance of such
companies.  These  market  fluctuations  may  adversely  affect the price of our
common stock.

WE HAVE A SIGNIFICANT  AMOUNT OF AUTHORIZED BUT UNISSUED  PREFERRED STOCK, WHICH
MAY AFFECT THE LIKELIHOOD OF A CHANGE OF CONTROL IN OUR COMPANY.

            As of October 31, 2000,  our Board of Directors  has the  authority,
without  further  action  by the  stockholders,  to issue  4,000,000  shares  of
preferred   stock  on  such  terms  and  with  such  rights,   preferences   and
designations,  including, without limitation restricting dividends on our common
stock,  dilution  of the voting  power of our  common  stock and  impairing  the
liquidation  rights  of the  holders  of our  common  stock,  as the  Board  may
determine  without  any vote of the  stockholders.  Issuance  of such  preferred
stock, depending upon the rights,  preferences and designations thereof may have
the  effect  of  delaying,  deterring  or  preventing  a change in  control.  In
addition, certain "anti-takeover" provisions of the Delaware General Corporation
Law,  among  other  things,  may  restrict  the ability of our  stockholders  to
authorize a merger, business combination or change of control.

WE CAN GIVE NO ASSURANCES THAT OUR FORWARD LOOKING STATEMENTS WILL BE CORRECT.

            Certain forward-looking  statements,  including statements regarding
our expected financial  position,  business and financing plans are contained in
this  document  or are  incorporated  in  documents  annexed as exhibits to this
document.  These  forward-looking  statements  reflect our views with respect to
future events and financial performance. The words, "believe," "expect," "plans"
and "anticipate" and similar expressions  identify  forward-looking  statements.
Although we believe  that the  expectations  reflected  in such  forward-looking

                                       17

<PAGE>

statements are reasonable,  we can give no assurance that such expectations will
prove to have been correct. Important factors that could cause actual results to
differ materially from such  expectations are disclosed in this prospectus.  All
subsequent written and oral  forward-looking  statements  attributable to us are
expressly qualified in their entirety by the cautionary  statements.  We caution
readers not to place undue reliance on these forward-looking  statements,  which
speak only as of their dates.  We undertake no obligations to publicly update or
revise any forward-looking  statements,  whether as a result of new information,
future events or otherwise.

PART II.          OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

            On September 14, 2000, the Company's common stock commenced  trading
on the American Stock Exchange.

            On October 23, 2000, Joseph M. Valley,  Jr. became the President and
Chief Operating Officer of the Company.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

            (a)   Exhibits

                  Statement of Computation of Net Loss Per Share (Exhibit 11.1)
                  Financial Data Schedule (Exhibit 27)
                  Employment  Agreement,  effective  October  23,  2000,  by and
                  between  Joseph  M.  Valley,   Jr.  and  QueryObject   Systems
                  Corporation (Exhibit 99.1)

            (b)   Reports on Form 8-K

                  No  Reports on Form 8-K were filed  during the  quarter  ended
                  September 30, 2000.



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<PAGE>


                                   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.



Dated:     November 13, 2000        QUERYOBJECT SYSTEMS CORPORATION



                               By:  /s/ Daniel M. Pess
                                    -------------------------------------------
                                    Executive Vice President, Chief Financial
                                    Officer (Principal Financial Officer and
                                    Principal Accounting Officer)






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