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, 2009
  or
 
 oTRANSITION 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 x     No  ̈
  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    
Yes o     No o
 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 o
  There were 42,861,328 shares of the Registrant’s Common Stock, par value $.003, outstanding on September 10, 2009.
  Table of Contents


QUERYOBJECT SYSTEMS CORPORATION
  FORM 10-Q
  Quarter ended June 30, 2009
  TABLEOF CONTENTS
  PART I
PageFINANCIAL INFORMATIONItem 1.
Condensed Financial Statements:Notes to Condensed Financial Statements
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
9Item 3.
Quantitative and Qualitative Disclosures About Market Risk
10Item 4T.
Controls and Procedures
10PART IIOTHER INFORMATIONItem 1A.
Risk Factors
11Item 3.
Default Upon Senior Securities
11Item 5.
Other Information
11Item 6.
Exhibits
11Signature

12Exhibit Index

13
  i
 Table of Contents
  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.
  ii
 Table of Contents
  PART 1.  FINANCIAL INFORMATION
  
  Item1.
Financial Statements and Supplementary Data.
  INDEX TO UNAUDITED FINANCIAL STATEMENTS
  PageBalance Sheet as of June 30, 2009 (Unaudited) and December 31, 2008 (Audited)
2Statements of Operations for the three and six  months ended June 30, 2009 and June 30, 2008 (Unaudited)
3Statements of Cash Flows for the six months ended June 30, 2009 and June 30, 2008 (Unaudited)
4Notes to the Condensed Financial Statements (Unaudited)
5
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  QueryObject Systems Corporation
  Condensed Balance Sheets
  AssetsJune 30, 2009


December 31, 2008Current Assets

(Unaudited)


(Audited)Cash

$
3,767


$
11,009Total Assets

$
3,767


$
11,009Liabilities and Stockholders’ DeficitCurrent LiabilitiesAccounts payable and accrued expenses

$
80,776


$
33,679Convertible notes payable, less $0 and $24,700 unamortized discount at June 30, 2009 and December 31, 2008, respectively


160,000



135,300Total Current Liabilities


240,776



168,979Stockholders’ DeficitPreferred stock, $.001 par value; 4,000,000 share authorized none issued and outstanding


-



-Common stock, $.003 par value; 250,000,000 shares Common stock, $.003 par value; 250,000,000 shares authorized; 42,861,328 shares issued and outstanding


128,584



128,584Additional paid-in-capital


59,568,187



59,568,187Accumulated deficit


(59,933,780
)


(59,854,741
)Total Stockholders’ Deficit


(237,009
)


(157,970
)Total Liabilities and Stockholders’ Deficit

$
3,767


$
11,009


See notes to unaudited financial statements




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QueryObject Systems Corporation




Condensed Statements of Operations




(Unaudited)For the Three Months ended June 30,


For the Six Months ended June 30,2009


2008


2009


2008Revenues

$
-


$
-


$
-


$
-Cost and ExpensesGeneral and administrative


21,407



55,485



49,157



68,493Interest expense


12,295



16,987



29,890



28,551Loss before other income


33,702



72,472



79,047



97,044Interest income


3



93



8



177Net loss

$
(33,699
)

$
(72,379
)

$
(79,039
)

$
(96,867
)Net Loss per Common Share - Basic and Diluted

$
(0.00
)

$
(0.00
)

$
(0.00
)

$
(0.00
)Weighted Average Number of Shares - Basic and Diluted


42,861,328



40,283,629



42,861,328



40,070,007





See notes to unaudited financial statements




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QueryObject Systems Corporation




Condensed Statements of Cash Flows




(Unaudited)For the Six Months ended June 30,2009


2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(79,039
)

$
(96,867
)Adjustments to reconcile net loss to net cash used in operating activities:Amortization of beneficial conversion feature


24,700



23,934Shares issued for interest


-



9,022Change in assets and liabilities:Accounts payable and accrued expenses


47,097



(31,233
)NET CASH USED IN OPERATING ACTIVITIES


(7,242
)


(95,144
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from issuance of convertible notes


-



60,000NET CASH FROM FINANCING ACTIVITIES


-



60,000DECREASE IN CASH


(7,242
)


(35,144
)CASH - BEGINNING OF PERIOD


11,009



51,066CASH - END OF PERIOD

$
3,767


$
15,922SUPPLEMENTAL NONCASH FINANCING ACTIVITIES:Beneficial conversion feature

$
-


$
60,000





See notes to unaudited financial statements




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QueryObject Systems Corporation
 
 Notesto 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.  The company discontinued these operations in December 12, 2001 and since then has been inactive.




Summary of significant accounting policies




Basis of Presentation


The accompanying financial statements have been prepared, in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).  The accompanying financial statements include the accounts
of the Company.  The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods.  Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such
rules and regulations.  These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company’s Annual report on Form 10-K filed on April 15, 2009.  The results of the six months ended June 30, 2009 are not necessarily indicative of the results to be expected for the full year ending December 31, 2009.




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 anti-dilutive 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, 2009, the Company has outstanding Senior Convertible Notes (see Note 3) 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.




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QueryObject Systems Corporation
 
 Notes to the Unaudited Financial Statements





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.




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




In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”.  The new standard is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date, but before the issuance of financial statements. Specifically,
the standard sets forth: 1) the period after the balance sheet date during which management should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, 2) the circumstances that an entity should recognize events or transactions that occur after the balance sheet date, and 3) the disclosures that an entity should make about events or transactions that occur after the balance sheet date.
 
 In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- a replacement of FASB Statement No. 162”.  The new standard sets forth that the FASB
Accounting Standards Codification(Codification) will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied to nongovernmental entities.  Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also a source for authoritative GAAP for SEC registrants.  When the statement is effective, the Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative.




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 3), 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’.




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QueryObject Systems Corporation
 
 Notes to the Unaudited Financial Statements





3.           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 Company did
not repay any of the 2007 Notes on or before May 19, 2009 and is in the process of negotiating an extension to the due date of the 2007 Notes.




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 $0 and $18,634 was included as interest expense for the six months ended June 30, 2009 and 2008, respectively.




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.  The Company did not repay any of the 2008 Notes on or before May 19, 2009 and is in the process of negotiating an extension
to the due date of the 2008 Notes.




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 $24,700 and $5,300 was included as interest expense for the six months ended June 30, 2009 and 2008, respectively.




4.           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, 2009, 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 thereof.  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.




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QueryObject Systems Corporation
 
 Notes to the Unaudited Financial Statements





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.




5. Subsequent Events
 
 The Company has evaluated subsequent events through September 11, 2009 and has determined that there were no subsequent events to recognize or disclose in these financial statements




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ITEM2.
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.




Plan of Operations




The Company has not realized any revenues from operations, and its plan of operation for the next twelve months shall be to continue its efforts to locate suitable acquisition candidates.  The Company can provide no assurance that it can continue to satisfy its cash requirements for at least the next twelve months.  It
is not anticipated at present that it will experience any change in its current number of employees until such time as it may consummate a business combination.




Liquidity and Capital Resources




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.  The
Company entered into an amendment to the 2007 notes extending the expiration date thereof to May 19, 2009.  The Company did not repay any of the 2007 Notes on or before May 19, 2009 and is in the process of negotiating an extension to the due date of the 2007 Notes.




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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.  The Company did not repay any of the 2008 Notes on or before May 19, 2009 and is in the process of negotiating an extension to the due date of the 2008 Notes.




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.




ITEM3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Not applicable, as the Company is a smaller reporting company




ITEM4T.
CONTROLS AND PROCEDURES




Evaluation of Disclosure Controls And Procedures




The Company carried out an evaluation, under the supervision and with the participation of the Company’s President and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13a-15(e) and 15d-15(e) as of the end of the
period covered by this report.  Based upon that evaluation, the President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s periodic reports.




Management’s Annual Report on Internal Control Over Financial Reporting




The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rule 13a-15(f).  Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting
and testing of the operational effectiveness of its internal control over financial reporting.  There are inherent limitations in the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls.  Accordingly, even effective internal controls over financial reporting can provide only reasonable assurance with respect to financial statement preparation.  Further, because of changes in conditions, the effectiveness
of internal control may vary over time.  Based on the evaluation under the framework in “Internal Control—Integrated Framework,” the Company’s management concluded that the Company’s internal control over financial reporting was effective at the reasonable assurance level as of June 30, 2009.




Changes in Internal Control Over Financial Reporting




The Company has made no significant changes in its internal controls over financial reporting, or in other factors that could significantly affect these controls during the six months ended June 30, 2009 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.




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PART II.  OTHER INFORMATION




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-K filed for the fiscal year ended December 31, 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.




As of June 30, 2009, there have been no material changes to the risk factors disclosed in the Form 10-K, except we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.




ITEM3.
DEFAULTS UPON SENIOR SECURITIES




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.




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 Company did
not repay any of the 2007 Notes on or before May 19, 2009 and is in the process of negotiating an extension to the due date of the 2007 Notes.




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 were due on May 19, 2009.  The Company did not repay any of the 2008 Notes on or before May 19, 2009 and is in the process
of negotiating an extension to the due date of the 2008 Notes.




In the aggregate on the 2007 Notes and 2008 Notes, the Company is in default of an aggregate principal amount of $160,000 and as of the date hereof are in arrearage on $10,403.11 in aggregated accrued interest.




ITEM5.
OTHER INFORMATION




See the  disclosure provided in Part II. Item 3. above concerning the Company’s default on the 2007 Notes and 2008 Notes.




ITEM6.
EXHIBITS




An index of exhibits filed as part of this Report is on page 13.




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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.




Dated:  September 10, 2009
QueryObject Systems CorporationBy:
/s/ Daniel PessName:
Daniel PessTitle:
President




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EXHIBITINDEX




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




13