<PAGE>   1
================================================================================

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the quarterly period ended October 31, 1999.


[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the transition period from ______ to ______.


                         Commission File Number: 0-25185


                      MOMENTUM BUSINESS APPLICATIONS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                         <C>
              DELAWARE                                  94-3313175
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
   Incorporation or organization)


 4301 Hacienda Drive, Suite 410, Pleasanton, CA            94588
   (Address of principal executive officers)             (Zip Code)
</TABLE>

               Registrant's telephone number, including area code:
                                 (925) 469-6621


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

<TABLE>
<CAPTION>
                 CLASS                         OUTSTANDING AT NOVEMBER 30, 1999
                 -----                         --------------------------------
<S>                                            <C>
 Class A Common Stock, par value $.001                   4,693,826
 Class B Common Stock, par value $.001                       1,000
</TABLE>

================================================================================



<PAGE>   2

                      MOMENTUM BUSINESS APPLICATIONS, INC.
                          (a development stage company)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE NO.
                                                                                                             --------
<S>                                                                                                          <C>
PART I     FINANCIAL INFORMATION

           ITEM 1 -- Financial Statements (unaudited)

           Condensed Balance Sheets                                                                               3
           Condensed Statements of Operations                                                                     4
           Condensed Statements of Cash Flows                                                                     5
           Notes to Condensed Financial Statements                                                                6

           ITEM 2 -- Management's Discussion and Analysis of Financial Condition and Results of Operations        9

PART II    OTHER INFORMATION

           ITEM 1 --  Legal Proceedings                                                                          12
           ITEM 2 --  Changes in Securities and Use of Proceeds                                                  12
           ITEM 3 --  Defaults upon Senior Securities                                                            12
           ITEM 4 --  Submission of Matters to a Vote of Security Holders                                        12
           ITEM 5 --  Other Information                                                                          12
           ITEM 6 --  Exhibits and Reports on Form 8-K                                                           12

SIGNATURES                                                                                                       12
</TABLE>



                                        2
<PAGE>   3

                         PART 1 -- FINANCIAL INFORMATION

                         ITEM 1 -- FINANCIAL STATEMENTS

                      MOMENTUM BUSINESS APPLICATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 ---------------


                            CONDENSED BALANCE SHEETS
                                   (UNAUDITED)
               (IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                             OCTOBER 31,       APRIL 30,
                                                                1999             1999
                                                             -----------      ----------
<S>                                                           <C>             <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents ............................      $ 249,552       $ 253,867
  Deferred income taxes ................................             --              35
                                                              ---------       ---------
          Total current assets .........................        249,552         253,902
Non-current deferred income taxes ......................             --              29
                                                              ---------       ---------
                                                              $ 249,552       $ 253,931
                                                              =========       =========

                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Payable to PeopleSoft ................................      $   7,939       $   2,812
  Accounts payable .....................................             34              18
  Accrued liabilities ..................................             19              71
  Accrued compensation and related expenses ............             37              34
  Income taxes payable .................................             --             492
                                                              ---------       ---------
          Total current liabilities ....................          8,029           3,427
Stockholders' equity:
  Class A Common stock, $0.001 par value, 10,000,000
     shares authorized, 4,693,826 issued and outstanding              5               5
  Class B Common stock, $0.001 par value, 1,000 shares
     authorized, issued and outstanding ................             --              --
  Additional paid-in capital ...........................        249,996         249,996
  Retained earnings (deficit) accumulated during the
     development stage .................................         (8,478)            503
                                                              ---------       ---------
                                                                241,523         250,504
                                                              ---------       ---------
                                                              $ 249,552       $ 253,931
                                                              =========       =========
</TABLE>

             See notes to condensed unaudited financial statements.



                                        3
<PAGE>   4

                      MOMENTUM BUSINESS APPLICATIONS, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                                 ---------------


                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                                                          PERIOD FROM
                                                                 THREE MONTHS        SIX MONTHS         NOVEMBER 9, 1998
                                                                     ENDED              ENDED              (INCEPTION)
                                                                OCTOBER 31, 1999   OCTOBER 31, 1999    TO OCTOBER 31, 1999
                                                                ----------------   ----------------    --------------------
<S>                                                                 <C>                 <C>                <C>
Revenues: .................................................          $     --           $     --           $     --

Costs and expenses:
  Product development .....................................             9,635             14,634             17,203
  General and administrative ..............................               347                690              1,098
                                                                     --------           --------           --------
          Total costs and expenses ........................             9,982             15,324             18,301
                                                                     --------           --------           --------
Operating loss ............................................            (9,982)           (15,324)           (18,301)
Interest income ...........................................             3,178              6,170             10,078
                                                                     --------           --------           --------
Income (loss) before income taxes .........................            (6,804)            (9,154)            (8,223)
Provision for (benefit from)income taxes ..................                --               (173)               255
                                                                     --------           --------           --------
Net loss ..................................................          $ (6,804)          $ (8,981)          $ (8,478)
                                                                     ========           ========           ========
Basic and diluted loss per share ..........................          $  (1.45)          $  (1.91)          $  (2.11)
                                                                     ========           ========           ========
Shares used in basic and diluted loss per share computation             4,695              4,695              4,023
                                                                     ========           ========           ========
</TABLE>


             See notes to condensed unaudited financial statements.



                                        4
<PAGE>   5

                      MOMENTUM BUSINESS APPLICATIONS, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                                 ---------------


                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                             PERIOD FROM
                                                           SIX MONTHS      NOVEMBER 9, 1998
                                                             ENDED            (INCEPTION)
                                                        OCTOBER 31, 1999  TO OCTOBER 31, 1999
                                                        ----------------  -------------------
<S>                                                       <C>                 <C>
OPERATING ACTIVITIES
Net loss .......................................          $  (8,981)          $  (8,478)
Adjustments to reconcile net loss to net cash
used by operating activities:
  Provision for deferred income taxes ..........                 64                  --
  Changes in operating assets and liabilities:
     Payable to PeopleSoft .....................              5,127               7,939
     Accounts payable ..........................                 16                  34
     Accrued liabilities .......................                (52)                 19
     Accrued compensation and related expenses .                  3                  37
     Income taxes payable ......................               (492)                 --
                                                          ---------           ---------
Net cash used by operating activities ..........             (4,315)               (449)

FINANCING ACTIVITIES
Capital contribution by PeopleSoft .............                 --             250,000
Issuance of common stock .......................                 --                   1
                                                          ---------           ---------
Net cash provided by financing activities ......                 --             250,001
                                                          ---------           ---------
Net increase (decrease) in cash and cash
equivalents ....................................             (4,315)            249,552
Cash and cash equivalents at beginning of period            253,867                  --
                                                          ---------           ---------
Cash and cash equivalents at end of period .....          $ 249,552           $ 249,552
                                                          =========           =========
</TABLE>

             See notes to condensed unaudited financial statements.



                                        5
<PAGE>   6

                      MOMENTUM BUSINESS APPLICATIONS, INC.
                NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
                                OCTOBER 31, 1999
                                   (UNAUDITED)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

     Momentum Business Applications, Inc., ("Momentum") was incorporated in
Delaware on November 9, 1998 and commenced operations on January 4, 1999.
Momentum was formed for the purpose of selecting and developing software
application products and commercializing such products, most likely through
licensing to PeopleSoft, Inc., ("PeopleSoft"). Since it commenced operations,
Momentum's principal activities have consisted of recruiting a board of
directors, reviewing individual product development proposals and funding of
approved development projects under its agreements with PeopleSoft, and handling
administrative matters. In accordance with generally accepted accounting
principles, Momentum is considered a development stage company.

     The information at October 31, 1999 and for the quarter ended October 31,
1999 is unaudited, and includes all adjustments (consisting only of normal
recurring adjustments) that the management of Momentum believes necessary for
fair presentation of the results for the period presented. Interim results are
not necessarily indicative of results to be expected for the full year. The
financial statements should be read in conjunction with the audited financial
statements and accompanying notes for the period from November 9, 1998
("inception") to its fiscal year ended April 30, 1999 included in Momentum's
1999 Annual Report on Form 10-K.

Accounting for Revenues and Expenses

     Momentum is presently a development stage company, and therefore does not
currently generate any revenues from operating activities. Subject to the
successful completion of one or more product development projects, Momentum may,
in the future, derive revenues from the sale or license of its products, most
likely through marketing, distribution and sub-licensing by third parties.
Royalty and other product revenue if any, will be recorded as earned. Momentum
expects to incur most of its expenses under its agreements with PeopleSoft.
Development costs paid to PeopleSoft under a software development agreement are
recorded as research and development expenses when incurred. Amounts paid to
PeopleSoft under a services agreement are recorded as administrative expenses
when incurred. (See Note 2 for a description of the agreements between Momentum
and PeopleSoft).

Investment Risk

     Momentum invests excess cash in money markets in financial institutions
with strong credit ratings. These funds typically bear minimal risk and Momentum
has not experienced any losses on its investments due to institutional failure
or bankruptcy.

Use of estimates

     The preparation of financial statements in accordance 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.

Cash equivalents

     Momentum considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents. At October 31, 1999, cash
equivalents ($249.6 million) consisted primarily of taxable investments in money
market funds at two financial institutions. All other cash is held in a bank
demand deposit. All of the Company's cash and cash equivalents at October 31,
1999 are restricted for use under the Development Agreement (See Note 2).

Segment Information

     Effective January 4, 1999, Momentum adopted Statement of Financial
Accounting Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" ("SFAS 131"). SFAS 131 superseded FASB Statement No. 14,
Financial Reporting for Segments of a Business Enterprise. SFAS 131 establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating



                                        6
<PAGE>   7

segments in interim financial reports. SFAS 131 also establishes standards for
related disclosures about products and services, geographic areas, and major
customers.

     Momentum has organized its business in one operating segment, since
Momentum's only business is to engage in selecting and developing software
application products and commercializing such products under its agreements with
PeopleSoft. At October 31, 1999, all of Momentum's interest income was derived
from its investments in the United States.

Comprehensive Income (Loss)

     Effective January 4, 1999, Momentum adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130")
which establishes standards for reporting comprehensive income and its
components. Total comprehensive income (loss) includes net loss plus other
comprehensive income. The adoption of SFAS 130 had no impact on Momentum's
results of operations or financial condition.

Per share information

     Momentum's earnings or loss per share amounts are calculated in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
This method requires calculation of both a basic earnings per share and a
diluted earnings per share. The basic earnings per share excludes the dilutive
effect of common stock equivalents such as stock options and warrants, while the
diluted earnings per share includes such dilutive effects. Momentum had no such
dilutive common stock equivalents as of October 31, 1999 and thus diluted
earnings per share equals basic earnings per share. The loss per share for the
quarter ended October 31, 1999 was ($1.45).

     The loss per share amount for the period from inception through October 31,
1999 has been computed using the weighted average number of common shares
outstanding for the period. Substantially all of Momentum's common stock was
issued on December 31, 1998 and thus was outstanding for only the last ten
months of the period from inception to October 31, 1999. The $250 million
contributed by PeopleSoft was only invested during the last ten months of the
same period. Had the shares been outstanding for the entire period or the cash
invested for the entire period, the resulting loss per share amounts would have
been different from the actual results achieved.

Income Taxes

     Momentum accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". This
statement provides for a liability approach under which deferred income taxes
are provided based upon enacted tax laws and rates applicable to the periods in
which the taxes become payable. Momentum expects to have a net loss for fiscal
year 2000, and thus no taxes were provided for in the period ended October 31,
1999.

Common Stock

     Momentum provides for two classes of common stock, Class A Common Stock and
Class B Common Stock. In December 1998, PeopleSoft declared a stock dividend of
one share of Momentum's Class A Common Stock for every fifty shares of
PeopleSoft stock held as of December 31, 1998, resulting in 4.7 million shares
distributed. The shares of Momentum Common Stock held by PeopleSoft on the
record date were converted into 1,000 shares of Momentum Class B Common Stock.
The holder or holders of the Momentum Class B Common Stock are entitled to vote
separately as a class with respect to any merger or liquidation of Momentum, the
sale, lease, exchange, transfer or other disposition of any substantial asset of
Momentum, and any amendments to the Certificate of Incorporation of Momentum
that would alter the Purchase Option, Momentum's authorized capitalization, or
the provisions of the Certificate of Incorporation governing Momentum's Board of
Directors. Accordingly, PeopleSoft could preclude the holders of the Momentum
Class A Common Stock from taking any of the foregoing actions during such
period. Prior to the exercise of the Purchase Option, the holders of the
Momentum Common B Stock, voting as a separate class, are entitled to elect one
director, and the holder or holders of the Momentum Class A Common Stock are
entitled to elect up to three directors. Upon exercise of the Purchase Option,
PeopleSoft, as the sole holder of the Momentum Class B Common Stock, has the
right to elect all of the Momentum directors and to remove incumbent directors
with or without cause. On all other matters, holders of the Momentum Class A
Common Stock and Momentum Class B Common Stock are entitled to vote together as
a single class. Holders of Momentum Common Stock are allowed one vote for each
share of Momentum Common Stock held by them. Subject to compliance with
securities laws, the Momentum Class B Common Stock is freely transferable.



                                        7
<PAGE>   8

2. ARRANGEMENTS WITH PEOPLESOFT

     In late December 1998, PeopleSoft contributed $250 million in cash to
Momentum. On December 31, 1998, PeopleSoft transferred 4,693,826 shares,
representing all of the outstanding shares, of Momentum Class A Common Stock
(the "Momentum Shares"), to a custodian who distributed the shares to the
holders of PeopleSoft common stock in mid January 1999 (the "Distribution").
Momentum Shares are traded on the Nasdaq National Market under the symbol
"MMTM". PeopleSoft continues to hold all 1,000 shares of the Momentum Class B
Common Stock. In connection with PeopleSoft's contribution to Momentum and the
distribution of Momentum Shares, Momentum and PeopleSoft entered into a number
of agreements, including a Development and License Agreement (the "Development
Agreement"), Marketing and Distribution Agreement and Services Agreement, which
are discussed below.

     Momentum and PeopleSoft have entered into a Development Agreement pursuant
to which PeopleSoft will conduct product development and related activities on
behalf of Momentum under work plans and cost estimates which have been proposed
by PeopleSoft and approved by Momentum. Momentum is required to utilize the cash
initially contributed to Momentum by PeopleSoft plus interest earned thereon,
less administrative expenses and reserves of up to $2 million (the "Available
Funds") to conduct activities under the Development Agreement. It is expected
that the products to be developed under the Development Agreement will include
electronic business applications ("e-commerce"), analytic applications, and
industry specific applications. PeopleSoft has granted to Momentum a perpetual,
worldwide, non-exclusive license to use certain of PeopleSoft's proprietary
technology solely for internal use in conjunction with the Development
Agreement. Development activities performed by PeopleSoft on behalf of Momentum
from inception to October 31, 1999 amount to $17.2 million.

     Under the terms of the Marketing and Distribution Agreement entered into by
Momentum and PeopleSoft, Momentum has granted PeopleSoft an option to acquire a
license to each product developed under the Development Agreement. The license
option for any such Momentum product is exercisable on a world-wide, exclusive
basis at any time from the date Momentum agrees to develop the product until the
earlier of a) thirty days after the product becomes Generally Available (as
defined in the agreements); or b) the expiration of the purchase option. The
license option will expire, to the extent not previously exercised, 30 days
after the expiration of PeopleSoft's option to purchase all of the outstanding
Momentum Shares as described below. If and to the extent the license option is
exercised as to any Momentum product, PeopleSoft will acquire a perpetual,
exclusive license (with the right to sublicense) to develop, make, have made and
use the licensed product, and to sell and have sold the licensed product. Upon
exercising the license option, PeopleSoft will assume responsibility for all
ongoing development and sustaining engineering expenses for the related product.
Under the License Agreement for each licensed product, PeopleSoft will make
payments to Momentum with respect to the licensed product equal to 1% of net
sales of the licensed product by PeopleSoft and its sublicensees, distributors
and marketing partners, plus an additional 0.1% of such net sales for each full
$1 million of Development Costs of the licensed product that have been paid by
Momentum, up to a maximum 6 percent royalty. PeopleSoft has the right to buyout
Momentum's right to receive payments for licensed products in accordance with a
formula set forth in the Marketing and Distribution Agreement.

     Under the terms of the Services Agreement, Momentum will pay PeopleSoft
$100,000 per quarter to provide office facilities, and to perform accounting,
finance, human resources, information systems and legal services on its behalf.
PeopleSoft has charged Momentum $400,000 for such services from inception
through October 31, 1999.

     Pursuant to Momentum's Restated Certificate of Incorporation, PeopleSoft
has the right to purchase all (but not less than all) of the Momentum Shares
(the "Purchase Option"). The Purchase Option will be exercisable by written
notice to Momentum at any time until December 31, 2002, provided that such date
will be extended for successive six month periods if, as of any June 30 or
December 31 beginning with June 30, 2002, Momentum has not paid (or accrued
expenses) for all but $15 million of Available Funds as of such date. In any
event, the Purchase Option will terminate on the 60th day after Momentum
provides PeopleSoft with a statement that, as of the end of any calendar month,
there are less than $2.5 million of Available Funds remaining.

     Except in instances in which Momentum's liabilities exceed its assets, if
the purchase option is exercised, the exercise price will be the greatest of:

     (1)  15 times the sum of (i) the actual worldwide payments made by or due
          from PeopleSoft to Momentum with respect to all Licensed Products and
          Developed Technology for the four calendar quarters immediately
          preceding the quarter in which the Purchase Option is exercised (the
          "Base Period"); plus (ii) such payments as would have been made during
          the Base Period by, or due from, PeopleSoft to Momentum if PeopleSoft
          had not previously exercised its Product Payment Buy-Out Option with
          respect to any Momentum Product (for purposes of the calculations in
          (i) and (ii), payments will be annualized for any product that has not
          been a Licensed Product for all of each of the four calendar quarters
          in the Base Period);

    minus



                                        8
<PAGE>   9

     any amounts previously paid to exercise any Product Payment Buy-Out Option
     for such Momentum Product;

     (2)  the fair market value of six hundred thousand (600,000) shares of
          PeopleSoft Common Stock, adjusted in the event of a stock split or
          dividend, as of the date PeopleSoft exercises its Purchase Option;

     (3)  three hundred million dollars ($300,000,000) plus any additional funds
          contributed to Momentum by PeopleSoft, less the aggregate of all
          amounts paid or incurred to develop the Momentum Products or pursuant
          to the Services Agreement as of the date the Purchase Option is
          exercised; or

     (4)  seventy-five million dollars ($75,000,000).

     In the event Momentum's liabilities (other than liabilities under the
Development Agreement, the Marketing Agreement and the Services Agreement)
exceed Momentum's assets, the Purchase Option Exercise Price described above
will be reduced by the amount such liabilities at the time of exercise are in
excess of Momentum's cash and cash equivalents, and short term and long term
investments. If PeopleSoft exercises the Purchase Option, PeopleSoft will pay
the exercise price in cash.


3. STOCK INCENTIVE PLAN

     Momentum's Stock Incentive Plan (the "Plan") was recently approved at its
Annual Meeting of Stockholders on September 9, 1999. The Compensation Committee
of the Board of Directors administers the Plan under which 225,000 shares have
been reserved for issuance to employees, consultants and directors. The option
exercise price per share may not be less than 100% of the fair market value of
the Common Stock on the grant date and in no event may the exercise price be
less than $12.00 per share. No options were granted to employees, consultants or
directors during the quarter ended October 31, 1999.


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

     The Discussion and Analysis of Financial Condition and Results of
Operations contains descriptions of the Company's expectations regarding future
trends affecting its business. These forward-looking statements and other
forward-looking statements made elsewhere in this document are made in reliance
upon safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The following discussion sets forth certain factors the Company believes
could cause actual results to differ materially from those contemplated by the
forward-looking statements. Forward-looking statements include, but are not
limited to, those items identified with a footnote (1) symbol. The Company
undertakes no obligation to update the information contained herein.

Results of Operations

     Momentum does not expect to earn any royalty revenues prior to its fourth
quarter of fiscal year 2000 when the development of an initial suite of products
is expected to be completed(1). Upon completion of any development activity,
PeopleSoft may elect to exercise an option to license the product and offer it
to the market through its distribution channels. Momentum will earn a royalty
for each product licensed by PeopleSoft or one of its distributors, based on a
sliding royalty rate determined by the amount of development costs incurred.
These royalty rates are contractually determined pursuant to the Marketing and
Distribution Agreement. It is not presently determinable when, if at all,
Momentum will realize material royalty revenues from its development efforts.

     Momentum incurred development expenses of approximately $9.6 million and
$17.2 million for the quarter ended October 31, 1999 and the period from
inception to October 31, 1999, respectively. These expenses are incurred
primarily under the Development Agreement. As Momentum engages PeopleSoft to
perform research and development work, PeopleSoft charges Momentum 110% of its
fully burdened cost of performing such activities. Fully burdened costs include
salary, benefits and overhead allocations, but do not include certain other
costs, such as the human resources costs associated with recruiting development
personnel and other indirect costs and expenses of establishing and maintaining
a development environment. Momentum also incurs certain direct costs associated
with developing its products that may include payments to other third parties
for development, royalties, or costs associated with acquiring or investing in
complementary companies, products or technology. Development expenses are
expected to significantly

----------------------------------
(1) Forward-looking statement



                                        9
<PAGE>   10

increase in fiscal year 2000 as development efforts are stepped up on current
projects and as development of new Momentum products commence.

     General and administrative expenses for the quarter ended October 31, 1999
were $0.3 million and were $1.1 million for the period from inception through
October 31, 1999. Under the Services Agreement, PeopleSoft provides Momentum
certain administrative services including accounting, finance, human resources
and legal services, and maintains office facilities for Momentum. Momentum pays
PeopleSoft a fee of $100,000 per quarter for such services. The amount of this
fee was determined on PeopleSoft's internal projections of its incremental costs
it will incur to provide these services to Momentum. Momentum is required to
separately pay for direct costs such as professional services, insurance, taxes,
director and officer compensation, and regulatory fees.

     Because of the restrictions on the use of Available Funds under the
Development Agreement, Momentum is not expected, for the indefinite future, to
spend any funds on sales, marketing, or distribution activities. As such, it
will not be able to effectively establish a brand, corporate image or identity
in the overall marketplace. Such anonymity may make it more difficult for
Momentum to pursue alternate exit strategies, should PeopleSoft not exercise its
purchase option in the future.

     Interest and investment income earned on invested funds were $3.2 million
for the quarter ended October 31, 1999 and $10.1 million for the period from
Momentum's inception through October 31, 1999. As Momentum's Available Funds are
used under the Development Agreement and the Services Agreement, lower cash
balances will be available for investment and therefore interest and investment
income is expected to decrease.

     The results of operations of Momentum currently reflect primarily interest
and investment income earned on the funds contributed by PeopleSoft, and
development expenses related to development of Momentum products. Momentum's net
loss for the quarter ended October 31, 1999 was ($6.8) million or ($1.45) per
share. The net loss from its inception through October 31, 1999 was ($8.5)
million or ($2.11) per share. Momentum is expected to record significant net
losses in future periods, as product development expenses under its agreements
with PeopleSoft are expected to continue to exceed income.

     Momentum's research and development and administrative activities are and
will be substantially performed by PeopleSoft. Momentum believes that
PeopleSoft's internal systems are Year 2000 compliant. To the extent that
Momentum purchases its own internal systems or contracts with other parties for
such services, it expects to be able to find systems and service providers which
are Year 2000 compliant. However, Momentum and PeopleSoft will be relying on a
variety of service providers, including telephone companies, utilities and
network services providers whose Year 2000 compliance is difficult to ascertain.
If any of these providers were unable to provide their services to either
PeopleSoft or Momentum, Momentum's business could be adversely affected.

Liquidity and Capital Resources

     Momentum was formed on November 9, 1998. PeopleSoft contributed a total of
$250 million in cash to Momentum prior to the Distribution. PeopleSoft's
contribution (together with interest earned thereon) is expected to fund
research and development activities for approximately three to four years.
Momentum's funds are expected to be used primarily to fund activities to be
conducted under the Development Agreement with PeopleSoft. Momentum expects to
engage PeopleSoft or other third parties to perform the development activities
on Momentum's behalf. Momentum is not expected to require significant facilities
or capital equipment of its own during the term of the Development Agreement. At
October 31, 1999, Momentum had cash and cash equivalents of approximately $249.6
million consisting primarily of investments in money market funds with
maturities of three months or less. These funds are restricted for use under the
Development Agreement.

     Momentum's development activities are expected to focus on e-business
products, analytic application products, and industry specific applications.
PeopleSoft has and will propose various products to Momentum from which Momentum
will select certain products to develop. Momentum believes there are numerous
possible products which could be developed in each of the three areas. Based on
PeopleSoft's experience in developing software products of comparable scope, and
the number of projects that are believed to be manageable at any given time, and
assuming availability of engineers with relevant expertise, the Available Funds
are expected to be expended in approximately three to four years.

     In addition to the Available Funds, Momentum may generate additional funds
through successfully licensing its products to PeopleSoft or other parties.
Momentum may also obtain additional financing through either debt or equity
financing, as long as the terms of such financings do not alter PeopleSoft's
rights as a Class B Common Stock holder. Funds raised through licensing of
products or financings would not be considered Available Funds and thus their
use by Momentum would not be restricted by PeopleSoft.



                                       10
<PAGE>   11

     There can be no assurances, particularly given the existence of the
Development Agreement, the Marketing Agreement and the Services Agreement, that
Momentum will be able to raise any additional capital. Such additional capital,
if raised, would most likely reduce the per share proceeds available to holders
of the Momentum Class A Common Stock if the Purchase Option were to be exercised
by PeopleSoft. (See Note 2 -- "Purchase Option").

     Since its inception, Momentum executed amendments to the Development and
License Agreement with PeopleSoft, whereby PeopleSoft will provide development
resources and project management oversight to nine different product development
projects with an aggregate budget of over $140 million. Projects being
undertaken include a suite of analytic applications which encompass nine
individual software products, and several industry-specific applications,
including a comprehensive solution for the insurance industry and three projects
targeted at the services industry which include consulting, engineering and
temporary help companies. In addition, Momentum will be funding the development
of PeopleSoft's recently announced eStore, an end-to-end e-commerce application
that will be integrated with PeopleSoft's e-business backbone. During the
quarter ended October 31, 1999, Momentum and PeopleSoft executed an amendment to
the Development Agreement under which the two companies would jointly develop an
industry specific application solution for the public sector. Momentum has
committed approximately $6 million of development funding over the next two
years to this new project


Risks and Uncertainties

     Momentum's actual results could differ materially from those anticipated in
these forward-looking statements due to certain factors. Such risks and
uncertainties include, but are not limited to the following:

-    Momentum may not successfully select or develop products. The development
     projects referenced herein are characterized by many inherent risks,
     including but not limited to 1) it may be difficult to staff such projects
     with qualified development personnel who have sufficient domain expertise,
     2) existing PeopleSoft technology may not be suitable as a foundation for
     the application software functionality, 3) development efforts in general
     are complex, and such complexities create a risk that the products may not
     be technologically feasible, and 4) constantly changing and evolving
     customer demands for products and product functionality may cause products
     to meet with limited market acceptance. Consequently, such development
     efforts may not be successful or result in a product that is accepted by
     the market.

-    Demand for Momentum's products may be highly sensitive to time to market
     and/or first mover advantages. Any material delays in the development
     project schedule may adversely affect demand for the product, even if the
     development project is otherwise successfully completed. Furthermore,
     competitors of PeopleSoft, and even PeopleSoft, may offer products that
     compete directly with Momentum's products. In addition, demand for
     Momentum's products will likely be a function of PeopleSoft's momentum and
     reputation in the Enterprise Software market. If PeopleSoft were to lose
     its market position as a premiere provider of application software
     solutions for medium and large organizations, the demand for Momentum's
     products could be significantly reduced.

-    Momentum and PeopleSoft are parties to various agreements which limit
     Momentum's ability to take certain actions, establish alternate channels of
     distribution for its products, and use funds for other than designated
     product development and administrative activities. Consequently, Momentum
     has few degrees of freedom with which to generate revenues or otherwise
     commercialize developed technology or products should PeopleSoft elect not
     to utilize some or all of the developed products.

-    Momentum or PeopleSoft may cancel a development project at anytime and for
     any reason or no reason at all. Accordingly, it is possible that Momentum
     could incur significant expenditures toward the development of a particular
     product, only to have the project cancelled in the later stages of the
     schedule. There is no recourse to PeopleSoft in the event of this
     occurrence.

-    If Momentum were not successful with a number of development projects,
     PeopleSoft would be unlikely to exercise its option to purchase the stock
     of Momentum. Even if Momentum is successful in developing certain products,
     PeopleSoft may not exercise its option to purchase the Common Stock of
     Momentum. For example, PeopleSoft has the right to buy out the ownership of
     selected products under its product royalty buy out rights. Consequently,
     it could purchase the rights to certain products, thereby obviating any
     need to exercise the purchase option on the Company's Common Stock.

     Other risks which are detailed in the Company's filings with the Securities
and Exchange Commission, including, but not limited to, the December 31, 1998
Second Amendment to the Information Statement (Form 10), the 1999 third quarter




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<PAGE>   12
Report to Shareholders (Form 10-Q) filed March 15, 1999, the 1999 Annual Report
to Shareholders (Form 10-K) filed July 29, 1999, and the 2000 first quarter
Report to Shareholders (Form 10-Q) filed September 14, 1999.

                          PART II -- OTHER INFORMATION

    Item 1. Legal Proceedings

     On February 1, 1999, Momentum was first named as an additional defendant in
a series of class action lawsuits brought against PeopleSoft, Inc. and certain
of its officers and directors, alleging securities fraud in connection with,
inter alia, PeopleSoft's spin off of Momentum to PeopleSoft shareholders. Out of
twenty-five such class actions filed, only one named Momentum as a defendant.
The class period in all such actions was from February 1997 to January 28, 1999,
the date when PeopleSoft first announced that the Securities and Exchange
Commission was reviewing PeopleSoft's accounting treatment for certain
transactions in prior periods. The actions were filed with the United States
District Court for the Northern District of California, under the lead case name
Suttovia v. Duffield, et al, No. C 99-0472 MJJ. As expected, all actions were
consolidated into a single action, and an amended complaint was filed on
December 6, 1999. Momentum is no longer named as a defendant in the consolidated
case.

    Item 2. Changes in Securities and Use of Proceeds

         None

    Item 3. Defaults Upon Senior Securities

         None

    Item 4. Submission of Matters to a Vote of Security Holders

         None

    Item 6. Exhibits and Reports on Form 8-K

        (a)     Exhibits

        27.1    Financial Data Schedule -- For the quarter ending October 31,
                1999.

        (b)     Reports on Form 8-K

     No reports on Form 8-K were filed during the period from inception to
October 31, 1999.

                                   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: December 15, 1999

                                        MOMENTUM BUSINESS APPLICATIONS, INC.

                                        By:  /s/ Ronald E. F. Codd
                                           -------------------------------------
                                           Ronald E. F. Codd
                                           President and Chief Executive Officer
                                           (Principal Executive, Financial and
                                           Accounting Officer)



                                       12
<PAGE>   13

                      MOMENTUM BUSINESS APPLICATIONS, INC.
                          (a development stage company)

                                INDEX OF EXHIBITS

<TABLE>
<CAPTION>
     EXHIBIT #        EXHIBIT TITLE
     ---------        -------------
<S>                   <C>
     27.1             Financial Data Schedule - For the quarter ending October 31, 1999
</TABLE>



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