<PAGE>


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

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ----------------------


                                   FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2001

                                       OR

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

                        For the transition period from to

                          Commission File No. 000-27803


                                 SCIQUEST, INC.

             (Exact Name of Registrant as Specified in Its Charter)

          Delaware                                         56-2127592
 (State or Other Jurisdiction                            (I.R.S. Employer
of Incorporation or Organization)                       Identification No.)

5151 McCrimmon Parkway, Suite 216                             27560
Morrisville, North Carolina                                (Zip Code)
(Address of Principal Executive Offices)

                                 (919) 659-2100

              (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 |X| No |_|

       As of November 12, 2001, 28,860,225 shares of Common Stock, $.001 par
value, were outstanding.




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

<PAGE>


                                 SCIQUEST, INC.

                                TABLE OF CONTENTS

PART I-- FINANCIAL INFORMATION:

 ITEM 1: FINANCIAL STATEMENTS

<TABLE>
<S>                                                                                                                     <C>

    Consolidated Balance Sheets at September 30, 2001 (unaudited) and December 31, 2000                                  3


    Consolidated Statements of Operations for the Three and Nine Months Ended
    September 30, 2001 and 2000 (unaudited)                                                                              4



    Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2000
    (unaudited)                                                                                                          5


    Notes to Consolidated Financial Statements (unaudited)                                                               6


ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS                                                                                           18


ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                      38


PART II-- OTHER INFORMATION:

ITEM 1: LEGAL PROCEEDINGS                                                                                               39


ITEM 2: CHANGES IN SECURITIES                                                                                           39


ITEM 3: DEFAULTS IN SECURITIES                                                                                          39


ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                             39


ITEM 5: OTHER INFORMATION                                                                                               39


ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K                                                                                40


SIGNATURES                                                                                                              43
</TABLE>



                                       2

<PAGE>

                                     PART I

Item 1.   Financial Statements

                                 SciQuest, Inc.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                                       September 30,       December 31,
                                                                                       ------------        ------------
                                                                                           2001                  2000
                                                                                           ------                ------
                                                                                        (unaudited)

                                     Assets

<S>                                                                                      <C>                      <C>

Current assets:
    Cash and cash equivalents                                                        $   48,243,325        $  20,162,831
    Short-term investments                                                                  780,000           29,414,789
    Accounts receivable, net                                                              3,548,656           16,163,830
    Prepaid expenses and other current assets                                             3,978,112            4,274,742
                                                                                     --------------        -------------
       Total current assets                                                              56,550,093           70,016,192
Long-term investments                                                                          --             19,289,276
Property and equipment, net                                                               4,285,764            9,901,220
Capitalized software and web site development costs, net                                 10,851,023            9,808,625
Goodwill and other long-term assets, net                                                 58,133,950           94,177,385
                                                                                     --------------        -------------
       Total assets                                                                  $  129,820,830        $ 203,192,698
                                                                                     ==============        =============

                      Liabilities and Stockholders' Equity

Current liabilities:
    Accounts payable                                                                 $      357,257        $   6,010,197
    Accrued liabilities                                                                   4,796,224            6,403,036
    Deferred revenues                                                                     1,426,405            1,033,238
    Current maturities of capital lease obligations                                       1,152,557            1,096,921
                                                                                     --------------        -------------
       Total current liabilities                                                          7,732,443           14,543,392
                                                                                     --------------        -------------
Capital lease obligations, less current maturities                                          936,331            1,524,457
Commitments and contingencies                                                                  --                    --
Stockholders' equity:
    Common stock, $0.001 par value; 90,000,000 shares authorized; 29,117,629 and
       28,696,097 shares issued as of September 30, 2001 and
       December 31, 2000, respectively                                                       29,118               28,696
    Additional paid-in capital                                                          317,107,398          319,475,952
    Deferred compensation                                                               (2,214,231)           (4,543,903)
    Deferred customer acquisition costs                                                 (2,997,891)           (4,849,235)
    Accumulated other comprehensive loss                                                    (8,908)               (5,369)
    Treasury stock, at cost; 304,000 and 0 shares as of September 30, 2001 and
       December 31, 2000, respectively                                                    (281,088)                  --
    Accumulated deficit                                                               (190,482,342)         (122,981,292)
                                                                                     --------------        -------------
    Total stockholders' equity                                                          121,152,056          187,124,849
                                                                                     --------------        -------------
       Total liabilities and stockholders' equity                                    $  129,820,830        $ 203,192,698
                                                                                     ==============        =============
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       3

<PAGE>

                                 SciQuest, Inc.

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                 Three Months End              Nine Months Ended
                                                                                 ----------------              -----------------
                                                                                   September 30,                  September 30,
                                                                                   -------------                  -------------
                                                                                2001          2000            2001           2000

                                                                               ------        ------          ------         ------
<S>                                                                            <C>             <C>            <C>            <C>

Revenues:
   E-commerce (net of ($394), $0, $57,667, and $0,
    respectively, of non-cash buyer incentive warrants
    (benefit) expense)                                                     $  443,313     $17,881,478    $16,193,219    $33,472,854
    License fees and other professional services                            1,776,491       1,809,100      4,724,055      4,145,295
                                                                            ---------       ---------      ---------      ---------
      Total revenues                                                        2,219,804      19,690,578     20,917,274     37,618,149
                                                                            ---------      ----------     ----------     ----------
Cost of revenues:
   Cost of e-commerce                                                         272,885      17,569,679     15,376,112     32,812,988
   Cost of license fees and other professional services
     (includes $691,102, $500,000, $1,918,888, and $1,000,000,
     respectively, of amortization of
     capitalized software costs)                                            1,256,559       1,151,197      3,630,842      2,606,920
                                                                            ---------       ---------      ---------      ---------
      Total cost of revenues                                                1,529,444      18,720,876     19,006,954     35,419,908
                                                                            ---------      ----------     ----------     ----------
      Gross profit                                                            690,360         969,702      1,910,320      2,198,241
                                                                              -------         -------      ---------      ---------
Operating expenses:
   Development (includes $108,927, $131,197,
     $352,950, and $873,056, respectively, of stock-
     based employee compensation)                                           2,159,139       3,554,711      9,430,560     11,695,438
   Sales and marketing (includes $101,362, $213,886,
     $366,780, and $821,095, respectively, of stock-based employee
     compensation and $27,259, ($989,254), $390,189, and ($2,555,417),
     respectively, of stock-based customer acquisition
     (benefits) expenses)                                                   1,626,186       8,173,909      8,634,860     18,605,192
   General and administrative (includes $187,046,
      $624,303, $681,432, and $2,493,838, respectively,
      of stock-based employee compensation and
      $9,741,029, $10,152,548, $30,147,304, and
      $21,597,688, respectively, of goodwill
      amortization)                                                        13,062,229      16,756,170     43,167,728     38,954,077
   Purchased in-process research and development                                  --              --             --         700,000
   Restructuring                                                                  --              --      10,650,000           --
                                                                        -------------    ------------   ------------   ------------
      Total operating expenses                                             16,847,554      28,484,790     71,883,148     69,954,707
                                                                           ----------      ----------     ----------     ----------
Operating loss                                                           (16,157,194)    (27,515,088)   (69,972,828)   (67,756,466)
                                                                         ------------    ------------   ------------   ------------
Interest income (expense):
   Interest income                                                            624,162       1,759,468      2,686,143      5,872,162
   Interest expense                                                         (111,189)        (42,277)      (214,365)      (104,761)
                                                                            ---------        --------      ---------      ---------
      Net interest income                                                     512,973       1,717,191      2,471,778      5,767,401
                                                                              -------       ---------      ---------      ---------
Loss before income taxes                                                 (15,644,221)    (25,797,897)   (67,501,050)   (61,989,065)
Income tax benefit                                                               --              --             --           66,225
                                                                      ---------------  -------------- --------------  -------------
Net loss                                                                $(15,644,221)   $(25,797,897)  $(67,501,050)  $(61,922,840)
                                                                        =============   =============  =============  =============
Net loss per common share--basic and diluted                                  $(0.54)         $(0.89)       $ (2.33)        $(2.21)
                                                                              =======         =======      =========        =======
Weighted average common shares outstanding--basic
and diluted                                                                29,072,407      28,959,928     28,942,078     28,063,927
                                                                           ==========      ==========     ==========     ==========

</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4

<PAGE>

                                 SciQuest, Inc.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                        Nine Months Ended
                                                                                        -----------------
                                                                                          September 30,
                                                                                          --------------
                                                                                        2001            2000
                                                                                     ----------      ----------
<S>                                                                                     <C>              <C>

Cash flows from operating activities

    Net loss                                                                      $(67,501,050)    $(61,922,840)
    Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                 37,504,391       26,282,393
       Bad debt expense                                                                    --            185,514
       Non-cash buyer incentive warrants                                                 17,058             --
       Purchased in-process research and development                                       --            700,000
       Deferred tax benefit                                                                --           (66,225)
       Amortization of deferred compensation                                          1,401,162        4,187,989
       Amortization of deferred customer acquisition costs                              430,797      (2,555,417)
       Amortization of discount on investments                                         (15,625)        (399,640)
       Loss from disposal of fixed assets                                                69,317             --
       Write-down of long-lived assets related to restructuring                       7,111,206             --
       Changes in operating assets and liabilities:
          Accounts receivable                                                        12,615,174     (18,967,327)
          Prepaid expenses and other assets                                             296,630        (895,359)
          Other long-term assets                                                      2,117,711             --
          Accounts payable                                                          (5,652,940)        9,070,053
          Accrued liabilities                                                       (1,606,812)        1,493,416
          Deferred revenue                                                              393,167        (812,086)
                                                                                        -------        ---------
              Net cash used in operating activities                                (12,819,814)     (43,699,529)
                                                                                   ------------     ------------
Cash flows from investing activities

    Purchase of property and equipment and capitalized software                     (6,257,105)     (10,788,331)
    Proceeds from sale of equipment                                                      81,913             --
    Cash received from acquisitions                                                        --            529,865
    Cash paid for acquisitions                                                             --        (2,935,268)
    Maturity of investments                                                          49,381,738       35,966,315
    Purchase of investments, including restricted cash                              (1,442,048)     (53,689,447)
                                                                                    -----------     ------------
              Net cash provided by (used in)  investing activities                   41,764,497     (30,916,866)
                                                                                    -----------     ------------
Cash flows from financing activities

    Repayment of capital lease obligations                                            (743,427)        (685,249)
    Proceeds from exercise of common stock warrants and options                          36,282          928,121
    Proceeds from sale of restricted common stock                                          --            339,750
    Proceeds from issuance of common stock under employee stock purchase plan           127,583                0
    Purchase of treasury stock                                                        (281,088)             --
                                                                                      ---------       ----------
              Net cash provided by (used in)  financing activities                    (860,650)          582,622
                                                                                      ---------          -------
Effect of exchange rate changes on cash and cash equivalents                            (3,539)             --
                                                                                        -------     ------------
Net increase (decrease) in cash and cash equivalents                                 28,080,494     (74,033,773)
Cash and cash equivalents at beginning of period                                     20,162,831       98,126,414
                                                                                     ----------     ------------
Cash and cash equivalents at end of period                                         $ 48,243,325     $ 24,092,641
                                                                                   ============     ============

</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       5

<PAGE>

                                 SciQuest, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   The Company

       SciQuest, Inc. ("SciQuest" or the "Company"), which began operations in
1995, is a technology and solutions company that provides integrated e-commerce
and research asset management solutions for research enterprises and their
supply chain partners worldwide. SciQuest develops and sells software that
improves the efficiency of research scientists in pharmaceutical, biotechnology
and chemical companies. SciQuest software helps scientists and their support
staff find, order and manage scientific supplies, such as chemicals, testing
materials and proprietary compounds. SciQuest generates revenues from scientific
organizations by charging license, subscription and maintenance fees for the use
of its technology. SciQuest also offers professional services related to these
solutions, for activities such as project implementation and training. In
addition, SciQuest receives revenue from scientific supply manufacturers for
converting their paper catalogs into an electronic format, enhancing or
enriching the data and distributing the information as directed by the
suppliers.

       Historically, the Company has also earned revenues from e-commerce
transactions generated by purchases made through the SciQuest web sites. In
addition, SciQuest, Inc. has historically earned revenue for advertising on its
web sites and advertising in the printed catalogue of scientific products (the
"Source Book"), which is prepared and distributed by the Company's subsidiary,
BioSupplyNet, Inc. ("BioSupplyNet") and on commissions received for the auction
of used scientific equipment by the Company's subsidiary, Internet Auctioneers
International, Inc. ("IAI"). In October 2000, it was determined that the
BioSupplyNet and IAI operations would be eliminated. Following the decision to
eliminate BioSupplyNet operations, the Company determined it would continue to
print the Source Book annually. Accordingly, the Company anticipates it will
continue to earn advertising revenue from the Source Book, primarily all of
which has historically been recognized, and is expected to continue to be
recognized, in the second quarter of each fiscal year. The Company also
recognizes revenues from its subsidiary, EMAX Solution Partners, Inc. ("EMAX"),
which provides customized electronic research solutions designed to integrate
chemical information systems to improve productivity and compliance for
pharmaceutical, scientific and research companies.

2.   Summary of Significant Accounting Policies

Unaudited Interim Financial Information

       The unaudited interim consolidated financial statements as of and for the
three and nine months ended September 30, 2001 and September 30, 2000 have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission (the "SEC") for interim financial reporting. These
consolidated financial statements are unaudited and, in the opinion of
management, include all adjustments necessary to present fairly the consolidated
balance sheets, statements of operations and statements of cash flows for the
periods presented in accordance with generally accepted accounting principles.
The consolidated balance sheet at December 31, 2000 has been derived from the
audited consolidated financial statements at that date. Certain information and
footnote disclosures have been omitted in accordance with the rules and
regulations of the SEC. These interim consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto for the year ended December 31, 2000 included in the Company's Form
10-K, filed with the SEC on April 2, 2001. The results of operations for the
three months and nine months ended September 30, 2001 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2001.

Use of Estimates

       The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


                                       6

<PAGE>

Principles of Consolidation

       The consolidated financial statements include the accounts of SciQuest
and its wholly-owned subsidiaries, BioSupplyNet, Inc., Internet Auctioneers
International, Inc., Intralogix, Inc. ( "Intralogix "), SciCentral, Inc. (
"SciCentral "), EMAX Solution Partners, Inc., and SciQuest Europe Limited. All
significant inter-company accounts and transactions have been eliminated.

Cash and Cash Equivalents

       The Company considers all highly liquid investments with a maturity of
three months or less at the date of purchase to be cash equivalents.

Investments

       The Company considers all investments that are not considered cash
equivalents and with a maturity of less than one year from the balance sheet
date to be short-term investments. The Company considers all investments with a
maturity of greater than one year to be long-term investments. All investments
are considered as held-to-maturity and are carried at amortized cost, as the
Company has both the positive intent and ability to hold them to maturity.
Interest income includes interest, amortization of investment purchases premiums
and discounts, and realized gains and losses on sales of securities. Realized
gains and losses on sales of investment securities are determined based on the
specific identification method.

Restricted Cash

       At September 30, 2001, restricted cash of $500,000 and $780,000 included
in cash and cash equivalents and short-term investments, respectively, is
comprised of certificates of deposit which serve as collateral for the Company's
lease commitments and officer loans guaranteed by the Company. At December 31,
2000, these amounts were included in cash and cash equivalents and long-term
investments, respectively.

Accounts Receivable

       The Company bears all risk of loss on credit sales of scientific products
in e-commerce transactions. Accounts receivable is presented net of an allowance
for doubtful accounts.

Property and Equipment

       Property and equipment is primarily comprised of furniture and computer
equipment which are recorded at cost and depreciated using the straight-line
method over their estimated useful lives which are usually seven years and three
to five years for furniture and computer software and equipment, respectively.
Property and equipment includes certain equipment under capital leases. These
items are depreciated over the shorter of the lease period or the estimated
useful life of the equipment. The related depreciation expense, included in
total operating expenses, was approximately $719,000 and $2,839,000 for the
three and nine months ended September 30, 2001, respectively.

Development Costs

       Development costs include expenses incurred by the Company to develop,
enhance, manage, monitor and operate the Company's web sites and costs of
managing and integrating data on the Company's web sites and developing software
to be licensed. The Company capitalizes certain development costs of internal
use software associated with the development of the Company's web sites and
internal applications and amortizes these costs to development expense over the
useful life of the related applications, which generally ranges from three
months to one year. The related amortization expense, included in total
operating expenses, was approximately $493,000 and $2,556,000 for the three and
nine months ended September 30, 2001, respectively.


                                       7

<PAGE>

Capitalized Software Costs

       Software development costs related to software products sold to customers
are required to be capitalized beginning when a product's technological
feasibility has been established and ending when a product is available for
general release to customers. Capitalized software costs result from the
acquisitions of EMAX and BioSupplyNet as determined by valuations prepared by
management and from developing standardized versions of software products for
sale. Capitalized software costs are typically amortized over a period of three
years. The related amortization expense, included in cost of revenues, was
approximately $691,000 and $1,919,000 for the three and nine months ended
September 30, 2001, respectively.

Intangible Assets

       Intangible assets consist of goodwill and certain other intangible assets
acquired in the Company's various acquisitions. Goodwill is amortized over three
to five years. All other intangible assets are amortized over a period of three
years.

Purchased In-Process Research and Development

       The acquisition cost of in-process technology that at the date of
purchase has not achieved technological feasibility and has no alternative
future use is charged to operations in the period such technology is acquired.
Purchased in-process research and development costs relate to the acquisition of
EMAX, (see Note 3) and was determined by a valuation prepared by management.

Fair Value of Financial Instruments

       The carrying value of cash and cash equivalents, accounts payable and
accounts receivable at September 30, 2001 and December 31, 2000 approximated
their fair value due to the short-term nature of these items. The Company
considers its short-term and long-term investments to be held-to-maturity, and
therefore these investments are carried at amortized cost.

Impairment of Long-Lived Assets

       The Company evaluates the recoverability of its property and equipment
and intangible assets in accordance with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS No. 121"). SFAS No. 121 requires
long-lived assets to be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment is recognized in the event that the net book value of
an asset exceeds the future undiscounted cash flows attributable to such asset
or the business to which such asset relates. No impairments were required to be
recognized during the three month and nine month periods ended September 30,
2000. As part of the restructuring plan during the three months ended June 30,
2001, an impairment of approximately $7 million of long-lived assets was
recognized related to the elimination of unprofitable business lines. In
addition, as part of the restructuring plan during the year ended December 31,
2000, an impairment of approximately $768,000 of long-lived assets was
recognized related to the elimination of unprofitable business lines. (See Note
5.)

       If the Company's market capitalization is consistently lower than the
carrying value of recorded net assets, an impairment analysis may be required.

Revenue Recognition

       SciQuest generates revenues from scientific organizations by charging
license, subscription and maintenance fees for the use of its technology.
SciQuest also offers professional services related to these solutions, for
activities such as project implementation and training. In addition, SciQuest
receives revenue from scientific supply manufacturers for converting their paper
catalogs into an electronic format, enhancing or enriching the data and
distributing the information as directed by the suppliers. Until recently, the
Company earned much of its revenues from the sale of scientific products (and
scientific equipment beginning in June 2000) through its e-commerce web sites.
The Company is in the process of discontinuing order processing services and
expects such transaction


                                       8

<PAGE>

revenues to be minimal in the future. Prior to April 1999, the Company's
revenues were primarily derived from advertising on its web sites. With the
acquisition of EMAX in March 2000, the Company began deriving revenues from
custom software development and implementation services, from sales of software
licenses, and from support and maintenance contracts.

       Prior to May 1, 2001, the Company took legal title to the products that
were purchased from its suppliers and that, in turn, were sold to its customers
in e-commerce transactions. Therefore, through April 2001, revenues received
from the sale of scientific products in e-commerce transactions and from the
sale of scientific equipment were recorded as product revenues on a gross basis
and were recognized by the Company upon delivery to the customer. As of May 1,
2001, the Company no longer took legal title to these products. Instead, the
Company has acted as an agent on behalf of the customer, and title has passed
directly from the supplier to the customer.

       Since the Company has acted as an agent for the customer and not as the
primary obligor in the transaction for orders after May 1, 2001, the Company no
longer records sales of scientific products and scientific equipment in
e-commerce transactions on a gross basis. For each sale, the Company recognizes
revenue in the amount of the net commission that it earns for processing the
transaction and/or payment for services. As a result of this change in the
method of reporting revenue, much lower revenues from e-commerce transactions
are being recorded; however, the calculation of gross profit dollars from
e-commerce transactions remains the same, although the gross margin as a
percentage of related net revenue increases.

       As a result, revenues of $443,000 for the third quarter of 2001 were
comprised of orders taken prior to May 1, 2001, totaling $283,000, which were
recorded on a gross basis and $160,000 representing the commissions earned on
transactions processed after May 1, 2001. The total value of the underlying
scientific products sold in transactions processed during the third quarter of
2001 was $4.8 million. This is compared to $9.2 million of sales of scientific
products and $8.7 million of scientific equipment during the three months ended
September 30, 2000. There were no sales of scientific equipment in 2001.

       During the second and third quarters of 2001, the Company began to phase
out order processing services provided to customers. This significantly reduced
the level of e-commerce transaction volume during such periods.

       Advertising revenues are recognized ratably over the period in which the
advertisement is displayed, provided that the Company has no significant
remaining obligations to the advertiser and that collection of the resulting
receivable is probable. Revenues from advertising included in the Source Book
are recognized at the date the Source Book is published and distributed to the
purchasers of scientific products as the Company has met all of its obligations
to the advertisers at that date. Source Book revenue is included in license fees
and other professional services.

       During the second quarter of 2001, the Company began generating revenues
by charging license, subscription and maintenance fees for the use of its
technology and by charging scientific supply manufacturers for data conversion
and maintenance services. The related revenues for access to the technology and
supplier data conversion and maintenance services are recognized ratably over
the period of the agreements.

       With the acquisition of EMAX in March 2000, revenues from the sale of
software licenses and custom development and implementation services under
fixed-fee contracts are recognized using the percentage-of-completion method
over the term of the development and implementation services. Revenues from the
sale of standardized versions of the EMAX software are recognized upon customer
acceptance in accordance with Statement of Position 97-2, "Software Revenue
Recognition." Revenues from implementation services are recognized concurrently
with the effort and costs incurred by the Company, at billable rates specified
in the terms of the contract. Losses expected to be incurred on custom
development and implementation services contracts in process, for which the fee
is fixed, are charged to income in the period in which the estimated losses are
initially identified. The Company sells maintenance contracts to provide updates
and standard enhancements to its software products. Maintenance fee revenue is
recognized ratably over the term of the arrangements, generally one year.


                                       9

<PAGE>

Cost of Revenues

       Through April 2001, cost of e-commerce revenues represents the purchase
price to the Company of the scientific products sold through its e-commerce web
sites and of scientific equipment, shipping and handling fees and the cost of
maintaining such web sites. Historically, the Company has generally taken legal
title to the scientific products and equipment purchased at the date of shipment
and relinquished title to its customers upon delivery. Effective May 1, 2001,
the Company discontinued taking legal title to these products and began
recording revenue on a net basis, as a commission, resulting in negligible costs
being recorded for e-commerce revenues.

       In addition, the Company bears all credit risk for its sales of
scientific products to its customers.

       The cost of software licensing, implementation and maintenance revenues
consists primarily of personnel costs for employees who work directly on the
development and implementation of customized electronic research solutions and
who provide maintenance to customers, and also consists of the amortization of
capitalized software development costs. Cost of advertising and subscription
revenue includes the cost of preparing the advertisements for display on the
Company's web sites and the cost of publishing and distributing the Source Book.
Advertising production costs are recorded as cost of revenues the first time an
advertisement appears on the Company's web sites.

Sales and Marketing Expenses

       Sales and marketing expenses consist primarily of costs, including
salaries and sales commissions, of all personnel involved in the sales process.
Sales and marketing expenses also include costs of advertising, trade shows and
certain indirect costs and amortization of deferred customer acquisition costs.
All costs of advertising the services and products offered by the Company are
expensed as incurred.

Deferred Customer Acquisition Costs

       Deferred customer acquisition costs relate to common stock warrants given
to several key suppliers and buyers of scientific products. The amount of
deferred customer acquisition costs is adjusted each reporting period based on
changes in the fair value of the warrants until such date the warrants are fully
vested and non-forfeitable. Deferred customer acquisition costs will be
amortized as a non-cash charge to sales and marketing expense over the term of
the related contractual relationship using a cumulative catch-up method. The
terms of the contractual relationships range from three to five years. Deferred
customer acquisition costs are presented net of accumulated amortization.

Sales Incentives

       The Company has agreed to issue to certain major enterprise buyers
additional incentive warrants, the number of which is based on each buyer's
volume of purchases during the years 2000, 2001 and 2002. The value of these
warrants is determined using the Black Scholes Model at the issuance date,
adjusted periodically using the cumulative catch-up approach (see Note 6). The
value of incentive warrants is presented as a reduction to revenues in the
Consolidated Statements of Operations.

Income Taxes

       The Company accounts for income taxes using the liability method which
requires the recognition of deferred tax assets or liabilities for the temporary
differences between financial reporting and tax bases of the Company's assets
and liabilities and for tax carryforwards at enacted statutory tax rates in
effect for the years in which the differences are expected to reverse.

       The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment date. In addition, valuation
allowances are established when necessary to reduce deferred tax assets to the
amounts expected to be realized.


                                       10

<PAGE>

Stock Based Compensation

       The Company accounts for non-cash stock based compensation in accordance
with the provisions of Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees", and its related interpretations, which states
that no compensation expense is recognized for stock options or other
stock-based awards to employees that are granted with an exercise price equal to
or above the estimated fair value per share of the Company's common stock on the
grant date. In the event that stock options are granted with an exercise price
below the estimated fair market value of the Company's common stock at the grant
date, the difference between the fair market value of the Company's common stock
and the exercise price of the stock option is recorded as deferred compensation.
Deferred compensation is amortized to compensation expense over the vesting
period of the related stock option.

       The Company has adopted the disclosure requirements of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation", which requires certain pro forma disclosures as if compensation
expense was determined based on the fair value of the options granted at the
date of the grant.

Credit Risk, Significant Customers and Concentrations

       Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents, accounts
receivable and investments. Cash and cash equivalents are deposited with high
credit quality financial institutions which invest primarily in U.S. Government
securities, highly rated commercial paper and certificates of deposit guaranteed
by banks which are members of the FDIC. The counterparties to the agreements
relating to the Company's investments consist primarily of the U.S. Government
and various major corporations with high credit standings. Substantially all of
the Company's revenues are from sales transactions originating in the United
States.

       The Company relies on a number of third party suppliers for various
services, including e-commerce fulfillment services. While the Company believes
it could obtain these services from other qualified suppliers on similar terms
and conditions, a disruption in supply of these services by the current
suppliers could materially harm the business.

Comprehensive Income (Loss)

       The Company's only item of other comprehensive income during the three
and nine months ended September 30, 2001 and 2000 was the foreign currency
translation adjustment.

Segment Reporting

       As a result of the acquisition of EMAX (see Note 3), the Company has
determined that it has separately reportable operating segments, as defined by
Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131
supersedes SFAS No. 14, "Financial Reporting for Segments of a Business
Enterprise", replacing the "industry segment" approach with the "management"
approach. The management approach designates the internal organization that is
used by management for making operating decisions and assessing performance as
the source of the Company's reportable segments. SFAS No. 131 also requires
disclosures about products and services, geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect results of operations or financial
position but did affect the disclosure of segment information (see Note 4).

Net Income (Loss) Per Common Share

       Basic net income (loss) per common share is computed by dividing net
income (loss) available to common stockholders by the weighted average number of
common shares outstanding. Diluted net income (loss) per common share is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common shares and dilutive potential common share
equivalents then outstanding. Potential common shares consist of shares issuable
upon the exercise of stock options and warrants and shares issuable upon
conversion of Class B common stock and convertible preferred stock. The
calculation of the net loss per share available to


                                       11

<PAGE>

common stockholders for the three months and nine months ended September 30,
2001 and 2000 does not include any potential shares of common stock equivalents,
as their impact would be anti-dilutive.

       In September 2001, the Board of Directors authorized a stock repurchase
program. The program authorizes the Company to purchase up to $5 million of
common stock over the next twelve months from time to time in the open market or
in privately negotiated transactions depending on market conditions. As of
September 30, 2001, the Company had purchased and placed in treasury, at cost,
304,000 shares of its common stock.

Reclassifications

       Certain prior period amounts have been reclassified to conform with the
current period presentation.

Recent Accounting Pronouncements

       In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 141, "Business Combinations," ( "SFAS No.
141 "). SFAS No. 141 supersedes APB Opinion No. 16, "Business Combinations," and
FASB Statement No. 38, "Accounting for Preacquisition Contingencies of Purchased
Enterprises." SFAS No. 141 requires: 1) that all business combinations be
accounted for by the purchase method, thereby eliminating the pooling method, 2)
that assets (including intangible assets) be recognized and valued apart from
goodwill, and 3) that additional disclosures be made regarding business
combinations and the resulting allocation of purchase price. The provisions of
SFAS No. 141 apply to all business combinations initiated after June 30, 2001
and to all purchase method acquisitions dated on or after July 1, 2001. The
Company's adoption of SFAS No. 141 will not have a material impact on the
consolidated financial position or results of operations.

       In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 142, "Goodwill and Other Intangible
Assets," ("SFAS No. 142"). SFAS No. 142 supersedes APB Opinion No. 17,
"Intangible Assets" and primarily addresses accounting for goodwill and other
intangible assets subsequent to their acquisition. The major provisions include:
1) the ceasing of amortization of goodwill and indefinite lived intangible
assets, 2) the testing for impairment of goodwill and indefinite lived
intangible assets at least annually, and 3) the removal of the restriction that
the maximum amortization period of intangible assets with finite lives be
limited to 40 years. The provisions of SFAS No. 142 will be effective for fiscal
years beginning after December 15, 2001 (with the exception that any goodwill or
intangible assets acquired after June 30, 2001 will be subject immediately to
the statement's provisions) with application being required at the beginning of
an entity's fiscal year. Any impairment losses from the initial application are
to be reported as a cumulative effect of a change in accounting principle in
accordance with APB 20, "Accounting Changes." The impact of the initial adoption
of SFAS No. 142 on the consolidated financial position of the Company is neither
currently known nor reasonably estimable. Due to the Company's historically
significant amounts of amortization expense related to goodwill and intangible
assets (approximately $10 million per quarter), the adoption of SFAS No. 142 may
have a material impact on the subsequently reported (after January 1, 2002)
consolidated results of operations.

       In October 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," ("SFAS No. 144"). SFAS No. 144
supersedes FASB Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of," ("SFAS No. 121") and APB
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," ("APB No. 30").

       In summary, SFAS No. 144, retains the fundamental recognition and
measurement provision of SFAS No. 121, however, establishes a "primary-asset"
approach to determine the cash flow estimation period for a group of assets and
liabilities. In addition, SFAS No. 144 retains the basic provisions of APB No.
30, but broadens the presentation to include a component of an entity. In
addition, discontinued operations are no longer measured on a net realizable
value basis and future operating losses are no longer recognized before they
occur. Rather, they are carried at the lower of its carrying amount or fair
value less cost to sell.


                                       12

<PAGE>

       The provisions of SFAS No. 144 are required to be applied to fiscal years
beginning  after December 15, 2001. The adoption of SFAS No. 144 is not expected
       to have any impact on the Company's financial statements or results of
operations.

Employee Stock Purchase Plan

       During 2000, the Board of Directors reserved 1,100,000 shares of the
Company's common stock for issuance under the Employee Stock Purchase Plan (the
"ESPP"). The ESPP has two six-month offering periods (each an "Offering Period")
annually, beginning May 1 and November 1, respectively. The first Offering
Period under the ESPP ended on November 1, 2000. Eligible employees can elect to
make deductions from 1% to 20% of their compensation during each payroll period
of an Offering Period. Special limitations apply to eligible employees who own
5% or more of the outstanding common stock of the Company. None of the
contributions made by eligible employees to purchase the Company's common stock
under the ESPP are tax deductible to the employees. At the end of an Offering
Period, the total payroll deductions by an eligible employee for that Offering
Period will be used to purchase common stock of the Company at a price equal to
85% of the lesser of (a) the reported closing price of the Company's common
stock for the first day of the Offering Period, or (b) the reported closing
price of the common stock for the last day of the Offering Period.

3.   Acquisitions

    Intralogix

       On January 14, 2000, the Company purchased all of the outstanding stock
of Intralogix, Inc. in exchange for the issuance of 26,930 shares of the
Company's common stock with a value of approximately $1,828,000 at the closing
date of the acquisition, cash payments in the amount of $295,000 (including
$61,000 for acquisition-related expenses) and the assumption of $71,500 in net
liabilities of Intralogix. This acquisition was accounted for using the purchase
method of accounting.

       Of the total purchase price of Intralogix, $600,000 was allocated to the
web site developed and operated by Intralogix and approximately $1,589,000 was
allocated to goodwill, which represents the excess of the purchase price over
the fair value of assets acquired less liabilities assumed. Prior to June 30,
2001, goodwill related to this acquisition was being amortized over a period of
three years. An immaterial amount of purchase price was allocated to the
tangible assets of Intralogix. In June 2001, as a result of an announced
restructuring plan to eliminate certain unprofitable business lines, the assets
of Intralogix were considered impaired and accordingly included in the
restructuring charge. (See Note 5.)

    SciCentral

       On February 2, 2000, the Company purchased all of the outstanding stock
of SciCentral, Inc. in exchange for the issuance of 40,000 shares of the
Company's common stock with a value of $2,534,000 at the closing date of the
acquisition, cash payments of $112,000 for acquisition-related expenses and the
assumption of approximately $15,000 in net liabilities of SciCentral. This
acquisition was accounted for using the purchase method of accounting.

       Of the total purchase price of SciCentral, approximately $2,372,000 was
allocated to goodwill, which represents the excess of purchase price over the
fair value of the assets acquired less the liabilities assumed. Prior to June
30, 2001, goodwill related to this acquisition was being amortized over a period
of three years. In June 2001, as a result of an announced restructuring plan to
eliminate certain unprofitable business lines, the assets of SciCentral were
considered impaired and accordingly included in the restructuring charge. (See
Note 5.)

       In connection with the purchase of SciCentral, a former shareholder and
employee of SciCentral entered into a two-year employment agreement with the
Company. In the event that this individual voluntarily terminates his employment
prior to the end of the two year period, this individual would be required to
pay to the Company an amount equal to $286,000, reduced by approximately $36,000
upon completion of each 90 day period of continuous employment. The Company also
entered into a three-year non-compete agreement with this individual. The
$286,000 has been recorded as deferred compensation and is being amortized to
stock-based compensation expense


                                       13

<PAGE>

over a period of two years. An immaterial amount of purchase price was allocated
to the tangible assets of SciCentral.

    EMAX

       On March 22, 2000, the Company purchased all of the outstanding common
and preferred stock of EMAX Solution Partners, Inc. in exchange for the issuance
of 1,584,010 shares of the Company's common stock with a total fair value of
$96,910,000, which is based on the average closing price of the common stock of
$61.175 for the two-day period immediately preceding and following the date of
the announcement of the acquisition of EMAX. In addition, the Company assumed
approximately $3,539,000 in net liabilities and incurred costs of approximately
$2,441,000 related to this acquisition. The Company also assumed EMAX's
obligations under its qualified employee incentive stock option plan for EMAX
employees. As a result of this, 374,152 shares of common stock have been
reserved by the Company as replacement options with an average exercise price of
$15.73 per share. The fair value of these options, which was estimated to be
$20,392,000 using the Black-Scholes option pricing model, is included as a
component of the total purchase price related to this acquisition. The
acquisition has been accounted for using the purchase method of accounting and,
accordingly, the total purchase price of approximately $123.3 million was
allocated to the assets acquired and liabilities assumed based on estimated fair
values. The fair value assigned to intangible assets acquired was based on a
valuation prepared by management of the Company.

       Of the total purchase price, $2,398,000 was allocated to the tangible
assets of EMAX, which were comprised of cash, accounts receivable, property and
equipment and prepaid and other assets. In addition, $6,000,000 was allocated to
developed software costs, $22,000,000 was allocated to the EMAX registered
trademark and $700,000 was allocated to purchased in-process research and
development ("IPR&D"). The remaining purchase price of approximately $94,119,000
has been allocated to goodwill. The trademark, goodwill and developed software
costs are all being amortized over a period of three years.

       The $700,000 in 2000 of IPR&D was based on a valuation prepared by
management and relates to software development projects that had not yet reached
technological feasibility and had no alternative future use at the date of the
acquisition of EMAX.

       In addition, the Company granted to EMAX employees a total of 113,980
SciQuest, Inc. stock options, pursuant to the SciQuest, Inc. 1999 Stock
Incentive Plan. These options were granted at an exercise price that was less
than the fair value of the Company's stock on the date of grant. In connection
with the grant of these options, the Company recorded $5,180,000 of deferred
compensation, which is being amortized in accordance with the vesting schedule
of the related options.


                                       14

<PAGE>

4.   Business Segment Data

       As a result of the acquisition of EMAX, the Company operates in two
business segments--e-commerce transactions and license fees and other
professional services (including advertising derived from the Source Book).
Substantially all operations are in the United States.

<TABLE>
<CAPTION>
                                                           Three Months Ended September 30, 2001
                                                -----------------------------------------------------
                                                                     License Fees
                                                                     ------------
                                                                      and Other
                                                                      ---------
                                                                     Professional
                                                                     ------------
                                                E-commerce           Services          Consolidated
                                                --------------       --------------    --------------
<S>                                                <C>                 <C>               <C>
       Total assets ............................   $ 59,298,884        $  70,521,946     $ 129,820,830
                                                   ============        =============     =============
       Revenues--external customers ............   $    443,313        $   1,776,491     $   2,219,804
       Operating loss ..........................   $(5,035,218)        $(11,121,976)     $(16,157,194)
       Interest income, net ....................                                               512,973
                                                                                               -------
       Loss before income taxes ................                                         $(15,644,221)
                                                                                         =============
</TABLE>

<TABLE>
<CAPTION>
                                                           Three Months Ended September 30, 2000
                                                           -------------------------------------
                                                                     License Fees
                                                                     ------------
                                                                      and Other
                                                                      ---------
                                                                     Professional
                                                                     ------------
                                                E-commerce           Services          Consolidated
                                                --------------       --------------    --------------

<S>                                                <C>                 <C>               <C>
       Total assets ............................   $ 129,029,706       $ 106,660,782     $ 235,690,488
                                                   =============       =============     =============
       Revenues--external customers ............   $  17,881,478       $   1,809,100     $  19,690,578
       Operating loss ..........................   $(16,048,559)       $(11,466,529)     $(27,515,088)
       Interest income, net ....................                                             1,717,191
                                                                                             ---------
       Loss before income taxes ................                                         $(27,797,897)
                                                                                         =============
</TABLE>

<TABLE>
<CAPTION>
                                                             Nine Months Ended September 30, 2001
                                                             ------------------------------------
                                                                     License Fees
                                                                     ------------
                                                                      and Other
                                                                      ---------
                                                                     Professional
                                                                     ------------
                                                E-commerce           Services          Consolidated
                                                --------------       --------------    --------------
<S>                                                <C>                 <C>               <C>
       Total assets ............................   $  59,298,884       $  70,521,946     $ 129,820,830
                                                   =============       =============     =============
       Revenues--external customers ............   $  16,193,219       $   4,724,055     $  20,917,274
       Operating loss ..........................   $(34,428,578)       $(35,544,250)     $(69,972,828)
       Interest income, net ....................                                             2,471,778
                                                                                             ---------
       Loss before income taxes ................                                         $(67,501,050)
                                                                                         =============

</TABLE>

<TABLE>
<CAPTION>
                                                             Nine Months Ended September 30, 2000
                                                             ------------------------------------
                                                                     License Fees
                                                                     ------------
                                                                      and Other
                                                                      ---------
                                                                     Professional
                                                                     ------------
                                                E-commerce           Services          Consolidated
                                                --------------       --------------    --------------
<S>                                                <C>                 <C>               <C>
       Total assets ............................   $ 129,029,706       $106,660,782      $ 235,690,488
                                                   =============       ============       ============
       Revenues--external customers ............      33,472,854          4,145,295         37,618,149
       Operating loss ..........................    (41,377,075)       (26,379,391)       (67,756,466)
       Interest income, net ....................                                             5,767,401
                                                                                             ---------
       Loss before income taxes ................                                         $(61,989,065)
                                                                                         =============
</TABLE>

5.   Restructuring

       In June 2001, the Company announced a restructuring of the business to
essentially eliminate outsourced procurement services. The restructuring
includes the elimination of certain unprofitable business lines and a resultant
reduction in workforce of approximately one-half of the employees located in the
United States. The total restructuring charge was $10.7 million and included
approximately $1.6 million for employee separation benefits,


                                       15

<PAGE>

$7.1 million of assets and approximately $2.0 million of other costs and lease
obligations relating to the unprofitable business lines to be eliminated.

       Per SEC Staff Accounting Bulletin 100 and Emerging Issues Task Force
Issue No. 94-3, the following table summarizes information about the Company's
restructuring plan:

<TABLE>
<CAPTION>
                                                                        Impairment         Remaining
                                                                        ----------         ---------
                                                                         Expenses        Liability at
                                                                         --------        ------------
                                                     Restructuring      and Charges      September 30,
                                                     -------------      -----------      -------------
                                                         Plan          to Liability           2001
                                                         ----          ------------           ----
<S>                                                              <C>              <C>               <C>
Number of employees ..............................               108              73                35
                                                                 ===              ==                ==
Involuntary termination benefits .................       $ 1,630,293      $1,018,647         $ 611,646
Other costs and lease obligations ................         1,917,393         293,158         1,624,235
Write-down of net assets of business lines to be
   eliminated ....................................         7,102,314       7,102,314                 0
                                                         -----------      ----------        ----------
Total ............................................       $10,650,000      $8,414,119        $2,235,881
                                                         ===========      ==========        ==========
</TABLE>
6.   Strategic Relationships

       In October, November, and December 1999, the Company entered into
strategic relationships with a number of key suppliers and buyers of scientific
products. As a part of these arrangements, the Company issued to these companies
5,035,180 warrants to purchase the Company's common stock at an exercise price
of $0.01 per share of which 3,732,112 warrants are issued and outstanding at
September 30, 2001. At September 30, 2001 and December 31, 2000, the Company has
total deferred customer acquisition costs of $4,962,741 and $6,583,286,
respectively, with accumulated amortization of $1,964,850 and $1,734,051 through
September 30, 2001 and December 31, 2001, respectively, related to these
warrants. In the event that the Company commits to issue additional warrants to
purchase its common stock as more strategic relationships are formed, the
Company will be required to record additional deferred customer acquisition
costs equal to the fair value of the warrants on the date of issuance. The
amount of deferred customer acquisition costs will be adjusted in future
reporting periods based on changes in the fair value of the warrants until such
date as the warrants are fully vested and non-forfeitable. Deferred customer
acquisition costs will be amortized to operating expense over the term of the
related contractual relationship, which in the case of the buyer agreements is
three years and in the case of the supplier agreements is four or five years,
using a cumulative catch-up method. The Company recognized $31,901 and $430,797
in stock based non-cash customer acquisition expense during the three and nine
months ended September 30, 2001, respectively, related to the amortization of
these deferred customer acquisition costs. These amounts include $0 and $200,000
of amortization of prepaid customer acquisition fees for the three and nine
months ended September 30, 2001, respectively. The Company recognized $1.0
million and $2.6 million in stock based non-cash customer acquisition net
benefit during the three and nine months ended September 30, 2000, respectively,
related to the amortization of these deferred customer acquisition costs. These
amounts include $100,000 and $300,000 of amortization of prepaid customer
acquisition fees for the three and nine months ended September 30, 2000,
respectively.

       These strategic relationships include agreements to be the exclusive
third party provider of electronic marketplace services in the United States for
a period of five years for eight key suppliers. Under the terms of these
agreements, these suppliers are not required to sell a minimum amount of
products through the Company's electronic marketplace. The warrants to purchase
the Company's common stock that were issued in connection with these agreements
will vest over a four or five year period regardless of the level of sales by
the suppliers through the Company's electronic marketplace.

       These strategic relationships also include agreements with several major
enterprise buyers to be their third party electronic aggregator for purchases of
scientific products in North America for a period of three years. Although these
enterprise buyers have agreed to use reasonable efforts to purchase at least $5
million of scientific products annually through the Company's marketplace, there
are no minimum purchase commitments. The warrants issued in connection with
these relationships vest over a period of three years regardless of their level
of purchases through the Company's electronic marketplace.


                                       16

<PAGE>

       In addition, the Company agreed to issue to certain major enterprise
buyers additional incentive warrants, the number of which is based on each
buyer's volume of purchases through the Company's marketplace during the years
2000, 2001 and 2002. These incentive warrants are issuable on February 15, 2001,
2002 and 2003, at an exercise price equal to the price per share of common stock
in the Company's initial public offering of $16 per share, and will be
exercisable upon issuance.

       Based on the purchasing volume during the year ended December 31, 2000,
incentive warrants to purchase approximately 58,000 shares of common stock were
issued on February 15, 2001, resulting in a non-cash charge to revenue and the
recognition of additional paid-in capital of approximately $52,000 representing
the estimated fair value of the warrants determined by using the Black Scholes
valuation model at the issuance date. Until such date as they are
non-forfeitable, the value of these incentive warrants will be adjusted to their
estimated fair value at each balance sheet date with the adjustment being
charged to operating expense. For the three and nine months ending September 30,
2001, this adjustment resulted in a benefit of approximately $5,000 and $41,000,
respectively.

       Beginning January 1, 2001, the Company began accounting for incentive
warrants pursuant to EITF Issue 00-22, "Accounting for "Points" and Other Time-
or Volume-Based Sales Incentive Offers, and Offers for Free Products or Services
to be Delivered in the Future." Under the consensus in Issue 00-22, the Company
estimates the number of incentive warrants that customers will ultimately earn,
factoring in returns, if it can be reasonably estimated. Each revenue
transaction with customers that earn incentive warrants is reduced by an
applicable non-cash incentive cost rate. Changes to estimates of the ultimate
incentive cost will be recognized by using a cumulative catch-up adjustment at
each balance sheet date and by reducing future revenues, based on a revised
non-cash incentive cost rate. For the three and nine months ended September 30,
2001, the non-cash charge (benefit) for estimated incentive warrants related to
2001 volume was approximately ($400) and $5,500, respectively.

7. Legal Proceeding

       On September 10, 2001, the Company was named as a defendant in a
purported class action lawsuit filed in the United States District Court,
Southern District of New York. The lawsuit is captioned Patricia Figuerido and
Robert Wallace v. Sciquest.com, Inc., et al. No. 01 CV 8467. The case has been
consolidated for pretrial purposes with over 100 other lawsuits filed against
other issuers, their officers, and underwriters of their initial public
offerings under the caption In re Initial Public Offering Securities Litigation,
21 MC 92 (SAS). The case includes claims against the Company, three of its
officers, and seven investment banking firms who either served as underwriters,
or are the successors in interest to underwriters, of the company's initial
public offering. The complaint alleges that the prospectus used in the Company's
initial public offering contained material misstatements or omissions regarding
the underwriters' activities in connection with the initial public offering. The
court has adjourned defendants' time to answer or respond to all complaints in
the consolidated proceedings until further order of the court.

       During 2001, a customer filed an action seeking a declaratory judgment
that its license entitled it to permit non-customer employees to use the
Company's licensed software. In addition, the complaint alleges breach by the
Company of an agreement pursuant to which the Company was to upgrade the
software to a newer version. The complaint seeks damages alleged to exceed
$1,000,000. The litigation arises out of the Company's discovery that the
customer had permitted non-customer employees to use the software. After
attempts proved unsuccessful to amicably resolve the dispute, the Company
suspended work on the upgrade and the customer failed to pay for the work
performed. The Company's answer to the complaint is due on December 2, 2001. The
Company intends to vigorously defend the action and to assert its counterclaims
seeking damages for copyright infringement and breach of contract and to recover
the amounts due for work previously billed, but unpaid.

       It is too early in each matter to reasonably predict the probability of
the outcome or to estimate a range of possible losses. Future losses may have a
material adverse effect on the Company's consolidated financial position,
liquidity or consolidated results of operations.


                                       17

<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

       The following discussion should be read in conjunction with the
consolidated financial statements and accompanying notes, which appear elsewhere
in this report.

       Some of the statements contained in this Management's Discussion and
Analysis of Financial Condition and Results of Operations and elsewhere in this
report contain forward-looking information. You can identify these statements by
forward-looking words such as "expect," "anticipate," "believe," "goal," "plan,"
"intend," "estimate," "predict," "potential," "continue," "may," "will," and
"should" or similar words. They include statements concerning:

       o      future revenues from e-commerce transactions;

       o      future revenues from sales of software licenses and fees from
              implementations;

       o      expansion of our product and service offerings;

       o      future sources of revenues;

       o      future gross profit;

       o      future development expenses;

       o      future sales and marketing expenses;

       o      future general and administrative expenses;

       o      future stock-based customer acquisition costs;

       o      operating expenses;

       o      future interest income;

       o      future cash flows;

       o      operating losses;

       o      the effect of changes in our revenue recognition policies;

       o      the timing of loading data into our e-commerce marketplace;

       o      the length of our sales cycle;

       o      our international expansion;

       o      the effects of our restructuring program; and

       o      the adequacy of our existing liquidity and capital resources.


       You should be aware that these statements are subject to known and
unknown risks, uncertainties and other factors, including those discussed in the
section entitled "Factors That May Affect Future Results," that could cause the
actual results to differ materially from those suggested by the forward-looking
statements.


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<PAGE>

Overview

       SciQuest is a technology and solutions company that provides integrated
e-commerce and research asset management solutions for research enterprises and
their supply chain partners worldwide. Its domain expertise, proven technologies
and professional services capabilities uniquely position SciQuest to make
e-solutions work for science. The Company's platform and solutions can be
utilized independently or integrated with leading software, automation equipment
and supplier systems to enhance innovation, reduce costs, and improve
operational effectiveness for scientific organizations worldwide.

       We were incorporated in November 1995 and commenced operations in January
1996. During 1996, we focused on developing our business model and the required
technology. We did not begin to recognize any revenues until 1997.

       In October, November and December 1999, we entered into strategic
relationships with a number of key suppliers and buyers of scientific products,
whereby we issued to these suppliers and buyers warrants to purchase the
Company's common stock at an exercise price of $0.01 per share. These warrants
will vest over a period of three to five years and will be exercisable until
2004. At September 30, 2001, warrants to acquire 3,732,112 shares of common
stock were outstanding.

       These strategic relationships include agreements to be the exclusive
third-party provider of electronic marketplace services in the United States for
a period of five years for ten key suppliers. Under the terms of these
agreements, these suppliers are not required to sell a minimum amount of
products through our electronic marketplace. The warrants to purchase our common
stock that were issued in connection with these agreements vest over a four or
five year period regardless of the level of sales by the suppliers through our
electronic marketplace.

       These strategic relationships also include agreements with major
enterprise buyers for SciQuest to be their third-party electronic aggregator for
purchases of scientific products in North America for a period of three years.
Although these buyers have agreed to use reasonable efforts to purchase at least
$5.0 million of scientific products annually through our marketplace, there are
no minimum purchase commitments. The warrants issued in connection with these
relationships vest over a period of three years, regardless of their level of
purchases through our electronic marketplace.

       We have recorded net deferred customer acquisition costs of approximately
$3.0 million at September 30, 2001, related to these outstanding warrants, which
is included as a separate component of stockholders' equity. Deferred customer
acquisition costs are determined based on the difference between the closing
trading price of our common stock and the $0.01 exercise price of the stock
warrants, which approximates the value as determined by the Black Scholes option
pricing model. The amount of deferred customer acquisition costs recognized for
all of the warrants issued to our key suppliers and buyers is adjusted each
reporting period based on changes in the fair value of the warrants until such
date as the warrants are fully vested and non-forfeitable. Deferred customer
acquisition costs will be amortized to operating expense, using a cumulative
catch-up method, over the term of the related contractual relationship. We
recorded net expense from stock-based customer acquisition costs of $30,000 and
$0.4 million for the three and nine months ended September 30, 2001,
respectively, and net benefits of $1.0 million and $2.6 million for the three
and nine months ended September 30, 2000, respectively. These amounts include $0
and $200,000 of amortization of prepaid customer acquisition fees for the three
and nine months ended September 30, 2001 and $100,000 and $300,000 for the three
and nine months ended September 30, 2000, respectively.

       We have also agreed to issue to these major enterprise buyers additional
incentive warrants to purchase shares of our common stock with an exercise price
of $16.00 per share, the number of which are based on each purchaser's volume of
purchases through our marketplace during the years 2000, 2001 and 2002. These
incentive warrants are issuable on February 15, 2001, 2002 and 2003, will be
fully vested and exercisable upon issuance and will continue to be exercisable
for a period of five years after the date of issuance. Based on the purchasing
volume during the year ended December 31, 2000, incentive warrants to purchase
approximately 58,000 shares of common stock were issued on February 15, 2001,
resulting in a non-cash charge to revenue and the recognition of additional paid
in capital of approximately $52,000 representing the estimated fair value of the
warrants determined by using the Black Scholes valuation model at issuance date.
Until such date as they are non-forfeitable, the value of these incentive


                                       19

<PAGE>

warrants will be adjusted to their estimated fair value at each balance sheet
date with the adjustment being charged to operating expense.

       Beginning January 1, 2001, we began accounting for incentive warrants
pursuant to EITF Issue 00-22, "Accounting for "Points" and Other Time- or
Volume-Based Sales Incentive Offers, and Offers for Free Products or Services to
be Delivered in the Future." Under the consensus in Issue 00-22, we estimate the
number of incentive warrants that customers will ultimately earn, factoring in
returns, if it can be reasonably estimated. Each revenue transaction with
customers that earn incentive warrants will be reduced by an applicable non-cash
incentive cost rate. Changes to estimates of the ultimate incentive cost will be
recognized by using a cumulative catch-up adjustment at each balance sheet date
and by reducing future revenues, based on a revised non-cash incentive cost
rate.

       As part of a restructuring program announced in November 2000, we reduced
our workforce by approximately 10%. In connection with this reduction, we
recorded a charge of approximately $2.2 million in the fourth quarter of 2000
related to separation benefits paid to those affected employees and the
write-down of assets related to unprofitable business lines. In the first and
second quarters of 2001, we further reduced the number of full-time employees by
approximately 100 and 130 people, respectively. The second quarter reduction was
part of a restructuring program announced in June 2001, which included charges
of approximately $1.6 million for separation benefits to those affected
employees, $7.1 million of assets and approximately $2.0 million of other costs
and lease obligations relating to the unprofitable business lines to be
eliminated. As a result, we expect to reduce our operating expenses and improve
our cash flow from operations throughout the remainder of 2001.

       On March 22, 2000, we acquired all of the outstanding capital stock of
EMAX Solution Partners, Inc., a provider of electronic research solutions
designed to optimize pharmaceutical drug research operations and expedite drug
discovery, for the issuance of 1,584,010 shares of our common stock and the
assumption of 374,152 outstanding stock options. In addition, we granted to EMAX
employees a total of 113,980 SciQuest, Inc. stock options (the "Additional
Options"), pursuant to the SciQuest, Inc. 1999 Stock Incentive Plan. These
Additional Options were granted at an exercise price that was less than the fair
value of our common stock on the date of grant. In connection with the grant of
these options, we recorded approximately $5.2 million of deferred compensation,
which is being amortized in accordance with the vesting schedule of the related
options. The acquisition of EMAX was accounted for using the purchase method of
accounting. The acquisition of EMAX enables us to provide electronic and
Internet-based solutions that are designed to streamline the drug discovery
processes of our customers, including large pharmaceutical, biotechnology and
life science companies, by integrating their supply chains with critical
research processes.

       EMAX incurs development costs in the customization of its software
products sold to customers. These costs are primarily comprised of salaries and
related benefits for EMAX's employees. EMAX typically retains the intellectual
property rights to modifications made to its software products for individual
customers and is then able to offer these modifications to future customers.
EMAX capitalizes its software development costs upon the achievement of
technological feasibility and ceases capitalization when the software product is
available for general release. Losses expected to be incurred on custom
development and implementation services contracts in process, for which the fee
is fixed, are charged to income in the period in which the estimated losses are
initially identified.

       On February 2, 2000, we acquired all of the outstanding capital stock of
SciCentral, Inc. for a total purchase price of $2.5 million, which included the
issuance of 40,000 shares of our common stock and the assumption of
approximately $32,000 in net liabilities. SciCentral, Inc. provides users with a
gateway to online science and technology resources, news and information.

       On January 14, 2000, we acquired all of the outstanding capital stock of
Intralogix, Inc. for a total purchase price of $2.1 million, which included the
issuance of 26,930 shares of our common stock, $192,000 in cash and the
assumption of $73,000 in liabilities. Intralogix provides tools that enable
scientists to search, compare and purchase chromatography products for their
research needs.

       The Intralogix and SciCentral acquisitions were not financially
significant as they related to the purchase price or past results of operations
of the acquired entities. Therefore, pro forma financial information has not
been presented for these acquisitions. These acquisitions were accounted for
using the purchase method of accounting.


                                       20

<PAGE>

       SciQuest generates revenues from scientific organizations by charging
license, subscription and maintenance fees for the use of its technology.
SciQuest also offers professional services related to these solutions, for
activities such as project implementation and training. In addition, SciQuest
receives revenue from scientific supply manufacturers for converting their paper
catalogs into an electronic format, enhancing or enriching the data and
distributing the information as directed by the suppliers.

       Revenues consist of (1) sales of software licenses and fees for
implementation, customization and maintenance services related to these software
licenses, (2) sales of scientific products in e-commerce transactions
originating on our web sites, (3) sales of scientific equipment, (4) advertising
revenues from our web sites, (5) advertising revenues from the Source Book, and
(6) commissions received from the auction of used scientific equipment. Prior to
the launch of our e-commerce marketplace in April 1999, substantially all of our
revenues were derived from advertising on our web sites. Revenues from
e-commerce transactions became a significant source of our revenues in the third
quarter of 1999. Sales of scientific equipment were a significant source of
revenues in the second and third quarters of 2000 as we sought to introduce new
pharmaceutical, clinical, biotechnology, chemical, industrial and educational
organizations to our marketplace. Transactions involving the sale of scientific
equipment typically have significantly higher gross sales prices, on a
per-transaction basis, and lower gross margins than do transactions for
scientific products in e-commerce transactions originating on our web sites.
During the second and third quarters of 2001, we began the process of
discontinuing our order processing services. This significantly reduced the
level of e-commerce transactions during said periods. In connection with this
restructuring, we expect that sales of software licenses and fees for
implementation, customization and maintenance services related to these software
licenses will be the primary source of revenues in future periods.

       We offer various web-based solutions where potential buyers can
cross-search content from multiple suppliers and build a multiple line item
order for products from various suppliers. Historically, when a purchaser placed
an order through our marketplace, we have purchased that item from the supplier
at either a pre-negotiated price or at a discount from the supplier's list price
and have arranged for shipment to the purchaser. We have historically taken
legal title to the products purchased at the date of shipment and relinquished
title to our customers upon delivery. After the customer receives the product,
we begin the collection process by presenting a consolidated invoice to the
customer for the products represented in the order. Payment by the customer to
us is then made through a traditional account setup and payment system or, in
some cases, by credit card/procurement card. We have offered extended payment
terms to our customers who purchased scientific equipment as these transactions
have higher dollar values. We bear all credit risk on sales that we make, and we
are obligated to pay the supplier of the products that we purchase regardless of
whether we receive payment from the customer for the products. For each
transaction through April 2001, we recognized revenue in the amount of the sales
price of the item to the customer and recognized the amount paid to the supplier
plus shipping costs as cost of goods sold. The difference between revenues and
cost of goods sold represented our gross profit.

       Through April 2001, revenues from sales of scientific products in
e-commerce transactions and from sales of scientific equipment were recorded as
product revenues on a gross basis and were recognized upon receipt by our
customers. Product shipments were generally made on our designated carriers and
we were responsible for shipping costs which are recorded as cost of revenues.
We invoice the customer for the shipping costs.

       Advertising revenues are recognized ratably over the period in which the
advertisement is displayed. Revenues from advertising included in the Source
Book are recognized at the date the Source Book is published and distributed,
which historically has been in the second quarter of the fiscal year.

       EMAX recognizes revenue from the sale of licenses to its software
products, the implementation and customization of its software products and the
sale of maintenance and support contracts. EMAX recognizes revenues from the
sale of licenses to its software products and implementation and customization
of these software products on a percentage-of-completion basis over the period
of the customization and implementation services, which generally ranges from
three to nine months. EMAX recognizes revenues from the sale of maintenance and
support contracts ratably over the period of the maintenance and support
agreements, which is typically twelve months. Revenues from the sale of
standardized versions of the EMAX software are recognized upon customer
acceptance in accordance with Statement of Position 97-2, "Software Revenue
Recognition."


                                       21

<PAGE>

Change in Business Procedure Affecting Revenue Reporting

       Prior to May 1, 2001, we took legal title to the products that we
purchased from our suppliers and that, in turn, were sold to our customers in
e-commerce transactions. Beginning May 1, 2001, we no longer take legal title to
these products. Instead, we now act as an agent on behalf of the customer, and
title will pass directly from the supplier to the customer. We expect this
change will allow us to reduce or eliminate some of our general and
administrative expenses, such as product insurance, regulatory compliance, sales
tax filings and other related order processing costs. We will continue to be
responsible for the collection of the receivable and to bear the resulting
credit risk.

       Since we act as an agent for the customer and not as the primary obligor
in the transaction for orders after May 1, 2001, we no longer record sales of
scientific products and scientific equipment in e-commerce transactions on a
gross basis. For each sale, we will recognize revenue in the amount of the net
commission that we earn for processing the transaction and/or payment for
services. As a result of this change in our method of reporting revenue, we
expect to record much lower gross revenues from e-commerce transactions in the
future; however, we do not expect our gross profit from e-commerce transactions
to be materially affected although our gross margin as a percentage of related
net revenue will increase.

       During the second and third quarters of 2001, we began the process of
discontinuing our order processing services to our customers. This significantly
reduced the level of e-commerce transactions during said periods.

Three Months Ended September 30, 2001 and 2000

    Revenues

       Revenues for the quarter ended September 30, 2001 and 2000 have been
derived primarily from the sale of licenses to our software products and the
implementation and customization of our software products and from the sale of
scientific products and scientific equipment in e-commerce transactions.

       E-commerce revenues decreased to $443,000 for the three months ended
September 30, 2001 from $17.9 million for the three months ended September 30,
2000. As we previously discussed, we began ceasing to provide order processing
services to our customers during the second and third quarters, which
significantly reduced the volume of e-commerce transactions. In addition,
effective May 1, 2001, we discontinued taking legal title to products we
purchase from our suppliers and, in turn, sell to our customer. As a result, for
products sold after May 1, 2001, we record revenue as the net commission that we
earn for processing the transaction. Therefore, revenues for the third quarter
of 2001 were comprised of transactions for orders placed prior to May 1, 2001,
totaling $283,000, which were recorded on a gross basis, and $160,000
representing the commissions earned on transactions for orders placed after May
1, 2001. The total value of the underlying scientific products sold in
transactions processed during the third quarter of 2001 was $4.8 million. This
is compared to $9.2 million of sales of scientific products and $8.7 million of
scientific equipment during the three months ended September 30, 2000. There
have been no sales of scientific equipment in 2001.

       This decrease in overall e-commerce revenue is primarily the result of
our efforts to migrate from providing customers with outsourced purchasing
services to purchasing our software solutions.

       During each of the three month periods ended September 30, 2001 and 2000,
we recognized $1.8 million of revenue from fees from licenses and other
professional services.

       During the three months ended September 30, 2001, three customers
accounted for 39%, 11%, and 10%, respectively, of gross transactions. There can
be no assurance that these customers will continue to purchase at these levels.

    Cost of Revenues

       Cost of revenues related to transactions for orders placed prior to May
1, 2001 primarily consists of the purchase price of scientific products sold in
e-commerce transactions and related shipping costs for these products.


                                       22

<PAGE>

Cost of license fees and other professional services primarily consist of
personnel costs for employees who work directly on the development and
implementation of customized electronic research solutions and who provide
maintenance to customers, and also consists of the amortization of capitalized
software development costs.

       Cost of e-commerce revenues decreased to $273,000 for the three months
ended September 30, 2001 from $17.6 million for the three months ended September
30, 2000. This decrease resulted from our migration away from providing order
processing services and because we stopped taking legal title to products sold
as of May 1, 2001. The cost of products related to sales for which we did not
take title was $4.0 million. The cost of scientific products was $9.0 million
for the three months ended September 30, 2000, respectively. Cost of scientific
equipment for the three months ended September 30, 2000 was $8.5 million. There
have been no sales of scientific equipment in 2001.

       In addition, cost of revenues for license fees and other professional
services for the three months ended September 30, 2001 and 2000 was $1.3 million
and $1.2 million, respectively, of which $0.7 million and $0.5 million,
respectively, related to the amortization of capitalized software development
costs.

       Gross Profit

       Gross profit was approximately $0.7 and $1.0 million for the three months
ended September 30, 2001 and 2000, respectively. Gross profit on the sale of
scientific products was $170,000 and $310,000, which represented approximately
38.4% and 1.7%, for the three months ended September 30, 2001 and 2000,
respectively. This increase in the gross margin percentage resulted, in part,
because we stopped taking legal title to products sold after May 1, 2001. This
had the effect of increasing the gross profit percentage for the period, without
any effect on the gross profit dollars. The gross profit percentage on all
products sold would have been 3.8% and 1.7% for the three months ended September
30, 2001 and 2000, had we continued taking legal title to products sold.

       Gross profit from licenses and professional fees was $520,000 and
$660,000, for the three months ended September 30, 2001 and 2000, respectively.

    Operating Expenses

       Development Expenses. Development expenses consist primarily of personnel
and related costs to develop, operate and maintain our web sites, aggregate data
and the amortization of capitalized development costs. Development costs
decreased to $2.2 million for the three months ended September 30, 2001 from
$3.6 million for the three months ended September 30, 2000. This decrease
resulted from decreased expenses required to develop our e-commerce fulfillment
system and list suppliers' products on our web sites. During the second and
third quarters of 2001, we reduced our development costs related to our
e-commerce business as we focused on selling software and services. During the
three months ended September 30, 2001 and 2000, we capitalized approximately
$0.9 million and $2.5 million, respectively, of certain costs related to
software and web site development projects. We expect our development expenses
to decrease during the remainder of 2001.

       Included in development cost is the amortization of non-cash stock-based
employee compensation expense, which totaled $0.1 million and $0.1 million for
the three months ending September 30, 2001 and 2000, respectively. This is
primarily due to stock options that had been issued to employees with exercise
prices less than fair value on the date of grant since December 31, 1999.
Deferred compensation recorded due to the issuance of such stock options is
charged to stock-based employee compensation expense over the vesting term of
the options.

       Sales and Marketing Expenses. Sales and marketing expenses consist
primarily of salaries and other related costs for sales and marketing personnel,
travel expenses, public relations expenses and marketing materials. Sales and
marketing expenses decreased to $1.6 million for the three months ended
September 30, 2001 from $8.2 million for the three months ended September 30,
2000. This decrease resulted primarily from reducing the number of sales and
marketing personnel to market our products and services and from reducing
advertising and promotion expenses for our e-commerce marketplace. Sales and
marketing expenses for the three months ended September 30, 2001 and 2000
include $0.1 million and $0.2 million, respectively, of amortization of non-cash
stock based employee compensation. Also included in sales and marketing expenses
for the three months ended September 30, 2001 and 2000 is amortization expense
(benefit) of non-cash stock based customer acquisition costs of $0.1 million and
($1.0) million, respectively.


                                       23

<PAGE>

     Stock-based customer acquisition costs represent the amortization of
deferred customer acquisition costs that were initially recorded in November
1999 upon the issuance of common stock warrants to key suppliers and customers.
The value of these warrants is adjusted each reporting period based upon the
closing trading price of our common stock at each balance sheet date. Decreases
in the Company's closing trading price from one reporting period to the next
will likely result in a benefit to the Company, and increases in the Company's
closing trading price will likely result in charges to expense. Because the
amortization of these costs is dependent upon the trading price of our common
stock, we cannot predict the future impact of this on our results from
operations.

     We expect our sales and marketing expenses, apart from the amortization of
stock-based customer acquisition costs, to decrease during the remainder of 2001
due to the aforementioned reduction in the number of personnel in our sales and
marketing departments.

     General and Administrative Expenses. General and administrative expenses
consist primarily of personnel and related costs for our customer care
department and general corporate functions, including finance, accounting,
legal, human resources, investor relations, facilities, amortization of goodwill
and non-cash stock based employee compensation. General and administrative
expenses decreased to $13.1 million for the three months ended September 30,
2001 from $16.8 million for the three months ended September 30, 2000. The
decrease in general and administrative expenses is primarily the result of
reduced personnel in these functional areas. Amortization of goodwill resulting
primarily from the acquisition of EMAX in March 2000 and other intangibles was
$9.7 million and $10.2 million in 2001 and in 2000, respectively. General and
administrative expenses also include a charge of $0.2 million and $0.6 million
relating to non-cash stock based employee charges in the three months ended
September 30, 2001 and 2000, respectively. General and administrative expenses
before these non-cash charges decreased by $2.8 million primarily due to reduced
personnel. We expect general and administrative expenses to decrease during the
remainder of 2001, as we reduce our overhead costs and realize the savings
impact of the previous reductions in personnel.

   Interest Income (Expense)

     Interest income (expense) consists of interest income earned on cash
deposited in money market accounts and invested in short and long term U.S.
Government obligations partially reduced by interest expense incurred on capital
lease obligations. Net interest income decreased to $0.5 million for the three
months ended September 30, 2001 from net interest income of $1.7 million for the
three months ended September 30, 2000. This decrease resulted from our use of
cash and investments to fund operations during 2000 and the first nine months of
2001. We expect interest income to decrease throughout 2001.

Nine Months Ended September 30, 2001 and 2000

    Revenues

     Revenues for the nine months ended September 30, 2001 and 2000 have been
derived primarily from the sale of scientific products and scientific equipment
in e-commerce transactions and from the sale of licenses to our software
products and the implementation and customization of our software products.

     E-commerce revenues decreased to $16.2 million for the nine months ended
September 30, 2001 from $33.5 million for the nine months ended September 30,
2000. As we previously discussed, effective May 1, 2001, we discontinued taking
legal title to products we purchase from our suppliers and, in turn, sell to our
customers. As a result, for products sold after May 1, 2001, we will record
revenue as the net commission that we earn for processing the transaction.
Therefore, revenues for the nine months ended September 30, 2001 were comprised
of sales prior to May 1, 2001, totaling $15.9 million, which were recorded on a
gross basis and commissions earned on transactions for orders placed after May
1, 2001 totaling $0.3 million. The total value of scientific product
transactions processed during the nine months ended September 30, 2001 was $25.1
million. This is compared to $22.3 million of sales of scientific products and
$11.2 million of scientific equipment during the nine months ended September 30,
2000. There have been no sales of scientific equipment in 2001.


                                       24

<PAGE>

       During the nine months ended September 30, 2001 and 2000, we recognized
$4.7 million and $4.1 million, respectively, of revenue from fees from licenses
and other professional services. This amount includes revenue related to
advertising sold on BioSupplyNet Source Book of $660,000 and $770,000,
respectively. Such revenue is recorded annually when the Source Book is
published.

       During the nine months ended September 30, 2001, three customers
accounted for 25%, 15%, and 10%, respectively, of gross transactions. There can
be no assurance that these customers will continue to purchase at these levels.

    Cost of Revenues

       Cost of revenues related to transactions for orders placed prior to May
1, 2001, primarily consists of the purchase price of scientific products sold in
e-commerce transactions and related shipping costs for these products. Cost of
license fees and other professional services primarily consist of personnel
costs for employees who work directly on the development and implementation of
customized electronic research solutions and who provide maintenance to
customers, and also consists of the amortization of capitalized software
development costs. Cost of revenues relating to the BioSupplyNet Source Book
consists primarily of printing, publishing and distribution of the Source Book.

       Cost of e-commerce revenues decreased to $15.4 million for the nine
months ended September 30, 2001 from $32.8 million for the nine months ended
September 30, 2000. This decrease resulted, in part, because we stopped taking
legal title to products sold as of May 1, 2001 and due to the substantial
reduction in e-commerce volume. The cost of products related to sales for which
we did not take title was $8.9 million. Therefore, the cost of scientific
products sold would have been $24.3 million (had we continued to take legal
title to products sold) and $21.9 million for the nine months ended September
30, 2001 and 2000, respectively. Cost of scientific equipment for the nine
months ended September 30, 2000 was $10.9 million. There were no sales of
scientific equipment in 2001.

       In addition, cost of revenues for license fees and other professional
services for the nine months ended September 30, 2001 and 2000 was $3.6 million
and $2.6 million, respectively, of which $1.9 million and $1.0 million,
respectively, related to the amortization of capitalized software development
costs. Also included in the cost of revenue for license fees and other
professional services are the costs related to the BioSupplyNet Source Book of
$290,000 and $310,000, during the nine months ending September 30, 2001 and
2000, respectively.

    Gross Profit

       Gross profit decreased to $1.9 million for the nine months ended
September 30, 2001 from $2.2 million for the nine months ended September 30,
2000. Gross profit on the sale of scientific products was $0.8 million and $0.7
million, which represented approximately 5.0% and 2.0%, for the nine months
ended September 30, 2001 and 2000, respectively. This increase in the gross
margin percentage resulted, in part, because we stopped taking legal title to
products sold after May 1, 2001. This had the effect of increasing the gross
profit percentage for the period, without any effect on the gross profit
dollars. The gross profit percentage on all products sold would have been 3.3%
and 2.0% for the nine months ended September 30, 2001 and 2000, had we continued
to take legal title to products sold.

       Gross profit from licenses and professional fees was $1.1 million and
$1.5 million, for the nine months ended September 30, 2001 and 2000,
respectively, of which $0.7 million and $1.1 million, respectively, related to
license fees and $370,000 and $460,000, respectively, were derived from the
Source Book.

    Operating Expenses

       Development Expenses. Development expenses consist primarily of personnel
and related costs to develop, operate and maintain our web sites, aggregate data
and the amortization of capitalized development costs. Development costs
decreased to $9.4 million for the nine months ended September 30, 2001 from
$11.7 million for the nine months ended September 30, 2000. This decrease
resulted from decreased expenses required to develop our e-commerce fulfillment
system and list suppliers' products on our web sites. We reduced our development
costs related to our e-commerce business as we focused on selling software and
services. During the nine months ended September 30, 2001 and 2000, we
capitalized approximately $5.4 million and $4.0 million, respectively, of
certain


                                       25

<PAGE>

costs related to software and web site development projects. We expect our
development expenses to decrease during the remainder of 2001.

       Included in development cost is the amortization of non-cash stock-based
employee compensation expense, which totaled $0.4 million and $0.9 million for
the nine months ending September 30, 2001 and 2000, respectively. This is
primarily due to stock options that had been issued to employees with exercise
prices less than fair value on the date of grant since December 31, 1999.
Deferred compensation recorded due to the issuance of such stock options is
charged to stock-based employee compensation expense over the vesting term of
the options.

       Sales and Marketing Expenses. Sales and marketing expenses consist
primarily of salaries and other related costs for sales and marketing personnel,
travel expenses, public relations expenses and marketing materials. Sales and
marketing expenses decreased to $8.6 million for the nine months ended September
30, 2001 from $18.6 million for the nine months ended September 30, 2000. This
decrease resulted primarily from reducing the number of sales and marketing
personnel to market our products and services and from reducing advertising and
promotion expenses for our e-commerce marketplace. Sales and marketing expenses
for nine months ended September 30, 2001 and 2000 include $0.4 million and $0.8
million, respectively, of amortization of non-cash stock based employee
compensation. Also included in sales and marketing expenses for the nine months
ended September 30, 2001 and 2000 is amortization expense (benefit) of non-cash
stock based customer acquisition costs of $0.4 million and ($2.6) million,
respectively.

       Stock-based customer acquisition costs represent the amortization of
deferred customer acquisition costs that were initially recorded in November
1999 upon the issuance of common stock warrants to key suppliers and customers.
The value of these warrants is adjusted each reporting period based upon the
closing trading price of our common stock at each balance sheet date. Decreases
in the Company's closing trading price from one reporting period to the next
will likely result in a benefit to the Company, and increases in the Company's
closing trading price will likely result in charges to expense. Because the
amortization of these costs is dependent upon the trading price of our common
stock, we cannot predict the future impact of this on our results from
operations.

       We expect our sales and marketing expenses, apart from the amortization
of stock-based customer acquisition costs, to decrease during the remainder of
2001 due to the aforementioned reduction in the number of personnel in our sales
and marketing departments.

       General and Administrative Expenses. General and administrative expenses
consist primarily of personnel and related costs for our customer care
department and general corporate functions, including finance, accounting,
legal, human resources, investor relations, facilities, amortization of goodwill
and non-cash stock based employee compensation. General and administrative
expenses increased to $43.2 million for the nine months ended September 30, 2001
from $39.0 million for the nine months ended September 30, 2000. The increase in
general and administrative expenses is primarily the result of $8.5 million
increase of amortization of goodwill relating primarily to our acquisition in
March of 2000 of EMAX Solutions. There was no amortization during the first
three months of 2000. This increase is offset by reduced personnel in these
functional areas. Amortization of goodwill resulting primarily from the
acquisition of EMAX in March 2000 and other intangibles was $30.1 million and
$21.6 million during the nine months ended September 30, 2001 and 2000,
respectively. General and administrative expenses also include a charge of $0.7
million and $2.5 million relating to non-cash stock based employee charges in
the nine months ended September 30, 2001 and 2000, respectively. We expect
general and administrative expenses to decrease during the remainder of 2001, as
we reduce our overhead costs and realize the savings impact of the previous
reductions in personnel.

       Purchased In-process Research and Development. For the nine months ended
September 30, 2000, we recognized an in-process research and development charge
of $0.7 million as a result of the acquisition of EMAX. Based on management's
valuation of EMAX and its assets, we allocated $0.7 million of the EMAX purchase
price of $126 million to software products being developed by EMAX that had not
reached technological feasibility and had no alternative use at the date of the
acquisition of EMAX. At the date of the acquisition, these software products
being developed by EMAX were approximately 15% complete.

       Restructuring.   In June 2001, the Company announced a restructuring of
its business to essentially eliminate outsourced procurement services. The
restructuring includes the elimination of certain unprofitable business lines


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and a resultant reduction in workforce of approximately half of the employees
located in the United States. The total restructuring charge was $10.7 million
and included approximately $1.6 million for employee separation benefits, $7.1
million of assets and approximately $2.0 million of other costs and lease
obligations relating to the unprofitable business lines to be eliminated.

    Interest Income (Expense)

       Interest income (expense) consists of interest income earned on cash
deposited in money market accounts and invested in short and long term U.S.
Government obligations partially reduced by interest expense incurred on capital
lease obligations. Net interest income decreased to $2.5 million for the nine
months ended September 30, 2001 from net interest income of $5.8 million for the
nine months ended September 30, 2000. This decrease resulted from our use of
cash and investments to fund operations during 2000 and the first nine months of
2001. We expect interest income to decrease throughout 2001.

    Income Tax Benefit

       Income tax benefit decreased to zero for the nine months ended September
30, 2001 from $0.1 million for the nine months ended September 30, 2000. The
decrease in income tax benefit was the result of the reduction in net deferred
tax liabilities to zero during the year ended December 31, 2000.

    Liquidity and Capital Resources

       We have primarily funded our operations through private placements of our
preferred stock during 1998 and 1999 and our initial public offering, which
closed in November 1999. As of September 30, 2001, we had total cash and
investments of $49.0 million, which is comprised of cash and cash equivalents of
$48.2 million and short-term investments of $0.8 million.

       Cash used in operating activities was $12.8 million and $43.7 million
during the nine months ended September 30, 2001 and 2000, respectively. Cash
used in operating activities was principally for payments to our suppliers for
purchases of scientific products, the development of our web sites, the
development of our e-commerce marketplace, our sales and marketing efforts, and
administrative and operations to support our growth.

       Cash (provided) used by investing activities during the nine months ended
September 30, 2001 and 2000 was ($41.8) million and $30.9 million, respectively.
Cash used in investing activities has primarily been comprised of purchases of
investments in US government obligations, commercial paper and corporate bonds,
net of maturities, purchases of computer equipment and the capitalization of
certain costs associated with the development of our web sites and with the
development of EMAX's electronic research software systems. Cash was primarily
provided from the maturity of investments.

       Cash (provided) used by financing activities during the nine months ended
September 30, 2001 and 2000 was $0.9 million and ($0.6) million, respectively.
During the nine months ended September 30, 2001, the Company repaid loan
obligations of $0.7 million and repurchased 304,000 shares of its common stock
for $0.3 million. During the nine months ended September 30, 2001 and 2000, the
Company received approximately $0.2 million and $1.3 million, respectively, in
proceeds from exercises of stock options and warrants, from purchases under the
employee stock purchase plan, and by the direct sale of restricted stock to an
officer of the Company.

       We believe that our existing liquidity and capital resources, including
the proceeds resulting from the sale of our common stock in our initial public
offering, will be sufficient to satisfy our cash requirements for the next two
years. To the extent that such amounts are insufficient, we will be required to
raise additional funds through equity or debt financing. There can be no
assurance that we will be able to raise such funds on favorable terms, or at
all.

New Accounting Pronouncements

       In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 141,  "Business Combinations,"  ( "SFAS
No. 141 "). SFAS No. 141 supersedes APB Opinion No. 16,
"Business Combinations,"  and FASB Statement No. 38,  "Accounting for
Preacquisition Contingencies of


                                       27

<PAGE>

Purchased Enterprises." SFAS No. 141 requires: 1) that all business combinations
be accounted for by the purchase method, thereby eliminating the pooling method,
2) that assets (including intangible assets) be recognized and valued apart from
goodwill, and 3) that additional disclosures be made regarding business
combinations and the resulting allocation of purchase price. The provisions of
SFAS No. 141 apply to all business combinations initiated after June 30, 2001
and to all purchase method acquisitions dated on or after July 1, 2001. The
Company's adoption of SFAS No. 141 will not have a material impact on the
consolidated financial position or results of operations.

       In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 142, "Goodwill and Other Intangible
Assets," ("SFAS No. 142"). SFAS No. 142 supersedes APB Opinion No. 17,
"Intangible Assets" and primarily addresses accounting for goodwill and other
intangible assets subsequent to their acquisition. The major provisions include:
1) the ceasing of amortization of goodwill and indefinite lived intangible
assets, 2) the testing for impairment of goodwill and indefinite lived
intangible assets at least annually, and 3) the removal of the restriction that
the maximum amortization period of intangible assets with finite lives be
limited to 40 years. The provisions of SFAS No. 142 will be effective for fiscal
years beginning after December 15, 2001 (with the exception that any goodwill or
intangible assets acquired after June 30, 2001 will be subject immediately to
the statement's provisions) with application being required at the beginning of
an entity's fiscal year. Any impairment losses from the initial application are
to be reported as a cumulative effect of a change in accounting principle in
accordance with APB 20, "Accounting Changes." The impact of the initial adoption
of SFAS No. 142 on the consolidated financial position of the Company is neither
currently known nor reasonably estimable. Due to the Company's historically
significant amounts of amortization expense related to goodwill and intangible
assets (approximately $10 million per quarter), the adoption of SFAS No. 142 may
have a material impact on the subsequently reported consolidated results of
operations.

       In October 2001, the Financial Accounting Standards Based Board issued
Statement of Financial Accounting Standard No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," ("SFAS No. 144").  SFAS No. 144
supersedes FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of," ("SFAS No. 121")
 and APB 30, "Reporting the Results of Operations - Reporting the Effects
of Disposal of a Segment of Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions," ("APB No. 30").

       In summary, SFAS No. 144, retains the fundamental recognition and
measurement provision of SFAS No. 121, however, establishes a "primary-asset"
approach to determine the cash flow estimation period for a group of assets and
liabilities. In addition, SFAS No. 144 retains the basic provisions of APB No.
30, but broadens the presentation to include a component of an entity. In
addition, discontinued operations are no longer measured on a net realizable
value basis and future operating losses are no longer recognized before they
occur. Rather, they are carried at the lower of its carrying amount or fair
value less cost to sell.

       The provisions of SFAS No. 144 are required to be applied to fiscal years
beginning after December 15, 2001. The adoption of SFAS No. 144 is not expected
to have any impact on the Company's financial statements or results of
operations.

Factors That May Affect Future Results

Since we have a limited operating history and an evolving business model,
forecasting future performance may be difficult.

       Our business model has evolved considerably since our company's
inception. For instance, we launched our public e-commerce marketplace in April
1999. Since that time, we have increasingly focused our efforts on providing
integrated e-commerce and asset management solutions to our customers. As part
of this strategy, we acquired EMAX in March 2000 and formed our Global
Professional Services division in February 2001. In addition, we are in the
process of discontinuing our order processing services. Accordingly, we have
only a limited operating history on which to evaluate our current business. As a
result of our limited operating history, the emerging nature of the scientific
products market and the evolving nature of our business model, we may be unable
to accurately forecast our revenues. We incur expenses based predominantly on
operating plans and estimates of future revenues. Revenues to be generated from
newly developed and evolving activities will be particularly difficult to
forecast accurately. Our expenses are to a large extent fixed. We may be unable
to adjust our spending in a timely manner to


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<PAGE>

compensate for any unexpected revenue shortfalls. Accordingly, a failure to meet
our revenue projections will have an immediate and negative impact on
profitability. In addition, if our restructuring program adversely affects our
revenues and/or fails to adequately reduce our expenses, our future earnings
will be negatively impacted. Finally, we cannot be certain that our evolving
business model will be successful, particularly in light of our limited
operating history.

We have a history of losses and anticipate incurring losses in the future. We
may not achieve profitability.

       We incurred net losses of $84.3 million for the year ended December 31,
2000 and $67.5 million for the nine months ended September 30, 2001. As of
September 30, 2001, we had an accumulated deficit of $190.5 million. We expect
to incur substantial operating losses and continued negative cash flow from
operations for the foreseeable future. In fact, we expect to continue generating
losses through at least 2002. We may not be able to increase revenues
sufficiently to achieve profitability.

Our future profitability and cash flows are dependent upon our ability to
control expenses.

       Our operating plan to achieve profitability is based upon estimates of
our future expenses. For instance, we have estimated that our development
expenses, certain sales and marketing expenses and general and administrative
expenses will decrease during the remainder of 2001. If our future expenses
are greater than anticipated, our ability to achieve profitability when expected
may be negatively impacted. In addition, greater than anticipated expenses may
negatively impact our cash flows, which could cause us to expend our capital
faster than anticipated. While we expect our existing capital to be sufficient
for the next two years, if our cash flows are negatively impacted, we may be
required to raise additional capital sooner than expected.

We are investing significantly in developing new product and service offerings
with no guarantee of success.

       Expanding our product and service offerings is an important component of
our business strategy. As such, we are expending a significant amount of our
resources in this development effort. For instance, we recently introduced
SciQuest SmartStore(TM), SelectSite SRA(TM) (Source and Requisition
Application), and SelectSite APA(TM) (Advanced Procurement Application). Any new
offerings that are not favorably received by buyers or suppliers could damage
our reputation or brand name. Expansion of our services will require us to
devote a significant amount of time and money and may strain our management,
financial and operating resources. We cannot assure you that our development
efforts will result in commercially viable products or services. In addition, we
may bear development costs in current periods that do not generate revenues
until future periods or at all. To the extent that we incur expenses that do not
result in increased current or future revenues, our earnings may be materially
and adversely affected.

Sales to larger customers may increase the length of our sales cycle and
decrease our profit margins.

       Increasing sales to larger enterprise buyers is an important element of
our business strategy. As we sell more sophisticated solutions to larger
organizations, we expect the average time from initial contact to final approval
to increase. During this sales cycle, we may expend substantial funds and
management resources without any corresponding revenue. If approval is delayed
or does not occur, our financial condition and operating results for a
particular period may be adversely affected. Approvals are subject to delays
over which we have little or no control, including the following:

       o      potential customers' internal approval processes;

       o      implementation of systems integration solutions;

       o      customers' concerns about implementing a new strategy and method
              of doing business; and

       o      seasonal and other timing effects.

       Increased sales to larger accounts may result in lower or negative profit
margins as larger customers typically have greater leverage in negotiating the
price and other terms of business relationships. We also typically incur costs


                                       29

<PAGE>

associated with customization of our systems with a sale to a large account. If
we do not generate sufficient revenues to offset any lower margins or these
increased costs, our operating results may be materially and adversely affected.
Also, the time between billing and receipt of revenues is often longer when
dealing with larger accounts due to increased administrative overhead.

We have relied, and continue to rely, on a limited number of large customers for
a significant portion of our revenues. Losing one or more of these customers may
adversely affect our revenues.

       We expect that for the foreseeable future we will generate a significant
portion of our revenues from a limited number of large customers. For the nine
months ended September 30, 2001, three customers accounted for 25% and 15%, and
10%, respectively, of our total revenues. In addition, large individual
transactions with these customers may represent an increasing percentage of our
revenues. These large transactions are often non-recurring, making it difficult
to predict future transactions. The failure of one or more large transactions to
occur in any given period may materially and adversely affect our revenues for
such period. If we lose any of our large customers or if we are unable to add
new large customers, our revenues will not increase as expected. In addition,
our reputation and brand name would be harmed.

Revenues from e-commerce transactions have historically comprised a significant
portion of our revenues. The failure to replace these revenues with license fee
revenues could have a material adverse effect on our revenues and earnings.

       As we increasingly shift our focus to providing technology solutions and
away from processing e-commerce transactions, we expect our revenues from
e-commerce transactions to decrease significantly. Consequently, we will become
increasingly dependent on sales of software licenses in order to achieve revenue
growth. We cannot assure you that we will be successful in growing software
license revenue. As part of our revenue generation efforts, we have entered into
a reseller arrangement with CambridgeSoft. However, we cannot assure you that we
will generate significant revenue from this arrangement. If we are not able to
replace revenues from e-commerce transactions with software license revenues,
our revenues and earnings will be materially and adversely affected.

Unless a broad range of purchasers and suppliers of scientific products adopt
our products and services, we will not be successful.

       Our success will require, among other things, that our solutions gain
broad market acceptance by our customers, suppliers, users and strategic
partners. For example, purchasers may continue managing assets and purchasing
products through their existing methods and may not adopt a web-based
supply-chain solution because of:

       o      their comfort with current purchasing habits and direct supplier
              relationships;

       o      the costs and resources required to switch purchasing methods;

       o      the need for products not offered through our web site;

       o      security and privacy concerns; or

       o      general reticence about technology or the Internet.

If we do not successfully market the SciQuest brand, our business may suffer.

       We believe that establishing, maintaining and enhancing the SciQuest
brand is critical in expanding our customer base. Some of our competitors
already have well-established brands in either online or supply chain services
or the scientific products industry. Promotion of our brand will depend largely
on continuing our sales and marketing efforts and providing high-quality
products and services to our enterprise customers. We reduced our spending on
sales and marketing significantly in the fourth quarter of 2000 and expect to
continue this reduction from prior levels throughout 2001. This reduction in
spending could materially and adversely affect our sales and marketing efforts.
We cannot be certain that we will be successful in marketing the SciQuest brand.
If we are unable


                                       30

<PAGE>

to successfully promote our brand, or if we incur substantial expenses in
attempting to do so, our revenues and earnings could be materially and adversely
affected.

If we are not able to successfully integrate our systems with the internal
systems of our key suppliers and buyers, our operating costs and relationships
with our suppliers and buyers will be adversely affected.

       A key component of all services is the efficiencies created for suppliers
and buyers through our products and services. In order to create these
efficiencies, it will often be necessary that our systems integrate with each
major supplier's and buyer's internal systems, such as inventory, customer
service, technical service, freight programs and financial systems. In addition,
there is little uniformity in the systems used by our customers. If these
systems are not successfully integrated, our operating costs and relationships
with our suppliers and buyers would be adversely affected, which could have a
material adverse effect on our financial condition and results of operations.

If we are unable to adapt our products and services to rapid technological
change, our revenues and profits could be materially and adversely affected.

       Rapid changes in technology, products and services, user profiles and
operating standards occur frequently. These changes could render our proprietary
technology and systems obsolete. We must continually improve the performance,
features and reliability of our products and services, particularly in response
to our competition.

       Our success will depend, in part, on our ability to:

       o      enhance our existing products and services;

       o      develop new services and technology that address the increasingly
              sophisticated and varied needs of our target markets; and

       o      respond to technological advances and emerging industry standards
              and practices on a cost-effective and timely basis.

       We cannot be certain of our success in accomplishing the foregoing. If we
are unable, for technical, legal, financial or other reasons, to adapt to
changing market conditions or buyer requirements, our market share could be
materially adversely affected.

If we are unable to protect our intellectual property rights, our business could
be materially and adversely affected.

       Our software technology is not patented and existing copyright laws offer
only limited practical protection. We cannot guarantee that the legal
protections that we rely on will be adequate to prevent misappropriation of our
technology. Also, these protections do not prevent independent third-party
development of competitive products or services. Failure to protect against the
misappropriation of our intellectual property could have a material adverse
effect on our business operations.

The market for technology solutions in the scientific products industry is
highly competitive, which makes achieving market share and profitability more
difficult.

       The market for technology solutions in the scientific products industry
is new, rapidly evolving and intensely competitive. Competition is likely to
intensify as this market matures.

       As competitive conditions intensify, competitors may:

       o    enter into strategic or commercial relationships with larger, more
            established and well-financed companies;

       o    secure services and products from suppliers on more favorable terms;



                                       31

<PAGE>

       o devote greater resources to marketing and promotional campaigns;

       o secure exclusive deals with buyers that impede our sales; and

       o devote substantially more resources to web site and systems
         development.

       In addition, new technologies and the expansion of existing technologies
may increase competitive pressures. As a result of increased competition, we may
experience reduced operating margins, as well as loss of market share and brand
recognition. We may not be able to compete successfully against current and
future competitors. These competitive pressures could have a material adverse
effect on our revenue growth and earnings.

Our future revenue growth may be adversely affected by a significant reduction
in spending in the scientific products industry.

       We derive substantial revenue from the scientific products industry via
licenses for procurement technology and historically from processing e-commerce
transactions. We expect our future growth to depend indirectly on spending
levels in this industry. Any significant reduction in spending in the scientific
products industry may have a material adverse effect on our revenues.

Our computer and telecommunications systems are in a single location, which
makes them more vulnerable to damage or interruption.

       Substantially all of our computer and telecommunications systems are
located in the same geographic area. These systems are vulnerable to damage or
interruption from fire, flood, power loss, telecommunications failure, break-ins
and similar events. While we have business interruption insurance, this coverage
may not adequately compensate us for lost business. Although we have implemented
network security measures, our systems, like all systems, are vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions.
These disruptions could lead to interruptions, delays, loss of data or the
inability to accept and confirm buyer purchases. Any of these occurrences could
have a material adverse effect on our revenues.

We bear the risk of credit sales on our web sites, which could put a significant
strain on our liquidity and capital resources.

       Our supplier agreements generally require us to pay the supplier for any
orders processed through our web sites. Accordingly, if a buyer fails to pay for
the products it purchased, we would be obligated to pay the supplier. Thus, we
bear the risk of collection. We also may be required to refund payments to
buyers for products returned to the supplier. Slow payment by buyers for
products purchased would negatively impact our cash flows. As our transaction
volume and average transaction size grow, these risks will increase. In isolated
instances, we have agreed to extend payment terms with our customers for large
purchases, which increases our credit risk and may negatively impact our cash
flows. We generally do not process an order from a buyer without a credit card
or other payment confirmation although we do extend credit terms to certain
qualified buyers. However, we cannot be certain that our credit confirmation
practices will be effective to protect us against these payment obligations. If
a significant number of buyers default on their payment obligations, or
suppliers fail to refund payments to us for products returned by our buyers, or
buyers do not pay their obligations to us on time, we could incur significant
and immediate cash payment obligations or suffer significant cash flow
constraints. These obligations could put a significant strain on our liquidity
and capital resources, which could prevent us from using our working capital to
further expand our business or require us to obtain additional financing.

If we are not able to effectively manage revenue growth with fewer personnel,
our business may suffer.

       We rapidly expanded our operations in 2000, which placed a significant
strain on our management, operational and financial resources as well as our
ability to achieve profitability. In November 2000, we commenced a restructuring
program that resulted in a significant reduction of our workforce. We further
reduced our workforce in the first half of 2001. This staff reduction could
adversely affect our ability to manage and continue the growth of our
operations. If we are unable to manage the growth of our business effectively,
our earnings could be materially and adversely affected.


                                       32

<PAGE>

       Many of our employees have only recently joined us. Additionally, several
of our key executives have been employed by us for two years or less. If our
employees do not work well together or some of our employees do not succeed in
their designated roles, our financial condition and results of operations could
be materially adversely affected. We cannot be certain that our management,
operational and financial resources will be adequate to support our future
operations.

If we fail to attract and retain key employees, our business may suffer.

       A key factor of our success will be the continued services and
performance of our executive officers and other key personnel. If we lose the
services of any of our executive officers, our financial condition and results
of operations could be materially and adversely affected. We do not have
long-term employment agreements with any of our key personnel. Our success also
depends upon our ability to identify, hire and retain other highly skilled
technical, managerial, editorial, marketing and customer service professionals.
Competition for such personnel is intense. We cannot be certain of our ability
to identify, hire and retain sufficiently qualified personnel. For example, we
may encounter difficulties in attracting a sufficient number of qualified
software developers and operations personnel for our online services and
transaction-processing systems. Failure to identify, hire and retain necessary
technical, managerial, editorial, merchandising, marketing and buyer service
personnel could have a material adverse effect on our financial condition and
results of operations.

We will be liable for any third party claims that may rise against EMAX
including claims related to important proprietary rights regarding EMAX's
technology. These claims could adversely affect our business.

       In our acquisition of EMAX, we acquired important proprietary rights that
are embodied in its software technology. This software technology is not
patented and existing copyright laws offer only limited practical protection. By
virtue of this acquisition, we will be liable for any valid third-party claims
that may arise against EMAX in relation to their proprietary rights or contracts
with suppliers and customers. While we have investigated EMAX's proprietary
rights and business practices, we cannot be certain that ownership, infringement
or other claims will not arise against EMAX. A successful claim by a third party
could result in significant liability on our part and could materially and
adversely affect the value of the technology that we are acquiring. As a
precaution, a portion of the purchase price for EMAX has been deposited into an
escrow fund. If we become liable for any claims against EMAX, we may be entitled
to compensation from this escrow fund. However, this escrow fund will terminate
in March 2002 and may not be sufficient to adequately compensate us for any
claims that do arise.

We are dependent on proprietary technology licensed from third parties, the loss
of which could be costly.

       We license a portion of the content for our products and services from
third parties. These third-party content licenses may not be available to us on
favorable terms, or at all, in the future. In addition, we must be able to
successfully integrate this content in a timely and cost-effective manner to
create an effective finished product. If we fail to obtain necessary content on
favorable terms or are unable to successfully integrate this content or if we
are unable to continue to license our order fulfillment transaction systems on
favorable terms, it could have a material adverse effect on our business
operations.

Our products, trademarks and other proprietary rights may infringe on the
proprietary rights of third parties, which may expose us to litigation.

       While we believe that our products, trademarks and other proprietary
rights do not infringe upon the proprietary rights of third parties, we cannot
provide any guarantees about the third-party products that are sold on our Web
sites or guarantee that third parties will not assert infringement claims
against us in the future or that any such assertion will not require us to enter
into a license agreement or royalty agreement with the party asserting a claim.
If the third-party products sold on our Web sites infringe the proprietary
rights of third parties, we may be deemed to infringe those rights by selling
such products. Even the successful defense of an infringement claim could result
in substantial costs and diversion of our management's efforts.


                                       33

<PAGE>

The failure to integrate successfully businesses that we have acquired or may
acquire could adversely affect our business.

       We have acquired and intend to continue to acquire complementary
businesses. In particular, we acquired BioSupplyNet, Inc. in 1998, and
SciCentral, Inc., Intralogix, Inc. and EMAX in 2000. An element of our strategy
is to broaden the scope and content of our products and services through the
acquisition of existing products, technologies, services and businesses.
Acquisitions entail numerous risks, including:

       o the integration of new operations, products, services and personnel;

       o the diversion of resources from our existing businesses, sites and
         technologies;

       o the inability to generate revenues from new products and services
         sufficient to offset associated acquisition costs;

       o the maintenance of uniform standards, controls, procedures and
         policies;

       o accounting effects that may adversely affect our financial results;

       o the impairment of employee and customer relations as a result of any
         integration of new management personnel;

       o dilution to existing stockholders from the issuance of equity
         securities; and

       o liabilities or other problems associated with an acquired business.

       We may have difficulty in effectively assimilating and integrating these,
or any future joint ventures, acquisitions or alliances, into our operations.
Any difficulties in the process could disrupt our ongoing business, distract our
management and employees, increase our expenses and otherwise adversely effect
our business. Any problems we encounter in connection with our acquisitions
could have a material adverse effect on our business.

If we cannot timely and accurately add supplier product data to our e-commerce
database, we may lose sales and customers, which would adversely affect our
revenues.

       Currently, we are responsible for loading supplier product information
into our database and categorizing the information for search purposes. We
currently have a backlog of product data from various companies to be loaded in
our e-commerce marketplaces. We anticipate that by the end of the quarter a
majority of these products will be loaded into these marketplaces. However, we
continuously receive new product data to load. We generally will not derive
revenue from this service until the data is loaded into our system. Timely
loading of these products into our database depends upon a number of factors,
including the file formats of the data provided to us by suppliers and our
ability to further automate and expand our operations to accurately load this
data into our product database, any of which could delay the actual loading of
these products beyond the dates we estimate.

       In addition, we are generally obligated under our supplier agreements to
load updated product data into our database for access through our marketplaces
within a reasonable period of time following their delivery from the supplier.
Our current supplier data backlog could make it difficult for us to meet these
data update obligations to our suppliers. While we intend to further automate
the loading and updating of supplier data on our system, we cannot assure you
that we will be able to do so in a timely manner.

If suppliers terminate their agreements with us, our product offerings may
suffer.

       Following an initial one-year term, many of our standard supplier
agreements may be terminated by either party on 90 days' notice. After
expiration of the initial term, such suppliers may terminate or seek to
renegotiate their agreements. If a significant number of suppliers terminate
their agreements with us, the range of products we can offer would be adversely
affected. The ability of suppliers to terminate their agreements may result in
negotiating new agreement terms that are less favorable to us, which could have
a material adverse effect on our earnings.


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<PAGE>

If our exclusive suppliers elect to terminate the exclusive nature of their
agreements with us, our business could be adversely affected.

       Our exclusive supplier agreements have a five-year term, but the
exclusive nature of such agreements may be terminated after 18 months following
execution of the agreement. This termination right will arise in most cases
during 2001. If a significant number of the exclusive suppliers terminate the
exclusive nature of such agreements, the volume of our order flow will be
reduced significantly. We may also be forced to negotiate new agreements with
terms that are less favorable to us.

Since we rely on third-party suppliers and carriers to fulfill orders for our
customers, we have limited control over the timing and accuracy of order
fulfillment. As a result, we may not be able to guarantee customer satisfaction.

       We do not carry inventory or directly supply products. As a result, we
rely on our suppliers and carriers for rapid order fulfillment and other
customer service functions to ensure buyer satisfaction. If our suppliers do not
provide high quality customer service, our business reputation and customer
satisfaction could be materially and adversely affected. Most of our supplier
arrangements do not guarantee the availability of merchandise, establish
guaranteed prices or require continuity of pricing practices. As a result, we
have little or no control over the fulfillment of buyers' orders. In order to be
successful, we must maintain relationships with suppliers that will produce,
stock and deliver high quality products to buyers through our web sites.

       We rely on third-party carriers to ensure accurate and timely delivery of
products to buyers. We cannot be certain that our carriers will consistently
provide high quality performance. If our carriers fail to deliver products
accurately and on a timely basis, our reputation and business could be
materially and adversely affected.

If our Web sites and transaction processing systems are not able to adequately
service traffic levels, our ability to satisfy our customers and maintain
revenue growth may suffer.

       Our revenues depend in part on the number of buyers who use our web sites
to purchase scientific supplies and products. Accordingly, our web sites,
transaction-processing systems and network infrastructure must be able to
service significant traffic levels while maintaining adequate buyer service
levels. Any system interruptions or delays in our transaction system would
reduce the volume of sales and the attractiveness of our service offerings,
which could have a material adverse effect on our customer satisfaction and our
ability to maintain revenue growth. We have experienced infrequent system
interruptions in the past during implementation of system upgrades. These
interruptions could continue to occur from time to time and could have a
material adverse effect on our service offerings. Substantial increases in the
volume of traffic on our web sites or the number of purchases made by buyers
will require expansion and upgrades of our technology, transaction-processing
systems and network infrastructure. We cannot be certain that our
transaction-processing systems and network infrastructure will be able to
accommodate traffic in the future.

We may become exposed to product liability claims, which could result in
substantial costs and liability.

       The sale of scientific products involves the risk of product liability
claims. We face potential liability for claims based on the type and adequacy of
the information and data that suppliers publish on our Web sites as well as the
nature of the products that are sold through our web sites, including claims for
breach of warranty, product liability, misrepresentation, violation of
governmental regulations and other commercial claims. Although we maintain
general liability insurance and product liability insurance, our insurance may
not cover some claims and may not be adequate to fully indemnify us for
liabilities that may be imposed. A product liability claim against us, if
successful, could result in a significant liability that would have a material
adverse effect on our liquidity and capital resources. In addition, even the
successful defense of a product liability claim could result in substantial
costs and diversion of our management's efforts.


                                       35

<PAGE>

The content of our Web sites may expose us to various claims, which could result
in substantial costs and liabilities.

       Our web sites contain information concerning the products offered by
suppliers, including product descriptions, specifications and pricing. This
information is provided by suppliers and we generally do not independently
verify this information. As a result, we could potentially face liability for
fraud, negligence, copyright, patent or trademark infringement and other claims
based on the information contained on our web sites. A successful claim could
subject us to significant liability that would have a material adverse effect on
our liquidity and capital resources. In addition, even the successful defense of
a claim could result in substantial costs and division of our management's
efforts and damage to our brand perception by our customers.

Our planned growth from international customers will require financial resources
and management attention and could have a negative effect on our earnings.

       We intend to invest resources and capital to expand internationally,
particularly in Europe. This expansion will require financial resources and
management attention and could have a negative effect on our earnings. We cannot
assure you that we will be successful in creating international demand for our
solutions and services. In addition, our international business may be subject
to a variety of risks, including, among other things, increased costs associated
with maintaining international marketing efforts, applicable government
regulation, fluctuations in foreign currency, difficulties in collecting
international accounts receivable and the enforcement of intellectual property
rights. We cannot assure you that these factors will not have an adverse effect
on future international sales and earnings. In addition, the business customs
and regulations in foreign countries may require changes in our business model.
In addition, we are currently contemplating registering our trademarks in other
countries. We cannot assure you that we will be able to do so.

We rely on our suppliers and carriers in complying with government regulations
regarding the sale and distribution of regulated products, and their failure to
so comply could result in substantial civil and criminal liability.

       Many of the products offered through our web sites are subject to direct
regulation by governmental agencies, which includes numerous laws and
regulations generally applicable to the chemical, pharmaceutical, controlled
substances, human and biological reagents, nuclear chemical businesses, and
environmental spills. Because of our presence in the distribution chain, we may
be subject to significant liability for violations of these regulations
regardless of our actual involvement in a violation. We could be fined or
exposed to civil or criminal liability, including monetary fines and injunctions
for any violations. We have historically relied, and will in the future rely,
upon our suppliers to meet all packaging, distribution, labeling, hazard and
health information notices to purchasers, record keeping and licensing
requirements applicable to transactions conducted through our system. In
addition, we rely upon our carriers to comply with regulations regarding the
shipment of hazardous materials sold through our system. We cannot assure you
that our suppliers and carriers will comply with all applicable government
regulations.

Online commerce and database security concerns could adversely affect traffic on
our web sites and our revenues.

       The secure transmission of confidential information over public networks
is a fundamental requirement for online commerce. Concerns over the security of
transactions and commercial online services and other privacy issues may also
inhibit the growth of the Internet and the online commerce industry. We license
encryption and authentication technology for the transmission of confidential
information, such as buyer credit card numbers, through our online system. In
addition, we maintain an extensive confidential database of buyer profiles and
transaction information. Technological advances, including new discoveries in
the field of cryptography, could result in a compromise or breach of our
security systems. Security breaches could have a material adverse effect on our
reputation, financial condition and results of operations. An intruder who
breaches our security measures could misappropriate proprietary information or
cause interruptions in our operations. We could be required to spend a
significant amount of time and money to protect against security breaches or to
alleviate problems caused by such breaches. Security breaches could also expose
us to a risk of loss or litigation and possible liability. We cannot be certain
that our security measures will prevent security breaches.


                                       36

<PAGE>

Significant fluctuation in the market price of our common stock could result in
securities class action claims against us.

       Significant price and value fluctuations have occurred with respect to
the securities of technology companies. Our common stock price has been volatile
and is likely to be volatile in the future. In the past, following periods of
downward volatility in the market price of a company's securities, class action
litigation has often been pursued against such companies. If similar litigation
were pursued against us, it could result in substantial costs and a diversion of
our management's attention and resources.

Unless Web-based purchasing achieves widespread acceptance, we will have
difficulty achieving revenue growth.

       Use of the Internet to purchase products, particularly in the scientific
products market, remains at an early stage of development. Convincing buyers to
purchase scientific products online may be particularly difficult as such buyers
have traditionally relied on distributors of scientific products and mail order
catalogs to purchase their scientific products. If the use of e-commerce
services does not grow in the future, our revenue could be materially and
adversely affected.

       The continued growth of e-commerce services is dependent upon a number of
factors that are beyond our control, including the following:

       o continued growth in the number of buyers who use e-commerce services;

       o continued development of transaction security technology;

       o continued development of e-commerce technology;

       o continued development and successful implementation of enterprise
         software solutions;

       o emergence of standard and common nomenclature and methodology for
         e-commerce; and

       o development of complementary services and products.

Additional regulation of online commerce could adversely affect demand for our
products and services.

       There are currently few laws and regulations directly applicable to the
Internet and e-commerce services. However, we expect that additional regulation
may be adopted covering issues such as user privacy, pricing, content,
copyrights, distribution, antitrust and characteristics and quality of products
and services. In addition, the growth and development of e-commerce may prompt
calls for more stringent buyer protection laws that may impose additional
burdens on those companies conducting business online. The adoption of any
additional laws or regulations may decrease the growth of the Internet or
commercial online services, which could, in turn, decrease the demand for our
products and services. Additional regulation could also increase our cost of
doing business.

New accounting rules could be proposed that could adversely affect our reported
financial results.

       Our financial statements are prepared based on generally accepted
accounting principles and SEC accounting rules. These principles and rules are
subject to change from time to time for various reasons. While we believe we
meet all current financial reporting requirements, we cannot predict at this
time whether any initiatives will be proposed or adopted that would require us
to change our accounting policies. Any change to generally accepted accounting
principles or SEC rules could adversely affect our reported financial results.


                                       37

<PAGE>

Item 3: Quantitative and Qualitative Disclosures About Market Risk

       Most of our cash equivalents, short-term and long-term investments and
capital lease obligations are at fixed interest rates, therefore the fair value
of these investments is affected by changes in market interest rates. However,
because our investment portfolio is primarily comprised of investments in U.S.
Government obligations and high-grade commercial paper, an immediate 10% change
in market interest rates would not have a material effect on the fair market
value of our portfolio. Therefore, we would not expect our operating results or
cash flows to be affected to any significant degree by the effect of a sudden
change in market interest rates on our investment portfolio.


                                       38

<PAGE>
                                     PART II

                                OTHER INFORMATION

Item 1. Legal Proceedings.

            On September 10, 2001 SciQuest was named as a defendant in a
purported class action lawsuit filed in the United States District Court,
Southern District of New York. The lawsuit is captioned Patricia Figuerido and
Robert Wallace v. Sciquest.com, Inc., et al. No. 01 CV 8467. The case has been
consolidated for pretrial purposes with over 100 other lawsuits filed against
other issuers, their officers, and underwriters of their initial public
offerings under the caption In re Initial Public Offering Securities Litigation,
21 MC 92 (SAS). The case includes claims against SciQuest, three of its
officers, and seven investment banking firms who either served as underwriters,
or are the successors in interest to underwriters, of the company's initial
public offering. The complaint alleges that the prospectus used in our initial
public offering contained material misstatements or omissions regarding the
underwriters' activities in connection with the initial public offering. The
court has adjourned defendants' time to answer or respond to all complaints in
the consolidated proceedings until further order of the court.

       During 2001, a customer filed an action seeking a declaratory judgment
that its license entitled it to permit non-customer employees to use the
Company's licensed software. In addition, the complaint alleges breach by the
Company of an agreement pursuant to which the Company was to upgrade the
software to a newer version. The complaint seeks damages alleged to exceed
$1,000,000. The litigation arises out of the Company's discovery that the
customer had permitted non-customer employees to use the software. After
attempts proved unsuccessful to amicably resolve the dispute, the Company
suspended work on the upgrade and the customer failed to pay for the work
performed. The Company's answer to the complaint is due on December 2, 2001. The
Company intends to vigorously defend the action and to assert its counterclaims
seeking damages for copyright infringement and breach of contract and to recover
the amounts due for work previously billed, but unpaid.

       It is too early in each matter to reasonably predict the probability of
the outcome or to estimate a range of possible losses. Future losses may have a
material adverse effect on the Company's consolidated financial position,
liquidity or consolidated results of operations.

Item 2. Changes in Securities.

       Not applicable.

Item 3. Defaults in Securities.

       Not applicable.

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

        Not applicable

Item 5. Other Information.

       None.


                                       39

<PAGE>

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

       (a) The following exhibits are filed as a part of, or are incorporated by
reference into, this report on Form 10-Q:

Exhibit
-------
Number                                  Description
------                                  -----------
  3.1*   Amended and Restated Certificate of Incorporation of SciQuest.com.

  3.2*   Amended and Restated Bylaws of SciQuest.com.

  4.1*   See Exhibits 3.1 and 3.2 for provisions of the Amended and Restated
         Certificate of Incorporation and Amended and Restated Bylaws of
         SciQuest.com defining rights of the holders of Common Stock of
         SciQuest.com.

  4.2*   Specimen Stock Certificate.

 10.1*   SciQuest.com, Inc. Stock Option Plan dated as of September 4, 1997.

 10.2*   Amendment No. 1 to SciQuest.com, Inc. Stock Option Plan dated as of
         September 11, 1998.

 10.3*   Amendment No. 2 to SciQuest.com, Inc. Stock Option Plan dated as of
         February 26, 1999.

 10.4*   Amendment No. 3 to SciQuest.com, Inc. Stock Option Plan dated as of
         March 1, 1999.

 10.5*   Amendment No. 4 to SciQuest.com, Inc. Stock Option Plan dated as of
         August 27, 1999.

 10.6*   Sublease Agreement by and between Applied Innovation, Inc. and
         SciQuest.com dated March 11, 1999.

 10.7*   Master Lease Agreement by and between Comdisco, Inc. and SciQuest.com
         dated May 21, 1999, as amended.

 10.8*   Stock Restriction Agreement by and between SciQuest.com and Antony
         Francis dated March 1, 1999.

 10.9*   Registration Rights Agreement by and among SciQuest.com and the
         purchasers of Class B Common Stock and the purchasers of Series A
         Preferred Stock dated October 17, 1997, as amended.

 10.10*  Registration Rights Agreement by and among SciQuest.com and the
         purchasers of Series C Preferred Stock dated September 29, 1998.

 10.11*  Registration Rights Agreement by and among SciQuest.com and Antony
         Francis dated March 1, 1999.

 10.12*  Registration Rights Agreement by and among SciQuest.com, the holders of
         Series B Preferred Stock and the purchasers of Series D Preferred Stock
         dated May 18, 1999, as amended.


                                       40

<PAGE>

Exhibit
-------
Number                                      Description
------                                      -----------
10.13*      Registration Rights Agreement by and among SciQuest.com and the
            holders of Series EPreferred Stock dated July 27, 1999.

10.14*      Merger Agreement by and among SciQuest.com, SciQuest Merger
            Subsidiary, Inc., Internet Auctioneers International, Inc. and Mark
            Atlas dated July 27, 1999.

10.15*      Merger Agreement by and among SciQuest.com, SciQuest Acquisition,
            Inc. and BioSupplyNet, Inc., dated September 29, 1998.

10.16*      Lease Agreement by and between Duke-Weeks Realty Limited Partnership
            and SciQuest.com dated as of October 19, 1999.

10.17*      Content Conversion Services Agreement by and between SciQuest.com
            and Requisite Technology, Inc. dated December 18, 1998.

10.18**     Form of Strategic Alliance Plus Agreement.

10.19**     Form of Strategic Purchasing Agreement.

10.20**     Registration Rights Agreement by and among SciQuest.com and the
            former holders of Intralogix, Inc. stock dated January 14, 2000.

10.21*      Amendment No. 5 to SciQuest.com, Inc. Stock Option Plan.

10.22*      SciQuest.com, Inc. 1999 Stock Incentive Plan dated as of October 12,
            1999

10.23**     First Amendment to 1999 Stock Incentive Plan.

10.24**     Merger Agreement by and among SciQuest.com, Lujack Subsidiary, Inc.,
            Intralogix, Inc., Mary T. Romac, Timothy M. Brady and Dale L. Young
            dated January 14, 2000.

10.25**     Merger Agreement by and among SciQuest.com, SciCentral Acquisition
            Subsidiary, Inc., SciCentral.com, Inc. and the shareholders of
            SciCentral.com, Inc. dated February 2, 2000.

10.26**     Registration Rights Agreement by and among SciQuest.com and the
            former holders of SciCentral, Inc. stock dated February 2, 2000.

10.27**     Agreement and Plan of Merger and Reorganization between
            SciQuest.com, SciQuest Acquisition, Inc. and EMAX Solution Partners,
            Inc. dated March 13, 2000.

10.28**     Registration Rights Agreement by and among SciQuest.com and the
            former holders of EMAX Solution Partners, Inc. dated March 13, 2000.

10.29***    SciQuest.com, Inc. 2000 Employee Stock Purchase Plan.

10.30****   Second Amendment to 1999 Stock Incentive Plan.

10.31*****  Form of Services Agreement.
--------------
   * Incorporated by reference to SciQuest.com's Registration Statement on
     Form S-1 (Reg. No. 333-87433).
  ** Incorporated by reference to SciQuest.com's Registration Statement on
     Form S-1 (Reg. No. 333-32582).
 *** Incorporated by reference to SciQuest.com's Quarterly Report on Form 10-Q
     for the quarter ended September 30, 2000.


                                       41

<PAGE>

**** Incorporated by reference to SciQuest.com's Annual Report on Form 10-K for
     the year ended December 31, 2000.
*****Incorporated by reference to SciQuest Quarterly Report on Form 10-Q for
     the quarter ended June 30, 2001.

     (b) Reports on Form 8-K.

      None.



                                       42

<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.

                                       SCIQUEST INC.


Date: November 14, 2001
                                              /s/ STEPHEN J. WIEHE
                                    ---------------------------------------
                                                  Stephen J. Wiehe
                                              Chief Executive Officer
                                           (Principal Executive Officer)

Date: November 14, 2001
                                             /s/ JAMES J. SCHEUER
                                   ----------------------------------------
                                                  James J. Scheuer
                                              Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

                                       43