<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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 NUMBER: 000-29059
                                 ELOQUENT, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

               DELAWARE                                   94-3221868
   (STATE OR OTHER JURISDICTION OF                      (IRS EMPLOYER
    INCORPORATION OR ORGANIZATION)                    IDENTIFICATION NO.)

                      2000 ALAMEDA DE LAS PULGAS, SUITE 100
                           SAN MATEO, CALIFORNIA 94403
                                 (650) 294-6500

 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF THE
                    REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)


Indicate by check mark whether the registrant (1) has filed all reports required
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. [X] Yes  [ ] No

The number of outstanding shares of the registrant's Common Stock, $0.001 par
value, was 17,847,185 at April 30, 2001.



<PAGE>   2

                                 ELOQUENT, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                                           PAGE
                                                                                                           ----
<S>                                                                                                        <C>
PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

          Condensed Balance Sheets as of March 31, 2001 and December 31, 2000 ......................         3

          Condensed Statements of Operations for the Three Months Ended March 31, 2001 and 2000 ....         4

          Condensed Statements of Cash Flows for the Three Months Ended March 31, 2001 and 2000 ....         5

          Notes to Condensed Financial Statements ..................................................         6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......        10


Item 3. Quantitative and Qualitative Disclosures about Market Risk .................................        24

PART II: OTHER INFORMATION

Item 2. Changes in Securities and Use of Proceeds ..................................................        25

Item 6. Exhibits and Reports on Form 8-K ...........................................................        25

Signature
</TABLE>



                                       2.
<PAGE>   3

                          PART I: FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
                                 ELOQUENT, INC.
                            CONDENSED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                           MARCH 31,            DECEMBER 31,
                                                                             2001                  2000
                                                                           ---------            ------------
                                                                          (unaudited)
<S>                                                                        <C>                  <C>
ASSETS
Current assets:
   Cash and cash equivalents                                               $   3,151             $   4,519
   Short-term investments                                                     33,287                35,937
   Accounts receivable, net of allowances for doubtful accounts
      of $599 and $599, respectively                                           1,378                 2,768
   Deferred production costs                                                      42                   147
   Prepaid expenses                                                              683                   223
                                                                           ---------             ---------
        Total current assets                                                  38,541                43,594
Property and equipment, net                                                    3,055                 3,348
Other assets                                                                   2,147                 2,651
                                                                           ---------             ---------
        Total assets                                                       $  43,743             $  49,593
                                                                           =========             =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Bank line of credit                                                     $      --             $      --
   Accounts payable and other liabilities                                      6,040                 7,726
   Capital lease obligation - current portion                                    540                   709
   Deferred revenue                                                              885                 1,128
                                                                           ---------             ---------
        Total current liabilities                                              7,465                 9,563
Capital lease obligation, net of current portion                                 131                   230

Commitments and contingencies                                                     --                    --

Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares
   authorized and no shares outstanding                                           --                    --
Common stock, $0.001 par value; 40,000,000 shares authorized;
   17,847,185 and 17,836,514 shares outstanding, respectively                     18                    18
Unearned stock-based compensation                                             (2,019)               (2,462)
Other comprehensive income: unrealized gain on investments                       314                   193
Additional paid-in capital                                                   128,139               128,150
Accumulated deficit                                                          (90,305)              (86,099)
                                                                           ---------             ---------
        Total stockholders' equity                                            36,147                39,800
                                                                           ---------             ---------
        Total liabilities and stockholders' equity                         $  43,743             $  49,593
                                                                           =========             =========
</TABLE>


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



                                       3.
<PAGE>   4

                                 ELOQUENT, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                   MARCH 31,
                                                         -----------------------------
                                                           2001                 2000
                                                         --------             --------
<S>                                                      <C>                  <C>
Revenue:
     Software licenses and maintenance                   $    527             $  1,504
     Content production services                            1,463                2,596
     Professional services                                     15                  526
                                                         --------             --------
            Total revenue                                   2,005                4,626
                                                         --------             --------

Cost of revenue:
     Software licenses and maintenance                        367                  427
     Content production services                              775                1,141
     Professional services                                    170                  643
     Stock-based compensation                                 (21)                  98
                                                         --------             --------
            Total cost of revenue                           1,291                2,309
                                                         --------             --------
     Gross margin                                             714                2,317
                                                         --------             --------

Operating expenses:
     Research and development:
       Other research and development                       1,559                  890
       Stock-based compensation                                65                  287
                                                         --------             --------
                                                            1,624                1,177
                                                         --------             --------
     Sales and marketing:
       Other sales and marketing                            2,287                4,030
       Stock-based compensation                                25                  580
                                                         --------             --------
                                                            2,312                4,610
                                                         --------             --------
     General and administrative:
       Other general and administrative                     1,094                  944
       Stock-based compensation                               433                1,517
                                                         --------             --------
                                                            1,527                2,461
                                                         --------             --------
            Total operating expenses                        5,463                8,248
                                                         --------             --------
Loss from operations                                       (4,749)              (5,931)
Interest expense and other charges                            (60)              (1,049)
Interest and other income                                     603                  476
                                                         --------             --------
Net loss before extraordinary item                         (4,206)              (6,504)
Extraordinary loss on extinguishment of debt                   --               (7,453)
                                                         --------             --------
Net loss                                                 $ (4,206)            $(13,957)
                                                         ========             ========

Basic and diluted net loss per share:
   Net loss before extraordinary item                    $  (0.24)            $  (0.67)
   Extraordinary loss                                          --                (0.77)
                                                         --------             --------
   Net loss                                              $  (0.24)            $  (1.44)
                                                         ========             ========

Shares used in computing basic and diluted
   net loss per share                                      17,793                9,698
                                                         ========             ========
</TABLE>


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



                                       4.
<PAGE>   5

                                 ELOQUENT, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                 THREE MONTHS ENDED
                                                                                                     MARCH 31,
                                                                                            ----------------------------
                                                                                             2001                 2000
                                                                                            -------             --------
<S>                                                                                         <C>                 <C>
Cash flows from operating activities:
   Net loss                                                                                 $(4,206)            $(13,957)
   Adjustments to reconcile net loss to net cash used in
   operating activities:
      Depreciation and amortization                                                             443                  293
      Extraordinary loss on extinguishment of debt                                               --                7,452
      Loss on equity investment - Rebop Media, Inc.                                             486                   --
      Amortization of discount on long-term notes payable                                        --                  478
      Amortization of deferred charges                                                           14                   62
      Amortization of stock-based compensation                                                  502                2,482
      Changes in operating assets and liabilities:
         Accounts receivable                                                                  1,390                 (836)
         Deferred production cost                                                               105                  (88)
         Prepaid expenses                                                                      (460)                (273)
         Other assets                                                                             4                   73
         Accounts payable and other liabilities                                              (1,686)                 (68)
         Deferred revenue                                                                      (243)               1,016
                                                                                            -------             --------
            Net cash used in operating activities                                            (3,651)              (3,366)
                                                                                            -------             --------

Cash flows from investing activities:
   Net purchases of short-term investment                                                     2,771               (5,946)
   Purchase of long-term investment                                                              --               (3,000)
   Acquisition of property and equipment                                                       (150)                (880)
                                                                                            -------             --------
            Net cash provided by (used in) investment activities                              2,621               (9,826)
                                                                                            -------             --------

Cash flows from financing activities:
   Repayment of borrowings under bank line of credit                                             --               (3,000)
   Repayment of subordinated notes                                                               --              (20,000)
   Proceeds from issuance of common stock, net of repurchases,
      and offering costs                                                                        (70)              75,837
   Proceeds from capital lease financing                                                         --                  277
   Payment of principal on capital lease financing                                             (268)                (173)
                                                                                            -------             --------
            Net cash (used in) provided by financing activities                                (338)              52,941
                                                                                            -------             --------

Net increase (decrease) in cash and cash equivalents                                         (1,368)              39,749

Cash and cash equivalents, beginning of year                                                  4,519               17,174
                                                                                            -------             --------
Cash and cash equivalents, end of year                                                      $ 3,151             $ 56,923
                                                                                            =======             ========

Supplemental disclosure of cash flow information:
      Cash paid during the year for:
         Interest                                                                           $    53             $    488
                                                                                            =======             ========
      Non-cash transactions:
         Stock-based compensation, net of cancellations                                     $    59             $  3,251
                                                                                            =======             ========
</TABLE>


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



                                       5.
<PAGE>   6

                                 ELOQUENT, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note 1 - The Company and Basis of Presentation

Eloquent, Inc. ("Eloquent" or the "Company") produces rich media solutions for
business communications. These rich media solutions are used to communicate to
target audiences through the combination of video, audio, graphics and text in a
synchronized, searchable and navigable format. These rich media presentations
can be delivered via the Web, intranets, extranets and CD-ROMs.

In the opinion of management, the accompanying unaudited condensed financial
statements include all adjustments, consisting only of normal recurring items,
necessary for their fair presentation in conformity with accounting principles
generally accepted in the United States. The results of operations for the
interim periods presented are not necessarily indicative of the results for any
future interim period or for the entire year. The information included in this
Form 10-Q should be read in conjunction with Management's Discussion and
Analysis and financial statements and notes thereto included in our Annual
Report on Form 10-K/A for the year ended December 31, 2000.

The preparation of condensed financial statements requires management to make
estimates and assumptions that affect the recorded amounts reported in the
unaudited condensed financial statements and accompanying notes. A change in the
facts and circumstances surrounding these estimates could result in a change to
the estimates and impact future operating results.


Note 2 - Equity Transactions

Common Stock and Conversion of Preferred Stock:

In February 2000, the Company completed its initial public offering and issued
5,175,000 shares of its common stock at a price of $16.00 per share. The Company
received approximately $75.4 million in cash, net of underwriting discounts,
commissions and other offering costs. Simultaneously with the closing of the
initial public offering, each outstanding share of convertible preferred stock
was automatically converted into one share of common stock.

Stock-Based Compensation:

Eloquent accounts for stock-based compensation issued to employees in accordance
with the provisions of Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees", and complies with the disclosure
provisions of Statement of Financial Accounting Standards (SFAS) No. 123,
"Accounting for Stock-Based Compensation." Under APB No. 25, expense is based on
the difference, if any, on the date of grant, between the fair value of common
stock and the exercise price. Stock issued to non-employees has been accounted
for in accordance with SFAS No. 123 and valued using the Black-Scholes
option-pricing model.



                                       6.
<PAGE>   7

Note 3 - Net Loss per Share

Eloquent computes net loss per share in accordance with SFAS No. 128, "Earnings
Per Share." Under the provisions of SFAS No. 128 basic net loss per share is
computed by dividing the net loss for the period by the weighted average number
of vested common shares outstanding during the period. Diluted net loss per
share is computed by dividing the net loss for the period by the weighted
average number of common and common stock equivalent shares outstanding during
the period. Common equivalent shares are composed of common shares issuable upon
conversion of convertible preferred stock (using the if-converted method) and
shares issuable upon the exercise of stock options and warrants and are included
in the diluted net loss per share to the extent that they are dilutive.

The following table sets forth the computation of basic and diluted net loss per
share for the periods indicated:

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED MARCH 31,
                                                                  -----------------------------
                                                                    2001                 2000
                                                                  --------             --------
<S>                                                               <C>                  <C>
Numerator:
   Net loss before extraordinary expense                          $ (4,206)            $ (6,504)
   Extraordinary loss on extinguishment of debt                         --               (7,453)
                                                                  --------             --------
Net loss                                                          $ (4,206)            $(13,957)
                                                                  --------             --------

Denominator:
   Weighted average common stock outstanding                        17,837                9,903
   Weighted average common stock subject to repurchase                 (44)                (205)
                                                                  --------             --------
Denominator  for basic and diluted calculation                      17,793                9,698
                                                                  --------             --------

Basic and diluted net loss per share                              $  (0.24)            $  (1.44)
                                                                  --------             --------

Antidilutive securities:
   Options to purchase common stock                                  4,494                4,174
   Warrants                                                            309                  906
                                                                  --------             --------
                                                                     4,803                5,080
                                                                  ========             ========
</TABLE>

Note 4 - Strategic Investments

ESPOC INC.

In March 2000, Eloquent and eSpoc Inc. ("eSpoc"), a provider of an electronic
marketplace for the purchase and liquidation of medical equipment and supplies,
entered into a strategic relationship. As part of this relationship, Eloquent
purchased 461,538 shares of eSpoc Preferred Stock for $3.0 million. This
investment is being accounted for using the cost method.

During the fourth quarter of 2000, Eloquent performed an evaluation of the
carrying value of this investment. Eloquent considered current financial market
conditions for raising capital and reviewed the cash flows and operating results
of the entity. Eloquent concluded that the unfavorable financial market
conditions as they relate to entities engaged in electronic commerce are not
temporary. Accordingly, the carrying value of the equity investment in eSpoc was
determined to be impaired. A loss of $2.3 million was recognized based on the
amount by which the carrying value exceeded the fair value of Eloquent's
proportionate share of the net assets of



                                       7.
<PAGE>   8

eSpoc.

REBOP MEDIA, INC.

In October 2000, Eloquent and Rebop Media, Inc. ("Rebop"), a new live
video-based Web conferencing company, entered into a strategic relationship
where-by Eloquent invested approximately $1.5 million in Rebop. The investment
was for Series A preferred stock and represented approximately 18% of Rebop's
capital stock, on an as-if converted basis. Eloquent also holds the right,
subject to Eloquent's stockholders' approval, to acquire Rebop if Rebop
successfully installs its product in three customer sites. Rebop's Web
conferencing solution will be designed to integrate with Eloquent's, Enterprise
Communications Server software. Cliff Reid, Eloquent's Chief Executive Officer,
serves as President and Chief Executive Officer of Rebop. This investment is
being accounted for using the equity method and accordingly, the investment has
been written down by the losses, excluding stock-based compensation charges,
incurred by Rebop, of $999,000. Eloquent recognized the operating expenses
incurred by Rebop of $1.3 million, including stock-based compensation charges of
$251,000, as research and development expense.


Note 5 - Long-term Notes Payable and Extraordinary Loss on Extinguishment of
Debt

In October 1999, Eloquent sold convertible notes and detachable warrants to
purchase 1.5 million shares of common stock for aggregate gross consideration of
$20.0 million. The notes provided that they were to mature on October 20, 2004
and bore interest at 12% per annum. The warrants expire the earlier of 5 years
after the repayment of the notes or October 20, 2006. In conjunction with the
sale of the notes Eloquent incurred approximately $1.5 million in debt issuance
costs. In accordance with the terms of the notes, all amounts outstanding under
the notes were repaid upon consummation of Eloquent's initial public offering on
February 23, 2000.

The gross consideration received from the notes was allocated between the notes
and the warrants in accordance with Accounting Principles Board Opinion No. 14
"Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants"
as follows (in thousands):

<TABLE>
<S>                                            <C>
Long-term notes payable                        $12,500
Warrants                                         7,500
                                               -------
Gross consideration                            $20,000
                                               -------
</TABLE>

The notes provided that after December 31, 2000, the investors, at their option,
could convert the notes to Series E preferred stock at an initial conversion
rate of $8 per share, subject to certain anti-dilutive provisions. This gave
rise to a beneficial conversion feature of $5.0 million, based on the fair value
of common stock at the date of the sale of the notes and detachable warrants.
This beneficial conversion feature was recorded as a further discount on the
sale of the notes.


                                       8.
<PAGE>   9
The debt issuance costs and the discount resulting from the issuance of the
warrants were being amortized to interest expense over the life of the notes.
The beneficial conversion feature was being amortized over the one-year period
up to the earliest conversion date. Upon repayment of the notes, the unamortized
portion of the discount resulting from the issuance of the warrants and the debt
issuance costs were recorded as an extraordinary loss on the extinguishments of
debt. In November 2000, the Emerging Issues Task Force reached a consensus
regarding accounting for securities involving beneficial conversion features.
The consensus requires a cumulative adjustment for certain securities issued
after May 1999. As outlined in EITF No. 00-27, the Task Force determined that
the conversion price used to calculate the intrinsic value should be based on
the proceeds allocated to the convertible instrument. The financial statement
impact to Eloquent of this requirement is that the additional beneficial
conversion feature calculated under the new regulations of $7.5 million has been
recorded in the fourth quarter 2000 statement of operations as the cumulative
effect of accounting change -- beneficial conversion feature.

Note 6 - Restructuring Activities

In December 2000, Eloquent announced a plan to restructure operations that
resulted in a one-time charge totaling $4.0 million. The restructuring is
intended to better align Eloquent with future market opportunities brought about
by its new product introductions and to reduce cash expenditures prior to
revenue growth. Under the plan, Eloquent gave notice of termination in December
2000 to 80 employees and consultants and recorded approximately $1.4 million
related to salary and termination benefits. Eloquent plans to reduce
expenditures for office space and is actively negotiating lease terminations,
where feasible, and pursuing sub-leases where lease termination is not feasible
for identified properties. The restructuring charge includes approximately $1.8
million for lease expense. This charge reflects payments required during lease
termination notice periods, estimates of lease payments prior to sub-letting
space and estimates of any rent differential between the contractual liability
of Eloquent and current market rates. The restructuring charge includes $356,000
for the buy-out of capital leases related to impaired equipment and elimination
of maintenance contracts for impaired software. At March 31, 2001 Eloquent had
made payments of $1.4 million related to salary and termination benefits,
$703,000 related to lease arrangements and other expenses and had a remaining
accrual balance of approximately $1.5 million.


Note 7 -- Derivative Instruments

Effective January 1, 2001, Eloquent adopted the provisions of SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", as amended by
SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of FASB Statement No. 133". SFAS No. 133
establishes methods of accounting for derivative financial instruments and
hedging activities related to those instruments as well as other hedging
activities. Adoption of the statement did not materially affect the financial
statement presentation.


Note 8 -- Reclassifications

Certain amounts reported in the previous year have been reclassified to conform
to the current year presentation. The reclassification did not affect the
previously reported net loss.



                                       9.
<PAGE>   10

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

This report on Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, which are subject to the "safe harbor" created by those
sections. These forward-looking statements involve risks and uncertainties and
relate to our future plans, objectives, beliefs, expectations and intentions.
These statements include, but are not limited to: statements related to industry
trends and future growth in the markets for rich media solutions for
business-to-business communications; our strategies for reducing the cost of our
products; our product development efforts; our future research and development;
the timing of our introduction of new products; the timing and extent of
deployment of our products by our customers; and future profitability. These
statements may be identified by the use of words such as "expects,"
"anticipates," "believes," "intends," "plans" and similar expressions. Our
actual results may differ significantly from those projected in the
forward-looking statements. Factors that may cause future results to differ
materially from those projected in the forward-looking statements include, but
are not limited to, those discussed in "Risk Factors" and elsewhere in this
report.

The following should be read in conjunction with the audited financial
statements and the notes thereto and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in our Annual Report on
Form 10-K/A for the year ended December 31, 2000.


OVERVIEW

We incorporated in Delaware in March 1995. In February 1996, we launched Version
1.0 of our solutions platform, which included the essential elements of content
production and navigation, including synchronized video, audio, graphics and
text as well as searchable transcripts, for delivery on CD-ROM only. In July
1996, we launched Version 2.0, which expanded delivery from CD-ROM to intranets,
included searchable slides and added variable speed playback. In November 1997
we launched Version 3.0. It further expanded delivery options to include
Web-based transmissions at 28.8 Kbps and added tracking and reporting and
software demonstrations. In April 1998, we introduced our content hosting
service and software. In January 1999, we launched our professional services
organization to provide integration services and professional media development
services. In April 1999, we launched Version 4.0 of our solutions platform,
which added support for high-resolution video and the ability for application
developers to customize certain aspects of our software. In December 1999, we
launched Version 5.0, which offers advanced integration, search navigation and
analysis features. In August 2000, we launched Version 6.0, which allows
enterprises to organize, manage, secure, personalize and enrich all forms of
streaming content

We generate revenue through software licenses and maintenance, content
production services and professional services. Our software licenses revenue
consists of one-time fees charged for the use of our desktop player and
applications server software and monthly fees for content hosting. Our
maintenance revenue consists of prepaid contracts related to software, which are
recognized over the contract term, usually one year. For each content production
transaction, we charge our customers a fixed project set-up fee plus a fee for
each hour of finished content. Our professional services revenue is from
contracted services to customize the content and software for our customers.
Most of our revenue to date has been from our content production services. We
expect content production services to produce the largest portion of our revenue
for the



                                      10.
<PAGE>   11

foreseeable future, but we intend to increase sales of our applications server
software and content hosting so that software license revenue constitutes an
increasing percentage of our revenue. The gross margin attributable to software
license revenue is significantly higher than that of our content production
services. We cannot assure you that we will be able to increase the proportion
of software license revenue and, therefore, we cannot assure you that we will be
able to proportionally improve our gross margin.

We generally recognize content production revenue upon shipment of the final
rich media event to the customer and software license revenue upon delivery of
software to the customer. Content production service revenue includes revenue
for CD-ROM duplication. We recognize this revenue upon shipment of the
duplicated CD-ROMs. The revenue for software licenses is recognized upon
shipment, or upon notification by the customer, dependent on the delivery
medium. We recognize revenue for maintenance and content hosting ratably over
the period of the maintenance or content hosting contract. We recognize
professional services revenue on a percentage of completion basis as services
are performed.

A limited number of large customers have accounted for a majority of our
revenue, and will continue to do so for the foreseeable future. One customer
accounted for more than 10% of our total revenue for the three months ended
March 31, 2001, and two customers each accounted for more than 10% of our total
revenue for the three months ended March 31, 2000. To date, most of our
customers have been in the telecommunications, software, high-technology
manufacturing, financial services and pharmaceuticals industries.

Stock-based compensation charges consist primarily of charges related to the
difference between employee option exercise prices and deemed fair market values
on the date of grant amortized over the vesting period of the options. Through
March 31, 2001, we have recorded a total of $13.4 million in stock-based
compensation charges in connection with stock option grants to our employees and
consultants, which is being amortized using an accelerated method of
amortization as described in Financial Accounting Standards Board Interpretation
No. 28, over the vesting periods of the options, generally four to five years.

We have not achieved profitability on a quarterly or annual basis to date and we
anticipate that we will continue to incur net losses for the foreseeable future.
As of March 31, 2001, we had an accumulated deficit of $90.3 million. In
December 2000, we announced a plan to restructure operations and gave notice of
termination to 80 employees and consultants. The restructuring is intended to
better align Eloquent with future market opportunities brought about by its new
product introductions and to reduce cash expenditures prior to revenue growth.
We expect to increase our operating expenses commensurate with increases in
revenue. If we are not able to increase revenue, our business, financial
condition and operating results would suffer.

We have experienced and expect to continue to experience seasonality in our
business. Due to the marketing cycles of our customers, sales of our content
production services generally tend to be lower in the fourth calendar quarter of
each year. Because the market for rich media business-to-business communications
using the Web is still new, additional seasonal and other patterns in the usage
of our products and services may emerge as the market matures.



                                      11.
<PAGE>   12

RESULTS OF OPERATIONS

The following table sets forth certain statement of operations data for the
periods indicated as a percentage of total revenue.

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED
                                                               MARCH 31,
                                                        ---------------------
                                                        2001             2000
                                                        ----             ----
<S>                                                     <C>              <C>
Revenue:
     Software licenses and maintenance                    26 %             33%
     Content production services                          73               56
     Professional services                                 1               11
                                                        ----             ----
           Total revenue                                 100              100

Cost of revenue:
     Software licenses and maintenance                    18                9
     Content production services                          39               25
     Professional services                                 8               14
     Stock-based compensation                             (1)               2
                                                        ----             ----
           Total cost of revenue                          64               50
                                                        ----             ----
     Gross margin                                         36               50
                                                        ----             ----

Operating expenses:
     Research and development:
       Other research and development                     78               19
       Stock-based compensation                            3                6
                                                        ----             ----
                                                          81               25
                                                        ----             ----

     Sales and marketing:
       Other sales and marketing                         114               87
       Stock-based compensation                            1               13
                                                        ----             ----
                                                         115              100
                                                        ----             ----

     General and administrative:
       Other general and administrative                   55               20
       Stock-based compensation                           22               33
                                                        ----             ----
                                                          77               53
                                                        ----             ----

           Total operating expenses                      273              178
                                                        ----             ----
Loss from operations                                    (237)            (128)
Interest expense and other charges                        (3)             (23)
Interest and other income                                 30               10
                                                        ----             ----
Net loss before extraordinary item                      (210)            (141)
Extraordinary loss on extinguishment of debt              --             (161)
                                                        ----             ----
Net loss                                                (210) %          (302)%
                                                        ====             ====
</TABLE>


THREE MONTHS ENDED MARCH 31, 2001 AND 2000

Revenue. Total revenue decreased to $2.0 million for the three months ended
March 31, 2001 from $4.6 million for the same period in 2000. The decrease in
revenue is attributable to a decrease in the number and average size of sales of
our products and services.

Software licenses and maintenance. Revenue from software licenses and
maintenance decreased to $527,000 for the three months ended March 31, 2001 from
$1.5 million for the same period in 2000. The decrease was due to fewer sales of
our software.



                                      12.
<PAGE>   13

Content production services. Content production services revenue decreased to
$1.5 million for the three months ended March 31, 2001 from $2.6 million for the
same period in 2000. The number of rich media events we produced decreased to 69
from 85 for the comparable periods in 2001 and 2000. The decrease in revenue was
also attributable to a reduction in the average sales price per event.

Professional services. Professional services revenue was $15,000 for the three
months ended March 31, 2001 and $526,000 for the three months ended March 31,
2000. Revenue was recognized on 3 professional services engagements in the first
quarter of 2001 compared to 16 professional services engagements for the same
period in 2000.

Cost of revenue. Cost of revenue consists primarily of software licenses and
maintenance costs, content production costs, and professional services costs.
Cost of software licenses and maintenance consists of customer support and
content hosting personnel and royalty payments due to the owners of licensed
third-party software. Cost of content production consists of event production
costs and direct personnel expenses associated with event production, with some
fixed overhead components for facilities and infrastructure support charges.
Direct labor costs associated with content production are deferred until revenue
is recognized, at which time they are expensed as cost of revenue. Cost of
professional services consists of direct labor costs associated with providing
professional services, which are deferred until revenue is recognized, at which
time they are expensed as cost of revenue.

Software licenses and maintenance. Cost of software licenses and maintenance was
$367,000 in the three months ended March 31, 2001 compared to $427,000 for the
same period in 2000. The overall decrease is due to a reduction in software
royalty payments, which resulted from reduced software licenses revenue, and an
offset from higher personnel expenses and related overhead expenses associated
with expansion of our content hosting organization.

Content production services. Cost of content production was $775,000 in the
three months ended March 31, 2001 compared to $1.1 million for the same period
in 2000. The decrease in expense was primarily due to the restructuring
initiatives undertaken in December 2000. The restructuring included the
termination of numerous employees and temporary employees. Accordingly, the
decrease is due to reduced personnel expenses and related facilities and
infrastructure and support charges.

Professional services. Cost of professional services was $170,000 for the three
months ended March 31, 2001 compared to $643,000 for the three months ended
March 31, 2000. The majority of the decrease is due to reduced personnel and
recruiting costs as a result of the December 2000 restructuring initiatives.
Professional services activities resulted in a negative gross margin in the
current period as Eloquent retained redundant staff to fulfill customer
commitments. The negative gross margin in the prior period is due to start-up
activities in the professional services organization. Eloquent is continuing to
redefine its professional services product offerings in response to anticipated
future product introductions.

Operating expenses. For the three months ended March 31, 2001, operating
expenses were $5.5 million compared to $8.2 million for the three months ended
March 31, 2000. Without the effect of stock-based compensation charges,
operating expenses for the three months ended March 31, 2001 and 2000 would have
been $4.9 million and $5.9 million, respectively.

Other research and development. Research and development expenses consist
primarily of personnel expenses associated with software development. Research
and development expenses were $1.6 million for the three months ended March 31,
2001 compared to $890,000 for the three



                                      13.
<PAGE>   14

months ended March 31, 2000. Over 70% of the increase reflects $486,000 of
expenses incurred by Rebop Media, Inc, which due to certain accounting
requirements is required to be included in our operating results. The remainder
of the increase is associated with additional personnel expenses and related
facilities and computing costs. We expect research and development expenses to
increase in absolute dollars as we seek to increase the functionality of our
solutions platforms.

Other sales and marketing. Sales and marketing expenses consist primarily of
personnel expenses associated with the sale of our products and services and
personnel and marketing materials and expenses associated with the marketing of
our products and services. Sales and marketing expenses were $2.3 million for
the three months ended March 31, 2001 compared to $4.0 million for the three
months ended March 31, 2000. Approximately 75% of the decrease was due to
reduced personnel expenses and recruiting costs associated with the reduction in
our sales force and marketing staff as a result of the December 2000
restructuring initiatives as well as the reduced travel and entertainment costs
associated with fewer personnel. The remainder of the decrease is primarily due
to reduced spending on marketing programs. We expect sales and marketing
expenses to increase commensurate with increases in revenue.

Other general and administrative. General and administrative expenses consist
primarily of administrative personnel expenses, professional fees and facilities
costs. General and administrative expenses were $1.1 million for the three
months ended March 31, 2001 compared to $944,000 for the three months ended
March 31, 2001. The increase was associated with accounting and legal
professional services fees and consulting fees to support our investor relations
activities. This increase was partially offset by reduced personnel expenses as
a result of the December 2000 restructuring initiatives.

Stock-based compensation expense. Stock-based compensation expense consists
primarily of charges related to the difference between employee option exercise
prices and deemed fair market values on the date of grant amortized over the
vesting period of the options. Stock-based compensation expense was $502,000 for
the three months ended March 31, 2001 compared to $2.5 million for the three
months ended March 31, 2000. The decrease in expense was due to the reversal of
amortized stock-based compensation expense related to cancellations, due to
employee terminations during 2001, of unvested stock options previously granted.
Stock-based compensation charges are presented within the relevant functional
expenses and are being amortized using an accelerated method of amortization as
described in Financial Accounting Standards Board Interpretation No. 28, over
the vesting periods of the options, generally four to five years.

Interest expense and other charges. Interest expense and other charges were
$60,000 for the three months ended March 31, 2001 and $1.0 million for the three
months ended March 31, 2000. Interest expense and other charges for the three
months ended March 31, 2001 consists primarily of interest paid for capital
leases. Interest expense and other charges for the three months ended March 31,
2000 consists primarily of interest paid and amortization of the debt issuance
costs and the discount related to the $20.0 million subordinated notes and
warrants. The subordinated notes were repaid upon our initial public offering in
February 2000.

Interest income and other income. Interest income and other income consists
primarily of interest earnings on our cash, cash equivalents and short-term
investments. Interest income and other income was $603,000 for the three months
ended March 31, 2001 compared to $476,000 for the three months ended March 31,
2000. This increase was due to larger average cash balances.



                                      14.
<PAGE>   15

Extraordinary loss on extinguishment of debt. In October 1999, we sold
convertible notes and detachable warrants to purchase 1,500,000 shares of common
stock for aggregate gross consideration of $20.0 million. In conjunction with
the sale of the notes, we incurred approximately $1.5 million in debt issuance
costs. In accordance with applicable accounting rules, we allocated the gross
proceeds among the notes, the beneficial conversion feature of the notes, and
the warrants. As a result of that allocation, the subordinated notes were
originally recorded on our balance sheet at a discounted value of approximately
$7.5 million. The $7.5 million discount resulting from the issuance of warrants
was being amortized over the five-year term of the notes and the $5.0 million
discount resulting from the beneficial conversion feature was being amortized
over the period from issuance to December 31, 2000, during which the note could
not be converted. In accordance with the terms of the notes, all amounts
outstanding under the notes were repaid upon consummation of our initial public
offering. Because the notes were repaid prior to the end of their term, the
unamortized portion of the discount resulting from the issuance of the warrants
and debt issuance costs was recorded as an extraordinary loss on extinguishment
of debt.

In November 2000, the Emerging Issues Task Force reached a consensus regarding
accounting for securities involving beneficial conversion features. The
consensus requires a cumulative adjustment for certain securities issued after
May 1999. As outlined in EITF No. 00-27, the Task Force determined that the
conversion price used to calculate the intrinsic value should be based on the
proceeds allocated to the convertible instrument. The financial statement impact
to us of this requirement is that the additional beneficial conversion feature
calculated under the new regulations of $7.5 million has been recorded in the
fourth quarter 2000 statement of operations as the cumulative effect of
accounting change -- beneficial conversion feature.


LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations through private sales of
preferred stock, our initial public offering of common stock and, to a lesser
extent, borrowings under lines of credit. Net proceeds from our initial public
offering of common stock were approximately $75.4 million. At March 31, 2001, we
had approximately $36.4 million of cash equivalents and short-term investments.

Net cash used in operating activities was $3.7 million for the three months
ended March 31, 2001 and $3.4 million for the three months ended March 31, 2000.
Net cash used in operating activities in 2001 was primarily attributable to net
losses and a reduction in accounts payable and accrued liabilities as
compensation expense and benefits that were accrued in the fourth quarter of
2000 as a result of the restructuring, were paid. This was partially offset by a
reduction in accounts receivable as we actively pursued collections. Net cash
used in operating activities in 2000 was primarily attributable to net losses.

Net cash provided by investing activities was $2.6 million in the three months
ended March 31, 2001 compared to net cash used in investing activities of $9.8
million for the three months ended March 31, 2000. Net cash provided by
investing activities was primarily related to maturities of short-term
marketable securities. Net cash used in investing activities in 2000 was related
primarily to investments in short-term marketable securities and investment in
eSpoc.

Net cash used in financing activities was $338,000 for the three months ended
March 31, 2001 compared to net cash provided by financing activities of $52.9
million for the three months ended March 31, 2000. Net cash used in financing
activities in 2001 resulted primarily from principal payments on our capital
leases. Net cash provided by financing activities in 2000 resulted



                                      15.
<PAGE>   16

primarily from the sale of common stock in our initial public offering,
partially offset by repayment of borrowings.

We believe that our current cash and cash equivalents will be sufficient to meet
our anticipated cash needs for working capital and capital expenditures for at
least the next 12 months. We may need to raise additional funds thereafter
through public or private financings, or other arrangements. There can be no
assurance that such additional financings, if needed, will be available on terms
attractive to us, if at all. Our failure to raise capital when needed could have
a material adverse effect on our business, financial condition and operating
results. If additional funds are raised through the issuance of equity
securities, the percentage ownership of our then-current, stockholders would be
reduced. Furthermore, such equity securities may have rights, preferences or
privileges senior to those of our common stock.

RISK FACTORS

Our business, financial condition or operating results could be seriously harmed
by any of the following risks. In addition, the trading price of our common
stock could decline due to any of the following risks, and you may lose all or
part of your investment.

RISKS RELATED TO OUR BUSINESS

BECAUSE WE HAVE A LIMITED OPERATING HISTORY, IT MAY BE DIFFICULT FOR YOU TO
EVALUATE OUR BUSINESS AND PROSPECTS.

Eloquent was formed in March 1995. Thus, we have a limited operating history,
which may make it difficult for you to evaluate our business. In part because we
are subject to the risks, expenses and uncertainties frequently encountered by
companies in new and rapidly evolving technology and Web-related markets, we
cannot be sure that our business model and future operating performance will
yield the results that we seek. Moreover, because these markets are constantly
changing, we may need to change our business model to adapt. We have not yet
proven our ability, on a sustained basis, to achieve the following:

        -       maintain and expand our customer base;

        -       identify new applications for our existing products;

        -       expand and enhance our customer solutions;

        -       maintain market prices for our solutions despite competition;

        -       effectively integrate any acquired businesses or technologies
                with our operations;

        -       prevent technologies we use in our operations from failing or
                operating poorly, and

        -       identify, attract, retain and motivate qualified personnel.

We may not be successful in achieving these objectives on a long-term basis. If
we are unable to do so, our business, financial condition and operating results
would suffer.



                                      16.
<PAGE>   17

WE EXPECT TO CONTINUE TO INCUR LOSSES, AND AS A RESULT WE MAY NOT ACHIEVE
PROFITABILITY.

We have not achieved profitability on a quarterly or annual basis to date and we
anticipate that we will continue to incur net losses for the foreseeable future.
Our failure to achieve profitability could deplete our current capital resources
and reduce our ability to raise additional capital. We incurred a net loss of
approximately $4.2 million in the three months ended March 31, 2001 compared to
$14.0 million in the three months ended March 31, 2000. As of March 31, 2001, we
had an accumulated deficit of approximately $90.3 million. In December 2000, We
announced a plan to restructure operations. The plan is intended to better align
us with future market opportunities brought about by our new product
introductions and to reduce cash expenditures prior to revenue growth. Under the
plan, We gave notice of termination in December 2000 to over 80 employees and
consultants. This resulted in excess equipment and furniture and unused leased
facilities. Accordingly, we plan to reduce expenditures for office space and
have written-off the carrying value of excess equipment and furniture, abandoned
leasehold improvements and certain software and technology assets. Although we
have initiated actions to reduce cash expenditures and expenses, there can be no
assurance that we will be successful in generating additional revenue or
achieving profitability.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS, AND AN
UNANTICIPATED DECLINE IN REVENUE MAY CAUSE OUR STOCK PRICE TO FALL.

In some future quarter, our operating results may be below the expectations of
public market analysts and investors, which would cause the price of our common
stock to fall. The factors that may cause our quarterly operating results to
fall short of expectations include:

        -       delays of large customer orders, which could prevent us from
                recognizing revenue until later quarters;

        -       seasonal trends in sales of our solutions, which could result in
                lower quarterly revenue in the fourth quarter;

        -       downward pressure on prices paid by our customers, as a result
                of competition or other factors, which could reduce our
                quarterly revenue even if we maintain or increase the number of
                sales;

        -       new product and service introductions by our competitors, which
                could cause our competitors to capture revenue that we otherwise
                could have received;

        -       increased costs incurred as we expand operations, increase our
                marketing efforts or undertake other initiatives, which could
                reduce our profit margin if not matched by a corresponding
                growth in revenue; and

        -       technical difficulties or system downtime affecting the Web
                generally or the operation of our network or servers, which
                could cause customer dissatisfaction and reduce our revenue.

We have experienced and expect to continue to experience seasonality in our
business. Due to the marketing cycles of our customers, sales of our content
production services generally tend to be lower in the fourth calendar quarter of
each year. Because the market for rich media business-to-business communications
using the Web is still new, additional seasonal and other patterns in the usage
of our products and services may emerge as the market matures.



                                      17.
<PAGE>   18

Our quarterly operating results may fluctuate significantly in the future
because of a variety of factors, many of which are outside our control. As a
result, operating results for any particular quarter may not be indicative of
future operating results.

WE DEPEND ON A LIMITED NUMBER OF LARGE CUSTOMERS FOR A MAJORITY OF OUR REVENUE,
SO THE LOSS OF OR DELAY IN PAYMENT FROM ONE OR A SMALL NUMBER OF CUSTOMERS COULD
HAVE A LARGE IMPACT ON OUR REVENUE AND OPERATING RESULTS.

If we were to lose a key customer, our business, financial condition and
operating results would suffer. In addition, if a key customer fails to pay
amounts it owes us, or does not pay those amounts on time, our revenue and
operating results would suffer. A limited number of large customers have
accounted for a majority of our revenue and will continue to do so for the
foreseeable future. For example, our top 10 customers during the three months
ended March 31, 2001 accounted for a majority of our revenue during that period.
Due to our limited number of large customers, the cancellation or delay of a
customer order during a given quarter is likely to significantly reduce revenue
for the quarter.

THE LENGTH OF OUR SALES CYCLE IS UNCERTAIN AND THEREFORE COULD CAUSE SIGNIFICANT
VARIATIONS IN OUR OPERATING RESULT.

Because our customers are typically large corporations, the length of our sales
cycle -- the time between an initial customer contact and completing a sale --
can be unpredictable. The time between the date of our initial contact with a
potential new customer and the execution of a sales contract with that customer
ranges from less than two weeks to more than three months, depending on the size
of the customer, the application of our solution and other factors. Our sales
cycle is also subject to delays as a result of customer-specific factors over
which we have little or no control, including budgetary constraints and internal
acceptance procedures. During the sales cycle, we may expend substantial sales
and management resources without generating corresponding revenue. Our expense
levels are relatively fixed in the short term and are based in part on our
expectations of our future revenue. As a result, any delay in our sales cycle
could cause significant variations in our operating results, particularly
because a relatively small number of customer orders represents a large portion
of our revenue.


WE MAY NOT BE ABLE TO BUILD AN EFFECTIVE SALES ORGANIZATION, WHICH WOULD PREVENT
US FROM ACHIEVING THE INCREASED SALES VOLUME NECESSARY FOR US TO ACHIEVE
PROFITABILITY.

In order to increase our revenue, we must build an effective sales organization.
If we do not do so, we will not be able to increase our sales sufficiently to
achieve profitability. In connection with our recent restructuring, we reduced
the size of our sales organization. Our future success will depend in part on
our ability to recruit and retain additional, qualified sales personnel and to
train and motivate such personnel. In the past, we have had difficulty
recruiting, retaining and managing qualified sales personnel. We cannot
guarantee that we will not encounter similar difficulties in the future.
Competition for personnel, particularly in the San Francisco Bay Area, where we
are located, is intense. Many of the companies competing with us for qualified
sales personnel are larger and more established than we are and have greater
financial resources than we do. This may make it even more difficult for us to
recruit and retain such personnel.

Our operational history suggests that the level of sales we achieve is generally
determined by the number of sales personnel we employ. In 1998 and early 1999,
we suffered a significant decline in sales to customers in the western United
States primarily due to attrition in our West Coast



                                      18.
<PAGE>   19

sales force. If we experience turnover in our sales force in the future, our
business, financial condition and operating results will suffer. Newly hired
sales personnel generally do not become fully productive until they have worked
for at least two quarters. Because of the time required to recruit new sales
personnel and for them to become fully productive, an unanticipated loss of
sales personnel could result in an under productive sales organization and
reduced sales for a significant period of time.

WE FACE INTENSE COMPETITION FOR PERSONNEL, WHICH COULD IMPAIR OUR ABILITY TO
RECRUIT AND RETAIN KEY PERSONNEL.

Our ability to develop, market and sell our solutions and to maintain our
competitive position depends on our ability to attract, retain and motivate
highly skilled technical, sales and marketing and other personnel. There is a
limited number of people with the necessary technical skills and understanding,
and competition for their services, particularly in the San Francisco Bay Area,
is intense. If we fail to recruit or retain these personnel, our ability to
develop, market and sell our solutions will suffer.

WE DEPEND ON TECHNOLOGY LICENSED FROM OTHER COMPANIES. WE MAY NOT BE ABLE TO
RENEW THESE LICENSES AS THEY EXPIRE FROM TIME TO TIME, AND WE MAY NOT BE ABLE TO
REPLACE THE LICENSED TECHNOLOGY WITHOUT SIGNIFICANT EXPENSE OR ENGINEERING
EFFORTS, IF AT ALL.

Our desktop player software, which runs on an end user's personal computer to
allow the user to view an event, and our Enterprise Communications Server
product, which enables customers to deliver events to their target audiences
through Web-based channels, include technologies that other companies have
licensed to us. If we are unable to maintain or renew these licenses when they
expire, we would be forced to remove these technologies from our products and
develop or license comparable technologies. This could require additional
license fees or extensive engineering efforts, or significantly decrease our
products' functionality, either of which could harm our business, financial
condition and operating results.

In addition, we have developed our products to integrate well with the Microsoft
Windows NT operating system, the operating system used by most of our customers
to run our software. If the Windows NT operating system is changed by Microsoft
so that it no longer integrates well with our products, or if Windows NT
experiences technical problems, the operation of our software could be impaired.
In that event, our business, financial condition and operating results could be
harmed. Microsoft is not obligated to ensure that Windows NT integrates well
with our products.

We may be required to obtain licenses from third parties to refine, develop,
market and deliver new products. We may be unable to obtain any needed license
on commercially reasonable terms or at all and rights granted under any licenses
may not be valid and enforceable.

WE OPERATE IN MARKETS THAT WILL BECOME INCREASINGLY COMPETITIVE, WHICH COULD
LEAD TO DECREASING PRICES AND REDUCED PROFITABILITY.

The market for rich media business-to-business communications solutions is new
and rapidly evolving. We expect that competition will intensify. Increased
competition could lead to decreasing prices and profitability. We compete with
companies that offer components of a rich media business-to-business
communications solution, including:

-       providers of rich media software tools;

-       multimedia content production and delivery companies;



                                      19.
<PAGE>   20

-       companies that provide content hosting services, which include storing,
        delivering and tracking the distribution of content; and

-       traditional business-to-business communications and learning solution
        companies that offer live meeting and seminar services.

In addition, our customers and potential customers represent a source of
competition to the extent they decide to develop in-house business-to-business
communications solutions.

Many of our current and potential competitors have longer operating histories,
significantly greater financial, technical and marketing resources, greater name
recognition and larger existing customer bases than we do. These competitors may
also be able to undertake more extensive marketing campaigns for their brands
and services, adopt more aggressive pricing policies and make more attractive
offers to potential employees and partners. We may be unable to compete
successfully against current or future competitors, and competitive pressures
may cause our business to suffer.

OUR MANAGEMENT TEAM HAS LITTLE EXPERIENCE WORKING TOGETHER IN THEIR CURRENT
POSITIONS, WHICH COULD LIMIT THE TEAM'S EFFECTIVENESS IN OPERATING OUR BUSINESS.

Our management team does not have significant experience working together at
Eloquent in their current positions. This could prevent or limit our management
team's ability to work together effectively. The failure of our management team
to work together effectively could delay efficient decision-making and execution
of business objectives, which would negatively impact our business, financial
condition and operating results.

WE MAY NOT BE ABLE TO ADEQUATELY MANAGE OUR ANTICIPATED GROWTH, WHICH COULD
IMPAIR OUR EFFICIENCY AND NEGATIVELY IMPACT OUR OPERATIONS.

We may not be able to manage our growth effectively, which could impair our
efficiency, reduce the quality of our solutions, impair further growth and harm
our business, financial condition and operating results. If we do not
effectively manage this growth, we will not be able to operate efficiently or
maintain the quality of our products. Either outcome would harm our operating
results. In the past, we have experienced rapid growth, and we plan to continue
to expand our operations. This expansion is expensive and places a significant
strain on our personnel and other resources. To manage our expanded operations
effectively, we will need to further improve our operational, financial and
management systems and successfully hire, train, motivate and manage our
employees.

WE PLAN TO EXPAND OUR BUSINESS INTO INTERNATIONAL MARKETS, IN WHICH WE HAVE NO
PRIOR EXPERIENCE. INTERNATIONAL EXPANSION WILL REQUIRE SIGNIFICANT RESOURCES AND
WILL SUBJECT US TO NEW RISKS THAT MAY LIMIT OUR RETURN FROM OUR INTERNATIONAL
SALES EFFORTS.

One of our strategies to increase our sales sufficiently to achieve
profitability is to add an international sales force and operations. This
expansion will involve a significant use of management and financial resources,
particularly because we have no previous experience with international
operations. We may not be successful in creating international operations or
sales. In addition, international business activities are subject to a variety
of risks, including the adoption of laws, currency fluctuations, actions by
third parties and political and economic conditions, any of which could restrict
or eliminate our ability to do business in foreign jurisdictions.



                                      20.
<PAGE>   21

WE WILL DEPEND ON REVENUE FROM OUR CONTENT HOSTING BUSINESS, WHICH WILL SUFFER
IF OUR HOSTING EQUIPMENT AND SOFTWARE EXPERIENCE SYSTEM FAILURES.

Our future success depends in part on our ability to successfully host our
customers' content on our servers. Our ability to host content will depend on
the efficient and uninterrupted operation of our computer and communications
hardware and software systems. We do not have fully redundant content hosting
systems, a formal disaster recovery plan or alternative providers of hosting
services. We also may not have business interruption insurance sufficient to
compensate us for losses that may occur. All of our content hosting servers are
located at XO Communications, Inc.'s ("XO") facilities in Cupertino, California.
These systems and operations are vulnerable to damage or interruption from
earthquakes, floods, fires, power loss, telecommunication failures or similar
events. They are also subject to computer viruses, break-ins, sabotage,
intentional acts of vandalism and similar misconduct. Despite any precautions we
may take, the occurrence of a natural disaster or other unanticipated problems
at the XO facility could result in interruptions in our content hosting service.
In addition, the failure by XO to provide the data communications capacity that
we require could result in interruptions in our content hosting service. Any
damage to or failure of our content hosting systems could result in
interruptions in our content hosting service. System interruptions will reduce
our revenue and profits, and our future revenue and profits will be harmed if
our customers believe that our content hosting system is unreliable.

POTENTIAL ERRORS IN OUR SOFTWARE COULD HARM OUR REPUTATION AND REDUCE OUR SALES
AND PROFITABILITY.

Software defects discovered after we release our software could result in loss
of revenue, delays in market acceptance and harm to our reputation. Any product
liability claim against us, if successful and of sufficient magnitude, could
harm our profitability and future sales. Our software has in the past contained,
and may in the future contain, "bugs" or errors. Although we typically design
our customer license agreements to contain provisions that limit our exposure to
potential product liability claims, we cannot guarantee that contractual
limitations of liability would be enforceable or would otherwise protect us from
liability for damages to a customer resulting from a defect in our software.
Even though we maintain insurance that covers damages arising from the
implementation and use of our software, we cannot assure you that our insurance
would cover or be sufficient to cover any product liability claims against us.

WE HAVE IN THE PAST EXPERIENCED RETURNS OF OUR PRODUCTS, AND AS OUR BUSINESS
GROWS WE MAY EXPERIENCE INCREASED RETURNS, WHICH COULD HARM OUR REPUTATION AND
NEGATIVELY IMPACT OUR OPERATING RESULTS.

In the past, some of our customers have returned our rich media events to us
because they felt that modifications were required for the product to meet
project specifications and the customer's requirements. It is likely that we
will experience some level of returns in the future and, as our business grows,
the amount of returns may increase despite our efforts to minimize returns.
Also, returns may adversely affect our relationship with affected customers and
may harm our reputation. This could cause us to lose potential customers and
business in the future.

POWER OUTAGES IN CALIFORNIA MAY ADVERSELY AFFECT US.

We conduct most of our operations in the state of California and rely on a
continuous power supply to conduct operations. California's current energy
crisis could substantially disrupt our operations and increase our expenses.
California has recently implemented, and may in the future continue to
implement, rolling blackouts throughout the state. Although state lawmakers are



                                      21.
<PAGE>   22

working to minimize the impact, if blackouts interrupt our power supply, we may
be temporarily unable to continue operations at our facilities. Any such
interruption in our ability to continue operations at our facilities could delay
the development and production of our products and disrupt communications with
our customers or suppliers. Future interruptions could damage our reputation and
could result in lost revenue, either of which could substantially harm our
business and results of operations. Furthermore, shortages in wholesale
electricity supplies have caused power prices to increase. If wholesale prices
continue to increase, our operating expenses will likely increase which will
have a negative effect on our operating results.


THE FAILURE TO PROTECT OUR INTELLECTUAL PROPERTY MAY IMPAIR OUR COMPETITIVE
POSITION.

Our copyrights, service marks, trademarks, trade secrets, proprietary technology
and similar intellectual property are critical to our success. If we are unable
to adequately protect our rights from infringement by competitors or others, or
from misuse by our licensees, the competitive advantage that our rights provide
will be weakened.

We rely on trademark and copyright law, trade secret protection and
confidentiality and license agreements with our employees and independent
contractors to protect our proprietary rights. We strategically pursue the
registration of trademarks and service marks in the United States and abroad.
Effective trademark, service mark, copyright and trade secret protection may not
be available in every country in which our products and services are made
available.

We have licensed in the past, and expect to license in the future, certain of
our proprietary rights to third parties. The steps taken by us to protect our
proprietary rights may not be adequate. Although we attempt to ensure that the
quality of our brand is maintained by these licensees, licensees may take
actions that may harm the value of our proprietary rights or reputation.

WE MAY BECOME SUBJECT TO INTELLECTUAL PROPERTY LITIGATION IN THE FUTURE THAT
COULD CAUSE US TO INCUR SIGNIFICANT EXPENSE AND COULD REQUIRE US TO ALTER OUR
PRODUCTS.

We may be subject to legal proceedings and claims associated with our
intellectual property from time to time in the future. These claims, even if
without merit, could cause us to expend significant financial and managerial
resources. Further, if these claims are successful, we may be required to change
our trademarks, alter our copyrighted material or pay financial damages, any of
which could harm our business. Third parties may infringe or misappropriate our
copyrights, trademarks or similar proprietary rights in the future. In such
event, we may be forced to pursue infringement claims against such third
parties. These claims also could cause us to expend significant financial and
managerial resources.


RISKS RELATED TO THE INTERNET

OUR FUTURE SUCCESS DEPENDS ON CONTINUED GROWTH IN USE OF THE WORLD WIDE WEB FOR
BUSINESS-TO-BUSINESS COMMUNICATIONS.

Our business could suffer if Web usage does not continue to grow. Web usage may
be inhibited for a number of reasons, including:

        -       inadequate network infrastructure;



                                      22.
<PAGE>   23

        -       security concerns;

        -       inconsistent quality of service;

        -       lack of availability of cost-effective and high-speed service;
                and

        -       changes in government regulation of the Web.

If Web usage grows, the Web infrastructure may not be able to support the
demands placed on it by this growth, or its performance and reliability may
decline. In addition, future outages and other interruptions occurring
throughout the Web could lead to decreased use of our products and would
therefore harm our business.

IF WE ARE UNABLE TO KEEP UP WITH THE RAPID TECHNOLOGICAL CHANGES THAT
CHARACTERIZE THE WEB, OUR BUSINESS WOULD SUFFER.

Our future success will depend on our ability to continually improve our
solutions. To do so, we will need to continually enhance our solutions in
response to the rapid technological developments, evolving industry standards
and user demands, and frequent new product introductions and enhancements that
characterize the market for Web products and services. In the event new
multimedia enabling technologies are developed and widely adopted, we may be
required to make fundamental and costly changes in our technology. We may not be
able to make these enhancements or changes in a cost-effective manner fast
enough to keep up with our competitors or at all. In this event, our business
would suffer.

RISKS RELATED TO OUR COMMON STOCK

OUR STOCK PRICE HAS BEEN EXTREMELY VOLATILE IN THE PAST AND IS LIKELY TO BE
EXTREMELY VOLATILE IN THE FUTURE, WHICH COULD CAUSE YOU TO LOSE ALL OR A PART OF
YOUR INVESTMENT AND MAY RESULT IN COSTLY AND DISTRACTING SECURITIES LITIGATION.

The market price of our common stock has been volatile in the past and is likely
to be extremely volatile in the future. In the past, following periods of
volatility in the market price of a company's securities, securities class
action litigation has often been instituted against such a company. Securities
litigation could result in substantial costs and a diversion of our management's
attention and resources. The stocks of Web-related and technology companies like
ours have experienced extreme price and volume fluctuations in recent months,
many of which appear unrelated to the companies' business, financial condition
or operating results. Although the market price of our stock will in part be
based on our business, financial condition and operating results, we expect that
it will also be affected to a significant degree by these market-wide and
industry-wide price and volume fluctuations.

IF WE FAIL TO MEET NASDAQ NATIONAL MARKET LISTING REQUIREMENTS, OUR COMMON STOCK
WILL BE DELISTED.

Our Common Stock is currently listed on the Nasdaq National Market. Nasdaq has
requirements that a company must meet in order to remain listed on the Nasdaq
National Market. These requirements include maintaining a minimum bid price of
$1.00 and minimum net tangible assets of $4.0 million. The minimum bid price
for our Common Stock has been below $1.00 on several occasions recently. Our
net tangible assets are approximately $34.0 million at March 31, 2001, however,
if we continue to experience losses from operations and we are unable to raise
additional funds, our net tangible assets will decline. If as a result of the
application of these listing requirements, our Common Stock were delisted from
the Nasdaq National Market, our stock would become hard to buy and sell.
Further, our stock could then potentially be subject to what are known as the
"penny stock" rules, which place additional requirements on broker-dealers who
sell or make a market in such securities. Consequently, if we were removed from
the Nasdaq National Market, the ability or willingness of broker-dealers to
sell or make a market in our Common Stock might decline. As a result, your
ability to resell your shares of our Common Stock could be adversely affected.

OUR DIRECTORS AND EXECUTIVE OFFICERS OWN A SIGNIFICANT PORTION OF OUR COMMON
STOCK, WHICH ENABLES THEM TO CONTROL MATTERS DECIDED BY THE STOCKHOLDER.

Our directors and executive officers and their affiliates beneficially own a
significant portion of our common stock. As a result of their beneficial
ownership, our directors and executive officers, acting alone or with others,
are able to control most matters requiring stockholder approval, including the
election of directors and approval of significant transactions. This
concentration of ownership may also have the effect of delaying or preventing a
change in control of Eloquent. This could prevent our stockholders from
realizing a premium over the market price for their shares or from bringing
about a change in management.



                                      23.
<PAGE>   24

ADDITIONAL DISCUSSION OF THESE AND OTHER RISK FACTORS IS DISCLOSED IN OUR ANNUAL
REPORT ON FORM 10-K/A FOR THE YEAR ENDED DECEMBER 31, 2000, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Our exposure to market risk is limited to interest income sensitivity, which is
affected by changes in the general level of U.S. interest rates, particularly
because the majority of our investments are in short-term debt securities issued
by corporations. We place our investments with high-quality issuers and limit
the amount of credit exposure to any one issuer. Our investments are subject to
interest rate risk, and will decline in value if interest rates increase. Due to
the nature of our investments, an immediate 10% increase in interest rates would
not have a material effect on our financial condition or results of operations.
We do not have any foreign currency or other derivative financial instruments.



                                      24.
<PAGE>   25

PART II:  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

      (a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER         DESCRIPTION
-------        -----------
<S>         <C>
3.03*       Amended and Restated Certificate of Incorporation, as currently in
            effect.

3.04*       Amended and Restated Bylaws, as currently in effect.

4.01*       Form of Specimen Stock Certificate.

4.02*       Fourth Amended and Restated Investors' Rights Agreement, dated
            October 20, 1999, among Eloquent and certain investors named
            therein.

4.03*       Securities Purchase Agreement, dated October 20, 1999, by and among
            Eloquent and certain investors named therein.

5.01*       Opinion of Cooley Godward LLP regarding legality of the securities
            being registered.

10.01*      Form of Indemnity Agreement entered into by Eloquent with each of
            its directors and executive officers.

10.02*      Equity Incentive Plan.

10.03*      Form of Stock Option Agreement under the Equity Incentive Plan.

10.04*      1997 Equity Incentive Plan.

10.05*      Form of Stock Option Agreement under the 1997 Equity Incentive Plan.

10.06*      1999 Equity Incentive Plan.

10.07*      Form of Stock Option Agreement under the 1999 Equity Incentive Plan.

10.08*      Form of Nonstatutory Stock Option Agreement for Non-Employee
            Director Grants under the 1999 Equity Incentive Plan.

10.09*      1999 Employee Stock Purchase Plan.

10.10*      Form of 1999 Employee Stock Purchase Plan Offering.

10.11*      Employment Agreement, dated December 23, 1998, between Eloquent and
            Abraham Kleinfeld.

10.12*      Office Lease, dated November 19, 1996, between Eloquent and
            California Casualty Indemnity Exchange, as amended.

10.13*      OEM Agreement, dated May 30, 1997, between Eloquent and Verity, Inc.

10.14*      Software License Agreement, dated June 30, 1997, between Eloquent
            and Voxware, Inc.

10.15*      Co-location Service Agreement, dated March 30, 1998, between
            Eloquent and Concentric Network Corporation.

10.16*      Sublease Agreement, dated June 1, 1999, between Eloquent and
            California Casualty Indemnity Exchange.

10.17*      ISV Software License Agreement, dated August 1, 1999, between
            Eloquent and WebXpress, Inc.

10.18*      Assignment of Sublease, dated November 24, 1999, between Eloquent
            and California Casualty Management Company.

10.19*      2000 Non-Qualified Stock Plan.
</TABLE>



                                      25.
<PAGE>   26

<TABLE>
<S>         <C>
10.20**     Agreement and Plan of Merger and Reorganization, dated October 31,
            2000 among Eloquent, Inc., Rebop Acquisition Corp., Rebop Media,
            Inc., and Certain Shareholders of Rebop Media, Inc.

10.21***    Employment Agreement, dated December 1, 2000, between Eloquent and
            John Curson.

10.22***    Confidential Severance Agreement, dated November 1, 2000, between
            Eloquent and Abraham Kleinfeld.
</TABLE>

*       Incorporated by reference to the same numbered exhibit previously filed
        with the Company's Regulation Statement on Form S-1 (SEC File No.
        333-89537).

**      Incorporated by reference to exhibit 99.2 previously filed with the
        Company's Quarterly Report on Form 10-Q for the quarterly period ended
        September 30, 2000.

***     Incorporated by reference to the same numbered exhibit previously filed
        with the Company's Annual Report on Form 10-K/A for the year ended
        December 31, 2000.


      (b) Reports on Form 8-K

       The Company did not file any reports on Form 8-K during the three months
       ended March 31, 2001.

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.


Date: May 14, 2001


                                     ELOQUENT, INC.


                                     By: /s/ R. John Curson
                                         ---------------------------------------
                                         R. John Curson
                                         Chief Financial Officer, Secretary and
                                         Treasurer (Principal Accounting and
                                         Financial Officer)



                                      26.