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 SEPTEMBER 30, 2001

                                       OR

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

            FOR THE TRANSITION PERIOD FROM __________ TO __________.

                        COMMISSION FILE 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. YES  [X]  NO [ ].

The number of outstanding  shares of the registrant's  Common Stock,  $0.001 par
value, was 19,494,281 at October 31, 2001.


<PAGE>

<TABLE>

                                      INDEX
<CAPTION>

                                                                                                         Page
PART I:     FINANCIAL INFORMATION

<S>               <C>                                                                                    <C>
    Item 1.       Financial Statements

                  Condensed Consolidated Balance Sheets as of September 30, 2001 and December              3
                  31, 2000

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

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

                  Notes to Condensed Consolidated Financial Statements                                     6

    Item 2.       Management's Discussion and Analysis of Financial Condition and                         11
                  Results of Operations

    Item 3.       Quantitative and Qualitative Disclosures about Market Risk                              25

PART II:    OTHER INFORMATION

    Item 1.       Legal Proceedings                                                                       26

    Item 2.       Changes in Securities and Use of Proceeds                                               26

    Item 6.       Exhibits and Reports on Form 8-K                                                        26


Signature                                                                                                 27

</TABLE>

                                                     2

<PAGE>

<TABLE>

                                PART I: - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

                                         ELOQUENT, INC.

                             CONDENSED CONSOLIDATED BALANCE SHEETS
                             (In thousands, except per share data)
<CAPTION>


                                                                     September 30,   December 31,
                                                                         2001           2000
                                                                         ----           ----
ASSETS                                                               (unaudited)
<S>                                                                   <C>            <C>
Current assets:
    Cash and cash equivalents                                         $   2,258      $   4,519
    Short-term investments                                               22,972         35,937
    Accounts receivable, net of allowances for doubtful
       accounts of $180 and $599, respectively                              586          2,768
    Prepaid expenses and deferred production costs                          374            370
                                                                      ---------      ---------
          Total current assets                                           26,190         43,594

Property and equipment, net                                               2,342          3,348
Acquired technology and patents, net                                      1,564             --
Goodwill                                                                  3,230             --
Other assets                                                                844          2,651
                                                                      ---------      ---------
          Total assets                                                $  34,170      $  49,593
                                                                      =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Accounts payable and other liabilities                            $   4,928      $   7,726
    Capital lease obligation - current portion                              332            709
    Deferred revenue                                                        695          1,128
                                                                      ---------      ---------
          Total current liabilities                                       5,955          9,563

Capital lease obligation, net of current portion                             18            230
Long-term liabilities                                                     1,550             --

Stockholders' equity:
Common stock, $0.001 par value; 40,000 shares authorized;
    19,491 and 17,837 shares outstanding, respectively                       19             18
Additional paid-in capital                                              129,716        128,150
Treasury stock                                                             (287)            --
Notes receivable from employees                                            (100)            --
Unearned stock-based compensation                                          (887)        (2,462)
Other comprehensive income: unrealized gain on investments                  170            193
Accumulated deficit                                                    (101,984)       (86,099)
                                                                      ---------      ---------
          Total stockholders' equity                                     26,647         39,800
                                                                      ---------      ---------
          Total liabilities and stockholders' equity                  $  34,170      $  49,593
                                                                      =========      =========


<FN>
         The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                               3

<PAGE>

                                 ELOQUENT, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                Three Months Ended      Nine Months Ended
                                                   September 30,          September 30,
                                               --------------------    --------------------
                                                 2001        2000        2001        2000
                                               --------    --------    --------    --------
<S>                                            <C>         <C>         <C>         <C>
Revenue:
     Software licenses and maintenance         $    284    $    984    $  1,453    $  4,601
     Content production services                    778       1,805       3,155       7,065
     Professional services                           10         365          79       1,321
                                               --------    --------    --------    --------
             Total revenue                        1,072       3,154       4,687      12,987
                                               --------    --------    --------    --------

Cost of revenue:
     Software licenses and maintenance              470         348       1,243       1,052
     Content production services                    631       1,624       2,135       4,340
     Professional services                           59         340         301       1,578
     Stock-based compensation                        (9)       (152)        (60)         22
                                               --------    --------    --------    --------
             Total cost of revenue                1,151       2,160       3,619       6,992
                                               --------    --------    --------    --------
     Gross margin                                   (79)        994       1,068       5,995
                                               --------    --------    --------    --------

Operating expenses:
     Research and development:
       Other research and development             1,187       1,597       4,151       3,754
       Stock-based compensation                     245         139         445         575
                                               --------    --------    --------    --------
                                                  1,432       1,736       4,596       4,329
                                               --------    --------    --------    --------
     Sales and marketing:
       Other sales and marketing                  2,166       6,225       6,967      15,728
       Stock-based compensation                     (17)        (28)          8       1,004
                                               --------    --------    --------    --------
                                                  2,149       6,197       6,975      16,732
                                               --------    --------    --------    --------
     General and administrative:
       Other general and administrative           1,156       1,376       3,347       3,577
       Stock-based compensation                     265         990       1,031       3,856
                                               --------    --------    --------    --------
                                                  1,421       2,366       4,378       7,433
                                               --------    --------    --------    --------
     Restructuring expense                         --          --         1,400        --
     In-process research and development            283        --           283        --
                                               --------    --------    --------    --------
             Total operating expenses             5,285      10,299      17,632      28,494
                                               --------    --------    --------    --------
Loss from operations                             (5,364)     (9,305)    (16,564)    (22,499)

Interest and other income                           389         838       1,524       2,262
Interest expense and other charges                  (11)       (135)        (86)     (1,374)
Impairment of investment                           --          --          (759)       --
                                               --------    --------    --------    --------
Net loss before extraordinary item               (4,986)     (8,602)    (15,885)    (21,611)
Extraordinary loss on extinguishment of debt       --          --          --        (7,453)
                                               --------    --------    --------    --------
Net loss                                       $(15,885)   $(29,064)   $ (4,986)   $ (8,602)
                                               ========    ========    ========    ========
Basic and diluted net loss per share:
     Net loss before extraordinary item        $  (0.27)   $  (0.50)   $  (0.88)   $  (1.48)
     Extraordinary loss                            --          --          --         (0.51)
                                               --------    --------    --------    --------
     Net loss                                  $  (0.27)   $  (0.50)   $  (0.88)   $  (1.99)
                                               ========    ========    ========    ========
Shares used in computing basic and diluted
     net loss per share                          18,610      17,185      18,109      14,618
                                               ========    ========    ========    ========
<FN>

   The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                               4
<PAGE>


                                 ELOQUENT, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                      Nine Months Ended
                                                                        September 30,
                                                                     --------------------
                                                                       2001       2000
                                                                     --------    --------
<S>                                                                  <C>         <C>
Cash flows from operating activities:
   Net loss                                                          $(15,885)   $(29,064)
   Adjustments to reconcile net loss to net cash used in operating
   activities:
     Extraordinary loss on extinguishment of debt                        --         7,453
     Depreciation and amortization                                      1,308       1,314
     Amortization of intangibles                                          135        --
     Acquired in-process research and technology                          283        --
     Amortization of discount on long-term notes payable                 --           478
     Amortization of deferred charges                                      14         277
     Amortization of stock-based compensation                           1,424       5,457
     Impairment of equity investment - eSpoc Inc.                         759        --
     Loss on equity investment - Rebop Media, Inc.                        796        --
     Changes in operating assets and liabilities:
        Accounts receivable                                             2,182      (1,308)
        Prepaid expenses and deferred production costs                     (4)       (465)
        Other assets                                                       48       2,474
        Accounts payable and other liabilities                         (1,973)      1,179
        Deferred revenue                                                 (433)        537
                                                                     --------    --------
          Net cash used in operating activities                       (11,346)    (11,668)
                                                                     --------    --------
Cash flows from investing activities:
   Net proceeds from (purchases of) short-term investments             12,942     (38,284)
   Purchase of long-term investment                                      --        (3,000)
   Acquisition of property and equipment                                 (214)     (4,276)
   Acquisition of Rebop Media, Inc., net of cash acquired              (3,345)       --
                                                                     --------    --------
         Net cash provided by (used in) investment activities           9,383     (45,560)
                                                                     --------    --------
Cash flows from financing activities:
   Repayment of borrowings under bank line of credit                     --        (3,000)
   Repayment of subordinated notes                                       --       (20,000)
   Net proceeds from issuance of common stock                             578      76,080
   Treasury stock purchase                                               (287)       --
   Proceeds from capital lease financing                                 --           277
   Payment of principal on capital lease financing                       (589)       (583)
                                                                     --------    --------
          Net cash (used in) provided by financing activities            (298)     52,774
                                                                     --------    --------
Net decrease in cash and cash equivalents                              (2,261)     (4,454)
Cash and cash equivalents, beginning of period                          4,519      17,174
                                                                     --------    --------
Cash and cash equivalents, end of period                             $  2,258    $ 12,720
                                                                     ========    ========

Supplemental  disclosure of cash flow  information:
     Cash paid during the period for:
       Interest                                                      $     76    $    557
                                                                     --------    --------
     Non-cash transactions:
       Stock-based compensation, net of cancellations                $    151    $  1,418
                                                                     --------    --------
<FN>
   The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

                                        5
<PAGE>

                                 ELOQUENT, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1 -- THE COMPANY AND BASIS OF PRESENTATION

Eloquent,  Inc.  ("Eloquent" or the "Company")  provides rich media applications
("Eloquent  LaunchForce") that help companies  communicate  critical new product
information  to globally  based  employees,  partners and customers  quickly and
cost-effectively.  Eloquent  LaunchForce manages an enterprise's complex product
launches,  enabling organizations to deliver clear,  consistent messages through
interactive  presentations that incorporate video, audio,  slides,  demos, text,
and Question & Answer  sessions.  Eloquent also  produces  rich media  solutions
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 Eloquent LaunchForce application or CD-ROMs.

In the opinion of management,  the accompanying unaudited condensed consolidated
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 of America.  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
the 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  consolidated 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 Repurchase Program

In May 2001,  Eloquent's  Board of Directors  authorized the repurchase of up to
250,000 shares of the Company's outstanding common stock. At September 30, 2001,
the Company had purchased 246,000 shares at an average price of $1.17 per share.

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>

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 potentially  dilutive shares outstanding during the
period.  Potentially dilutive 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 (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                           Three Months Ended       Nine Months Ended
                                                              September 30,           September 30,
                                                          --------------------    --------------------
                                                            2001        2000        2001        2000
                                                          --------    --------    --------    --------
<S>                                                       <C>         <C>         <C>         <C>
Net loss                                                  $ (4,986)   $ (8,602)   $(15,885)   $(29,064)
                                                          ========    ========    ========    ========
Denominator:
    Weighted average common stock outstanding               19,121      17,281      18,735      14,727
    Weighted average common stock subject to repurchase       (511)        (96)       (626)       (109)
                                                          --------    --------    --------    --------
Denominator for basic and diluted calculation               18,610      17,185      18,109      14,618
                                                          ========    ========    ========    ========
Basic and diluted net loss per share                      $  (0.27)   $  (0.50)   $  (0.88)   $  (1.99)
                                                          ========    ========    ========    ========
Anti-dilutive securities:
    Options to purchase common stock                         3,907       4,122       3,907       4,122
                                                          --------    --------    --------    --------
    Warrants                                                   159         609         159         609
                                                          --------    --------    --------    --------
                                                             4,066       4,731       4,066       4,731
                                                          ========    ========    ========    ========
</TABLE>

NOTE 4 -- INTANGIBLE ASSETS AND GOODWILL

In July 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible  Assets",
which is effective  for fiscal years  beginning  after March 15, 2001.  SFAS 142
requires,  among other things, the discontinuance of goodwill  amortization.  In
addition,   the   standard   includes   provisions   upon   adoption   for   the
reclassification  of  certain  existing  recognized   intangibles  as  goodwill,
reassessment   of  the  useful   lives  of  existing   recognized   intangibles,
reclassification  of certain intangibles out of previously reported goodwill and
the testing for  impairment  of existing  goodwill  and other  intangibles.  The
statement  contains  transition  provisions  related to  goodwill  acquired in a
business transaction after June 30, 2001. The transition provisions require that
goodwill  acquired  after  June 30,  2001 not be  amortized  but be  tested  for
impairment in accordance  with APB No.17,  "Intangible  Assets" or SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of", as appropriate,  until SFAS 142 is adopted in its entirety.  In
July 2001,  Eloquent  completed its acquisition of Rebop Media, Inc. and adopted
the transition provisions of SFAS 142. See Note 5.


NOTE 5 -- ACQUISITION OF REBOP MEDIA, INC.

In October 2000,  Eloquent and Rebop Media,  Inc.  ("Rebop"),  a recently-formed
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 held the  right,
subject to Eloquent's  Board of Directors'  approval,  to acquire Rebop if Rebop
successfully  installed its product in three customer sites.  Eloquent exercised
this right in April 2001. In July 2001,  Eloquent  completed its  acquisition of
all the outstanding shares of Rebop common stock and common

                                       7
<PAGE>

stock options for approximately  $3.8 million in cash,  850,000 shares of common
stock  and  common  stock  options  valued at  approximately  $1.2  million  and
acquisition costs of approximately  $310,000.  The value of the common stock and
options was determined  based on the average  market price of Eloquent's  common
stock over the 5-day period before and after the terms of the  acquisition  were
announced  in June 2001.  The 1.5 million  shares of Rebop's  series A preferred
stock owned by Eloquent were canceled as part of the transaction. At the closing
of the acquisition, ten percent of the stock to be issued and cash to be paid to
the  former  shareholders  of Rebop was  placed  in  escrow  to  secure  certain
indemnification  obligations contained in the merger agreement.  The escrow will
terminate six months following the closing.

Rebop's Web conferencing solution,  "LaunchForce Live", is designed to integrate
with Eloquent's "LaunchForce OnDemand" software. As a result of the acquisition,
Eloquent's customers are expected to benefit from a fully integrated  live-to-on
demand business communications  solution. Cliff Reid, Eloquent's Chief Executive
Officer, served as President and Chief Executive Officer of Rebop.

The initial  investment  in Rebop was  accounted for using the equity method and
accordingly,   the  investment  was  written  down  by  the  losses,   excluding
stock-based  compensation  charges,  incurred  by Rebop  through the date of the
acquisition,  of  $1.3  million.  Eloquent  recognized  the  operating  expenses
incurred by Rebop of $1.7 million, including stock-based compensation charges of
$358,000,  as  research  and  development  expense.  The  acquisition  has  been
accounted for in accordance with SFAS No. 141, "Business Combinations." SFAS 141
requires the purchase method of accounting for business  combinations  initiated
after June 30, 2001 and eliminates the  pooling-of-interests  method.  Pro forma
information  reflecting the results of Rebop's  operations for the periods prior
to the acquisition of Rebop have not been presented as Rebop's operating results
have been recognized by the Company since Rebop's inception.

The  allocation  of the purchase  price to the assets  acquired and  liabilities
assumed based on the fair value of Rebop is as follows (in thousands):


                Tangible assets acquired               $  238
                Acquired technology                     1,492
                Patents                                   207
                Goodwill                                3,230
                In-process research and development       283
                Liabilities assumed                       (77)
                                                       ------
                   Total                               $5,373
                                                       ======

Acquired  technology of  approximately  $1.5 million is being  amortized  over a
three-year useful life. Patents of $207,000 are being amortized over a five-year
useful life.  Goodwill of $3.2 million is being accounted for in accordance with
SFAS 142. The $283,000  attributable to in-process  research and development was
expensed  on the  acquisition  date  in  accordance  with  Financial  Accounting
Standards Board (FASB)  Interpretation  No. 4,  "Applicability of FASB Statement
No. 2 to Business Combinations Accounted for by the Purchase Method."

NOTE 6 -- STRATEGIC INVESTMENT

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 financial  position,  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

                                       8
<PAGE>

eSpoc.  In the second  quarter of 2001,  the Company  re-evaluated  the carrying
value of its  investment in eSpoc.  Eloquent  concluded that eSpoc was no longer
pursuing its original business plan and that eSpoc's current business plan would
not result in any return to  investors.  Accordingly,  Eloquent  recognized as a
loss the remaining carrying value of $759,000.

NOTE 7-- 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):

                   Long-term notes payable   $  12,500
                   Warrants                      7,500
                                             ---------
                   Gross consideration       $  20,000
                                             =========

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.

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 8 -- RESTRUCTURING ACTIVITIES

In December  2000,  Eloquent  announced a plan to  restructure  operations  that
resulted in a 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.  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.   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.

                                       9
<PAGE>

In June 2001, Eloquent recorded an additional $1.4 million  restructuring charge
for lease expense as a result of  deteriorating  real estate  market  conditions
resulting  in  lower  facility  lease  rates  than  estimated  for  the  initial
restructuring charge.

At  September  30, 2001  Eloquent had made  payments of $1.4 million  related to
salary and termination benefits,  $1.2 million related to lease arrangements and
other expenses and had a remaining accrual balance of approximately  $742,000 in
short-term liabilities and $1.6 million in long-term liabilities.

NOTE 9 -- 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 10 -- 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.

NOTE 11 -- CONTINGENCIES

Beginning in July 2001,  Eloquent and certain of its directors and officers were
named as defendants in several class action shareholder  complaints filed in the
United  States  District  Court  for the  Southern  District  of New  York  (the
"Court").  Similar  complaints  were  filed in the same Court  against  numerous
public  companies that conducted  initial public offerings of their common stock
since the mid-1990s.  In each of these  complaints,  the plaintiffs  allege that
Eloquent,  certain of its officers and directors and its initial public offering
underwriters  violated the federal  securities laws because  Eloquent's  initial
public  offering   registration   statement  and  prospectus   contained  untrue
statements of material fact or omitted material facts regarding the compensation
to be received by, and the stock  allocation  practices  of, the initial  public
offering  underwriters.  The plaintiffs seek  unspecified  monetary  damages and
other relief.

On September 7, 2001, the Court ordered,  among other things,  that the time for
all  defendants to respond to any complaint be postponed  until further order of
the Court. Thus, Eloquent has not been required to answer any of the complaints,
and no discovery has been served on Eloquent.  Eloquent  believes these lawsuits
are without merit and intends to defend against them vigorously.

In addition to the  foregoing  matters,  from time to time,  Eloquent may become
involved in various lawsuits and legal  proceedings  which arise in the ordinary
course of  business.  Litigation  is subject to inherent  uncertainties,  and an
adverse  result in this or other  matters  may arise  from time to time that may
harm our business, financial condition, results of operations or cash flows.

NOTE 12 -- RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001,  the FASB issued SFAS No. 144 ("SFAS 144")  "Accounting  for the
Impairment  or Disposal of  Long-Lived  Assets",  which is effective  for fiscal
years  beginning after December 15, 2001. SFAS 144 supersedes FASB Statement No.
121,  "Accounting  for the  Impairment or Disposal of Long-Lived  Assets and for
Long-Lived  Assets  to  Be  Disposed  Of",  and  the  accounting  and  reporting
provisions  relating  to the  disposal of a segment of a business of APB No. 30.
The  Company  does  not  expect  that  the  adoption  of SFAS  144  will  have a
significant impact on its financial statements.

                                       10

<PAGE>
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.  In December 2000, we introduced Version
6.1 which  supports  rich media  content  creation.  In May 2001,  we introduced
Eloquent  LaunchForce,  rich media applications that help  organizations  manage
their  complex  product  launches   through   interactive   presentations   that
incorporate video,  audio,  slides,  demos, text, and Questions & Answers (Q&A).
The presentations can be created by our customer with the application or created
by Eloquent.

         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 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 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 notification by the customer,

                                       11
<PAGE>

depending  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.  Two
customers,  Compaq Computer Corporation and FileNET  Corporation,  accounted for
more than 10% of our total revenue for the three months ended September 30, 2001
and no  customer  accounted  for more  than  10% of our  total  revenue  for the
comparable period in 2000. One customer,  Compaq Computer Corporation, accounted
for more than 10% of our revenue  during the nine  months  ended  September  30,
2001. No customer accounted for more than 10% of our revenue for the nine months
ended  September  30,  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  September  30,  2001,  we have  recorded  a total of $13.2  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 September 30, 2001, we had an accumulated  deficit of
$102.0 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 our new product introductions and to reduce cash
expenditures  prior to revenue  growth.  In December  2000,  we  introduced  the
Eloquent  Communications  Server  Version 6.1 which  supports rich media content
creation. In May 2001, we introduced Eloquent LauchForce, the next generation of
our software. Our restructuring activities support the transition of our product
focus to Eloquent  LaunchForce  from the  production  of rich media  events.  We
expect to  increase  our  operating  expenses  commensurate  with  increases  in
revenue.  If we will not  able to  increase  revenue,  our  business,  financial
condition and operating results would suffer.

Results of Operations

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

                                            Three Months Ended Nine Months Ended
                                               September 30,     September 30,
                                            ------------------ -----------------
                                               2001     2000     2001     2000
                                               ----     ----     ----     ----
Revenue:
     Software licenses and maintenance           26%      31%      31%      35%
     Content production services                 73       57       67       55
     Professional services                        1       12        2       10
                                               ----     ----     ----     ----
                 Total revenue                  100      100      100      100
                                               ----     ----     ----     ----
Cost of revenue:
     Software licenses and maintenance           44       11       27        8
     Content production services                 59       51       46       33
     Professional services                        6       11        6       12
     Stock-based compensation                    (1)      (5)      (1)    --
                                               ----     ----     ----     ----
                 Total cost of revenue          108       68       78       53
                                               ----     ----     ----     ----
     Gross margin                                (8)      32       22       47
                                               ----     ----     ----     ----


                                       12
<PAGE>

Operating expenses:
     Research and development:
       Other research and development           111       51       89       29
       Stock-based compensation                  23        4        9        4
                                               ----     ----     ----     ----
                                                134       55       98       33
                                               ----     ----     ----     ----
     Sales and marketing:
       Other sales and marketing                202      197      149      121
       Stock-based compensation                  (2)      (1)    --          8
                                               ----     ----     ----     ----
                                                200      196      149      129
                                               ----     ----     ----     ----
     General and administrative:
       Other general and administrative         108       44       71       28
       Stock-based compensation                  25       31       22       30
                                               ----     ----     ----     ----
                                                133       75       93       58
                                               ----     ----     ----     ----

     Restructuring expense                     --       --         30     --
     In-process research and development         26     --          6     --
                                               ----     ----     ----     ----
                 Total operating expenses       493      327      376      219
                                               ----     ----     ----     ----
Loss from operations                           (501)    (295)    (354)    (172)

Interest and other income                        36       27       33       17
Interest expense and other charges               (1)      (4)      (2)     (11)
Impairment of investment                       --       --        (16)    --
                                               ----     ----     ----     ----
Net loss before extraordinary item             (466)    (272)    (339)    (166)
Extraordinary loss on extinguishment of debt   --       --       --        (57)
                                               ----     ----     ----     ----
Net loss                                       (466)%   (272)%   (339)%   (223)%
                                               ====     ====     ====     ====

Three and Nine Months Ended September 30, 2001 and 2000

         Revenue.  Total revenue  decreased to $1.1 million for the three months
ended  September  30, 2001 from $3.2 million for the same period in 2000.  Total
revenue for the nine months ended  September 30, 2001  decreased to $4.7 million
from $13.0  million for the  comparable  period in 2000.  The decline in revenue
from the third  quarter of 2000 to the third  quarter of 2001 is  reflective  of
difficult global economic conditions and the Company's transition of its product
focus to LaunchForce,  a rich media business communication solution encompassing
our  software  applications  and  services,  from the  production  of rich media
events. The Company believes that cost-cutting efforts by customers is resulting
in reduced capital expenditure  budgets thereby delaying  purchasing  decisions.
Assuming no improvement in the current economic climate, the Company anticipates
that customers will continue to review their  expenditures  and may eliminate or
defer those projects and purchases  determined to be  non-critical.  The Company
believes that while the impact of the recent  terrorist  attacks in New York and
Washington  and  the  slowing   economy  has  reduced  our  customer's   capital
expenditure budgets, it has also increased the need for effective global product
launches that do not rely on travel.  LaunchForce is designed to meet this need.
Therefore,  to enable  companies to adopt  LaunchForce,  we introduced a program
called  "FirstLaunch"  which is tailored to fit into existing marketing budgets.
This will enable companies with limited capital budgets to adopt  LaunchForce on
a rental basis, with an option to purchase or to continue renting in the future

         Software  licenses and maintenance.  Revenue from software licenses and
maintenance  decreased to $284,000 for the three months ended September 30, 2001
from  $984,000 for the same period in 2000.  For the  nine-month  periods  ended
September  30,  revenue  decreased  to $1.5 million in 2001 from $4.6 million in
2000.  The  decreases  were  due to  fewer  sales  of  our  software  and  fewer
maintenance renewals from our customers.

         Content  production  services.   Content  production  services  revenue
decreased to $778,000 for the three  months ended  September  30, 2001 from $1.8
million  for the same  period  in 2000.  The  decrease  in  revenue  reflects  a
reduction  in the  number of rich media  events  produced  to 26 in the  current
quarter  from 76 in the same  quarter in the prior  year.  However,  the average
revenue per event  increased  to $30,000 in 2001 from  $24,000 in 2000.  For the
nine months ended September 30, 2001,  revenue was $3.2 million compared to $7.1
million for the same period in 2000.  The number of rich media  events  produced
fell to 131 from 266 for the nine-month  comparable periods. The

                                       13
<PAGE>

average revenue per event was $24,000 for the nine-month period in 2001 compared
to $27,000 for the same period in 2000.

         Professional  services.  Professional  services revenue was $10,000 for
the three  months  ended  September  30, 2001 and  $365,000 for the three months
ended  September 30, 2000.  Revenue was  recognized on 2  professional  services
engagements  in the third quarter of 2001 compared to 19  professional  services
engagements for the same period in 2000. Professional services revenue decreased
to $79,000 for the nine months  ending  September 30, 2001 from $1.3 million for
the  nine  months  ending  September  30,  2000.  Revenue  was  recognized  on 5
professional  services  engagement for the nine-month period in 2001 compared to
19 engagements 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 $470,000 in the three months ended  September 30, 2001 compared
to  $348,000  for the  same  period  in  2000.  Cost of  software  licenses  and
maintenance  increased to $1.2 million for the nine months ended  September  30,
2001 from $1.1  million  for the nine  months  ended  September  30,  2000.  The
increases  for both the three month and nine month periods are  attributable  to
the higher payroll and overhead  expenses  associated  with the  introduction of
application hosting.

         Content  production  services.  Cost of content production was $631,000
for the three months ended  September  30, 2001 compared to $1.6 million for the
same period in 2000.  For the  nine-month  periods  ended  September 30, cost of
content production  decreased to $2.1 million in 2001 from $4.3 million in 2000.
The decreases in expenses were  primarily due to the  restructuring  initiatives
undertaken in December  2000.  The  restructuring  included the  termination  of
numerous employees and temporary employees.  Accordingly,  the decreases are due
to reduced  personnel  expenses and related  facilities and  infrastructure  and
support charges.

         Professional  services.  Cost of professional  services was $59,000 for
the third  quarter in 2001  compared to $340,000 for the third  quarter in 2000.
Cost of  professional  services was $301,000 for the nine months ended September
30, 2001 compared to $1.6 million for the nine months ended  September 30, 2000.
The majority of the  decreases for both the three and nine month periods are due
to reduced  personnel  and  recruiting  costs as a result of the  December  2000
restructuring  initiatives.  The negative  gross margin in the current period is
due to start-up  activities in the professional  services  organization.  We are
continuing to redefine our professional  services product  offerings in response
to the introduction of the Eloquent LaunchForce application.

         Operating  expenses.  For the three  months ended  September  30, 2001,
operating  expenses  were $5.3 million  compared to $10.3  million for the three
months ended September 30, 2000. Without the effect of stock-based  compensation
charges,  operating  expenses for the third  quarter in 2001 and 2000 would have
been $4.8  million and $9.2  million,  respectively.  For the nine months  ended
September 30, 2001,  operating  expenses  were $17.6  million  compared to $28.5
million for the nine months  ended  September  30,  2000.  Without the effect of
stock-based compensation charges, operating expenses for the nine months in 2001
and 2000 would have been $16.1 million and $23.1 million, respectively.

         Other  research  and  development.  Research and  development  expenses
consist primarily of personnel  expenses  associated with software  development.
Research and  development  expenses were $1.2 million for the three months ended
September 30, 2001 compared to $1.6 million for the three months ended September
30,  2000.  The  decrease  in expense in the  current  period  reflects  reduced
expenditures on consultants. Research and development expenses were $4.2 million
for the nine  months  ended  September  30,  2001 and $3.8  million for the nine
months ended  September 30, 2000.  The increase in expense in the current period
reflects   expenses  incurred  by  Rebop,   which  due  to  certain   accounting
requirements, were required to be included in our operating results prior to the


                                       14
<PAGE>

acquisition.  This was partially offset by reduced  expenditures on consultants.
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 $2.2
million for the three months ended  September  30, 2001 compared to $6.2 million
for the three months ended September 30, 2000. Sales and marketing expenses were
$7.0  million for the nine months  ended  September  30, 2001  compared to $15.7
million for the nine months ended September 30, 2000. The decreases for both the
three  and  nine  month  periods  were 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.  We
expect  sales and  marketing  expenses to increase at a rate  commensurate  with
increases in revenue.

         Other general and administrative.  General and administrative  expenses
consist primarily of administrative  personnel expenses,  professional  services
fees and facilities costs. General and administrative expenses were $1.2 million
for the three months ended  September  30, 2001 compared to $1.4 million for the
three months ended September 30, 2000. General and administrative  expenses were
$3.3 million for the nine months ended  September  30, 2001 and $3.6 million for
the nine months ended  September 30, 2000.  The decreases for both the three and
nine month  periods  were due to reduced  personnel  expenses as a result of the
December 2000  restructuring  initiatives  and lower bad debt expenses offset by
slightly higher professional services fees.

         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
$493,000  for the third  quarter of 2001  compared to $1.1 million for the third
quarter of 2000. Stock-based  compensation expense was $1.5 million for the nine
months  ended  September  30, 2001  compared to $5.4 million for the nine months
ended  September  30, 2000.  The decrease in expense for both periods was due to
accelerated  vesting in prior periods and the reversal of amortized  stock-based
compensation   expense  related  to   cancellations,   resulting  from  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.

         Restructuring  expense. In June 2001, Eloquent recorded $1.4 million in
additional  restructuring  expense  relating to various office leases as part of
our  December  2000  restructuring  plan.  The  restructuring   charge  reflects
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.

         In-process  research and development  expense.  In July 2001,  Eloquent
completed its  acquisition of all the  outstanding  shares of Rebop common stock
and common stock options for approximately  $3.8 million in cash, 850,000 shares
of common stock and common stock options  valued at  approximately  $1.2 million
and acquisition costs of approximately  $310,000.  The value of the common stock
and  options was  determined  based on the average  market  price of  Eloquent's
common stock over the 5-day period before and after the terms of the acquisition
were  announced  in June 2001.  The purchase  price was  allocated to the assets
acquired and liabilities assumed based on the fair value of Rebop.  Accordingly,
Eloquent recorded a $283,000 charge for in-process research and development. See
Note  5 -  Acquisition  of  Rebop  Media,  Inc.  to the  condensed  consolidated
financial statements.

         Interest  income and other  income.  Interest  income and other  income
consist  primarily  of  interest  earnings  on our cash,  cash  equivalents  and
short-term  investments.  Interest  income and other income was $389,000 for the
three months ended  September 30, 2001 compared to $838,000 for the three months
ended September 30, 2000.  Interest income and other income was $1.5 million for
the nine  months  ended  September  30, 2001  compared  to $2.3  million for the
comparable  period in 2000.  The  decreases  for both the  three and nine  month
periods were due to lower average balances.

                                       15
<PAGE>

         Interest expense and other charges.  Interest expense and other charges
were $11,000 for the three months ended  September 30, 2001 and $135,000 for the
comparable  quarter in 2000. The decrease is  attributable  to the expiration of
several  lease  lines and the bank line of credit.  Interest  expense  and other
charges for the nine months ended  September 30, 2001  decreased to $86,000 from
$1.4 million for the nine months ended September 30, 2000.  Interest expense and
other charges for the nine months ended  September 30, 2000 consisted  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.

         Impairment  of  investment.  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.  See Note 6 - Strategic Investments to the condensed  consolidated
financial  statements.  In the second quarter of 2001, Eloquent re-evaluated the
carrying  value in eSpoc and  determined  the  investment to be fully  impaired.
Eloquent recognized as a loss the remaining carrying value of $759,000.

         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  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.

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 September
30, 2001, we had  approximately  $25.2  million of cash,  cash  equivalents  and
short-term investments.

         Net cash used in operating  activities  was $11.3  million for the nine
months  ended  September  30, 2001 and $11.7  million for the nine months  ended
September 30, 2000. Net cash used in operating  activities in 2001 was primarily
attributable  to net losses and a  reduction  in  accounts  payable  and accrued
liabilities.  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 $9.4 million in the nine
months  ended  September  30,  2001  compared  to net  cash  used  in  investing
activities  of $45.6 million for the nine months ended  September 30, 2000.  Net
cash provided by investing  activities in 2001 was primarily related to the sale
of short-term marketable securities.  This was partially offset by cash used for
the  acquisition  of Rebop.  Net cash used in investing  activities  in 2000 was
related primarily to investments in short-term marketable securities,  purchases
of property and equipment and investment in eSpoc.

                                       16
<PAGE>

         Net cash used in financing  activities was $298,000 for the nine months
ended  September 30, 2001 compared to net cash provided by financing  activities
of $52.8  million  for the nine  ended  September  30,  2000.  Net cash  used in
financing  activities in 2001 resulted  primarily from principal payments on our
capital leases and the repurchase of Eloquent  common stock.  This was partially
offset by cash  received  for  common  stock  issuances.  Net cash  provided  by
financing activities in 2000 resulted 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.

Recent Accounting Pronouncements

         In August 2001,  the FASB issued SFAS No. 144 ("SFAS 144")  "Accounting
for the  Impairment  or Disposal of Long-Lived  Assets",  which is effective for
fiscal  years  beginning  after  December  15, 2001.  SFAS 144  supersedes  FASB
Statement  No. 121,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets and for  Long-Lived  Assets to Be Disposed  Of", and the  accounting  and
reporting  provisions relating to the disposal of a segment of a business of APB
No. 30. The Company  does not expect  that the  adoption of SFAS 144 will have a
significant impact on its financial statements.

                                       17
<PAGE>

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

We compete in new and rapidly evolving  technology and Web-related  markets,  we
need to manage product  transitions and to develop new product features in order
to succeed.

     Our future  success  depends in part on our  ability to manage the  product
transition from focusing on providing rich media content production  services to
providing our rich media business communications solution, Eloquent LaunchForce.
Managing this  transition  and  marketing  Eloquent  LaunchForce  requires us to
present a compelling value proposition to our potential customers. Therefore, we
must do the following:

         o     identify new applications for our existing products;

         o     anticipate  the features and  functionality  that will reduce our
               customers'  costs  as  well as the  time  from  customer  product
               introduction to first revenue;

         o     incorporate those features and  functionality  into products that
               can be easily deployed;

         o     communicate  and  demonstrate  the  operational   impact  of  the
               features and functionality; and

         o     price our products  competitively  and offer  flexible  licensing
               models.

         If we are not successful in achieving  these  objectives on a long-term
basis, our business, financial condition and operating results will suffer.

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  $15.9  million in the nine  months  ended
September 30, 2001 compared to $29.1 million in the nine months ended  September
30,  2000.  As  of  September  30,  2001,  we  had  an  accumulated  deficit  of
approximately  $102.0  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. In June 2001,
we recorded additional  restructuring  expense relating to various office leases
as part of our  December  2000  restructuring  plan.  The  restructuring  charge
reflects 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. 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:

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<PAGE>
         o     delays of large  customer  orders,  which  could  prevent us from
               recognizing revenue until later quarters;

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

         o     the slowdown and potential  recession of the US and international
               economies may cause  customers to defer or decrease their orders,
               resulting in fewer sales;

         o     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;

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

         o     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

         o     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.

         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 nine months
ended  September 30, 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. The current slowdown, and potential recession,  in
the US and  international  economies  may cause our sales cycle to lengthen even
further. If this occurs, our orders and revenue may be adversely impacted.

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.

                                       19
<PAGE>

         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 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  qualified  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.  Despite the
economic  downturn,  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, continues to be intense. We continue
to  recruit  in  several  key  areas,  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


                                       20
<PAGE>

compete   with   companies    that   offer    components   of   a   rich   media
business-to-business communications solution, including:

         o     providers of rich media software tools;

         o     multimedia content production and delivery companies;

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

         o     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

                                       21
<PAGE>

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 will depend on revenue  from our content and  application  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  AT&T  Hosting  Services   ("AT&T")   facilities  in  Redwood  City,
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 AT&T facility could result in interruptions
in our content hosting service. In addition,  the failure by AT&T 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.

                                       22
<PAGE>

         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
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 worldwide 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:

         o     inadequate network infrastructure;

         o     security concerns;

         o     inconsistent quality of service;

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

         o     changes in government regulation of the Web.

                                       23
<PAGE>

         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  $31.0 million at September 30, 2001,
however,  if we continue to experience  losses from operations and we are unable
to raise additional funds, our net tangible assets will decline.  Although these
requirements  are not being  enforced  through  December  31,  2001,  the Nasdaq
National Market may begin to enforce these  requirements  again in January 2002.
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.

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<PAGE>

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.



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<PAGE>


                           PART II: OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

         Beginning  in July 2001,  Eloquent  and  certain of its  directors  and
officers were named as defendants in several class action shareholder complaints
filed in the United States District Court for the Southern District of New York.
These  actions  include (1) Pond  Equities v.  Eloquent,  Inc., et al., Case No.
01-CV-6775;  (2) Zitto  Investments,  Inc. v.  Eloquent,  Inc., et al., Case No.
01-CV-7591;  (3) Bartula v. Eloquent, Inc., et al., Case No. 01-CV-7607; and (4)
Holleran v. Eloquent, Inc., et al., Case No. 01-CV-7698. Similar complaints were
filed in the same Court against numerous public companies that conducted initial
public  offerings of their common  stock since the  mid-1990s.  In each of these
complaints,  the plaintiffs  allege that  Eloquent,  certain of its officers and
directors  and its initial  public  offering  underwriters  violated the federal
securities  laws  because  Eloquent's   initial  public  offering   registration
statement and prospectus contained untrue statements of material fact or omitted
material  facts  regarding  the  compensation  to be received  by, and the stock
allocation  practices  of,  the  initial  public  offering   underwriters.   The
plaintiffs seek unspecified monetary damages and other relief.

         On  August  8,  2001,  all  of  the   above-referenced   lawsuits  were
consolidated  for pretrial  purposes before United States Judge Shira Scheindlin
of the  Southern  District of New York.  Judge  Scheindlin  held an initial case
management  conference  on September 7, 2001,  at which time she ordered,  among
other  things,  that the time for all  defendants to respond to any complaint be
postponed until further order of the Court. Thus, Eloquent has not been required
to answer any of the  complaints,  and no discovery has been served on Eloquent.
Eloquent believes these lawsuits are without merit and intends to defend against
them vigorously.

         In addition to the foregoing matters,  from time to time,  Eloquent may
become  involved in various  lawsuits and legal  proceedings  which arise in the
ordinary  course of business.  Litigation is subject to inherent  uncertainties,
and an adverse  result in this or other matters may arise from time to time that
may harm our business, financial condition, results of operations or cash flows.

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS

         On July 5, 2001, pursuant to a First Amended and Restated Agreement and
Plan of Merger  dated June 22, 2001 by and among  Eloquent,  Rebop  Media,  Inc.
("Rebop"),  Rebop Acquisition Corp. and Certain Shareholders of Rebop,  Eloquent
acquired  all  outstanding  shares of  capital  stock of Rebop in  exchange  for
802,481 shares of common stock and approximately $3.8 million. In addition,  the
former Rebop option holders  received options to purchase an aggregate of 47,514
shares of Eloquent common stock.

         The issuance and sale of the unregistered  securities were deemed to be
exempt from the  registration  and prospectus  delivery  requirements  under the
Securities  Act of 1933,  as amended (the  "Securities  Act"),  in reliance upon
Section 4(2) of the Securities Act and Regulation D promulgated  thereunder,  as
transactions by an issuer not involving any public  offering.  The recipients of
securities in each such transaction  represented their intentions to acquire the
securities for investment  only and not with a view to or for sale in connection
with any  distribution  thereof  and  appropriate  legends  were  affixed to the
securities  issued in such  transactions.  All recipients  had adequate  access,
through their relationship with Eloquent, to information about Eloquent.


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

         (a)   Exhibits

       Exhibit
       Number                             Description
       ------                             -----------

       3.03*             Amended and Restated  Certificate of Incorporation,  as
                         currently in effect.

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

                                       26
<PAGE>

       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, as amended.

       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.

       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.

                                       27
<PAGE>

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

       10.23*****        First  Amended  and  Restated  Agreement  and  Plan  of
                         Merger,  dated June 22, 2001, by and between  Eloquent,
                         Rebop Media,  Inc., Rebop Acquisition Corp. and Certain
                         Shareholders of Rebop Media, Inc.

       10.24******       Employment  Offer  Letter,  dated June 6, 2001  between
                         Eloquent and M. Edward Molkenbuhr

       10.25******       Employment  Offer  Letter,  dated June 28, 2001 between
                         Eloquent and Joseph Cortale

------------------
*         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 99.1  previously  filed with the
          Company's Registration Statement on Form S-8 (SEC File No. 333-34182).

***       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.

*****     Incorporated by reference to the exhibit 2.1 previously filed with the
          Company's Current Report on Form 8-K filed on July 6, 2001.

******    Incorporated  by reference  to the same  numbered  exhibit  previously
          filed  with  the  Company's  Quarterly  Report  on Form  10-Q  for the
          quarterly period ended June 30, 2001.


         (b)  Reports on Form 8-K

              The  Company  filed a report  on Form  8-K on July 6,  2001 and an
amended  report on Form 8-K/A on  September  7, 2001,  reporting  the  Company's
acquisition of the outstanding capital stock of Rebop Media, Inc.


         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: November 13, 2001      ELOQUENT, INC.



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



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