<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 2000
                          Commission File No. 000-29199

                                 SeraNova, Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             New Jersey                               22-3677719
  --------------------------------        -----------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

499 Thornall Street, Edison, New Jersey                                   08837
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

                                 (732) 362-1601
                          -----------------------------
                        (Registrant's telephone number,
                              including area code)

       Indicate by checkmark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

            Yes:  x                                   No:
                 ---                                      ---

       Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of October 30, 2000:

                 Class                               Number of Shares
                 -----                               ----------------
     Common Stock, $.01 par value                       17,460,883


<PAGE>   2


                         SERANOVA, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page
                                                                                                      ----
<S>                                                                                                   <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Consolidated Financial Statements............................................         1

                    Consolidated Balance Sheets
                    as of September 30, 2000 (unaudited)
                    and December 31, 1999......................................................         1

                    Consolidated Statements of Operations for the
                    Three Months and Nine Months Ended September
                    30, 2000 and 1999 (unaudited)..............................................         2

                    Consolidated Statements of Cash Flows
                    for the Nine Months Ended
                    September 30, 2000 and 1999 (unaudited)....................................         3

                    Notes to Consolidated Financial Statements (unaudited).....................         4

         Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations..............................         9

         Item 3.  Quantitative and Qualitative Disclosures about Market Risk...................        18

PART II.  OTHER INFORMATION

         Item 2.  Changes in Securities and Use of Proceeds....................................        18

         Item 6.  Exhibits and Reports on Form 8-K.............................................        20

SIGNATURES.....................................................................................        21
</TABLE>



                                       i
<PAGE>   3
                          PART I. FINANCIAL INFORMATION

                    ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

                         SERANOVA, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                    SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
                 (in thousands, except per share and share data)

<TABLE>
<CAPTION>
                                                                                      September 30,   December 31,
                                                                                          2000            1999
                                                                                       -----------    ------------
                                                                                       (unaudited)
<S>                                                                                   <C>             <C>
                                 ASSETS
Current Assets:
     Cash .......................................................................       $  4,911        $    611
     Accounts receivable, net of allowance for doubtful accounts of $1,481
          and $353 at September 30, 2000 and December 31, 1999, respectively ....         17,154           7,456
     Unbilled services ..........................................................          8,782           3,680
     Deferred tax assets ........................................................          3,670              --
     Other current assets .......................................................          1,580             769
                                                                                        --------        --------
Total Current Assets ............................................................         36,097          12,516

     Property and equipment, net ................................................          8,500           2,863
     Intangible assets, net .....................................................          2,871           3,492
     Other assets ...............................................................            739               9
                                                                                        --------        --------
Total Assets ....................................................................       $ 48,207        $ 18,880
                                                                                        ========        ========

                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable ...........................................................       $  2,472        $    872
     Accrued payroll and related expenses .......................................          2,436           1,551
     Accrued expenses and other liabilities .....................................          2,730           2,352
     Notes Payable to Intelligroup ..............................................         11,686           8,397
     Loan-Line of Credit ........................................................          9,921              --
     Current portion of long-term debt and obligations ..........................             37             120
                                                                                        --------        --------
Total Current Liabilities .......................................................         29,282          13,292

     Long-term debt and obligations, less current portion .......................            580             618
                                                                                        --------        --------
Total Liabilities ...............................................................         29,862          13,910
                                                                                        --------        --------

Preferred stock, $.01 par value, 5,000,000 shares authorized, 800 shares
     of 6% series A convertible preferred stock issued and outstanding ..........          7,280              --
Common stock warrants ...........................................................            690              --

Commitments

Shareholders' Equity:
     Common stock, $.01 par value, 40,000,000 shares authorized;
         17,460,883 and 16,629,413 shares issued and outstanding
         at September 30, 2000 and December 31, 1999, respectively ..............            175             167
     Additional paid-in capital .................................................         17,558           7,083
     Accumulated deficit ........................................................         (7,377)         (2,246)
     Currency translation adjustment ............................................             19             (34)
                                                                                        --------        --------
Total Shareholders' Equity ......................................................         10,375           4,970
                                                                                        --------        --------
Total Liabilities and Shareholders' Equity ......................................       $ 48,207        $ 18,880
                                                                                        ========        ========
</TABLE>



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



                                      - 1 -
<PAGE>   4




                         SERANOVA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
     FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                      (in thousands, except per share data)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                               Three months ended September 30,   Nine months ended September 30,
                                                               --------------------------------   -------------------------------
                                                                    2000             1999            2000             1999
                                                                  ---------        --------        --------        ---------

<S>                                                               <C>              <C>             <C>             <C>
Revenue ....................................................       $ 23,268        $ 10,471        $ 59,287        $ 27,073

Professional services costs ................................         11,115           6,091          29,550          15,606
Selling and marketing expenses .............................          3,815           1,085           9,693           2,815
General and administrative expenses ........................          8,152           2,612          25,369           6,982
Depreciation and amortization ..............................            731             351           1,862             630
                                                                   --------        --------        --------        --------
Total operating expenses ...................................         23,813          10,139          66,474          26,033
                                                                   --------        --------        --------        --------

Operating income (loss) ....................................           (545)            332          (7,187)          1,040

Other income (expense), net ................................            (11)             --              (9)             27
Interest expense, net ......................................           (524)             (5)           (870)            (64)
                                                                   --------        --------        --------        --------

Income before provision (benefit) for income taxes .........         (1,080)            327          (8,066)          1,003

Income tax provision (benefit) .............................           (839)            205          (2,934)            449
                                                                   --------        --------        --------        --------

Net income (loss) ..........................................       $   (241)       $    122        $ (5,132)       $    554
                                                                   ========        ========        ========        ========

Net earnings (loss) per share:
     Basic and diluted .....................................       $  (0.01)       $   0.01        $  (0.30)       $   0.03
                                                                   ========        ========        ========        ========

Shares used in computing net income (loss) per share:
     Basic and diluted .....................................         17,461          16,629          17,236          16,629
                                                                   ========        ========        ========        ========
</TABLE>


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


                                      - 2 -
<PAGE>   5



                         SERANOVA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                               September 30,    September 30,
                                                                                    2000            1999
                                                                                  --------        --------
<S>                                                                               <C>             <C>
Cash Flows from Operating Activities:
     Net income (loss) ....................................................       $ (5,132)       $   554
     Adjustments to reconcile net income (loss) to net cash used in
         operating activities:
         Depreciation and amortization ....................................          1,862            630
         Provision for doubtful accounts ..................................          1,489            115
         Deferred taxes ...................................................         (3,670)            --
     Changes in operating assets and liabilities:
         Accounts receivable ..............................................        (11,186)        (4,001)
         Unbilled services ................................................         (5,102)        (2,683)
         Other current assets .............................................           (811)           (23)
         Other assets .....................................................           (730)           (17)
         Accounts payable .................................................          1,600             (5)
         Accrued payroll and related expenses .............................            885            420
         Accrued expenses and other liabilities ...........................            378          1,777
                                                                                  --------        -------
             Net cash used in operating activities ........................        (20,417)        (3,233)
                                                                                  --------        -------

Cash Flows from Investing Activities:
     Purchase of business, net of cash acquired ...........................             --         (2,186)
     Capital expenditures .................................................         (6,878)          (659)
                                                                                  --------        -------
             Net cash used in investing activities ........................         (6,878)        (2,845)
                                                                                  --------        -------

Cash Flows from Financing Activities:
     Loans from former parent .............................................         15,001          2,958
     Repayment of loans ...................................................        (11,833)           (80)
     Net borrowing under line of credit ...................................          9,921             --
     Proceeds from sales of series A Preferred stock and warrants..........          7,970             --
     Proceeds from sales of common stock ...................................        10,000             --
     Net investments from former parent ...................................            483          2,870
                                                                                  --------        -------

             Net cash provided by financing activities ....................         31,542          5,748
                                                                                  --------        -------

     Effect of foreign currency exchange rate changes on each and cash
       equivalents ........................................................             53            (26)
                                                                                  --------        -------

             Net increase (decrease) in cash and cash equivalents .........          4,300           (356)
Cash and cash equivalents at beginning of period ..........................            611            677
                                                                                  --------        -------

Cash and cash equivalents at end of period ................................       $  4,911        $   321
                                                                                  ========        =======

Supplemental disclosures of cash flow information:
         Cash paid for income taxes .......................................       $    322        $     8
                                                                                  ========        =======
         Cash paid for interest ...........................................       $     17        $    55
                                                                                  ========        =======
</TABLE>


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




                                      - 3 -
<PAGE>   6


                         SERANOVA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 -- DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

       SeraNova, Inc. ("SeraNova" or the "Company") is a provider of strategic
eBusiness services, including business-to-business solutions. SeraNova's
services include strategic consulting, design, implementation and management of
eBusiness systems. SeraNova serves ebusiness solution needs of Global 5000 as
well as emerging internet based companies through rapid conception, creation and
deployment of innovation internet and portal-based solutions.

       SeraNova was incorporated under the name Infinient, Inc. in the State of
New Jersey on September 9, 1999 and issued 100 shares to Intelligroup, Inc.
("Intelligroup") on such date. Effective on January 1, 2000, Intelligroup
contributed the assets and liabilities of its Internet solutions group,
including SeraNova India which commenced operations in October 1999, the capital
stock of Network Publishing, Inc. and the capital stock of the Azimuth Companies
to SeraNova in exchange for 900 shares of the common stock of SeraNova, $0.01
par value per share (the "Formation"). The Formation was accounted for using the
carryover basis of accounting. The accompanying financial statements include the
accounts and operations of Intelligroup's Internet solutions group since its
inception in 1997, Network Publishing, Inc. from the date of its acquisition by
Intelligroup (January 8, 1999) and the Azimuth Companies for all periods
presented. Intelligroup acquired the Azimuth Companies in a transaction
accounted for as a pooling of interests and Network Publishing, Inc. through a
purchase acquisition.

       On July 5, 2000, Intelligroup distributed to its shareholders all
16,629,413 shares of the SeraNova shares of common stock it then held (the
"spin-off"). For each common share of Intelligroup common stock held by an
Intelligroup shareholder, one share of SeraNova common stock was distributed.
SeraNova split the number of its outstanding shares on the record date of such
dividend so that the number of SeraNova's outstanding shares equaled the number
of outstanding shares of Intelligroup.

       SeraNova faces the risks and uncertainties encountered by companies in
the early stages of development such as managing growth, intense competition,
expansion both domestically and internationally and rapidly changing technology.
In the past, SeraNova relied on Intelligroup for many administrative services
and financial support.



                                      - 4 -
<PAGE>   7
       The consolidated information presented as of September 30, 2000 and 1999,
and for the three-month and nine-month periods then ended, is unaudited, but, in
the opinion of SeraNova's management, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring
adjustments) which the Company considers necessary for the fair presentation of
the Company's financial position as of September 30, 2000 and the results of its
operations and its cash flows for the nine-month periods ended September 30,
2000 and 1999. The financial statements included herein have been prepared in
accordance with generally accepted accounting principles and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. These financial statements should be read in conjunction with the
Company's audited financial statements and accompanying notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Information Statement/Prospectus dated June 29, 2000,
which is a part of the Company's Registration Statement on Form S-1,
Registration No. 383-34964, filed with the Securities and Exchange Commission.

       Results for the interim period are not necessarily indicative of results
that may be expected for the entire year.

NOTE 2 -- NET INCOME PER SHARE

                        COMPUTATION OF EARNINGS PER SHARE
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED         NINE MONTHS ENDED
                                                      SEPTEMBER 30,             SEPTEMBER 30,
                                                    2000         1999         2000          1999
                                                    ----         ----         ----          ----

<S>                                               <C>          <C>          <C>          <C>
Net income (loss)                                 $   (241)    $   122      $ (5,132)    $     554
                                                  =========    =======      =========    =========

Basic and diluted:
   Weighted average shares outstanding              17,461      16,629        17,236        16,629
                                                  =========    =======      =========    =========

Net income (loss) per share                       $  (0.01)    $  0.01      $  (0.30)    $    0.03
                                                  =========    =======      =========    =========
</TABLE>

       Options and warrants to purchase 5,046,049 shares of common stock have
been excluded in the September 30, 2000 calculations since their effect would be
anti-dilutive. All common shares and per share amounts have been adjusted
retroactively to give effect to a 16,629,413-for-one stock split effective May
12, 2000 relating to the spin-off.

NOTE 3 -- SEGMENT INFORMATION

       Historically, SeraNova has managed operations only by geographic region.
The following is information by geographic area as of and for the three and nine
month periods ended September 30, 2000 and 1999.


                                     - 5 -
<PAGE>   8

<TABLE>
<CAPTION>
FOR THREE MONTHS
ENDED SEPTEMBER 30, 2000                   UNITED STATES      ASIA PACIFIC        EUROPE      INDIA      COMBINED TOTAL
------------------------                   -------------      ------------       --------    --------    --------------
<S>                                        <C>                <C>                <C>         <C>         <C>
Revenue..............................      $      15,140      $     2,422        $  1,264    $  4,442      $   23,268
Depreciation & amortization..........                539               35               6         151             731
Income (loss) from operations........             (1,234)          (1,669)            113       2,245            (545)
Interest income......................                 --                1              --           2               3
Interest expense.....................                353               11              --         160             524
Other income (expense)...............                (16)              --              --           2             (14)
Income (loss) before income
  taxes..............................             (1,603)          (1,679)            113       2,089          (1,080)
Capital spending.....................                624              116              31         837           1,608
Total assets.........................             33,490            1,402             282      13,033          48,207
</TABLE>

<TABLE>
<CAPTION>
FOR THREE MONTHS
ENDED SEPTEMBER 30, 1999                   UNITED STATES      ASIA PACIFIC        EUROPE      INDIA      COMBINED TOTAL
------------------------                   -------------      ------------       --------    --------    --------------
<S>                                        <C>                <C>                <C>         <C>         <C>
Revenue..............................      $       7,351      $     3,120        $     --    $     --    $     10,471
Depreciation & amortization..........                336               15              --          --             351
Income (loss) from operations........               (128)             460              --          --             332
Interest income......................                 --              (14)             --          --             (14)
Interest expense.....................                 19              (14)             --          --               5
Other income (expense)...............                 --               14              --          --              14
Income (loss) before income
  taxes..............................               (147)             474              --          --             327
Capital spending.....................                267               --              --          --             267
Total assets.........................             12,088            5,345              --          --          17,433
</TABLE>

<TABLE>
<CAPTION>
FOR NINE MONTHS
ENDED SEPTEMBER 30, 2000                   UNITED STATES      ASIA PACIFIC        EUROPE      INDIA      COMBINED TOTAL
------------------------                   -------------      ------------       --------    --------    --------------
<S>                                        <C>                <C>                <C>         <C>         <C>
Revenue................................    $      40,096      $     7,559        $  1,451    $  9,371    $     59,287
Depreciation & amortization............            1,332               87               9         434           1,862
Income (loss) from operations..........           (6,111)          (4,394)           (988)      4,306          (7,187)
Interest income........................               --                5              --           4               9
Interest expense.......................              656               20              --         194             870
Other income (expense).................              (22)              (3)             --           7             (18)
Income (loss) before income
  taxes................................           (6,788)          (4,412)           (988)      4,122          (8,066)
Capital spending.......................            3,125              253             109       3,391           6,878
Total assets...........................           33,490            1,402             282      13,033          48,207
</TABLE>

<TABLE>
<CAPTION>
FOR NINE MONTHS
ENDED SEPTEMBER 30, 1999                 UNITED STATES     ASIA PACIFIC      EUROPE         INDIA        COMBINED TOTAL
------------------------                 -------------     ------------     ---------     ----------     --------------
<S>                                      <C>               <C>              <C>           <C>            <C>
Revenue................................  $      18,444     $     8,629      $      --     $       --     $      27,073
Depreciation & amortization............            579              51             --             --               630
Income (loss) from operations..........           (175)          1,215             --             --             1,040
Interest income........................              5              23             --             --                28
Interest expense.......................             59               5             --             --                64
Other income (expense).................             --              (1)            --             --                (1)
Income (loss) before income
  taxes................................           (229)          1,232             --             --             1,003
Capital spending.......................            607              52             --             --               659
Total assets...........................         12,088           5,345             --             --            17,433
</TABLE>

       Foreign revenue is based on the country in which SeraNova's operations
reside.

                                     - 6 -
<PAGE>   9

NOTE 4 -- SALE OF COMMON STOCK

       On March 14, 2000, SeraNova sold 831,470 shares of its common stock to
four institutional investors for $10,000,000. SeraNova granted certain demand
and piggyback registration rights to such investors.

NOTE 5 -- SALE OF PREFERRED STOCK AND WARRANTS

The Company has 5,000,000 authorized shares of $.01 per value preferred stock,
issuable in series. On September 29, 2000, SeraNova sold 800 shares of 6% series
A convertible preferred stock to two institutional investors for $8,000,000.
Upon conversion to common stock, the cumulative dividends will be payable at 6%
per annum, in cash or shares. The series A convertible preferred stockholders
have no voting rights, however, they are required to approve certain
transactions, as defined. The convertible preferred stock can be converted into
shares of the Company's common stock at $7 per share at any time and, also is
redeemable by the holders at a premium if certain triggering events occur, such
as a change in control of the Company or an agreement to sell more than a third
of its assets. See Note 7.

In addition, SeraNova has granted the investors warrants to purchase 150,000
shares of SeraNova common stock. The exercise price for the warrant shares
equals the lesser of $7.00 and the average price per share of SeraNova common
stock for the five trading days immediately preceding the date of the exercise.

The Company allocated the proceeds, net of transaction costs, to the series A
convertible preferred stock and warrants based on the fair value of each
instrument. The fair value of the series A convertible preferred stock was
determined based on a discounted cash flow analysis and the fair value of the
warrants was determined based on the Black-Sholes option pricing model. As a
result the Company allocated approximately $7,280,000 and $690,000 of the net
proceeds to the Series A convertible preferred stock and warrants,
respectively. The warrants have been classified as a liability in the
accompanying Consolidated Balance Sheet since the warrants give the holder the
choice of a net share settlement at a time when other shareholders would not
have such a choice (upon a merger or change in control).


SeraNova has the right to redeem the series A convertible preferred stock at
105% of the initial investment value. In case of such redemption by SeraNova, it
will grant additional warrants to the investors to purchase 160,000 shares of
SeraNova common stock. The exercise price for the warrant shares will equal the
lesser of $7.00 and the average price per share of SeraNova common stock for the
five trading immediately preceding the date of the exercise. SeraNova also has
the option to require the conversion of the series A convertible preferred stock
into common stock if the asking price of the common stock for 10 trading days is
130% of the conversion price.

SeraNova agreed to register the resale of the common stock underlying the series
A preferred stock and warrants and accordingly filed with the Securities and
Exchange Commission's a Registration Statement on Form S-1, Registration No.
333-49690. SeraNova is subject to liquidated damages, as defined, if this
Registration Statement is not effective by January 27, 2001. In addition,
SeraNova has provided certain piggyback registration rights to the investors.

A portion of the proceeds from the sale of series A convertible preferred stock
was used to repay $3,000,000 of the Intelligroup note which partially matured on
September 30, 2000.

NOTE 6 -- BORROWINGS

Note payable to Intelligroup represents a calculation of net borrowings from
Intelligroup. On January 1, 2000, such borrowings were converted to amounts
repayable SeraNova to a bank under Intelligroup's revolving credit facility
agreement. Effective January 1, 2000, SeraNova became a co-borrower under
Intelligroup's revolving credit facility agreement with a bank. Intelligroup and
SeraNova are jointly and severally liable under the agreement. In the event
Intelligroup requests and the bank approves a change in control of the ownership
of SeraNova, as contemplated by the spin off, all SeraNova's obligations under
the agreement become due and payable. Intelligroup was in technical default of
one of the bank covenants as of March 31, 2000 but obtained a waiver of such
default through September 2000.

                                     - 7 -

<PAGE>   10

As of December 31, 1999, the aggregate outstanding advances against the
revolving credit facility were $10.6 million. SeraNova's portion of the
outstanding balance as of December 31, 1999, was $8.4 million. As of March 31,
2000, a portion of the proceeds from the sale of common stock was used to pay
off the outstanding balance due to the bank as of March 31, 2000.

On May 31, 2000, SeraNova was released from all obligations under Intelligroup's
revolving credit facility agreement and entered into a $15,100,000 promissory
note with Intelligroup. Such note is for services and advances previously
provided by Intelligroup. The note, which is unsecured and bears interest at the
prime rate plus 1/2%, partially matured on September 30, 2000 when the Company
repaid $3,000,000, and the balance was due on July 31, 2001. The note has
certain mandatory prepayment provisions based on future debt or equity
financings by SeraNova, as defined. Pursuant to these provisions, a $3,000,000
prepayment would have been due as a result of the September 29 sale of the
series A preferred stock; however, Intelligroup waived this prepayment in return
for an amended repayment schedule, under which SeraNova paid Intelligroup
$500,000 on November 8, 2000, will pay $400,000 on or before December 15, 2000
(or apply such payment as an advance payment towards a contemplated services
arrangement between Intelligroup and SeraNova), and will pay additional
installments of $500,000 on or before each of the last days of January,
February, March, April and May 2001. The balance of the note ($9,100,000 or
$8,700,000) will still be due on July 31, 2001.

On June 20, 2000, SeraNova India executed an agreement with Andhra Bank for a
fixed asset-based revolving term loan that will provide SeraNova India with up
to INR 87.6 million (approximately USD 2 million) in financing for fixed assets
purchases. The term loan is secured by substantially all fixed assets of
SeraNova India; it is also co-secured by collateral properties owned by the two
Directors, Raj Koneru and Nagarjun Valluripalli. Borrowings may be made under
the loan for fixed assets purchases with interest at the prime rate
(approximately 12.5% at September 30, 2000) plus 1%. The loan agreement contains
customary representations, warranties, default provisions and financial
covenants. As of September 30, 2000, the outstanding balance on the loan in INR
85 million (approximately USD 1.8 million).

On June 30, 2000, SeraNova India executed an agreement with Andhra Bank for a
working capital revolving credit facility that will provide SeraNova with up to
INR 180 million (approximately $4 million) in financing. The credit facility is
secured by substantially all accounts receivables and fixed assets of SeraNova
India; it is also co-secured by collateral properties owned by two Directors,
Raj Koneru and Nagarjun Valluripalli. Borrowings may be made under the loan for
general corporate purposes with interest at the then current prime rate
(approximately 12.5% at September 30, 2000) plus 1%. The credit agreement
contains customary representations, warranties, default provisions and financial
covenants. As of September 30, 2000, the outstanding balance on the facility is
INR 122 million (approximately USD 2.7 million).

On July 14, 2000, SeraNova executed an agreement with Fleet Credit Corporation
for an asset-based revolving credit facility that provides SeraNova with up to
$15 million in financing. The credit facility is a three-year agreement secured
by substantially all U.S. based assets of SeraNova. Borrowings may be made under
the facility for general corporate purposes with interest at the then current
prime rate plus 1/2%. The credit agreement contains customary representations,
warranties, default provisions and financial covenants. The specific financial
covenants which are effective with the third quarter of 2000 are: (1) SeraNova
must maintain a total debt to tangible net worth not to exceed a ratio of three
to one, (2) SeraNova must maintain a minimum of $1,000,000 of availability, (3)
Interest Coverage Ratio of not less that 1.2 to 1 and (4) Fixed Charge Ratio of
not less than 1.1 to 1. For the three months ended September 30, 2000, SeraNova
was in breach of the Interest Coverage Ratio and the Fixed Charge Ratio;
however, Fleet Capital Corporation waived compliance with these covenants for
this period. As of September 30, 2000, the outstanding balance on the facility
is $5.2 million.

                                     - 8 -
<PAGE>   11

NOTE 7 -- THE MERGER

On October 27, 2000, SeraNova and Silverline Technologies Limited announced that
they had entered into an agreement and plan of merger, under which Silverline
would acquire SeraNova in exchange for American depositary shares of Silverline
then valued at approximately $99 million, and the assumption by Silverline of
SeraNova indebtedness currently in the amount of approximately $12 million. The
acquisition would occur by means of a merger of a wholly-owned subsidiary of
Silverline into SeraNova in which each share of SeraNova common stock would be
converted into 0.35 of a Silverline American depositary share, and each share of
SeraNova's 6% series A convertible preferred stock would, at the option of the
holder, either be converted into the number of Silverline ADSs the holder would
have received if such preferred share had been converted into SeraNova common
stock immediately before the Silverline merger, or be converted into a cash
payment equal to 120% of the stated value of a preferred share, which stated
value is currently $10,000. The merger is subject to regulatory approvals and
approval by the shareholders of SeraNova and Silverline. Subject to such
approvals, SeraNova expects that the merger will be complete sometime in the
first quarter of 2001.

Under the tax sharing agreement with Intelligroup, SeraNova has indemnified
Intelligroup for any tax liabilities in the event a future transaction of
SeraNova results in the spin-off being deemed a taxable transaction. However,
Company management has represented that the proposed merger with Silverline as
described above was not contemplated at the time of the spin-off and
accordingly, the spin-off should be tax free. Should the spin-off be ultimately
construed to be taxable, the resultant tax liability could be up to $40.0
million.

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

OVERVIEW

       SeraNova provides Internet professional services to businesses. We design
and implement Internet-based software applications that help companies manage
procurement, sell products and services, provide customer service, conduct
supplier transactions and communicate with their employees over the Internet. We
offer a comprehensive set of services, including strategy consulting, creative
design, technology implementation and maintenance of Internet-based software
applications. In all of our client engagements, we apply SeraNova's
Time-to-Market Approach, our proprietary methodology, to deliver these services.
We believe that our services allow our clients to gain competitive advantages by
enabling them to penetrate existing markets, enter new markets, reduce
operational costs, improve customer service, shorten product development cycles
and enhance employee productivity. We focus on five industry markets --
financial services, telecommunications, automotive, technology and healthcare.
Most of the services we provide are for clients within the United States. In
addition to our domestic offices, we maintain a presence in multiple locations
in the Asia-Pacific region, India and the United Kingdom.

       We generally bill our services based on the actual time spent providing
services. For the three months ended September 30, 2000, approximately 95% of
our revenues were derived from such time and materials contracts and
arrangements. Revenues related to time and materials contracts are typically
recognized when the services are provided. Revenues with respect to fixed-price
contracts are recognized in proportion to the costs incurred. American Express
accounted for approximately 48% of the total revenues for the three months ended
September 30, 2000. No other client accounted for more than 10% of revenues for
the three months ended September 30, 2000. American Express accounted for
approximately 41% and Volkswagen of America accounted for approximately 11% of
the combined revenues of SeraNova for the nine months ended September 30, 2000.
Accounts receivable as of September 30, 2000 attributable to these customers was
$2,704,000 and $2,447,000, respectively. No other customer accounted for more
than 10% of the combined revenues of SeraNova for the nine months ended
September 30, 2000. We anticipate that such client concentration will continue
for the foreseeable future. To effectively address the market demand, and to
remain competitive, our clients tend to pursue multiple Internet initiatives at
the same time. By proactively developing a strong relationship with our key
clients, we expect to benefit from such initiatives, but to the extent our
significant clients use fewer of our services or terminate their relationship
with us, our revenues could decline materially. This could result in a
significant negative impact on our business and operations. Our results from
quarter to quarter may vary based upon various factors such as changes in our
pricing policies, variations in billing margins and personnel utilization rates,
length of our sales cycle, our ability to recruit technical personnel, the
acceptance of our new services offerings and fluctuation in foreign exchange
rates.

       Professional services costs represent the cost to provide professional
services to our customers. These costs include such items as compensation,
benefits, recruiting, consultant-training and non-billable expenses incurred by
our consultants. They do not include expenses relating to our sales and
marketing efforts. Given the supply-constrained market, we anticipate that our
cost per professional will increase in future quarters. Our typical client
engagement lasts between three and six months, and any early termination or
postponement of a large project or of several projects could significantly
impact revenues in any given quarter and result in lower gross margins.

       Selling and marketing expenses include costs associated with sales and
marketing and
                                     - 9 -


<PAGE>   12

related support functions including salaries, commissions and payroll related
expenses, employee benefits, recruiting, advertising and travel and
entertainment. SeraNova made significant sales and marketing investments during
the first nine months of 2000 to build a visible SeraNova brand among prospects
and potential employees, and to reorganize our sales process. We expect these
expenses to decrease significantly in the next few months.

       General and administrative expenses include all costs not included in
professional services, sales or marketing. Such expenses include salaries and
payroll expenses of executives, finance, human resources, information technology
and other administrative personnel; facilities costs, professional services and
other general corporate expenditures. These costs have increased significantly
over the last few months due to the expansion of both our domestic and foreign
operations. We expect general and administrative expenses to remain constant or
decrease slightly over the next few months.

       Prior to September 1999, Intelligroup did not account for our business as
a separate unit or division. In presenting our historical financial statements
for all periods, we specifically identified all revenue, professional services
costs, other income (expense) and certain selling and marketing expenses and
other general and administrative expenses incurred by Intelligroup on our
behalf. Selling and marketing expenses and other general and administrative
expense were allocated using methodologies which took into consideration the
ratio of our revenue to the consolidated revenue of Intelligroup, head count,
occupancy and other factors. However, we cannot assure you that our historical
financial information prior to December 31, 1999 necessarily reflects what the
results of operations, financial position and cash flows would have been had we
been a separate company, or is indicative of our future results of operations,
financial positions and cash flows.

                           FORWARD-LOOKING STATEMENTS

       This Form 10-Q contains certain "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
concerning our operations, performance and financial condition, including our
future economic performance, plans, and objectives and the likelihood of success
in developing and expanding our business. These statements are based upon a
number of assumptions and estimates which are subject to significant
uncertainties, many of which are beyond our control. The words "may," "would,"
"could," "will," "expect," "anticipate," "believe," "intend," "plan," "estimate"
and similar expressions are meant to identify such forward-looking statements.
Such forward-looking statements include risks and uncertainties, including, but
not limited to:

       -      the Company's ability to manage its growth effectively, which will
              require the Company (a) to develop operational, financial and
              other internal systems, as well as its business development
              capabilities, (b) to attract, train, retain, motivate and manage
              its employees, (c) to maintain sufficiently high employee
              utilization, (d) to obtain financing for its expanding business,
              (e) to expand its sales an support staff, (f) to respond
              effectively to competitive pressures, (g) to increase the scale of
              its operations, (h) to continue to develop and upgrade its
              services and solutions, and (i) to replace the transitional
              services necessary for its business that Intelligroup will provide
              for a limited time following the spin-off;



                                     - 10 -
<PAGE>   13

       -      the Company's limited operating history as a company separate from
              Intelligroup;

       -      the Company's ability to contain costs, grow revenue or increase
              profitability;

       -      the Company's reliance on a continued relationship with American
              Express and Volkswagen of America;

       -      the Company's substantial reliance on key customers and large
              projects;

       -      the Company's ability to develop an effective internal control
              structure;

       -      changes in the Company's billing and employee utilization rates;

       -      the Company's ability to obtain financing with favorable interest
              rates;

       -      the Company's ability to satisfy its obligations to Intelligroup;

       -      the highly competitive nature of the markets for the Company's
              services;

       -      the Company's ability to successfully address the continuing
              changes in information technology, evolving industry standards and
              changing customer objectives and preferences;

       -      the substantial variability of the Company's quarterly operating
              results caused by a variety of factors, many of which are not
              within the Company's control, including (a) seasonal impact on
              customer spending, (b) changes in its competitors' pricing
              policies, (c) introduction of new services by its competitors, (d)
              acceptance of its new services offerings, (e) the market for
              qualified technical personnel, (f) timing, size and stage of
              projects, (g) the demand for Internet professional services, (h)
              length of its sales cycles, (i) fixed price contracts, and (j)
              general economic conditions;

       -      the Company's ability to attract and retain a sufficient number of
              highly skilled employees in the future;

       -      the Company's ability to expand sales and marketing efforts and
              promote existing or future services offerings;

       -      the Company's reliance on the continued services of its key
              executive officers and leading technical personnel;

       -      the Company's ability to continue to diversify its offerings;

       -      the Company's ability to successfully acquire and integrate any
              future businesses;

       -      the Company's ability to develop administrative functions in a
              timely and cost-effective manner;



                                     - 11 -
<PAGE>   14

       -      the Company's ability to protect its intellectual property rights;

       -      the Company's lack of long-term customer contracts and its ability
              to attract new clients;

       -      uncertainties from potential administrative, regulatory,
              immigration and tax law matters;

       -      the continued growth of the Internet; and

       -      those risks listed under "Risk Factors" in our information
              statement/prospectus filed with the SEC.

       As a result of these factors and others, the Company's actual results may
differ materially from the results disclosed in such forward-looking statements.
We undertake no obligation to update such statements or publicly release the
result of any revisions to these forward-looking statements which we may make to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.

                              RESULTS OF OPERATIONS

       The following table sets forth for the periods indicated certain
financial data as a percentage of revenue:

<TABLE>
<CAPTION>
                                                         Three Months Ended September 30,        Nine Months Ended September 30,
                                                         --------------------------------        -------------------------------
                                                             2000                1999                2000               1999
                                                             ----                ----                ----               ----

<S>                                                         <C>                 <C>                 <C>                <C>
Revenue................................................     100.0%              100.0%              100.0%             100.0%

Professional services costs............................      47.8                58.2                49.8               57.6
Selling and marketing expenses.........................      16.4                10.4                16.3               10.4
General and administrative expenses....................      35.0                24.9                42.8               25.8
Depreciation and amortization..........................       3.1                 3.4                 3.1                2.3
                                                            -----                ----               -----               ----
     Total operating expenses..........................     102.3                96.9               112.0               96.1
                                                            -----                ----               -----               ----

     Operating income (loss)...........................      (2.3)                3.1               (12.0)               3.9

Other income (expense), net............................       0.0                  --                 0.0                0.0
Interest expense, net..................................      (2.3)                 --                (1.5)              (0.2)
                                                            -----                ----               -----               ----

Income before provision (benefit) for income taxes.....      (4.6)                3.1               (13.5)               3.7

Income tax provision (benefit) ........................      (3.6)                2.0                (4.9)               1.7
                                                            -----                ----               -----               ----

Net income (loss)......................................      (1.0)%               1.1%               (8.6)%              2.0%
                                                            =====                ====               =====               ====
</TABLE>

                                     - 12 -
<PAGE>   15

THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999

       REVENUES. Revenues increased by $12.8 million, or 122.2%, to $23.3
million for the three months ended September 30, 2000 compared with $10.5
million for the same period in 1999. The increase in revenue is primarily due to
an increase in the number of clients and size of engagements for U.S. operations
and to the development of our India and United Kingdom subsidiaries. U.S. based
revenue increased by $7.7 million for the three months ended September 30, 2000
compared with the same period in 1999. Revenues from India and United Kingdom
subsidiaries were $4.4 million and $1.3 million, respectively, for the three
months ended September 30, 2000. These subsidiaries did not exist during the
comparable period in 1999. Combined revenues from other foreign subsidiaries
decreased by $700,000 during the third quarter of 2000 compared with the same
period in 1999 due to economic downturns in the Asia-Pacific region.

       PROFESSIONAL SERVICE COSTS. Professional service costs represent the cost
of consultant salaries and payroll-related costs plus non-reimbursed direct
expenses attributable to the consultants or projects, such as training,
recruiting, relocation and travel expenses. Professional service costs increased
to $11.1 million for the three months ended September 30, 2000 compared with
$6.1 million for the same three-month period in 1999 but decreased as a
percentage of revenue by 10.4%, to 47.8% from 58.2%. The primary reasons for the
decrease in professional service costs as a percentage of revenue are an
increase in billing margins for U.S.-based consultants and the continued
expansion of our India subsidiary during the quarter. Billing margins in the
U.S. increased by 14.6%, to 54.0%, for the three months ended September 30, 2000
compared with 39.4% for the three months ended September 30, 1999. Profession
service costs as a percentage of revenue are typically much lower in India due
to India's cost structure. Margins on professional service costs as a percentage
of revenue for our India operations were 71.8% for the three months ended
September 30, 2000.

       SELLING AND MARKETING EXPENSES. Selling and marketing expenses include
costs that are directly related to sales and marketing such as salaries and
related benefits, advertising expenses, recruiting, travel and other costs.
Selling and marketing expenses increased by $2.7 million, or 251.6%, to $3.8
million for the three months ended September 30, 2000 compared with $1.1 million
for the comparable period in 1999. Selling and marketing expenses also increased
as a percentage of revenue to 16.4% from 10.4% over the same periods. These
increases in actual expenses and as a percentage of revenue are due to
investments in the Company's sales and marketing infrastructure during the
quarter that did not exist during the same period in 1999.

       GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
include administrative salaries and related benefits, occupancy costs,
professional fees, and other costs. These expenses increased by $5.5 million, or
212.0%, to $8.2 million for the three months ended September 30, 2000 from $2.6
million in the same period ended September 30, 1999. General and administrative
expenses also increased as a percentage of revenue to 35.0% for the three months
ended September 30, 2000 compared with 24.9% for the same three months in 1999.
Primary reasons for the increases in both actual general and administrative
expenses and the percentage of total revenue were: (a) costs associated with the
development of our foreign operations in India and Europe during 2000, (b)
investment in the infrastructure of U.S. operations and (c) costs associated
with the spin-off of SeraNova.

       DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
$380,000, or 108.3%, to $731,000 for the three months ended September 30, 2000
from $351,000 for the corresponding period in 1999 but decreased as a percentage
of total revenue to 3.1% from 3.4%. The increase in actual depreciation and
amortization expenses was due to capital expenditures required for the expansion
of U.S. and foreign operations in India and Europe. The decrease as a percentage
of revenue is primarily due to the substantial increases in revenues from the
US, India and Europe.

       OTHER INCOME (EXPENSE), NET. Other income (expense), net consists of
interest income, interest expense, currency fluctuations on daily transactions,
and miscellaneous other income and expense items. For the three months ended
September



                                     - 13 -
<PAGE>   16

30, 2000, SeraNova incurred a net expense of $535,000 compared to a
net expense of $5,000 for the corresponding period in 1999. The increase in net
expense is due to interest on the Intelligroup note and on the revolving credit
agreement. Both items did not exist during 1999.

       PROVISION FOR INCOME TAXES. Income tax expense represents combined
federal, state and foreign taxes. SeraNova reported an income tax benefit of
$839,000 on pretax losses of $1.1 million for the three months ended September
30, 2000 compared with an income tax provision of $205,000 on pretax profits of
$327,000 for the comparable period in 1999. The effective tax rate for the
three-month period ended September 30, 2000 was 77.7% as compared with 62.7% for
the similar period in 1999. The high, effective tax rate for the third quarter
of 2000 is due to tax benefits reported on losses from U.S. and Asia-Pacific
operations combined with operating profits reported on India and European
operations that incurred no tax provision. The high tax rate for the three
months ended September 30, 1999 was due to tax provisions incurred on profits in
certain foreign jurisdictions that could not be offset against losses from other
regions. Management believes that it is more likely than not that all net,
deferred tax assets recorded as of September 30, 2000 will be realized within
the next twelve months.

       NET LOSS. As a result of the factors described above, SeraNova's net loss
for the three months ended September 30, 2000 was $241,000 compared with a net
income of $122,000 for the three months ended September 30, 1999.


NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999

       REVENUES. Revenues increased by $32.2 million, or 119.0%, to $59.3
million for the nine months ended September 30, 2000 compared with $12.8 million
for the same period in 1999. The increase in revenue is primarily due to an
increase in the number of clients and size of engagements for U.S. operations
and to the development of our India and United Kingdom subsidiaries. U.S. based
revenue increased by $22.5 million for the nine months ended September 30, 2000
compared with the same period in 1999. Revenues from India and United Kingdom
subsidiaries were $9.4 million and $1.5 million, respectively, for the first
nine months of 2000. These subsidiaries did not exist during the comparable
period in 1999. Combined revenues from other foreign subsidiaries decreased by
$1.1 million during the nine months ended September 30, 2000 compared with the
same period in 1999 due to the economic conditions and restructuring of our
operations in the Asia-Pacific region.

       PROFESSIONAL SERVICE COSTS. Professional service costs represent the cost
of consultant salaries and payroll-related costs plus non-reimbursed direct
expenses attributable to the consultants or projects, such as training,
recruiting, relocation and travel expenses. Professional service costs increased
to $29.6 million for the nine months ended September 30, 2000 compared with
$15.6 million for the same nine-month period in 1999 but decreased as a
percentage of revenue by 7.8%, to 49.8% from 57.6%. The primary reasons for the
decrease in professional service costs as a percentage of revenue are an
increase in billing margins for U.S.-based consultants and the continued
expansion of our India subsidiary during the quarter. Billing margins in the
U.S. increased by 12.5%, to 51.1%, for the nine months ended September 30, 2000
compared with 38.7% for the nine months ended September 30, 1999. Professional
service costs as a percentage of revenue are typically much lower in India due
to India's cost structure. Margins on professional service costs as a percentage
of revenue for our India operations were 75.5% for the nine months ended
September 30, 2000.

       SELLING AND MARKETING EXPENSES. Selling and marketing expenses include
costs that are directly related to sales and marketing such as salaries and
related benefits, advertising expenses, recruiting, travel and other costs.
Selling and marketing expenses increased by $6.9 million, or 244.3%, to $9.7
million for the nine months ended September 30, 2000 compared with $2.8 million
for the comparable period in 1999. Selling and marketing expenses also increased
as a percentage of revenue to 16.3% from 10.4% over the same periods. These
increases in actual expenses and as a percentage of revenue are due to
investments in the Company's sales and marketing infrastructures during 2000
that did not exist during the same period in 1999.


                                     - 14 -
<PAGE>   17

       GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
include administrative salaries and related benefits, occupancy costs,
professional fees, and other costs. These expenses increased by $18.4 million,
or 263.3%, to $25.4 million for the nine months ended September 30, 2000 from
$7.0 million in the same period in 1999. General and administrative expenses
also increased as a percentage of revenue to 42.8% for the nine months ended
September 30, 2000 compared with 25.8% for the same period in 1999. The primary
reasons for both the actual and percentage increases in general and
administrative expenses were the investment in the infrastructure for both the
U.S. and foreign operations and costs associated with the spin-off of SeraNova
from Intelligroup.

       DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased by
$1.2 million, or 195.6%, to $1.9 million for the nine months ended September 30,
2000 from $630,000 for the corresponding period in 1999 and also increased as a
percentage of total revenue to 3.1% from 2.3%. The increases in both actual
depreciation and amortization expense and in the percentage of revenue were due
to capital expenditures required for the expansion of U.S. and foreign
operations in India and Europe.

       OTHER INCOME (EXPENSE), NET. Other income (expense), net consists of
interest income, interest expense, currency fluctuations on daily transactions,
and miscellaneous other income and expense items. For the nine months ended
September 30, 2000, SeraNova incurred a net expense of $879,000 compared to a
net expense of $37,000 for the corresponding period in 1999. The increase in net
expense is primarily due to interest on the Intelligroup note and on the
revolving credit agreements during the first nine months of 2000. These notes
did not exist during 1999.

       PROVISION FOR INCOME TAXES. Income tax expense represents combined
federal, state and foreign taxes. SeraNova reported an income tax benefit of
$2.9 million on pretax losses of $8.1 million for the nine months ended
September 30, 2000 compared with an income tax provision of $449,000 on pretax
profits of $1.0 million for the comparable period in 1999. The effective tax
rate for the three-month period ended September 30, 2000 was 36.4% as compared
with 44.8% for the similar period in 1999. The effective tax rate for the first
nine months of 2000 was based on an average of tax benefits recorded on losses
from U.S. and Asia-Pacific operations. The high tax rate for the nine months
ended September 30, 1999 was due to tax provisions incurred on profits in
certain foreign jurisdictions that could not be offset against losses from other
regions. SeraNova believes that it is more likely than not that all net,
deferred tax assets recorded as of September 30, 2000 will be realized within
the next twelve months.

       NET LOSS. SeraNova's net loss for the nine months ended September 30,
2000 was $5.1 million compared with a net income of $554,000 for the comparable
period in 1999. The losses incurred during the first nine months of 2000 are
primarily due to SeraNova's significant investments in development SeraNova's
sales, marketing and management infrastructure in 2000.


LIQUIDITY AND CAPITAL RESOURCES

       Our principal capital requirements are to fund working capital needs and
capital expenditures in order to support revenue and operations growth.

       For the nine months ended September 30, 2000, the net cash used in
operating activities totaled $20.4 million. Cash was provided by $1.9 million
from depreciation and amortization, $1.5 million from provisions for doubtful
accounts and increases of $1.6 million in accounts payable, $885,000 in accrued
payroll and related expenses and $378,000 in accrued expenses and other
liabilities. This was offset by a net loss of $5.1 million and increase of $11.2
million in accounts receivable, $5.1 million in unbilled services, $3.7 million
in deferred taxes and $811,000 in other current assets. The increases in
accounts receivable and unbilled services were primarily due to the increased
operations within the U.S. and India. In the nine months ended September 30,
1999, net cash used in operating activities was $3.2 million. The principal uses
of funds were an increase in accounts receivable of $4.0 million and an increase
in unbilled services of $2.7 million.



                                     - 15 -
<PAGE>   18

This was offset by net income of $554,000, $630,000 from depreciation and
amortization and increases accrued expenses of $1.8 million and in accrued
payroll and related costs of $420,000.

       We had capital expenditures for the first nine months of 2000 and 1999 of
$6.9 million and $659,000, respectively, for computers, furniture, equipment and
leasehold improvements. Capital expenditures are expected to be much lower over
the remainder of 2000 and into 2001 than they were for the first nine months of
2000.

       The foregoing cash flows are not necessarily indicative of the cash flows
that would have resulted if we were a separate entity.

       On May 31, 2000, SeraNova entered into a $15,100,000 unsecured promissory
note with Intelligroup reflecting funds borrowed from Intelligroup for working
capital purposes. The note bears interest at the prime rate plus 1/2%. A payment
of $3,000,000 was made on September 29, 2000 with some of the proceeds from the
sale of SeraNova's 6% series A convertible preferred stock (see below) and the
balance of $12,100,000 was due on July 31, 2001. The note has certain mandatory
prepayment provisions based on possible future debt or equity financings by
SeraNova. Pursuant to these provisions, a $3,000,000 prepayment would have been
due as a result of the September 29 sale of the Series A preferred stock (see
below); however, Intelligroup waived this prepayment in return for an amended
repayment schedule, under which SeraNova paid Intelligroup $500,000 on November
8, 2000, will pay an additional $400,000 on or before December 15, 2000 (or
apply such payment as an advance payment towards a contemplated services
arrangement between Intelligroup and SeraNova), and will pay additional
installments of $500,000 on or before each of the last days of January,
February, March, April and May 2001. The balance of the note ($9,100,000 or
$8,700,000) will be due on July 31, 2001.

       On July 14, 2000, SeraNova executed an agreement with Fleet Credit
Corporation for an asset-based revolving credit facility that provides SeraNova
with up to $15 million in financing. The credit facility is a three-year
agreement secured by substantially all U.S. based assets of SeraNova. Borrowings
may be made under the facility for general corporate purposes with interest at
the then current prime rate plus 1/2%. The credit agreement contains customary
representations, warranties, default provisions and financial covenants. The
specific financial covenants which are effective with the third quarter of 2000
are: (1) SeraNova must maintain a total debt to tangible net worth not to exceed
a ratio of three to one, (2) SeraNova must maintain a minimum of $1,000,000 of
availability, (3) Interest Coverage Ratio of not less that 1.2 to 1 and (4)
Fixed Charge Ratio of not less than 1.1 to 1. For the three months ended
September 30, 2000, SeraNova was in violation of the Interest Coverage Ratio and
the Fixed Charge Ratio; however, Fleet Capital Corporation waived compliance
with these covenants for this period.

       On September 29, 2000, SeraNova sold 800 shares of 6% series A
convertible stock to two institutional investors for $8,000,000. Cumulative
dividends on the preferred stock have been accruing since that date at the rate
of 6% per year on the $8,000,000 of aggregate stated value. SeraNova will pay
these dividends at such time as the series A preferred stock is converted into
common stock, in cash or, at SeraNova's option, by increasing the stated value
of the preferred stock. The series A preferred stock, in general, has no voting
rights and is convertible into shares of common stock at $7.00 of stated value
per share of common stock, subject to anti-dilution adjustments in certain
circumstances, including an exercise at a price less that $7.00 per share of the
warrants described in the next paragraph. The series A preferred stock is also
redeemable by the holders at a premium in certain events, such as a change in
control of SeraNova or an agreement to sell more than a third of its assets. A
portion of the proceeds from the sale of the 6% series A convertible preferred
stock was used to pay $3,000,000 of SeraNova's obligation to Intelligroup as
describe above.

       In addition, SeraNova has granted these two investors warrants to
purchase 310,000 shares of SeraNova common stock at an exercise price equal to
the lessor of $7.00 and the average price per share of SeraNova common stock for
the five trading days immediately preceding the date of exercise; however, the
exercise price is $7.00 until December 29, 2000. 150,000 of these warrants are
currently exercisable and warrants to purchase 160,000 shares will become
exercisable if SeraNova redeems


                                     - 16 -
<PAGE>   19

any shares of the 6% series A convertible preferred stock. SeraNova generally
can redeem the preferred stock at any time at 105% of the stated value of the
preferred stock.

       Management believes that the cash to be generated from SeraNova's
operations, proceeds from the sale of its 6% Series A convertible preferred
stock, and funds available under the credit facility through Fleet Credit
Corporation will be sufficient to satisfy SeraNova's cash requirements
throughout at least the next twelve months. However, there can be no assurance
in this regard.

THE PROPOSED MERGER

     On October 27, 2000, SeraNova and Silverline Technologies Limited announced
that they had entered into an agreement and plan of merger, under which
Silverline would acquire SeraNova in exchange for American depositary shares of
Silverline then valued at approximately $99 million, and the assumption by
Silverline of SeraNova indebtedness currently in the amount of approximately $12
million. The acquisition would occur by means of a merger of a wholly-owned
subsidiary of Silverline into SeraNova in which each share of SeraNova common
stock would be converted into 0.35 of a Silverline American depositary share,
and each share of SeraNova's 6% series A convertible preferred stock would, at
the option of the holder, either be converted into the number of Silverline ADSs
the holder would have received if such preferred share had been converted into
SeraNova common stock immediately before the Silverline merger, or be converted
into a cash payment equal to 120% of the stated value of a preferred share,
which stated value is currently $10,000. On October 26, 2000, the day before the
agreement and plan of merger was signed, the closing price of a Silverline
American depositary share for New York Stock Exchange composite transactions was
$15.875. The merger is subject to regulatory approvals and approval by the
shareholders of SeraNova and Silverline. Subject to such approvals, we expect
that the merger will be complete sometime in the first quarter of 2001.

     The agreement and plan of merger provides that SeraNova will pay
Silverline a termination fee of $4 million in certain circumstances if

     -  the agreement and plan of merger is terminated after a competing
        proposal or offer is made to acquire at least 20% of the assets of
        SeraNova and its subsidiaries or at least 20% of the combined voting
        power of the shares of SeraNova common stock, or after a competing
        proposal is made to involve SeraNova or any of its subsidiaries in a
        merger consolidation, business combination, recapitalization,
        dissolution, liquidation or similar transaction in which the other party
        to the transaction or its stockholders would own at least 20% of the
        combined voting power of the parent entity resulting from any such
        transaction, and

     -  within twelve months of such termination, SeraNova or any of its
        subsidiaries enters into an agreement with respect to, or approves or
        consummates, a proposal to acquire at least 50% of the assets of
        SeraNova and its subsidiaries or at least 50% of the combined voting
        power of the shares of SeraNova common stock, or a proposal involving
        SeraNova or any of its subsidiaries in a merger, consolidation, business
        combination, recapitalization, dissolution, liquidation or similar
        transaction in which the other party to the transaction or its
        stockholders will own at least 40% of the combined voting power of the
        parent entity resulting from any such transaction.

     Silverline Technologies is a Bombay, India based international software
solutions provider with more than 12 years of industry experience and over 1600
software professionals globally. Silverline provides IT solutions and
outsourcing services with specific focus in eBusiness, CRM, Legacy
Transformation, and Application Maintenance. While experienced in many business
disciplines, Silverline brings exceptional skills to the key areas of
telecommunications, banking, utilities, insurance, transportation, and retail.
With annual revenues of over $116 million for trailing twelve months ended June
2000, Silverline provides solutions to Fortune 500 companies as well as major
corporations throughout the world. Silverline Technologies is ISO 9001 and SEI
CMM Level 4 certified with facilities in the United States, India, Canada, the
UK, Germany, Hong Kong, Japan, and Egypt. Silverline uses its global delivery
model to provide superior service, accelerated delivery and significant cost
savings to its network of worldwide clients.

                                    - 17 -

<PAGE>   20
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        Although the Company cannot accurately determine the precise effect
thereof on its operations, it does not believe inflation, currency fluctuations
or interest rate changes have historically had a material effect on its
revenues, sales or results of operations. Any significant effects of inflation,
currency fluctuations and changes in interest rates on the economies of the
United States, Asia and Europe could adversely impact the Company's revenues,
sales and results of operations in the future. If there is a material adverse
change in the relationship between European currencies and/or Asian currencies
and the United States Dollar, such change would adversely affect the result of
the Company's European and/or Asian operations as reflected in the Company's
financial statements. The Company has not hedged its exposure with respect to
this currency risk, and does not expect to do so in the future, since it does
not believe that it is practicable for it to do so at a reasonable cost.

                          PART II.  OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

ISSUANCE OF PREFERRED STOCK

        Our authorized capital stock consists of 40,000,000 shares of common
stock, par value $0.01 per share and 5,000,000 shares of preferred stock, par
value $0.01 per share.

        The preferred stock is issuable from time to time in one or more series
and with such designations, preferences and other rights for each series as
shall be stated in the resolutions providing for the designation and issue of
each such series adopted by our board of directors. The board of directors is
authorized by our certificate of incorporation to determine, among other things,
the voting, dividend, redemption, conversion, exchange and liquidation powers,
rights and preferences and the limitations thereon pertaining to such series.
The board of directors, without shareholder approval, may issue preferred stock
with voting and other rights that could adversely affect the voting power of the
holders of the common stock and that could have certain anti-takeover effects.
The ability of the board of directors to issue preferred stock without
shareholder approval could have the effect of delaying, deferring or preventing
a change in control of us or the removal of existing management.

        The only shares of preferred stock of SeraNova currently outstanding are
800 shares of 6% series A convertible preferred stock (the "Series A Preferred
Stock"), which was issued in a private placement on September 29, 2000. The
following description of the SeraNova common stock includes a description of
those terms of the Series A Preferred Stock which affect the rights evidenced by
the common stock.

Voting Rights

        The holders of our common stock are entitled to one vote per share on
all matters to be voted on by shareholders. Holders of shares of our common
stock are not entitled to cumulate their votes in the election of directors.
Generally, all matters to be voted on by shareholders must be approved by a
majority, or, in the case of election of directors, by a plurality, of the votes
entitled to be cast by the holders of our common stock present in person or
represented by proxy, subject to any voting rights granted to holders of any
preferred stock. Except as otherwise provided by law or in our certificate of
incorporation, and subject to any voting rights granted to holders of any
outstanding preferred stock, amendments to our certificate of incorporation must
be approved by a majority of the votes entitled to be cast by the holders of our
common stock. However, amendments to our certificate of incorporation that would
alter or change the powers, preferences or special rights of any class or series
of stock (including the Series A Preferred Stock) so as to affect them adversely
also must be approved by a majority of the votes entitled to be cast by the
holders of the class or series affected by the amendment. Notwithstanding the
foregoing, any amendment to our certificate of incorporation to increase the
authorized shares of any class of our capital stock requires the approval only
of a majority of the votes entitled to be cast by the holders of our common
stock.

                                    - 18 -
<PAGE>   21


        The Series A Preferred Stock has no voting rights except as described in
the immediately preceding paragraph, and except that as long as any shares of
Series A Preferred Stock are outstanding. SeraNova may not, without the
affirmative vote of the holders of a majority of the shares of the Series A
Preferred Stock then outstanding,

        (a) alter or change adversely the powers, preferences or rights given to
the Series A Preferred Stock or alter or amend the certificate of designation
providing for the Series A Preferred Stock,

        (b) authorize or create any class of stock ranking senior to or equal to
the Series A Preferred Stock as to dividends or distribution of assets upon a
liquidation,

        (c) amend SeraNova's certificate of incorporation or other charter
documents so as to affect adversely any rights of the holders of Series A
Preferred Stock,

        (d) increase the authorized number of shares of Series A Preferred
Stock, or

        (e) enter into any agreement with respect to clauses (a) through (d)
above.


Dividends

        Holders of our common stock will share ratably on a per share basis in
any dividend declared by the board of directors, subject to any preferential
rights of any outstanding preferred stock. Dividends payable in shares of common
stock may be paid only as follows: (1) shares of our common stock may be paid
only to holders of our common stock; and (2) the number of shares so paid will
be equal on a per share basis with respect to each outstanding share of our
common stock.

        Holders of Series A Preferred Stock are entitled to receive, out of
funds legally available therefor, cumulative dividends at the rate per share (as
a percentage of the stated value per share) of 6% per annum. Stated value per
share of Series A Preferred Stock is currently $10,000 and aggregate stated
value is $8,000,000. Accrued dividends on a share of Series A Preferred Stock
are payable (1) on the date when such share is converted into shares of common
stock, and (2) in cash or by accretion of the stated value of such share. The
decision whether to accrete dividends to the stated value or to pay dividends in
cash is at the discretion of SeraNova, subject to certain exceptions. For
example, SeraNova must pay dividends in cash if

        - the number of shares of common stock at the time authorized, unissued
          and unreserved for all purposes is insufficient to accrete such
          dividends to the stated value to permit conversion in full of all
          outstanding stated value, or

        - the common stock is not then listed or quoted on the Nasdaq National
          Stock Market, the New York Stock Exchange, the American Stock Exchange
          or the Nasdaq SmallCap Stock Market.

       Any dividends to be paid in cash on the series A Preferred Stock that are
not paid within three Nasdaq trading days following a conversion date shall
continue to accrue and shall entail a late fee, which must be paid in cash, at
the rate of 18% per annum or the lesser rate permitted by applicable law.

                                     - 19 -
<PAGE>   22
        As long as any shares of Series A Preferred Stock are outstanding,
neither SeraNova nor any subsidiary of SeraNova may purchase or otherwise
acquire directly or indirectly any shares of common stock, nor shall SeraNova
directly or indirectly (a) pay or declare any dividend or make any distribution
upon the common stock at any time when SeraNova is not in compliance with its
payment and other obligations with respect to the Series A Preferred Stock, (b)
make any distribution in respect of any shares of common stock, or (c) set aside
any monies for the purchase of any shares of common stock.

  Liquidation

        Upon any liquidation, dissolution or winding up of SeraNova, after
payment in full of the amounts required to be paid to holders of preferred
stock, if any, all holders of our common stock are entitled to receive the same
amount per share with respect to any distribution of assets to holders of shares
of our common stock. Upon any liquidation, dissolution or winding-up of
SeraNova, the holders of Series A Preferred Stock will be entitled to receive,
out of the assets of SeraNova for each share of Series A Preferred Stock, an
amount equal to the stated value per share of the Series A Preferred Stock
(currently $10,000, or $8,000,000 for all 800 outstanding shares of Series A
Preferred Stock in the aggregate) before any distribution or payment will be
made to the holders of common stock.

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

       (a)    Exhibits.

                     2      Agreement and Plan of Merger dated as of October 27,
                            2000, among Silverline Technologies Limited,
                            Silverline Acquisition Corp., Silverline
                            Technologies, Inc. and the Registrant, filed as an
                            Exhibit to the Registrant's Registration Statement
                            on Form S-1, Registration No. 333-49690, and
                            incorporated herein by reference. Not included in
                            this exhibit are certain schedules to the
                            representations and warranties of the Registrant in
                            Article III of the Agreement, and to the
                            representations and warranties of Silverline
                            Technologies Limited and Silverline Acquisition
                            Corp. in Article IV of the Agreement. The Registrant
                            undertakes to furnish these schedules supplementally
                            to the Commission upon its request.

                     3.1A   Certificate of Incorporation of the Registrant,
                            filed as an exhibit to the Registrant's
                            Registration Statement on Form S-1, Registration No.
                            333-34964, and incorporated herein by reference.

                     3.1B   Certificate of Designation constituting part of the
                            Registrant's Certificate of Incorporation, providing
                            for its 6% Series A convertible preferred stock,
                            filed  as an exhibit to the Registrant's
                            Registration Statement on Form S-1, Registration No.
                            333-49690, and incorporated herein by reference.

                     3.2    By-Laws of the Registrant, filed as an exhibit to
                            the Registrant Registration Statement on Form S-1,
                            Registration No. 333-34964, and incorporated herein
                            by reference.

                     10.1   Agreement by and between Fleet Capital Corporation
                            and the Registrant for a revolving credit facility,
                            dated July 14, 2000, filed as an exhibit to the
                            Registrant's Quarterly Report on Form 10-Q for the
                            quarterly period ended June 30, 2000, and
                            incorporated herein by reference.


                     10.2   Convertible Preferred Stock Purchase Agreement dated
                            as of September 26, 2000, among the Registrant,
                            Strong River Investments, Inc., and Montrose
                            Investments Ltd., filed as an exhibit to the
                            Registrant's Registration Statement on Form S-1,
                            Registration No. 333-49690, and incorporated herein
                            by reference.

                     10.3   Agreement and Waiver with Respect to Amended and
                            Restated Promissory Note entered into as of
                            September 29, 2000, by the Registrant and
                            Intelligroup, Inc.

                     27.1   Financial Data Schedule.


       (b)    Reports on Form 8-K.

                     None during the quarter for which this report is filed.

                                    - 20 -

<PAGE>   23

                                   SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               SERANOVA, INC.


DATE:   November 14, 2000      By: /s/ Rajkumar Koneru
                                  ---------------------------------------------
                                  Rajkumar Koneru
                                  Chairman, President and
                                  Chief Executive Officer
                                  (Principal Executive Officer)

                               By: /s/ Ravi Singh
                                  ---------------------------------------------
                                  Ravi Singh
                                  Chief Financial Officer and Executive Vice
                                    President
                                  (Principal Financial and Accounting Officer)



                                     - 21 -