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 June 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
                          ----------------------------
                           (Issuer'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:                                              No:  X
              ---                                               ---

     Indicate  the  number of  shares  outstanding  of each of the  Registrant's
classes of common stock, as of July 31, 2000:

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



<PAGE>

                         SERANOVA, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS
                                -----------------

                                                                           Page

PART I. FINANCIAL INFORMATION

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

            Consolidated Balance Sheets
            as of June 30, 2000 (unaudited)
            and December 31, 1999.........................................   2

            Consolidated Statements of Operations for the
            Three Months and Six Months Ended June
            30, 2000 and 1999 (unaudited).................................   3

            Consolidated Statements of Cash Flows
            for the Six Months Ended
            June 30, 2000 and 1999 (unaudited)............................   4

            Notes to Consolidated Financial Statements (unaudited)........   5

   Item 2.  Management's Discussion and Analysis of

            Financial Condition and Results of Operations.................   9

            Results of Operations.........................................   13

            Liquidity and Capital Resources...............................   16

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

PART II.  OTHER INFORMATION

   Item 1.  Legal Proceedings.............................................   19

   Item 6.  Exhibits and Reports on Form 8-K................................ 19

SIGNATURES.................................................................. 20




                                      -i-
<PAGE>



                          PART I. FINANCIAL INFORMATION

                    ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS



                                      -1-
<PAGE>

                         SERANOVA, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       June 30, 2000 and December 31, 1999
                 (in thousands, except per share and share data)
<TABLE>
<CAPTION>
                                                                                         June 30,            December 31,
                                                                                           2000                  1999
                                                                                      -------------         -------------
                                                                                       (unaudited)

                                 ASSETS

<S>                                                                                   <C>                   <C>
Current Assets:
     Cash...........................................................................  $         920         $         611
     Accounts receivable, net of allowance for doubtful accounts of $1,086
          and $353 at June 30, 2000 and December 31, 1999, respectively.............         13,052                 7,456
     Unbilled services..............................................................          7,419                 3,680
     Deferred tax assets............................................................          2,868                    --
     Other current assets...........................................................          1,060                   769
                                                                                      -------------         -------------
Total Current Assets................................................................         25,319                12,516

     Property and equipment, net ...................................................          7,408                 2,863
     Intangible assets, net.........................................................          3,365                 3,492
     Other assets...................................................................            782                     9
                                                                                      -------------         -------------
Total Assets........................................................................  $      36,874         $      18,880
                                                                                      =============         =============

                  LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:

     Accounts payable...............................................................  $       3,843         $         872
     Accrued payroll and related expenses...........................................          3,074                 1,551
     Accrued expenses and other liabilities.........................................          2,118                 2,352
     Note Payable ..................................................................             --                 8,397
     Current portion of long-term debt and obligations..............................          3,138                   120
                                                                                      -------------         -------------
Total Current Liabilities...........................................................         12,173                13,292

     Long-term debt and obligations, less current portion...........................         13,997                   618
                                                                                      -------------         -------------
Total Liabilities...................................................................         26,170                13,910
                                                                                      -------------         -------------

Commitments

Shareholders' Equity:
     Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued or
         outstanding................................................................             --                    --
     Common stock, $.01 par value, 40,000,000 shares authorized;
         17,460,883 and 16,629,413 shares issued and outstanding
         at June 30, 2000 and December 31, 1999, respectively.......................            175                   167
     Additional paid-in capital.....................................................         17,558                 7,083
     Accumulated deficit ...........................................................         (7,136)               (2,246)
     Currency translation adjustment................................................            107                   (34)
                                                                                      -------------         -------------
Total Shareholders' Equity .........................................................         10,704                 4,970
                                                                                      -------------         -------------
Total Liabilities and Shareholders' Equity..........................................  $      36,874         $      18,880
                                                                                      =============         =============
</TABLE>

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

                                      -2-
<PAGE>

                         SERANOVA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
        For the Three Months and Six Months Ended June 30, 2000 and 1999
                      (in thousands, except per share data)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                Three Months Ended June 30,           Six Months Ended June 30,
                                                                ---------------------------           -------------------------
                                                                2000                1999                2000            1999
                                                            -------------       -------------       -------------   -----------

<S>                                                        <C>                 <C>                 <C>            <C>
Revenue.............................................       $      19,843       $       8,614       $      36,019  $     16,602

Professional services costs.........................              10,046               4,866              18,435         9,515
Selling and marketing expenses......................               3,098                 995               5,878         1,730
General and administrative expenses.................               8,678               2,378              17,217         4,370
Depreciation and amortization.......................                 659                 145               1,131           279
                                                           -------------       -------------       -------------       -------
Total operating expenses............................              22,481               8,384              42,661        15,894
                                                           -------------       -------------       -------------       -------

Operating income (loss).............................              (2,638)                230              (6,642)          708
Other income (expense), net.........................                   6                  25                   2            27
Interest expense, net...............................                (165)                (38)               (346)          (59)
                                                           -------------       -------------       -------------       -------

Income before provision (benefit) for income taxes..              (2,797)                217              (6,986)          676

Income tax provision (benefit) .....................                (985)                 65              (2,095)          244
                                                           -------------       -------------       -------------       -------

Net income (loss)...................................       $      (1,812)      $         152       $      (4,891)      $   432
                                                           =============       =============       =============       =======

Net earnings (loss) per share:

     Basic and diluted..............................       $       (0.10)      $        0.01       $       (0.29)      $  0.03
                                                           =============       =============       =============       =======

Shares used in computing net income (loss) per share:

     Basic and diluted..............................              17,461              16,785              17,123        16,785
                                                           =============       =============       =============       =======
</TABLE>


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


                                      -3-
<PAGE>

                         SERANOVA, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Six Months Ended June 30, 2000 and 1999
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                     June 30,          June 30,
                                                                                       2000              1999
                                                                                     -------             ----

<S>                                                                                  <C>              <C>
Cash Flows from Operating Activities:
     Net income (loss)............................................................   $ (4,891)        $    432
     Adjustments to reconcile net income (loss) to net cash used in
         operating activities:
         Depreciation and amortization............................................      1,131              279
         Provision for doubtful accounts..........................................        950               --
         Deferred taxes...........................................................     (2,868)              --
     Changes in operating assets and liabilities:
         Accounts receivable......................................................     (6,546)          (2,034)
         Unbilled services........................................................     (3,739)            (332)
         Other current assets.....................................................       (291)             205
         Other assets.............................................................     (1,051)              (7)
         Accounts payable.........................................................      2,971             (258)
         Accrued payroll and related expenses.....................................      1,523             (180)
         Accrued expenses and other liabilities...................................       (234)          (1,566)
         Income taxes payable.....................................................         --            1,002
                                                                                     --------           ------
             Net cash used in operating activities................................    (13,045)          (2,461)
                                                                                     --------         --------

Cash Flows from Investing Activities:
     Purchase of business, net of cash acquired...................................         --           (2,186)
     Capital expenditures.........................................................     (5,270)            (392)
                                                                                     --------         --------
             Net cash used in investing activities................................     (5,270)          (2,578)
                                                                                     --------         --------
Cash Flows from Financing Activities:
     Loans from former parent.....................................................     15,001            1,467
     Repayment of loans...........................................................     (7,002)             (53)
     Proceeds from sale of common stock...........................................     10,000               --
     Net investments from former parent...........................................        483            3,073
                                                                                     --------         --------
             Net cash provided by financing activities............................     18,482            4,487
                                                                                     --------         --------

     Effect of foreign currency exchange rate changes on each and cash
       equivalents................................................................        142              (26)
                                                                                     --------         --------

             Net increase (decrease) in cash and cash equivalents ................        309             (578)
Cash and cash equivalents at beginning of period..................................        611              677
                                                                                     --------         --------
Cash and cash equivalents at end of period........................................   $    920         $     99
                                                                                     ========         ========
Supplemental disclosures of cash flow information:

         Cash paid for income taxes...............................................   $    675         $     70
                                                                                     ========         ========
         Cash paid for interest...................................................   $     25         $     40
                                                                                     ========         ========
</TABLE>

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


                                      -4-
<PAGE>

                         SERANOVA, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

NOTE 1 -- DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

     SeraNova,  Inc. ("SeraNova") 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 the 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.  SeraNova began  operations in India in October 1999 and the United
Kingdom in November 1999.

     On  July  5,  2000,  Intelligroup   distributed  to  its  shareholders  all
16,629,413  shares of the  SeraNova  shares of  common  stock it held.  For each
common share of  Intelligroup  stock held by an  Intelligroup  shareholder,  one
share of  SeraNova  common  stock was issued.  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.


                                      -5-
<PAGE>

     The  consolidated  information  presented as of June 30, 2000 and 1999, and
for the three-month and six-month periods then ended, is unaudited,  but, in the
opinion of  SeraNova,  Inc.'s  ("SeraNova"  or the  "Company")  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 June 30, 2000
and the results of its operations  and its cash flows for the six-month  periods
ended June 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.

     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               Six Months Ended
                                                       June 30,                        June 30,
                                                   2000        1999                2000         1999
                                                   ----        ----                ----         ----

<S>                                           <C>            <C>               <C>           <C>
Net income (loss)                             $  (1,812)     $   152           $ (4,891)     $   432
                                              =========      =======           ========      =======

Basic and diluted:
   Weighted average shares outstanding            17,461      16,785             17,123       16,785
                                              ==========     =======           ========      =======

Net income (loss) per share                   $    (0.10)    $  0.01           $  (0.29)     $  0.03
                                              ==========     =======           ========      =======

</TABLE>

     Options to purchase  4,903,667 shares of common stock have been excluded in
the June 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 six
month period ended June 30, 2000 and 1999.

                                      -6-
<PAGE>

<TABLE>
<CAPTION>

<S>                                      <C>                <C>               <C>            <C>          <C>
FOR THE THREE-MONTH PERIOD
ENDED JUNE 30, 2000                       UNITED STATES      ASIA PACIFIC       EUROPE        INDIA        COMBINED TOTAL
--------------------------                -------------      ------------       ------        -----        --------------
Revenue..............................    $     14,249       $      2,635      $    115       $2,844       $      19,843
Depreciation & amortization..........             425                 29             3          202                 659
Income (loss) from operations........          (1,150)            (1,814)         (714)       1,040              (2,638)
Interest income......................              --                  2            --           --                   2
Interest expense.....................             128                  3            --           34                 165
Other income (expense)...............              (2)                (1)           --            7                   4
Income (loss) before income
  taxes..............................          (1,279)            (1,817)         (714)       1,013              (2,797)
Capital spending.....................           1,127                122            51        1,736               3,036
Total assets.........................          26,594              2,751          (117)       7,646              36,874

FOR THE THREE-MONTH PERIOD
ENDED JUNE 30, 1999                       UNITED STATES      ASIA PACIFIC       EUROPE        INDIA        COMBINED TOTAL
--------------------------                -------------      ------------       ------        -----        --------------
Revenue..............................    $      5,688       $      2,926      $     --        $  --       $       8,614
Depreciation & amortization..........             124                 21            --           --                 145
Income (loss) from operations........            (145)               375            --           --                 230
Interest income......................               1                 19            --           --                  20
Interest expense.....................              20                 18            --           --                  38
Other income ........................              --                  5            --           --                   5
Income (loss) before income
  taxes..............................            (164)               381            --           --                 217
Capital spending.....................             100                 24            --           --                 124
Total assets.........................          11,087              1,849            --           --              12,936

FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 2000                       UNITED STATES      ASIA PACIFIC       EUROPE        INDIA        COMBINED TOTAL
------------------------                  -------------      ------------       ------        -----        --------------
Revenue..............................    $     25,766       $      5,138       $   187      $ 4,928       $      36,019
Depreciation & amortization..........             795                 51             3          282               1,131
Income (loss) from operations........          (4,877)            (2,725)       (1,101)       2,061              (6,642)
Interest income......................              --                  3            --            2                   5
Interest expense.....................             303                  9            --           34                 346
Other income (expense)...............              (5)                (3)           --            5                  (3)
Income (loss) before income taxes....          (5,184)            (2,735)       (1,101)       2,034              (6,986)
Capital spending.....................           2,501                137            78        2,554               5,270
Total assets.........................          26,594              2,751          (117)       7,646              36,874

</TABLE>

                                      -7-
<PAGE>

<TABLE>
<CAPTION>

<S>                                      <C>                <C>                <C>          <C>           <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1999                       UNITED STATES        ASIA PACIFIC     EUROPE        INDIA        COMBINED TOTAL
----------------------------              -------------        ------------     ------        -----        --------------
Revenue..............................    $      11,094      $      5,508       $    --      $    --       $      16,602
Depreciation & amortization..........              243                36            --           --                 279
Income (loss) from operations........              (46)              754            --           --                 708
Interest income......................                4                37            --           --                  41
Interest expense.....................               40                19            --           --                  59
Other income (expense)...............               --               (14)           --           --                 (14)
Income (loss) before income taxes....              (82)              758            --           --                 676
Capital spending.....................              340                52            --           --                 392
Total assets.........................           11,087             1,849            --           --              12,936

</TABLE>

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

NOTE 4 -- SUBSEQUENT EVENTS

Borrowings

     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  matures with  $3,000,000
due on September  30, 2000 with the balance due on July 31,  2001.  The note has
certain  mandatory  prepayment   provisions  based  on  future  debt  or  equity
financings by SeraNova, as defined.

     On July  14,  2000,  SeraNova  executed  an  agreement  with  Fleet  Credit
Corporation  for an  asset-based  revolving  credit  facility  that will provide
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  listed are:  (1)  SeraNova  must
maintain total debt to tangible net worth not to exceed a ratio of three to one,
(2) any quarterly  loss may not exceed the original  budget amount plus 10%, (3)
interest  coverage  ratio must be  greater  than 1.2 and (4) the  principal  and
interest coverage ratio must be greater than 1.1.


                                      -8-
<PAGE>

     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 June 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  41% of the total  revenues  for the three  months  ended June 30,
2000. Another client, Volkswagen of America,  accounted for approximately 14% of
total revenues during the same period.  No other client  accounted for more than
10% of revenues  for the three  months  ended June 30,  2000.  American  Express
accounted  for  approximately  39%  and  Volkswagen  of  America  accounted  for
approximately  13% of the combined revenues of SeraNova for the six months ended
June 30, 2000.  Accounts  receivable as of June 30, 2000  attributable  to these
customers was $4,764,000 and $863,000, respectively. No other customer accounted
for more than 10% of the combined  revenues of SeraNova for the six months ended
June 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.

                                      -9-
<PAGE>

     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 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 six  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 remain  constant or decrease  slightly 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, technology expenditures,
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:

                                      -10-
<PAGE>

     o    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;

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

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

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

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

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

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

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

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

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

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

     o    the  substantial   variability  of  the  Company's  quarterly  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;

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

                                      -11-
<PAGE>

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

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

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

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

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

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

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

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

     o    the continued growth of the Internet; and

     o    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.


                                      -12-
<PAGE>

                              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 June 30,        Six Months Ended June 30,
                                                           ---------------------------        -------------------------
                                                             2000              1999             2000             1999
                                                           --------          --------         -------           ------
<S>                                                         <C>               <C>              <C>              <C>
Revenue.............................................        100.0%            100.0%           100.0%           100.0%

Professional services costs.........................         50.6              56.5             51.2             57.3
Selling and marketing expenses......................         15.6              11.6             16.3             10.4
General and administrative expenses.................         43.7              27.6             47.8             26.3
Depreciation and amortization.......................          3.3               1.7              3.1              1.7
                                                             ----              ----             ----             ----
     Total operating expenses.......................         62.6              40.9             67.2             38.4
                                                             ----              ----             ----             ----

     Operating income (loss)........................        (13.2)              2.6            (18.4)             4.3

Other income (expense), net.........................          0.0               0.4              0.0              0.2
Interest expense, net...............................         (0.8)             (0.4)            (1.0)            (0.4)
                                                            -----              ----            -----             ----

Income before provision (benefit) for income taxes..        (14.0)              2.6            (19.4)             4.1

Income tax provision (benefit) .....................         (5.0)              0.8             (5.8)             1.5
                                                            -----              ----            -----              ---

Net income (loss)...................................         (9.0)%            1.8%            (13.6)%            2.6%
                                                            =====              ====            ======            ===
</TABLE>

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

     Revenues.  Revenues  increased by $11.2  million,  to $19.8 million for the
three months ended June 30, 2000 compared with $8.6 million for the  three-month
period ended June 30, 1999.  The increase in revenue is primarily  the result of
an increase in the number of clients and the size of engagements in the U.S. and
the development of the India  subsidiary.  U.S. based revenue  increased by $8.6
million for the  three-months  ended June 30, 2000 compared with the same period
ended June 30, 1999.  Revenue from the India subsidiary was $2.8 million for the
three months ended June 30, 2000 compared with $0 for the  corresponding  period
in 1999.  Combined  revenue from all other foreign  subsidiaries  was relatively
constant for the three months ended June 30, 2000  compared with the same period
ended June 30, 1999.

     Professional  service costs.  Professional service costs increased to $10.0
million for the three months ended June 30, 2000  compared with $4.9 million for
the  corresponding  period in 1999 but  decreased as a percentage  of revenue by
5.9%,  to 50.6% from 56.5%.  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. The primary reasons for the decrease
in  professional  service costs as a percentage of total revenue are an increase
in billing margins for U.S.-based  consultants and the continued  development of
the India subsidiary during 2000. Billing margins

                                      -13-
<PAGE>

in the U.S. increased by 11.7% to 51.0% for the three months ended June 30, 2000
compared  with  39.3% for the three  months  ended  June 30,  1999.  Margins  on
professional  services  costs as a percentage  of revenue in India was 77.7% for
the three months ended June 30, 2000 due to the lower cost structure in India.

     Selling and marketing expenses.  Selling and marketing expenses include all
costs  directly  related to sales and  marketing  such as  salaries  and related
benefit costs, advertising expenses, recruiting, travel and other costs. Selling
and marketing expenses increased by $2.1 million, or 211.4%, to $3.1 million for
the three months ended June 30, 2000 compared to $1.0 million for the comparable
period in 1999.  Selling  expenses also  increased as a percentage of revenue to
15.6% from 11.6% over the same periods.  These  increases in actual expenses and
as a percentage of revenue are due to  significant  investments in the Company's
sales infrastructure during the quarter and in marketing expenses to promote the
SeraNova, Inc. name during 2000.

     General and administrative  expenses.  General and administrative  expenses
include  administrative  salaries and related  benefit costs,  occupancy  costs,
professional fees, and other costs.  These expenses  increased $6.3 million,  or
264.8%,  to $8.7  million  for the three  months  ended June 30,  2000 from $2.4
million in the same  period  ended June 30,  1999.  General  and  administrative
expenses  also  increased as a percentage  of total sales to 43.7% for the three
months ended June 30, 2000 compared to 27.6% for the three months ended June 30,
1999. The primary reasons for the increase in actual general and  administrative
expenses and as a percentage of total revenue were:  (a) costs  associated  with
the  development  of 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
$514,000,  or 357.6%,  to $659,000 in the three  months ended June 30, 2000 from
$145,000  in the  same  period  in  1999.  Depreciation  and  amortization  also
increased  as a percentage  of total  revenues to 3.3% in the three months ended
June 30, 2000 from 1.7% in the  comparable  period of 1999.  Both the actual and
percentage increases were primarily due to capital investments in U.S. expansion
and  the  development  of  foreign  operations  in  Europe  and  India.  Capital
expenditures  were $1.1  million in the U.S.  during the three months ended June
30, 2000 and an additional $1.7 million in India during the same period.

     Other income  (expense),  net.  Other income  (expense),  net  decreased by
$146,000 to a net expense of $159,000  for the three month period ended June 30,
2000 from a net expense of $13,000 for the three months ended June 30, 1999. The
decrease is due to interest  on the loan  signed  with  Intelligroup  during May
2000.

     Provision for income taxes. Income tax expense represents combined federal,
state and foreign taxes.  Our income tax benefit of $985,000 on a pretax loss of
$2.8 million for the three months  ended June 30, 2000  compares  with a $65,000
provision on pretax profits of $217,000 for the  comparable  period in 1999. The
effective tax rate for the  three-month  period ended June 30, 2000 was 35.2% as
compared with 30.3% in the similar period in 1999. The higher effective tax rate
for the three  months ended June 30, 2000 as compared to the same period in 1999
was  due to a  zero  tax  rate  on the  net  income  from  the  Company's  India
operations. This was partially offset by the non-recognition of a tax benefit on
losses from European operations. Management

                                      -14-
<PAGE>

believes  that it is more  likely  than  not that all net  deferred  tax  assets
recorded as of June 30, 2000 will be realized within the next twelve months.

     Net loss.  Net loss increased by $2.0 million to a net loss of $1.8 million
for the three  months  ended June 30, 2000 from a net income of $152,000 for the
three months ended June 30, 1999.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO SIX MONTHS ENDED JUNE 30, 1999

     Revenues.  Revenues increased by $19.4 million,  to $36.0 million,  for the
six months  ended June 30, 2000  compared  with $16.6  million for the first six
months of 1999.  The  increase  in revenue is the  result the  increases  in the
number of clients,  consultants billing rates and the size of engagements in the
U.S. and the development of our India  subsidiary.  U.S. based revenue increased
by $14.7  million for the first six months of 2000 compared with the same period
in 1999.  Revenue from the India  subsidiary was $4.9 million for the six months
ended  June 30,  2000  compared  with $0 for the  corresponding  period in 1999.
Combined  revenue from all other foreign  subsidiaries was down slightly for the
six months ended June 30, 2000 compared with the same period in 1999.

     Professional  service costs.  Professional service costs increased to $18.4
million for the six months  ended June 30, 2000  compared  with $9.5 million for
the  corresponding  period in 1999 but  decreased as a percentage of revenues by
6.1%,  to 51.2% from 57.3%.  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. The primary reasons for the decrease
in professional  service costs as a percentage of total revenues are an increase
in billing margins for U.S.-based  consultants and the considerable  development
of the India subsidiary  during 2000.  Billing margins in the U.S.  increased by
10.7% to 49.4% for the six months  ended June 30, 2000  compared  with 38.7% for
the first six  months  of 1999.  Margins  on  professional  services  costs as a
percentage  of revenue in India was 78.7% the six months ended June 30, 2000 due
to the lower cost structure in India.

     Selling and marketing expenses.  Selling and marketing expenses include all
costs  directly  related to sales and  marketing  such as  salaries  and related
benefit costs, advertising expenses, recruiting, travel and other costs. Selling
and marketing expenses increased by $4.1 million, or 239.8%, to $5.9 million for
the first six months of 2000 compared to $1.7 million for the comparable  period
in 1999.  Selling  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  significant  investments  in the  sales and
marketing  infrastructure during the first six months of 2000 and in advertising
expenses to promote the SeraNova, Inc. name during 2000.

     General and administrative  expenses.  General and administrative  expenses
include  administrative  salaries and related  benefit costs,  occupancy  costs,
professional fees, and other costs.  These expenses increased $12.8 million,  or
294.0%,  to $17.2  million  for the six  months  ended  June 30,  2000 from $4.4
million in the same  period  ended June 30,  1999.  General  and  administrative
expenses  also  increased  as a  percentage  of total sales to 47.8% for the six
months

                                      -15-
<PAGE>

ended June 30, 2000  compared  with 26.3% for the first six months of 1999.  The
primary reasons for the increases in actual general and administrative  expenses
and the  percentage  of  total  revenue  were:  1)  costs  associated  with  the
development of foreign operations in India and Europe during 2000, 2) investment
in the  infrastructure  of U.S.  operations  and 3)  costs  associated  with the
spin-off of SeraNova.

     Depreciation and amortization.  Depreciation and amortization  increased by
$852,000,  or 305.4%, to $1.1 million in the six months ended June 30, 2000 from
$279,000  in the  same  period  in  1999.  Depreciation  and  amortization  also
increased as a percentage of total revenues to 3.1% in the six months ended June
30,  2000  from  1.7% in the  comparable  period of 1999.  Both the  actual  and
percentage increases were primarily due capital investment in U.S. expansion and
the development of foreign operations in Europe and India.

     Other income  (expense),  net.  Other income  (expense),  net  decreased by
$312,000 to a net expense of $344,000  for the six month  period  ended June 30,
2000 from a net expense of $32,000 for the six months ended June 30,  1999.  The
decrease is  primarily a due to interest on loans from  Intelligroup  during the
three months ended June 30, 2000.

     Provision for income taxes. Income tax expense represents combined federal,
state and foreign  taxes.  Our income tax  benefit was $2.1  million on a pretax
loss of $7.0  million  for the first  six  months  of 2000  compared  with a tax
provision  of $244,000 on pretax  profits of $676,000 for the  six-month  period
ended June 30, 1999. The effective tax rate for the first six months of 2000 was
30.0%  compared with an effective tax rate of 36.2% for the same period in 1999.
The lower  effective  tax rate for the first six  months of 2000 is due to a tax
provision  recognized  on certain  foreign  operations  that could not be offset
against losses in other jurisdictions.

     Net loss.  Net loss increased by $5.3 million to a net loss of $4.9 million
for the six months ended June 30, 2000 from a net income of $432,000 for the six
months  ended June 30,  1999.  The primary  reasons for the net loss for the six
months  ended June 30,  2000 are  planned  increases  in selling  and  marketing
infrastructure,  general and administrative expenses for the continued expansion
of operations in the U.S. and abroad, specifically India and the United Kingdom,
and costs related to the spin-off.

LIQUIDITY AND CAPITAL RESOURCES

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

     For the six  months  ended  June  30,  2000,  net  cash  used in  operating
activities  totaled  $13.0  million.  Cash was  provided  by $1.1  million  from
depreciation and amortization,  $3.0 million increase in accounts payable,  $1.5
million  increase in accrued  payroll and related  expenses  and  $950,000  from
provision  for bad debt.  This was  offset by a net loss of $4.9  million,  $6.5
million  increase  in accounts  receivable,  $3.7  million  increase in unbilled
revenue,  $2.9 million  increase in deferred taxes and $1.1 million  increase in
other assets.  The increases in accounts  receivable and unbilled  services were
primarily due to the increased  operations within the U.S. and India. In the six
months  ended June 30,  1999,  net cash used in  operating  activities  was $2.5
million.  The principal uses of funds were an increase in accounts receivable of
$2.0

                                      -16-
<PAGE>

million, an increase in unbilled services of $332,000 and an decrease in accrued
expenses and other liabilities of $1.6 million. This was offset by net income of
$432,000,  $279,000 from  depreciation and amortization and an increase in other
current assets of $205,000.

     We had  capital  expenditures  for the first six months of 2000 and 1999 of
$5.3 million and $392,000, respectively, for computers, furniture, equipment and
leasehold  improvements.  Capital expenditures are expected to decrease over the
next six months compared to the first six 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  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  matures with  $3,000,000
due on September  30, 2000 with the balance due on July 31,  2001.  The note has
certain  mandatory  prepayment   provisions  based  on  future  debt  or  equity
financings by SeraNova, as defined.

     On July  14,  2000,  SeraNova  executed  an  agreement  with  Fleet  Credit
Corporation  for an  asset-based  revolving  credit  facility  that will provide
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 to 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) any  quarterly  loss may not  exceed the
original  budget amount plus 10%, (3) interest  coverage  ratio of not less that
1.25 to 1 and (4) principal and interest coverage of not less than 1.1 to 1.

     SeraNova  believes that the cash to be generated  from its  operations  and
available under the credit  facility  through Fleet Credit  Corporation  will be
sufficient to satisfy SeraNova's cash  requirements,  including the $3.0 million
obligation  to  Intelligroup,  throughout  at the least the next twelve  months.
However, there can be no assurance in this regard.

                                      -17-
<PAGE>

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.


                                      -18-
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     There are  currently  no material  legal  proceedings  pending to which the
Company is a party or to which any of its property is subject.

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

          (a)  Exhibits.


                    10.1 Agreement by and between Fleet Capital  Corporation and
                         SeraNova,  Inc. for a revolving credit facility,  dated
                         July 14, 2000.

                    27.1 Financial Data Schedule for the six-month  period ended
                         June 30, 2000.


          (b)  Reports on Form 8-K.

                    None.



                                      -19-
<PAGE>

                                   SIGNATURES

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

                                        SERANOVA, INC.


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

DATE: August 14, 2000                   By: /s/Ravi Singh
                                            ----------------------------------
                                            Ravi Singh
                                            Executive Vice President,
                                            Chief Financial Officer and Director
                                            (Principal Financial and Accounting
                                            Officer)

                                      -20-