SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

(X) Quarterly Report Pursuant to Section 12 or 15(d) of the
Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 1997

( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the Transition Period From ________ To ________

Commission File Number: 0-22281

SCOOP, INC.

(Exact name of Registrant as specified in its charter)

Delaware 33-0726608
(State or other jurisdiction of (I.R.S. Employer ID No.)
incorporation or organization)

205 Technology Drive 92618
Irvine, CA (Zip Code)
(Address of principal
executive offices)

(714) 453-8383
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for any 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 issuer's classes of
common stock as of the latest practicable date.

Common Stock, par value 5,501,214
$.001 per share (outstanding on November 3, 1997)

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SCOOP, INC.
BALANCE SHEET
SEPTEMBER 30, 1997
(UNAUDITED)

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 2,651,100
Accounts receivable, net of allowance for doubtful accounts of $47,500 146,900
Prepaid expenses 439,600
-----------
Total current assets 3,237,600

EQUIPMENT, at cost, net of accumulated depreciation and amortization 598,800
COVENANT-NOT-TO-COMPETE, net of amortization 62,500
OTHER ASSETS 71,400
-----------
$ 3,970,300
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable $ 345,400
Accrued payroll 97,400
Accrued royalty 402,500
Current portion of capital lease obligations 95,600
Current portion of covenant not-to-compete obligation 15,300
Current portion of rent payable 84,100
Other accrued liabilities 83,700
-----------
Total current liabilities 1,124,000

CAPITAL LEASE OBLIGATIONS, net of current portion 31,100
COVENANT-NOT-TO-COMPETE
OBLIGATION, net of current portion 48,200
RENT PAYABLE (Note 5) 168,200

STOCKHOLDERS' EQUITY (Note 2):
Preferred stock $.001 par value; 5,000,000 shares authorized;
no shares issued or outstanding
Common stock, $.001 par value; 20,000,000 shares authorized;
5,501,214 shares issued and outstanding (Note 2) $ 5,500
Additional paid-in capital (Note 2) 9,146,000
Accumulated deficit (6,755,800)
Deferred compensation 203,100
-----------
Total stockholders' equity 2,598,800
-----------
$ 3,970,300
-----------

See accompanying notes to financial statements

SCOOP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1996 1997 1996 1997

Net sales $ 331,400 $ 530,100 $ 978,400 $ 1,492,100
Cost of sales 246,200 283,900 574,000 762,400
---------- ---------- ---------- -----------
Gross profit 85,200 246,200 404,400 729,700

Operating expenses:
Research and development 125,700 814,000 412,900 1,630,500
Selling and marketing 72,000 303,300 189,100 656,800
General and administrative 664,600 519,000 1,199,900 1,491,000
Other expense. (Note 5) 0 330,700 0 330,700
---------- ---------- ---------- -----------
862,300 1,967,000 1,801,900 4,109,000

Operating loss (777,100) (1,720,800) (1,397,500) (3,379,300)
Interest income (expense), net 8,600 44,500 (23,600) 55,400
---------- ---------- ---------- -----------
Loss before provision for income taxes (768,500) (1,676,300) (1,421,100) (3,323,900)

Provision for income taxes 800 1,600 1,600
---------- ---------- ---------- -----------
Net loss $ (769,300) $ (1,676,300) $ (1,422,700) $ (3,325,500)
---------- ---------- ---------- -----------

Net loss per common share (Note 3) $ (.19) $ (.29) $ (.42) $ (.65)
---------- ---------- ---------- -----------
Weighted average common shares outstanding (Note 3) 4,054,000 5,794,000 3,393,000 5,164,000
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------

See accompanying notes to financial statements

SCOOP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)

NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1996 1997

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,422,700) $ (3,325,500)
Adjustments to reconcile net loss to net cash
Used in operating activities:
Depreciation and amortization 51,800 126,600
Stock bonus 81,800
Deferred compensation 154,900 10,900
Abandonment of lease 330,700
Changes in:
Accounts receivable (8,000) (31,000)
Publishing materials 10,200
Income tax refund receivable 1,800 15,400
Other assets (8,200) (63,200)
Prepaid expenses (30,400) (252,100)
Accounts payable 145,900 (69,600)
Accrued payroll 16,400 (35,600)
Accrued royalty 37,500 118,300
Other accrued liabilities (15,200) 51,400
---------- ----------
Net cash used in operating activities (984,200) (3,123,700)

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (42,300) (440,200)
Purchase of investments (197,700)
---------- ----------
Net cash used in investing activities (240,000) (440,200)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of note payable to stockholder (88,000)
Repayment of note payable -other (57,500)
Repayment of capital lease obligations (47,700) (94,700)
Borrowings under line of credit (Note 4) (150,000) 150,000
Repayment of line of credit (Note 4) (150,000)
Proceeds from bridge notes (Note 4) 400,000 300,000
Repayment of bridge notes (Note 4) (400,000) (300,000)
Repayment of covenant-not-to-compete obligation (12,500) (17,100)
Proceeds from issuance of common stock (Note 2) 265,000 6,064,400
Proceeds from issuance of redeemable common stock 2,187,500
---------- ----------
Net cash provided by financing activities 2,096,800 5,952,600

INCREASE IN CASH AND CASH EQUIVALENTS $ 872,600 $ 2,388,700

CASH AND CASH EQUIVALENTS:
Beginning of period 1,300 262,400
---------- ----------
End of period $ 873,900 $ 2,651,100
---------- ----------
---------- ----------

See accompanying notes to financial statements

SCOOP, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

NINE MONTHS ENDED
SEPTEMBER 30,
1996 1997
--------- ----------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 37,500 $ 27,700
--------- ----------
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,200 $ 1,600
--------- ----------
SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS
Contractual obligations incurred for the acquisition of equipment $ 125,000 $ 43,700
--------- ----------
Increase in redemption value of redeemable shares of common stock $ 58,900 $ 56,200
--------- ----------
Common stock issued in repayment of debt and accrued interest $ 155,000
---------
Termination of obligations related to redeemable shares of
common stock (Note 2). . . . . . . . . . . . . . . . . . . . . . $2,358,700
----------

See accompanying notes to financial statements

SCOOP, INC.
NOTES TO FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying consolidated financial statements of Scoop, Inc. (the
"Company") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, the
financial statements include all adjustments necessary for a fair
presentation of the balance sheet at September 30, 1997, the results of
operations for the three and nine months ended September 30, 1997 and 1996,
and the cash flows for the nine months ended September 30, 1997 and 1996. The
condensed consolidated financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
Form SB-2 Registration Statement (file no. 333-15129) declared effective by
the SEC on April 9, 1997.

In May 1996, the Company effected a 1,006.654-for-1 stock split of its then
outstanding common stock. All share and per share amounts included in the
accompanying financial statements have been restated to reflect the stock
split.

In November 1996, NewsMakers Information Services, Inc., a wholly owned
subsidiary of the Company was merged into the Company. The accompanying
financial statements have been restated to reflect this reorganization, which
has been accounted for on a basis similar to a pooling of interests.

In March 1997, the Company reincorporated in the State of Delaware. The
accompanying financial statements include the effects of the reincorporation
and the resulting increase in the authorized common stock to 20,000,000
shares and authorization of 5,000,000 shares of preferred stock.

2. INITIAL PUBLIC OFFERING & REQUIRED ADDITIONAL FINANCING

On April 16, 1997, the Company completed its initial public offering of
1,450,000 shares of common stock at $4.50 per share, resulting in proceeds to
the Company of approximately $5.0 million, net of underwriting discounts and
commissions and offering expenses. In May 1997, the Company sold an
additional 207,050 shares of common stock at $4.50 per share pursuant to the
exercise of the underwriters' over-allotment option, resulting in additional
net proceeds to the Company of approximately $800,000. Upon the completion
of the initial public offering, the mandatory redemption rights associated
with 926,664 shares of common stock terminated. As a result of the
termination of the redemption rights, the Company reclassified manditorily
redeemable common stock to equity.

Through September 30, 1997, the Company has incurred significant
operating losses and expects significant additional losses in the future.
The Company's ability to continue as a going concern is dependent upon future
events, including the successful development and market acceptance of its
Scoop! service and its ability to secure additional sources of financing.
These factors raise substantial doubt about the Company's ability to continue
as a going concern. The Company believes that cash and cash equivalents on
hand as of September 30, 1997, will be adequate to meet its capital needs for
at least the next four months. The Company's current operating plan shows
that at the end of such four-month

SCOOP, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

period, the Company will require substantial additional capital. The Company
requires additional capital to fund its operations, continue research and
development programs, and commercialize any additional products that may be
developed. The Company is in the process of seeking additional capital.
There can be no assurance, however, that additional financing will be
available at all or that, if available, such financing will be obtainable on
terms favorable to the Company and would not be dilutive.

3. NET LOSS PER SHARE

Net loss per common share has been computed by dividing the net loss by the
weighted average number of common shares outstanding during the periods
presented. For purposes of calculating the weighted average number of common
shares outstanding, the Company has considered the common stock which had
redemption rights prior to the initial public offering (Note 2) as common
stock equivalents. Additionally, pursuant to SEC Staff Accounting Bulletin
Topic 4d, stock options and warrants granted during the twelve months prior
to the effective date of the Company's Form SB-2 Registration Statement have
been included in the calculation of common equivalent shares using the
treasury stock method, as if they were outstanding as of the beginning of
each period net loss per share is presented.

In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard No. 128, Earnings Per Share
(SFAS 128) which is effective for financial statements issued for periods
ending after December 15, 1997. SFAS No. 128 requires the disclosure of basic
and diluted earnings per share. For the three and nine months ended
September 30, 1996 and 1997, the amount reported as net loss per common share
is not materially different than would have been reported for basic and
diluted loss per common share in accordance with SFAS No. 128.

4. FINANCING ARRANGEMENTS

Line of Credit - In February 1997, the Company entered into a credit
agreement with an independent third party, which provided for maximum
borrowings of $150,000. The line of credit was secured by the Company's
accounts receivable, accrued interest at 9.5% and had a commitment term
expiring in August 1997. In connection with entering into the credit
agreement, the Company granted the lender a warrant to purchase up to 15,750
shares of the Company's common stock at $5.50 per share. The Company repaid
all borrowings under the line of credit from the proceeds of its initial
public offering and terminated the credit agreement in June 1997.

Bridge Notes - In February 1997, the Company borrowed $150,000 from a
stockholder of the Company. The loan was unsecured, accrued interest at
9.75% and matured April 30, 1997. As additional consideration for the loan,
the Company granted the stockholder a warrant to purchase 15,000 shares of
the Company's common stock at $4.50 per share. The Company repaid the bridge
note in full from the proceeds of its initial public offering.

Additionally, in February 1997, two separate individuals each loaned $75,000
to the Company in exchange for the Company's promissory notes. The
borrowings were unsecured, accrued interest at

SCOOP, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9.75% and matured at the earlier of March 31, 1997, or upon the completion of
an initial public offering. In April 1997, the Company repaid both bridge
notes in full from the proceeds of its initial public offering.

5. FACILITY LEASE AGREEMENT

In August 1997, the Company entered into a new non-cancelable operating lease
for its principal facility which extends through September 2000. The Company
will incur lease payments aggregating approximately $924,800 over the 36
month term of the lease. The Company vacated its prior facility and moved
into its new principal facility in October 1997.

During the three months ending September 30, 1997, the Company recorded a
reserve equal to the net present value of the remaining lease payments
required under the vacated building lease and wrote off the net book value of
the leasehold improvements of the vacated facility. The aggregate costs
associated with vacating the facility totaled $330,700 and has been recorded
as other expense in the accompanying statements of operations. The Company is
in the process of trying to sublease the vacated facility or find a third
party to assume the Company's obligations under the lease agreement covering
the vacated facility.

6. SUBSEQUENT EVENT

In October 1997, the Company obtained a $500,000 equipment lease line of
credit ("Lease Line"). The Company intends to use the Lease Line to finance
its capital equipment purchases for the remainder of 1997 and to finance a
portion of amounts previously expended on capital equipment purchases under a
sales leaseback arrangement. Borrowings under the Lease Line will be for
terms of up to 30 months, will bear interest at 8.25% and will require a cash
security deposit equal to 25% of the equipment cost. The lease line will be
secured by the capital equipment being financed. The Lease Line is available
through October 1998, subject to certain conditions.

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

The following discussion and analysis of the Company's financial condition
and results of operations for the three and nine months ended September 30,
1996 and 1997 should be read in conjunction with the Company's Form SB-2
Registration Statement (file no. 333-15129) declared effective by the SEC on
April 9, 1997.

GENERAL

Scoop, Inc. is in the business of providing information products and services
to businesses. In September 1997, the Company launched its first Scoop!-TM-
online information service. Scoop! Direct is an Internet and e-mail based
business information service designed to enable customers to efficiently
satisfy their daily information needs. The Company currently intends to
launch an expanded service early in 1998. The successful development and
release schedules for future Scoop! services are subject to potential delay
and other risks inherent in the development of technology-related services
and products. A number of factors may affect the Company's ability to launch
the enhanced version of the Scoop! service on the schedule described in the
foregoing forward-looking statements, including, without limitation, the
Company's ability to successfully develop enhancements to its Scoop!
SmartGuide technology such that the technology actually performs as
conceptualized and designed, and to achieve market acceptance of the Scoop!
service. For a more detailed description of these factors, see "Risk Factors
- -- Failure to Develop Service or Obtain Market Acceptance," " -- Dependence
on Potential Strategic Distribution Partners," "--Established Competitors and
Intense Competition," and "-- Risk of Technological Change and Evolving
Industry Standards" in the Company's Form SB-2 Registration Statement. There
can be no assurance that the Company will be successful in its efforts to
market Scoop! Direct or develop and market the Web-based version of the
Scoop! service.

As part of its strategy to deliver relevant information to business
professionals, the Company announced on October 22, 1997, a distribution
relationship with Netscape-Registered Trademark- Communications Corporation
to provide Scoop! Direct through the Netscape In-Box Direct program. The
Company believes that this relationship will help to facilitate broad
exposure of the Scoop! Direct service to business professionals. The Company
views this relationship as a key to the initiation of its corporate and
small-business sales efforts being implemented in the fourth quarter.

The Company's Media Services group designs and markets a line of business
information products consisting of customized media reprints and framed
layouts of articles from newspapers, magazines and on-line publications.
Scoop Media Services leverages exclusive reprint relationships with key
business publications including "Investor's Business Daily", "Orange County
Business Journal", and "The Motley Fool" as well as non-exclusive working
relationships with numerous other publications. Substantially all of the
Company's net sales to date have been generated by the Scoop Media Services
product line.

In April 1997, the Company completed its initial public offering of common
stock. The Company sold 1,657,050 shares of common stock at $4.50 per share,
including shares sold upon the exercise of the

underwriters' over-allotment option, resulting in net proceeds to the Company
of approximately $5.8 million. The Company has used a substantial portion of
the net proceeds from the offering for expenses relating to the development
and launch of the Scoop! service.

In November, the Company began to implement a series of cost-cutting measures
to reduce the Company's operating expenses. These actions included
reductions in contracted services as well as internal headcount and were
targeted to reduce expenditures primarily in operations, marketing, and
administrative areas.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain financial
data as a percentage of net sales for the three and nine month periods ended
September 30, 1996 and 1997.

THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
----------------------- --------------------
1996 1997 1996 1997
------ ------ ------ ------

Net sales. . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0%
Cost of sales. . . . . . . . . . . . . . . . . 74.3% 53.6% 58.7% 51.1%
------ ------ ------ ------
Gross profit . . . . . . . . . . . . . . . . 25.7% 46.4% 41.3% 48.9%

Operating expenses:
Research and development. . . . . . . . . . . 37.9% 153.6% 42.2% 109.3%
Selling and marketing . . . . . . . . . . . . 21.7% 57.2% 19.3% 44.0%
General and administrative. . . . . . . . . . 200.6% 97.8% 122.6% 99.9%
Other expense . . . . . . . . . . . . . . . . 62.4% 22.2%
------ ------ ------ ------
260.2% 371.0% 184.1% 275.4%

Operating loss . . . . . . . . . . . . . . . . (234.5)% (324.6)% (142.8)% (226.5)%
Interest income (expense), net . . . . . . . . 2.6% 8.4% (2.4)% 3.7%
Loss before provision for income taxes . . . . (231.9)% (316.2)% (145.2)% (222.8)%
Provision for income taxes . . . . . . . . . . 0.2% 0.2% 0.1%
------ ------ ------ ------
Net loss . . . . . . . . . . . . . . . . . . . (232.1)% (316.2)% (145.4)% (222.9)%
------ ------ ------ ------
------ ------ ------ ------

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

NET SALES. Net Sales increased 60.0% in the three months ended
September 30, 1997 to $530,100 from $331,400 in the comparable 1996 period.
The growth in net sales was principally driven by the Company's focused
efforts to expand sales of reprints from its Scoop Media Services product
line. The Company has focused its sales efforts on reprints because the
Company believes that there is a larger market for reprints with a higher
growth potential than there is for the other products marketed by Scoop Media
Services.

Net sales of reprints increased 101.1% in the three months ended
September 30, 1997 to $416,500 from $207,100 in the comparable 1996 period.
This growth resulted primarily from increased sales generated through the
Company's relationship with "Investor's Business Daily" ("IBD"). The Company
has been the exclusive provider of content reprints for IBD since August 1995
and derived

approximately 67.7% of total net sales for the three months ended September
30, 1997 from the sale of reprints of IBD content.

The Company began marketing the Scoop! information service with the
launch of Scoop! Direct in September, 1997. Currently, Scoop! Direct
customers receive a 14-day free-trial as part of the marketing program to
promote the new service. As a result, initial sales are expected to occur
when customers move out of the promotional program in the fourth quarter of
1997. However, there can be no assurance that these sales will occur.

COST OF SALES. Cost of sales increased 15.3% in the three months ended
September 30, 1997 to $283,900 from $246,200 in the comparable period in
1996. The increase in cost of sales was primarily driven by higher royalty
fees and production costs associated with the growth of reprint sales.
Overall, gross profits from the sale of Scoop! Media products increased by
$161,000 in the three months ended September 30, 1997 compared to the same
period in 1996.

Cost of sales consists primarily of the production costs, subscriptions,
shipping and various usage, permission, and royalty fees arising from the
reproduction of printed and electronic content for the media products.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development ("R&D")
expenses increased 547.6% in the three months ended September 30, 1997 to
$814,000 from $125,700 in the comparable 1996 period. The increase in R&D
expenses was primarily driven by additional development team staffing and
license fees and other costs associated with software licensed from third
parties, all related to the Scoop! SmartGuide technology. Also driving the
increase in R&D expenses is the creation of the operations data center to
support the Scoop! service; operations data center expenses include the cost
of networking, telecommunications, computer equipment, and computer
operators. Beginning in the fourth quarter of 1997, operations data center
expenses will be included as part of cost of sales to coincide with the
launch of the Scoop! service. R&D expenses are expected to continue to
increase during 1997 as the Company continues development of new Scoop!
information service products and expects to expand the customer base of the
Scoop! service.

R&D expenses in the 1997 and 1996 periods also include the cost of
content acquisition from UMI Company ("UMI"), the Company's principal content
supplier for the Scoop! service, and a prior content supplier for the purpose
of developing the Scoop! SmartGuide technology. Expenses for content
acquisition in the three months ended September 30, 1997 were $74,800 versus
$62,500 in the comparable 1996 period. In October 1996, the Company signed a
content agreement with UMI. Costs for UMI content have been incurred as R&D
expense up to the launch of the Scoop! service. Beginning in the fourth
quarter of 1997, these costs will be included as part of cost of sales. The
1997 contractual minimums with UMI are approximately $296,000.

The license fees and certain costs associated with software licensed
from third parties for the development of the Scoop! SmartGuide technology
are being expensed over the term of the applicable license agreement.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses
increased 321.3% in the three months ended September 30, 1997 to $303,300
from $72,000 in the comparable 1996 period. The increase was driven by
increased sales and marketing headcount and marketing expenses related to the
September free trial period of the Scoop! Direct service including
advertising and marketing promotional materials. Selling and marketing
expenses are expected to continue to increase during 1997 as the Company
increases its sales and marketing efforts relating to the Scoop! service.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative ("G&A")
expenses decreased 21.9% in the three months ended September 30, 1997 to
$519,000 from $664,600 in the comparable 1996 period. The decrease in G&A
expenses was primarily attributable to decreases in bad debt, professional
accounting and legal service fees, and warrant-related compensation expense
which more than offset the increases in salary resulting from the expansion
of the management team.

The Company implemented cost-cutting measures in November 1997 aimed at
further reductions to G&A expenses.

OTHER OPERATING EXPENSES. Other operating expenses were reported in the
three months ended September 30, 1997 totaling $330,700; no expenses were
reported in the comparable period for 1996. The expense reflects the net
present value of the remaining lease payments and the net book value of the
leasehold improvements of the company's vacated facility.

INTEREST INCOME (EXPENSE). Interest income, net of interest expense,
was $44,500 for the three months ended September 30, 1997 compared to $8,600
of interest income, net of interest expense, in the comparable 1996 period.
Net interest income in the 1997 period was primarily attributable to the
Company having interest bearing assets as a result of its initial public
offering.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

NET SALES. Net Sales increased 52.5% in the nine months ended September
30, 1997 to $1,492,100 from $978,400 in the comparable 1996 period. The
growth in net sales was principally driven by the Company's focused efforts
to expand sales of reprints from its Scoop! Media Services product line.

Net sales of reprints increased 69.1% in the nine months ended September
30, 1997 to $1,134,600 from $671,100 in the comparable 1996 period. This
growth resulted primarily from increased sales generated through the
Company's relationship with IBD. The Company derived approximately 58.5% of
total net sales for the nine months ended September 30, 1997 from the sale of
reprints of IBD content.

No sales have been reported from the Company's Scoop! Direct information
service launched in September 1997. Sales commenced in the fourth quarter of
1997.

COST OF SALES. Cost of sales increased 32.8% in the nine months ended
September 30, 1997 to $762,400 from $574,000 in the comparable period in
1996. The increase in cost of sales was primarily driven by higher royalty
fees and production costs associated with the growth of reprint sales.
Overall,

gross profits from the sale of Scoop! Media products increased by $325,300 in
the nine months ended September 30, 1997 compared to the same period in 1996.

RESEARCH AND DEVELOPMENT EXPENSES. R&D expenses increased 294.9% in the
nine months ended September 30, 1997 to $1,630,500 from $412,900 in the
comparable 1996 period. The increase in R&D expense was primarily driven by
additional development team staffing, license fees and other costs associated
with software licensed from third parties and increased utilization of third
party design services, all related to the Scoop! SmartGuide technology.
Initiation of the Scoop! data center also contributed to the increase of R&D
expenses in 1997. R&D expenses are expected to continue to increase during
1997 as the Company continues development of the Scoop Smart Guide technology
and the Scoop! service.

R&D expenses for content acquisition in the nine months ended September
30, 1997 were $164,300 versus $187,500 in the comparable 1996 period.

SELLING AND MARKETING EXPENSES. Selling and marketing expenses
increased 247.3% in the nine months ended September 30, 1997 to $656,800 from
$189,100 in the comparable 1996 period. The increase was driven by increased
sales and marketing headcount and marketing expenses related to the September
launch of the Scoop! service including advertising and marketing promotional
materials as well as increased commissions earned by sales staff due to the
growth in net sales of Scoop Media Services. Selling and marketing expenses
are expected to continue to increase during 1997 as the Company increases its
sales and marketing efforts relating to the Scoop! service.

GENERAL AND ADMINISTRATIVE EXPENSES. G&A expenses increased 24.3% in
the nine months ended September 30, 1997 to $1,491,000 from $1,199,900 in the
comparable 1996 period. The increase in G&A expenses was primarily
attributable to additional salary expenses resulting from the expansion of
the management team, recruiting fees relating to the Company's hiring
activities and various costs associated with being a public company,
including directors and officers insurance.

OTHER OPERATING EXPENSES. Other operating expenses were reported in the
nine months ended September 30, 1997 totaling $330,700; no expenses were
reported in the comparable period for 1996. The expense reflects the net
present value of the remaining lease payments and the net book value of the
leasehold improvements of the company's vacated facility.

INTEREST INCOME(EXPENSE). Interest income, net of interest expense, was
$55,400 for the nine months ended September 30, 1997 compared to $23,600 of
interest expense for the comparable 1996 period. Net interest income in the
1997 period was primarily attributable to the Company having interest bearing
assets as a result of its initial public offering.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has financed its operations primarily through
private and public sales of common stock and has supplemented such funds with
borrowings. During the nine months ended September 30, 1997, the Company
used approximately $3.1 million in operating cash flows, primarily to

fund the Scoop! SmartGuide technology development activities and additional
expenses, including those resulting from the expansion of the management,
development, operations and marketing teams during the past 9 months. Cash
provided by financing activities in the nine months ended September 30, 1997
totaled approximately $6.0 million, principally reflecting the proceeds from
the Company's initial public offering which was completed in April 1997. The
Company has used a substantial portion of the proceeds from the initial
public offering for the development of the Scoop! Smart Guide technology,
sales and marketing expenses relating to the Scoop! service, the acquisition
of capital equipment and the initiation of the Scoop! operations center. The
Company also had used proceeds from the initial public offering to repay
indebtedness aggregating $450,000. The Company had approximately $2.7 million
in cash and cash equivalents at September 30, 1997.

The Company also has used equipment leases and debt instruments to
finance a portion of its purchases of capital equipment, and at September 30,
1997 had obligations of approximately $126,700 incurred in connection with
these purchases. During the nine months ended September 30, 1997, the
Company expended $440,200 on purchases of capital equipment. Capital
requirements for the remainder of 1997 are currently expected to be
approximately $250,000, primarily consisting of computer equipment required
to support development of the Scoop! SmartGuide technology and to run the
Scoop! service.

In October 1997, the Company obtained a $500,000 equipment lease line of
credit ("Lease Line"). The Company intends to use the Lease Line to finance
its capital equipment purchases for the remainder of 1997 and to finance a
portion of amounts previously expended on capital equipment purchases under a
sale leaseback arrangement. Borrowings under the Lease Line will be for
terms of up to 30 months, will bear interest at 8.25% and will require a cash
security deposit equal to 25% of the equipment cost. The lease line will be
secured by the capital equipment being financed. The Lease Line is available
through October 1998, subject to certain conditions.

In October 1996, the Company entered into a license agreement with UMI
which gives the Company the right to resell content from news and information
sources through the Scoop! service. The Company will incur minimum royalty
payments under the UMI license agreement of approximately $296,000 in 1997
and $570,000 in 1998.

In August 1997, the Company entered into a three-year lease agreement
for its principal facility. The term of the lease began in September 1997.
The Company will incur minimum payments under the lease of approximately
$105,000 in 1997 and $362,000 in 1998.

products that may be developed. The Company is in the process of seeking
additional capital. There can be no assurance, however, that additional
financing will be available at all or that, if available, such financing will
be obtainable on terms favorable to the Company and would not be dilutive.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issues SFAS No. 130. "Reporting Comprehensive
Income." SFAS 130 establishes standards for the reporting and display of
comprehensive income and its components (revenues, expenses, gains and
losses) in a full set of general purpose financial statements. SFAS 130
requires all items that are required to be recognized under accounting
standards as components of comprehensive incomes to be reported in a
financial statement that is displayed with the same prominence as other
financial statements. SFAS 130 does not require a specific format for that
financial statement but requires that an enterprise display an amount
representing total comprehensive income for the period covered by that
financial statement. SFAS 130 requires an enterprise to (a) classify items
of other comprehensive income by their nature in a financial statement and
(b) display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in-capital in the equity section
of a statement of financial position. SFAS 130 is effective for fiscal years
beginning after December 15, 1997. Management has not determined whether the
adoption of SFAS 130 will have a material impact on the Company's
consolidated financial position or results of operations.

In June 1997, FASB issues SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information (SFAS 131). SFAS 131 establishes
standards for the way public business enterprises are to report information
about operating segments in annual financial statements and requires those
enterprises to report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic
areas, and major customers. SFAS 131 is effective for financial statements
for fiscal period beginning after December 15, 1997. The Company does not
believe that the adoption of SFAS 131 will have a significant impact on the
presentation of its financial statements.

PART II - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

(c) During the three months ended September 30, 1997, the Company issued
25,000 shares of common stock in connection with the exercise of an
employee stock option. The issuance of the shares was exempt from
the registration requirements of the Securities Act of 1933 pursuant
to Rule 701.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are included herein:

3.1 Certificates of Incorporation of Scoop, Inc.*
3.2 Bylaws of Scoop, Inc.*
4.1 Form of Common Stock Certificate*
4.2 Form of Representative Warrant*
4.3 Form of Consultant Warrant*
4.4 Warrant Dated October 18, 1996 issue to Bell & Howell*
4.5 Form of Subscription Supplement and Registration Rights
Agreement*
4.6 Form of Lock-up Agreement*
10.13 Lease dated August 6, 1997 between The Irvine Company and
Scoop, Inc.
11.1 Computation of Net Loss Per Common Share
27.1 Financial Data Schedule

(b) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the three
months ended September 30, 1997.
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* Incorporated by reference to the corresponding numbered exhibit included
in the Company's Registration Statement on Form SB-2 (file no. 333-15129)

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.

Date: November 12, 1997 /s/ Mark Davidson
-------------------------------
Mark Davidson
President and Chief Financial Officer
(authorized officer and principal
financial and accounting officer)