================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

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



                        Commission File Number: 00-19813

                               InfoNow Corporation
              ---------------------------------------------------
             (Exact name of registrant as specified in its charter)


        Delaware                                         04-3083360
 ----------------------                      ----------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

            1875 Lawrence Street, Suite 1100, Denver, Colorado, 80202
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                  303-293-0212
               ---------------------------------------------------
              (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 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

As of October 22, 1999, there were 7,155,986 shares of the Registrant's common
stock outstanding.

Transitional Small Business Disclosure Format                 Yes     No   X
                                                                  ---     ---



<PAGE>
                               INFONOW CORPORATION

                                      INDEX
                                                                      Page No.
                                                                      --------

                          PART I. FINANCIAL INFORMATION

ITEM 1.       CONSOLIDATED FINANCIAL STATEMENTS

              Unaudited Balance Sheets - September 30, 1999
                and December 31, 1998......................................3

              Unaudited Statements of Operations - For the Three
                Months and Nine Months Ended September 30, 1999
                and September 30, 1998.....................................4

              Unaudited Statement of Stockholders Equity (Deficit)
                - For the Nine Months Ended September 30, 1999.............5

              Unaudited Statements of Cash Flows - For the Nine Months
                Ended September 30, 1999 and September 30, 1998............6

              Notes to Unaudited Consolidated Financial Statements.........7


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS........................8


                           PART II. OTHER INFORMATION

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K............................14

              SIGNATURES..................................................15

                                       2

<PAGE>
<TABLE>
<CAPTION>

                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1. FINANCIAL STATEMENTS

                       INFONOW CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                            (US Dollars in Thousands)

Assets                                                             September 30, 1999    December 31, 1998
                                                                   ------------------    -----------------
                                                                       (Unaudited)
CURRENT ASSETS:
<S>                                                                     <C>                   <C>
Cash and cash equivalents                                               $  1,308              $  1,303
Restricted cash investments                                                   76                    76
Accounts receivable, net                                                     621                   379
Other current assets                                                         284                    20
                                                                        --------              --------
         Total current assets                                              2,289                 1,778

Property and Equipment, net                                                  988                   760

Capitalized software development costs, net of accumulated
   amortization of $530 and $522 at September 30, 1999
   and December 31, 1998 respectively                                          0                     7
Other assets and deferred charges                                             30                     9
                                                                        --------              --------
         Total assets                                                   $  3,307              $  2,554
                                                                        ========              ========

CURRENT LIABILITIES:
Notes Payable - current portion                                         $    112              $    103
Accounts payable and accrued expenses                                        891                   603
Unearned revenue and prepaid service fees                                    685                   464
                                                                        --------              --------
         Total current liabilities                                         1,688                 1,170

NOTES PAYABLE, net of current portion                                         51                    89

STOCKHOLDER'S EQUITY
Preferred stock, $.001 par value; 1,962,335
   shares authorized, none issued or outstanding                            --                    --

Common stock, $.001 par value; 15,000,000 shares
   authorized, 7,155,986 and 6,815,243 shares issued
   and outstanding at September 30, 1999 and
   December 31, 1998 respectively                                              7                     7

Additional paid-in capital                                                24,129                23,910
Accumulated deficit                                                      (22,568)              (22,622)
                                                                        --------              --------
         Total stockholder's equity                                        1,568                 1,295
                                                                        --------              --------
Total liabilities and stockholder's equity                              $  3,307              $  2,554
                                                                        ========              ========



            The accompanying notes are an integral part of these financial statements

                                                3



<PAGE>

                                         INFONOW CORPORATION AND SUBSIDARY
                                 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                        (In thousands, except per share amounts)


                                      For the Three Months Ended Sep 30,                  For the Nine Months Ended Sep 30,

                                          1999              1998                               1999             1998
                                          ----              ----                               ----             ----

REVENUES                                $   1,553         $    680                           $  3,977         $   1,641
Cost of revenues                              761              387                              1,933             1,157
                                        ---------         --------                           --------         ---------

      Gross profit                            792              293                              2,044               484

OPERATING EXPENSES:

Selling and marketing                         437              309                              1,183               667
Product development                            55               41                                139               125
General and administrative                    238              212                                728               614
                                        ---------         --------                           --------         ---------

Total operating expenses                      730              562                              2,050             1,406
                                        ---------         --------                           --------         ---------
Net income (loss) from operations              62             (269)                                (6)             (922)

OTHER INCOME (EXPENSE):

Interest income (expense), net                 13               19                                 37                31
Debt forgiveness gain                           0                0                                  0                 2
Other non-operating income                      0                0                                 23                 5
                                        ---------         --------                           --------         ---------

NET INCOME (LOSS) AND
     COMPREHENSIVE
     INCOME (LOSS)                      $      75         $   (250)                          $     54         $    (884)
                                        =========         ========                           ========         =========

Earnings per common share:

    Basic                               $    .01          $   (.04)                          $    .01         $    (.15)
                                        ========          =========                          ========         ==========

    Diluted                             $    .01                                             $    .01
                                        ========                                             ========

WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING

    Basic                               7,046,000         6,815,000                          7,032,000        5,927,000
                                        =========         =========                          =========        =========

    Diluted                             8,513,000                                            8,502,000
                                        =========                                            =========

                     The accompanying notes are an integral part of these financial statements

                                                         4






<PAGE>
                                         INFONOW CORPORATION AND SUBSIDARY
                               STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)(UNAUDITED)
                                  For the nine months ended September 30, 1999
                                     (In thousands, except per share amounts)

                                                                Common Stock                Additional           Accumulated
                                                         Shares             Amount        Paid-in Capital         Deficit
                                                         ------             ------        ---------------         -------

BALANCES, December 31, 1998                            6,815,243          $       7          $  23,910          $ (22,622)

Common shares issued in exchange
      For outstanding warrants                           100,000               --                 --                 --

Common shares issued in lieu
      of compensation                                      1,000               --                    4               --

Common shares issued upon exercise
   of warrants and options at prices
   ranging from $0.29 to $2.19
   per share                                             239,743               --                  215               --
Net income (loss)                                           --                 --                 --                   54
                                                       ---------          ---------          ---------          ---------

BALANCES, September 30, 1999                           7,155,986          $       7          $  24,129          $ (22,568)
                                                       =========          =========          =========          =========


             The accompanying notes are an integral part of these financial statements

                                                 5






<PAGE>


                                          INFONOW CORPORATION AND SUBSIDARY
                                 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                                               (US Dollars in Thousands)


                                                                     For the Nine Months Ended September 30,
                                                                     ---------------------------------------
                                                                           1999                    1998
                                                                           ----                    ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                         $    54                $  (884)
Adjustments to reconcile net loss to net cash used in
operating activities:
     Depreciation and amortization                                            400                    420
     Allowance for bad debt                                                    32                     12
     Compensation expense recognized in
         connection with stock warrant issuance                              --                       76
      Changes in operating assets and liabilities:
     Increase in accounts receivable                                         (274)                  (207)
     Increase in other assets and deferred charges                            (21)                    (3)
     Increase in other current assets                                        (264)                   (35)
     Increase in payables and accrued liabilities                             288                     76
     Increase in unearned revenue                                             220                    125
                                                                          -------                -------
Net cash flows from (used in) operating activities                            435                   (420)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                           (541)                  (229)
Increase in restricted cash                                                  --                      (76)
Data acquisition costs                                                        (13)                  --
                                                                          -------                -------
Net cash flow used in investing activities                                   (554)                  (305)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock                                   --                      769
Proceeds from the exercise of options and warrants                            219                  1,137
Payment of capital lease obligations                                          (38)                    (8)
Proceeds from notes payable                                                  --                        9
Principal payment on debt obligations                                         (57)                   (43)
                                                                          -------                -------
Net cash flows from financing activities                                      124                  1,864

Net increase (decrease) in cash and cash equivalents                            5                  1,139

CASH AND CASH EQUIVALENTS, beginning of period                              1,303                    325
                                                                          -------                -------

CASH AND CASH EQUIVALENTS, end of period                                  $ 1,308                $ 1,464
                                                                          =======                =======

Supplemental Information:
  Cash paid during period for interest                                    $    13                $    10


                    The accompanying notes are an integral part of these financial statements

                                                         6
</TABLE>

<PAGE>

                        INFONOW CORPORATION AND SUBSIDARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The financial statements are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods.

     The financial statements as of December 31, 1998, have been derived from
audited financial statements. The financial statements should be read in
conjunction with the financial statements and accompanying notes contained in
the Company's Form 10-KSB for the fiscal year ended December 31, 1998. The
results of operations for the three months ended September 30, 1999 and the nine
months ended September 30, 1999 are not necessarily indicative of the results
that will be achieved for the entire fiscal year ending December 31, 1999.



Note 2. SUPPLEMENTAL CASH FLOW DISCLOSURES

     On March 3, 1999 and on August 31, 1999, the Company issued common stock in
non-cash transactions described in Note 3 below.

     On May 21, 1999, the Company completed a non-cash transaction in which the
company financed an excess policy for directors & officers insurance in exchange
for a note payable to Cananwill, Inc. for approximately $76,000. The note bears
interest at 6.2% and is payable in equal monthly installments of $7,129 ending
in March, 2000.



Note 3. EQUITY TRANSACTIONS

     On March 3, 1999, in a non-cash transaction, the Company issued 100,000
shares of common stock in exchange for 200,000 of the Company's outstanding
stock warrants held by an investor.

     On August 31, 1999, in a non-cash transaction, the Company issued 1,000
shares of common stock to an employee in lieu of compensation.

     During the nine months ended September 30, 1999, the Company issued 239,743
shares of common stock in conjunction with the exercise of options and warrants.
The per-share price range of $0.29 to $2.19 resulted in gross proceeds to the
Company of $215,000.


                                       7
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

     The following discussion and analysis of the financial condition and
results of operations for InfoNow should be read in conjunction with our
financial statements and related notes appearing elsewhere in this Report. This
discussion contains statements that are not historical fact. These
forward-looking statements are based on our current expectations, assumptions,
estimates and projections about our industry and our business including
statements about markets for our services, planned development of products and
anticipated expense and revenue levels. These forward-looking statements contain
words such as "anticipate", "believe", "plan", "expect" or similar language.
These forward-looking statements are subject to business and economic risks. Our
actual results could differ materially from those anticipated in such
forward-looking statements as a result of many factors including those set forth
in this discussion and in reports we have filed with the Commission, including
our registration statement on Form SB-2.

General Information and Overview

     We provide outsourced services over the Internet designed to enable our
clients to convert the inquiries they receive from potential customers, or
prospects, into sales. Our automated technology can increase the rate of
conversion of these inquiries into sales by (1) responding to each prospect in
an individualized, or one-to-one, manner, (2) providing the prospect with
targeted buying incentives such as rebates or coupons and (3) generating leads
for immediate follow-up by the channel partner best suited to close the sale.
Channel partners for our clients can include their product dealers,
distributors, value added resellers and agents. Our services provide closed loop
follow-up and feedback that enable our clients to measure whether inquiries
resulted in sales as well as the effectiveness of their channel partners and
advertising investments. We provide these services to our clients over the
Internet or via secure, private extranets and intranets. Our server centers
house proprietary software, databases, and systems that respond to inquiries
received across a client's enterprise, including Internet sites, interactive
voice response systems and call centers. We also have made significant progress
in working with several clients on the design and development of eChannel(TM),
our new channel-friendly ecommerce services.

     As of September 30, 1999, we have approximately fifty-one clients. Most of
our clients are large multinational companies who have extensive branch or
reseller networks. Our clients include American Airlines, Apple, Bank of
America, Cisco, Compaq, 3Com, FedEx, First Union, Hewlett Packard, IBM, Intel,
Maytag, United Health Care, UPS and Visa.

     Our services are sold on the basis of multi-year service contracts. The
initial term of these contracts are one to three years and are renewable upon
mutual agreement of InfoNow and the client. A typical contract fee includes two
components, a setup fee and a recurring service fee. The setup fee covers the
initial development of a customized, client-specific access to our service, and
the design and implementation of client databases. The recurring monthly service
fee covers hosting of the service and performance of recurring maintenance to
the client databases and core applications.

     Currently, the combined fees for the initial year of service typically
range from $45,000 for a simple installation to greater than $750,000 for a
complex application involving multiple services across several customer "touch
points" and geographies. The actual setup and monthly service fees are
determined based on a variety of factors, including the type(s) of service
selected, the number of client locations supported, anticipated transaction
volumes, geographic coverage of the service and the level of service
customization requested by the client. We also may charge transaction fees for
some elements of our services depending upon the specific client configuration
such as fax transactions, voice recordings and dedicated telecommunication
lines. Our services are modular and all, or a portion of the services can be
selected depending on client requirements.

     We recognize revenues from setup fees for implementation of our services on
the percentage of completion method using project milestones. Service fees for
our services are recognized as services are rendered over the term of the
contract.

                                       8

<PAGE>


     We market our services through our direct sales force. During the last
eight quarters, we have experienced a significant increase in our backlog and
revenues from sales of our services and have reduced our losses from operations.

     During the last six months, we generated a profit from our operations. Our
success in maintaining profitability is primarily dependent on market acceptance
and future sales of our services to additional customers to offset operating
costs. Although we have experienced significant percentage revenue growth and a
reduction in operating losses in recent periods, these growth rates, or
improvement in operating results, may not be sustainable and may not be
indicative of future performance. We also have plans to increase our spending in
sales, marketing and product development in order to increase our market
presence and broaden our product offerings, which will affect our future
financial results.

     Our limited operating history and the early stage of development in the
markets for our services makes it difficult or impossible to predict our
revenues and operating results. We believe that our prospects should be
considered in light of the risks and difficulties encountered by companies at an
early stage of development. We may not be successful in addressing these risks
and difficulties.

Results of Operations

     The results from continuing operations for the periods presented reflect
the revenues and expenses of our inquiry management service operations.

     Comparison of the Three Months Ended September 30, 1999 to the Three Months
Ended September 30, 1998

     Net Revenues.  The Company's  revenues from continuing  operations  consist
primarily of setup fees from new contracts and monthly service fees from ongoing
contracts for our  services.  Total sales from our inquiry  management  services
increased by $873,000,  or 128% for the three months ended  September  30, 1999,
compared to the same period in the previous  year.  The increased  revenues were
generated by additional  contracts sold and  implemented  during the last twelve
months.  The number of  contracts  in backlog at  September  30,  1999 was 74 as
compared  with 63 on September  30,  1998.  Setup fees  increased  by 46%,  from
$250,000 to $366,000.  The higher fees were due to  contracts  with higher setup
fees implemented during the three months ended September 30, 1999 as compared to
the same period in the  previous  year.  Service Fees  increased  by 163%,  from
$382,000 to $1,005,000.  The higher fees were due to the  implementation  of new
contracts  and higher  average  monthly  service  fees per  contract.  Recurring
service fees from new and existing clients increased 18% during the three months
ended  September  30, 1999 to $420,000  per month,  or $5.0 million on an annual
basis.  Miscellaneous  revenues increased by 240%, from $50,000 to $170,000. The
higher fees were due to an  increase  in the number of  projects  with hourly or
per-unit fees.  There was a $12,000 net reduction of bad debt expense during the
three  months  ended  September  30, 1999 due to recovery of amounts  previously
written off. This compares to expense of $1,000 for the same period the previous
year.

     Cost of Revenues. The cost of revenues decreased from 57% of revenues for
the three months ended September 30, 1998, to 49% of revenues for the three
months ended September 30, 1999. The total cost of revenues over the same period
increased by 97% or $374,000. This increase is a result of increased costs in
creating and expanding an infrastructure for delivering our services. These
costs include technical personnel payroll, contract labor, data royalties,
depreciation and amortization for server equipment and capitalized software
development, telecommunications and other costs related to operating our data
center. The costs of revenues are expected to increase as more customers use our
services.

     Product Development. Product Development costs consist of time spent on
development not specifically associated with a client contract. To date, product
development costs have been comprised of subcontracted costs and salaries and
related costs. Product development costs decreased from 6% of revenues for the
three months ended September 30, 1998 to 4% of revenues for the three months
ended September 30, 1999. Total product development costs over the same period
increased by 34% or $14,000. A majority of product development expenses have
been incurred in conjunction with delivery of our services to customers and are
classified in the cost of revenues. We plan to increase spending on project
development not directly associated with specific customer contracts pending the
acquisition of additional financing.

                                       9

<PAGE>


     Selling and Marketing Expenses. Selling and marketing expenses, which
consist of payroll costs, sales commissions, travel and promotion expenses,
decreased from 45% of revenues for the three months ended September 30, 1998, to
28% of revenues for the three months ended September 30, 1999. The total amount
of selling and marketing expenses increased by 41%, or $128,000. The overall
increase is primarily the result of the addition of sales personnel and other
marketing and promotion costs during the last twelve months. We plan to increase
spending on selling and marketing activities pending the acquisition of
additional financing.

     General and Administrative Expenses. General and administrative expenses
consist primarily of payroll costs for InfoNow's executive, accounting and
administrative personnel, facilities costs, insurance and other general
corporate expenses. General and administrative expenses decreased from 31% of
revenues for the three months ended September 30, 1998, to 15% of revenues for
the three months ended September 30, 1999. The total amount of general and
administrative expenses increased by 12%, or $26,000. The overall increase is
the result of additional administrative costs related to growth in business
activity.

     Provision for Income Taxes. InfoNow has paid no income taxes since its
inception. As of December 31, 1998, there were approximately $7,328,000 of net
operating loss carryforwards for federal income tax purposes, which expire
beginning in 2010.

     Non-Operating Income (Expense). Net non-operating income was $13,000 for
the three months ended September 30, 1999 compared to $19,000 for the three
months ended September 30, 1998. The decrease is due to lower interest income
from lower cash balances available for investment, and lower interest rates.

     Net Income (Loss) from Continuing Operations. Net income for the three
months ended September 30, 1999 was $75,000, as compared to a net loss of
$250,000 for the three months ended September 30, 1998. The improvement is
primarily due to increased revenues generated by additional contracts sold and
implemented during the last twelve months without corresponding increases in
operating expenses.


     Comparison of the Nine Months Ended September 30, 1999 to the Nine Months
Ended September 30, 1998

     Net Revenues. The Company's revenues from continuing operations consist
primarily of setup fees from new contracts and monthly service fees from ongoing
contracts for our services. Total sales from our inquiry management services
increased by $2,336,000, or 142% for the nine months ended September 30, 1999,
compared to the same period in the previous year. The increased revenues were
generated by additional contracts sold and implemented during the last twelve
months. The number of contracts in backlog at September 30, 1999 was 74 as
compared with 63 on September 30, 1998. Setup fees increased 89%, from $584,000
to $1,103,000. The higher fees were due to contracts with higher setup fees
implemented during the nine months ended September 30, 1999 as compared to the
same period in the previous year. Service fees increased by 183%, from $903,000
to $2,551,000. The higher fees were due to the implementation of new contracts
and higher average monthly service fees per contract. Miscellaneous revenues
increased by 114%, from $166,000 to $355,000. Bad debt expense was $32,000 for
the nine months ended September 30, 1999 as compared to $12,000 for the same
period in the previous year.

     Cost of Revenues. The cost of revenues decreased from 71% of revenues for
the nine months ended September 30, 1998, to 49% of revenues for the nine months
ended September 30, 1999. The total cost of revenues over the same period
increased by 67% or $776,000. This increase is a result of increased costs in
creating and expanding an infrastructure for delivering our services. These
costs include technical personnel payroll, contract labor, data royalties,
depreciation and amortization for server equipment and capitalized software
development, telecommunications and other costs related to operating our data
center. Costs of revenues are expected to continue to increase as additional
customer use our services.

                                       10

<PAGE>


     Product Development. Product Development expenses consist of time spent on
development not specifically associated with a client contract. To date, product
development costs have been comprised of subcontracted services and salaries and
related costs. Product development costs decreased from 8% of revenues for the
nine months ended September 30, 1998 to 3% of revenues for the nine months ended
September 30, 1999. Total product development costs over the same period
increased by 11% or $14,000. A majority of product development expenses have
been incurred in conjunction with delivery of our services to customers and are
classified in the cost of revenues. We plan to increase spending on project
development not directly associated with specific customer contracts pending the
acquisition of additional financing.

     Selling and Marketing Expenses. Selling and marketing expenses, which
consist of payroll costs, sales commissions, travel and promotion expenses,
decreased from 41% of revenues for the nine months ended September 30, 1998, to
30% of revenues for the nine months ended September 30, 1999. The total amount
of selling and marketing expenses increased by 77%, or $516,000. The overall
increase is primarily the result of the addition of sales personnel and other
marketing and promotion costs during the last twelve months. We plan to increase
spending on selling and marketing activities pending the acquisition of
additional financing.

     General and Administrative Expenses. General and administrative expenses
consist primarily of payroll costs for InfoNow's executive, accounting and
administrative personnel, facilities costs, insurance and other general
corporate expenses. General and administrative expenses decreased from 37% of
revenues for the nine months ended September 30, 1998, to 18% of revenues for
the nine months ended September 30, 1999. The total amount of general and
administrative expenses increased by 19%, or $114,000. The overall increase is
the result of additional administrative costs related to growth in business
activity.

     Provision for Income Taxes. InfoNow has paid no income taxes since its
inception. Although the Company has reported net income for the nine months
ended September 30, 1999, we have not recorded a provision for income taxes. We
believe that any tax liability for 1999 will be offset against tax loss
carryforwards, which expire beginning in 2010, estimated at $6,992,000 as of
September 30, 1999.

     Non-Operating Income (Expense). Net non-operating income was $59,000 for
the nine months ended September 30, 1999 compared to $38,000 for the nine months
ended September 30, 1998. The increase is due primarily to additional interest
income on cash and cash equivalents, and a buyout earned based on Cimarron's
gross profits in accordance with the December 1997 sale agreement between
InfoNow and Cimarron Dog & Pony.

     Net Income (Loss) from Continuing Operations. Net income for the nine
months ended September 30, 1999 was $54,000, as compared to a net loss of
$884,000 for the nine months ended September 30, 1998. The improvement is
primarily due to increased revenues generated by additional contracts sold and
implemented during the last twelve months without corresponding increases in
operating expenses.

Liquidity and Capital Resources

     InfoNow has financed its operations through private placement of equity
securities and through borrowing arrangements. We have received a total of
approximately $4,815,000 from private offerings and an additional $1,711,000
from the exercise of stock options and warrants since we began marketing our
inquiry management services in 1995.

     We had cash and equivalents of $1,308,000 at September 30, 1999, compared
to $1,528,000 at June 30, 1999, a net decrease of $220,000. The decrease was
primarily due to purchases of equipment to support the expansion of services to
clients.

     Net cash from operating activities during the three months ended September
30, 1999 was $17,000, compared to $144,000 during the three months ended June
30, 1999. The decrease was primarily due to an increase in accounts receivable
during the three months ended September 30, 1999 as compared to a decrease
during the three months ended June 30, 1999.

                                       11

<PAGE>


     Cash used in investing activities increased from $211,000 during the three
months ended June 30, 1999 to $252,000 during the three months ended September
30, 1999. The increase is due to the purchase of computer hardware and software
for our data centers and additional personnel, and additional data acquisition
costs.

     Net cash generated from financing activities during the three months ended
September 30, 1999 was $15,000, consisting of $60,000 from the exercise of stock
options and warrants, less $45,000 in principal payments on debt obligations.
Net cash generated from financing activities during the three months ended June
30, 1999 was $79,000, consisting of $40,000 from the exercise of stock options
and warrants and $66,000 proceeds from notes payable, less $27,000 in principal
payments on debt obligations

     We currently project that available cash balances, together with projected
cash flow from contracted backlog and anticipated new sales, will be sufficient
to fund our operations for at least the next twelve months. These projections
assume that revenues from new sales and from backlog will continue to provide
cash from its operations and that our overall operating costs will not change
significantly as new client contracts are added.

     We are currently seeking additional equity financing to accelerate planned
investments in sales and marketing, product development and to increase general
working capital and license additional intellectual property. We have not made a
final determination regarding the terms and conditions of an equity placement
but anticipate that a placement would involve the issuance of up to 2,000,000
shares of common stock and generate net proceeds of approximately $8.0-$12.0
million. Our ability to successfully complete an offering is dependent on a
number of factors. There can be no assurance that we successfully complete an
equity placement, or that a placement will be concluded on the terms and
conditions that we anticipate.

Impact of the Year 2000 Issue

     The Year 2000 Issue is the result of certain computer programs being
written using two digits rather than four to indicate the applicable year. As a
result, computer programs with date-sensitive software may incorrectly recognize
a date using "00" as the year 1900 rather than the year 2000. Such an error
could result in a system failure or miscalculations resulting in disruptions of
operations, including a temporary inability to process normal business
transactions or provide service to our customers.

     InfoNow has undertaken a review of its own computer systems and
applications to determine if significant problems exist with the operations of
those systems as a result of the Year 2000 Issue. As a result of that review, we
do not expect that any modifications required to address Year 2000 problems will
have a material impact on its business, operations or financial condition. In
addition, InfoNow has implemented a Year 2000 compliance inquiry program with
its major vendors and suppliers as to both the status of the Year 2000
compliance of their own systems and any delays they anticipate in supplying
goods and services to us.

     We cannot guarantee that the systems of our vendors and suppliers will be
Year 2000 compliant. However, based on our initial surveys, we do not anticipate
replacement or major modification of any hardware or software components in our
systems if third party supplied hardware and software is not year 2000
compliant. Nevertheless, we may be required to install software updates to our
systems and hardware so that they will run properly after December 31, 1999. We
believe that these needed software updates are currently available or will be
available based on announcements made by our vendors through our normal software
maintenance licenses.

     We have not incurred material costs to date in our Year 2000 review process
and do not anticipate that we will incur material expenses outside the normal
course of business to modify our own systems or third party supplied systems to
be Year 2000 compliant. However, our systems and third party systems may contain
undetected errors or defects that may cause us to incur material costs and could
result in a material adverse effect on our operations and financial condition.
In addition, if our suppliers or other third parties fail to address and correct
their Year 2000 issues, we could face business interruption and material
unexpected costs.

                                       12

<PAGE>


     We have not yet fully developed a contingency plan to address situations
that may result if we are unable to achieve year 2000 readiness of our critical
operations. The cost of developing and implementing such a plan may itself be
significant and implementing such a plan may be greater than the cost of
possible interruptions caused by Year 2000 issues. In addition, we are also
subject to external forces that might generally affect industry and commerce,
such as electric utility or telecommunications interruptions caused by Year 2000
failures.

Risks of Forward Looking Statements

     Our actual results may vary materially from the forward-looking statements
made above. We intend that such statements be subject to the safe harbor
provision of the Securities Act. Our forward-looking statements include the
plans and objectives of management for future operations and relate to a variety
of factors, including management's assumptions about our ability to:

     -    Gain market acceptance of our inquiry management services

     -    Accurately forecast and meet demands for our services, including our
          ability to maintain technical performance of the system as new clients
          are added

     -    Improve our operational and financial systems in order to address
          planned growth in our operations

     -    Maintain pricing and adequate profit margins on our products and
          services

     -    Retain and attract qualified technical personnel

     -    Develop future enhancements to our services and control development
          costs of those enhancements

     -    Respond to competitive threats

     -    Raise additional capital, if needed.

     Our assumptions are based on judgments with respect to, among other things,
future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our ability to control.

     We believe that the assumptions underlying our forward-looking statements
are reasonable. However, our assumptions may prove to be inaccurate and
therefore there can be no assurance that the results contemplated in
forward-looking statements will be realized. You should not regard any
statements made in this Report as a representation by InfoNow or any other
person that we will achieve our objectives.


                                       13

<PAGE>

                           PART II. OTHER INFORMATION
                           --------------------------



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits-  Included,  as exhibits  are the items  listed on the Exhibit
         Index. The Registrant will furnish a copy of any of the exhibits listed
         upon payment of $5.00 per exhibit to cover the costs to the  Registrant
         of furnishing such exhibit.

     (b) Reports on Form 8-K

     No reports were filed on form 8-K during the three months ended September
30, 1999



                                       14
<PAGE>



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

      Dated:  October 22, 1999

                           INFONOW CORPORATION

                           (Registrant)



                           /s/ Michael W. Johnson
                           ------------------------------------------------
                           Michael W. Johnson
                           Chief Executive Officer, President and Director
                           (Principal Executive Officer)


                           /s/ Kevin D. Andrew
                           ------------------------------------------------
                           Kevin D. Andrew
                           Chief Financial Officer, Treasurer and Secretary
                           (Principal Financial and Accounting Officer)


                                       15
<PAGE>

                                  EXHIBIT INDEX



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

     3.1      Certificate of Incorporation of the Company, as Amended.(A)

     3.3      Bylaws of the Company, as Amended.(B)

     4.1      Form of Common Stock Certificate for the Registrant's Common
              Stock, $.001 par value per share.(B)

     4.4      Form of Class C Warrant.(C)

     10.14    InfoNow Corporation 1990 Stock Plan as amended. (G)

     10.29    Employment Agreement between the Company and W. Brad Browning
              dated January 9, 1996.(E)

     10.30    Employment Agreement between the Company and Kevin Andrew dated
              March 1, 1996.(E)

     10.32    Agreement between the Company and Environmental Systems Research
              Institute, Inc. ("ESRI") dated March 6, 1996.(E)

     10.33    Stock Purchase and Sale Agreement by and among VDC Paradigms,
              Inc., Craig Michaelis, David Wertzberger and InfoNow Corporation
              dated December 13, 1996.(A)

     10.34    Employment Agreement between the Company and Donald E. Cohen dated
              May 22, 1995, as amended.(A)

     10.35    Asset Sale Agreement for sale of assets to Cimarron Dog and Pony
              Company, Inc. dated December 11, 1997.(F)

     10.36    Michael W. Johnson employment agreement dated January 1, 1998.(F)

     10.37    Agreement dated October 23, 1997 between the Company and Michael
              W. Johnson regarding sale of the Company.(F)

     10.38    Letter Agreement between the Company and Michael Basch dated
              September 21, 1998. (G)

     27.1     Financial Data Schedule
----------------------

(A) Incorporated by reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
(B) Incorporated by reference from Registration Statement No. 33-43035 on Form
S-1 dated February 14, 1992.
(C) Incorporated by reference from Post-Effective Amendment No. 2 to
Registration Statement No. 33-43035 on Form S-1 dated July 13, 1993.
(D) Incorporated by reference from Post-Effective Amendment No. 3 to
Registration Statement No. 33-43035 on Form S-1 dated September 30, 1996.
(E) Incorporated by reference from the Company's Annual Report on Form 10-K for
year ended December 31, 1995.
(F)  Incorporated  by reference from the Company's  Annual Report on Form 10-KSB
for the year ended December 31, 1997.
(G)  Incorporated by reference from the Company's Quarterly Report on Form 10QSB
for the period ended September 30, 1998.

                                       16