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                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C.  20549

                                 FORM 10-Q
                                     

  [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY 
        EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
 
  [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITY 
        EXCHANGE ACT OF 1934 


For the transition period from              to   

Commission File Number: 0-19813

                            INFONOW CORPORATION
          (Exact name of registrant as specified in its charter)


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

3131 So. Vaughn Way, Suite 134, Aurora, CO                 80014       
(Address of principal executive offices)                (Zip Code)     

Registrant's telephone number, including area code:  303-368-4646

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
                                     

The number of shares outstanding of the Registrants Common Stock, $.001 par 
value, as of October 28, 1996 was 3,743,940.

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<PAGE>


                            INFONOW CORPORATION

                                  INDEX

PART I.     FINANCIAL INFORMATION                                    PAGE NO. 
                                                                     -------- 
   Item 1.  Financial Statements

            Balance Sheets -- September 30, 1996 (Unaudited) and 
             December 31, 1995.                                           1 

            Unaudited Statements of Operations-For the Three Months       2
             Ended September 30, 1996 and September 30, 1995 and 
             For the Three Months and Nine Months Ended 
             September 30, 1996 and September 30, 1995.                  

            Statement of Stockholders Equity (Deficit) - For the Nine     3
             Months Ended September 30, 1996.                            

            Unaudited Statements of Cash Flows--For the Nine Months       4
             Ended September 30, 1996 and September 30, 1995.              

            Notes to Unaudited Condensed Financial Statements             7 

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

PART II.    OTHER INFORMATION                                            12 

SIGNATURES                                                               14 

<PAGE>

                             INFONOW CORPORATION
                                      
                          CONSOLIDATED BALANCE SHEETS

                                              September 30,   December 31, 
Assets                                            1996            1995     
                                              -------------   ------------ 
                                               (Unaudited)                 
CURRENT ASSETS:
  Cash and cash equivalent                     $    187,266   $    231,781 
  Accounts receivable, net                          258,230         494,91 
  Other current assets                              113,920         34,809 
                                                -----------    ----------- 
    Total current assets                            559,416        761,508 
Property and Equipment, net                         410,608        336,050 
Goodwill, net of accumulated amortization
 of $90,728 and $87,820 at September 30, 
 1996 and December 31, 1995, respectively.          929,967      3,099,955 
Software development costs, net of 
 accumulated amortization of $43,354 at 
 September 30, 1996.                                153,103              - 
Other assets and deferred charges                    19,717         18,381 
                                                -----------    ----------- 
    Total assets                                $ 2,072,811    $ 4,215,894 
                                                -----------    ----------- 
                                                -----------    ----------- 
CURRENT LIABILITIES:
  Accounts payable and accrued expenses             724,283        435,591 
  Notes payable-current portion                      69,445         43,202 
  Related party payables                            100,000              - 
  Deferred compensation                              58,779              - 
  Unearned revenue                                  237,057        123,386 
  Capital lease obligation-current                    3,930          3,514 
                                                -----------    ----------- 
    Total current liabilities                   $ 1,193,494    $   605,693 

CAPITAL LEASE OBLIGATION                             14,935         14,039 
NOTES PAYABLE                                       139,518        172,440 

COMMITMENTS AND CONTINGENCIES                             -              - 

STOCKHOLDER'S EQUITY
  Preferred stock, $.001 par value, 2,000,00 
   shares authorized, none issued                         -              - 
  Common stock, $.001 par value; 15,000,000 
   shares authorized, 3,743,940 and 3,183,567
   shares issued and outstanding at September
   30, 1996 and December 31, 1995 respectively        3,836          3,184 

Treasury stock (92,000 shares at cost)                    -              - 
Additional paid-in capital                       19,873,707     19,478,118 
Accumulated deficit                             (19,152,679)   (16,057,580)
                                                -----------    ----------- 
      Total stockholder's equity                    724,864      3,423,722 
                                                -----------    ----------- 
Total liabilities and stockholder's equity      $ 2,072,811    $ 4,215,894 
                                                -----------    ----------- 
                                                -----------    ----------- 


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

                                     3 
<PAGE>

                             INFONOW CORPORATION

             CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
                                          For the Three Months        For the Nine Months      
                                           Ended September 30,        Ended September 30,      
                                        -------------------------   -------------------------- 
                                           1996          1995          1996           1995     
                                        -----------    ----------   -----------   ------------ 
<S>                                     <C>            <C>          <C>           <C>          
SALES                                   $   542,503    $  635,748   $ 1,765,317   $    774,875 

OPERATING EXPENSES:

Cost of sales                               304,056       209,532       838,721        306,740 
Selling, general and administrative         563,597       647,927     1,991,719      1,587,587 
Research and development                          -         6,981             -         18,721 
Impairment of long lived assets           2,010,599             -     2,010,599              - 
                                        -----------     ---------   -----------    ----------- 

Total operating expenses                  2,878,247       864,430     4,841,039      1,913,048 
                                        -----------     ---------   -----------    ----------- 
Net loss from operations                 (2,335,744)     (228,682)   (3,075,722)    (1,138,173)

OTHER INCOME (EXPENSE):

Loss on disposition of assets                     -         9,606             -       (103,816)
Interest income (expense), Net               (8,345)       (3,017)      (19,377)       (10,832)
                                        -----------     ---------   -----------    ----------- 
Net loss before extraordinary gain
 from debt restructuring                 (2,344,089)     (222,093)   (3,095,099)    (1,252,821)

EXTRAORDINARY GAIN FROM
 DEBT RESTRUCTURING                               -       (35,560)            -        134,123 
                                        -----------     ---------   -----------    ----------- 
NET LOSS                                $(2,344,089)    $(257,653)  $(3,095,099)   $(1,118,698)
                                        -----------     ---------   -----------    ----------- 
                                        -----------     ---------   -----------    ----------- 

Net loss per common share before  
 extraordinary gains from debt     
 restructuring                          $     (0.65)    $   (0.09)  $     (0.92)   $     (0.91)

Extra ordinary gain from debt
 restructuring                          $         -     $   (0.01)  $         -    $      0.10 

Net loss per common share               $     (0.65)    $   (0.10)  $     (0.92)   $     (0.81)

WEIGHTED AVERAGE COMMON
 SHARES OUTSTANDING                       3,608,394     2,588,624     3,365,055      1,378,844 
                                        -----------     ---------   -----------    ----------- 
                                        -----------     ---------   -----------    ----------- 
</TABLE>


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



                                     4 
<PAGE>

                            INFONOW CORPORATION

                STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

                For the nine months ended September 30, 1996
<TABLE>
                                     Common Stock    
                                  ------------------     Additional      Treasury   Accumulated  
                                   Shares     Amount   Paid-in Capital     Stock      Deficit    
                                  ---------   ------   ---------------   --------   ------------ 
<S>                               <C>         <C>       <C>              <C>        <C>          
BALANCES, December 31, 1995       3,183,567   $3,184     $19,478,118           -     (16,057,580)
Issuance of common stock in 
 conjunction with the exercise 
 of employee stock options           15,708       15          20,404    
Issuance of common stock in 
 conjunction with the exercise 
 of warrants                        469,554      470         187,352 
Return of common stock to treasury 
 from escrow                        (92,000)       -               -           - 
Common stock issued to three 
 officers of the Company at $1.12
 per share for cash, deferred 
 salaries and expenses              167,111      167         187,833 
Net loss                                  -        -               -           -      (3,095,099)
                                  ---------   ------     -----------         ---    ------------ 
BALANCES, September 30, 1996      3,743,940   $3,836     $19,873,707         $ -    $(19,152,679)
                                  ---------   ------     -----------         ---    ------------ 
                                  ---------   ------     -----------         ---    ------------ 
</TABLE>













                                     5 
<PAGE>
                            INFONOW CORPORATION
              CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

                                                    For the Nine Months     
                                                    Ended September 30,     
                                                 -------------------------- 
                                                    1996           1995     
                                                 -----------    ----------- 
CASH FLOWS USED IN OPERATING ACTIVITIES:
Net loss                                         $(3,095,099)   $(1,118,698)
    Adjustments to reconcile net loss to 
     net cash used in operating activities
    Depreciation and amortization                    335,519        110,654 
    Long-lived asset impairment                    2,010,599              - 
    Gain on debt restructuring                             -       (134,123)
    Allowance for bad debts                           43,785              - 
    Compensation expense related to 
     stock options and stock warrant 
     issuance's                                            -        327,599 
    Loss on asset dispositions                             -        122,063 
Changes in operating assets and liabilities:
    Decrease (Increase) in accounts receivable       217,067         65,421 
    Decrease in inventory                                  -          5,969 
    Increase in other current assets                 (79,111)        21,575 
    Increase (decrease) in payables and 
     accrued liabilities                             216,307        115,082 
    Increase (decrease) in payables to 
     officers, directors and related parties               -            115 
    Increase in unearned revenue                     113,671            922 
                                                 -----------    ----------- 
Net cash flows used in operating activities         (237,262)      (483,421)

CASH FLOWS FROM(USED IN)INVESTING ACTIVITIES:              -              - 
Purchase of property and equipment                  (207,333)      (184,986)
Proceeds of net assets of Cimarron                         -       (160,000)
Purchase of net assets of Navigist                         -        (76,261)
Decrease (increase) in other assets                 (197,794)             - 
Proceeds from sale of equipment                            -         18,247 
                                                 -----------    ----------- 
Net cash flow used in investing activities          (405,127)      (403,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock            95,000      1,315,217 
Decrease in restricted cash                                -         15,000 
Proceeds from the exercise of options 
 and warrants                                        208,241              - 
Payment of capital lease obligation                   (2,615)        (2,243)
Proceeds from notes payable                          503,664        292,512 
Payment of notes payable                            (206,416)      (280,276)
                                                 -----------    ----------- 
Net cash flows from financing activities             597,874      1,340,210 

Net increase (decrease) in cash and 
 cash equivalents                                    (44,515)       453,789 

CASH AND CASH EQUIVALENTS, beginning of period       231,781         17,976 
                                                 -----------    ----------- 

CASH AND CASH EQUIVALENTS, end of period         $   187,266    $   471,765 
                                                 -----------    ----------- 
                                                 -----------    ----------- 
Supplemental Information:
Cash paid during period for interest             $    23,458    $    22,927 




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

                                     6 
<PAGE>

                            INFONOW CORPORATION

           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, 1995, have been derived from audited 
     financial statements, the report on which which included an explanatory 
     paragraph describing uncertainties concerning the Company's ability to 
     continue as a going concern. The financial statements should be read in 
     conjunction with the financial statements and notes thereto contained in 
     the Company's Form 10-K for the fiscal year ended December 31, 1995. The 
     results of operations for  the three months and nine months ended September
     30, 1996 are not necessarily indicative of the results that will be 
     achieved for the entire fiscal year ending December 31, 1996.

NOTE 2 - SUPPLEMENTAL CASH FLOW DISCLOSURES

     During the nine months ended September 30, 1996, the Company completed a 
     non-cash transaction with Environmental Research Institute, Inc. ("ESRI"),
     in which the Company received computer equipment and software licenses from
     ESRI in exchange for an obligation of $350,000 to be paid to ESRI which has
     been recorded as an accrued expense. The Company also issued 167,111 shares
     in exchange for cash and cancellation of $143,000 in current liabilities 
     (see Note 4).

     During the nine months ended September 30, 1995, the Company had the 
     following non-cash transactions: the Company purchased Cimarron 
     International, Inc. ("Cimarron") with a combination of cash, notes and 
     common stock, the Company renegotiated certain accounts and notes payable,
     the Company agreed to issue common stock, warrants, and certain other 
     consideration to certain related party debt holders and preferred 
     shareholders, and the Company converted a convertible note payable to 
     common stock.

NOTE 3 - RELATED PARTY TRANSACTIONS

     On March 29, 1996, the company executed a promissory note to the Chief 
     Financial Officer of the Company in the amount of $100,000 secured by all
     the receivables of the Company. The note is due in March 1997 bearing 
     interest at prime plus 2.75%. The note can be converted into common stock
     of the Company at $3.00 per share at the option of the note holder at any
     time prior to maturity. 

     In a separate transaction, a vice-president of the Company has advanced
     $50,000 to the Company as a short term non-interest bearing loan. On 
     September 13, 1996 this loan was exchanged  for 66,667 shares of common
     stock valued at $1.12 per share.

NOTE 4 - EQUITY TRANSACTIONS

     On September 13, 1996, the Company completed a private placement of common
     shares to three officers of the Company in which the Company issued 167,111
     shares of common stock valued at $1.12 and granted warrants to purchase 
     83,556 shares at $1.12 per share, exercisable until September 13, 1998. In
     consideration for these shares, the three officers provided $45,000 in cash
     and reduced obligations owed to them including a $50,000 short term advance
     and $93,000 in deferred salaries and other expenses.

NOTE 5 - IMPAIRMENT OF GOODWILL

     During the third quarter, as a result of its review of long-lived assets as
     required by SFAS 121 "Impairment of Long Lived Assets" the Company took a 
     non-cash charge  against operating results in the amount of $2,010,599 as a
     write down of all goodwill related to its acquisition of Navigist, Inc. 
     This write down will reduce future amortization expense by approximately
     $144,000 on an annual basis. The recent write down was based on the 
     evaluation of recent poor financial results in this subsidiary. The 
     Company is currently considering, among other options, the sale of this 
     subsidiary. 


                                     7 
<PAGE>

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

GENERAL

The Company was originally formed to engage in the development and marketing 
of an electronic distribution system using CD-ROM technology for software 
programs and other products. During 1995, the Company ceased all activities 
in this business and shifted its strategy towards providing Internet-based 
customer service applications and services to large business and governmental 
organizations. As part of this strategy change, the Company acquired Cimarron 
International, Inc., a multimedia production company and Navigist, Inc., a 
network engineering consulting company in May and August of 1995, 
respectively. In addition to these acquisitions, the Company formed a third 
business unit, Internet Products, which is pursuing opportunities on the 
Internet.

In July 1996, the Company deployed its first Internet offering, called 
FindNow-SM-, a locator and mapping service designed to integrate into a 
client company's website in order to improve how they respond to location 
based inquiries from their customers over the Internet. FindNow-SM- was 
integrated into the VISA International web site (http://www.visa.com) in July 
1996, and is the first customer for this service. In August of 1996, the 
Company implemented the FindNow-SM- system for Compaq Computers 
(http://www.compaq.com) and announced on September 26, 1996 that it had 
contracted with Nations Banc to provide this service to their web site. In 
addition, the Company is currently in the contract negotiation stage with 
four other clients that have selected the Company's FindNow-SM- system. The 
Company is also in discussions with other customers at the current time and 
expects that additional sales of the FindNow-SM- system will occur as the 
system continues to gain market acceptance.

The Company's Navigist operations have continued to generate poor financial 
results and declining sales when compared to the prior year periods resulting 
in negative cash flows from it's operations during the nine months ended 
September 30, 1996. In order to reduce these losses, the Company ceased 
Navigist's network and communications consulting operations located in Denver 
CO during the second quarter. As part of this change, the applications 
development group that was previously part of the Denver Navigist operations 
was consolidated into the Internet Products Group. Navigist's San Jose 
operations have remained unchanged. These actions were taken to better focus 
the application development group on Internet Products projects and reduce 
recent operating and cash losses due to poor sales in the network 
communications engineering business in Denver. However, while the recent 
changes have reduced operating losses, they have not resulted in profitable 
operations for Navigist. As a result of these developments and a review of 
how the operations of Navigist strategically fit into the current operations 
of InfoNow, the Company recorded a non-cash charge of $2,010,599 in the third 
 quarter to reflect the write down of all of the goodwill of Navigist. In 
addition, the Company is considering, among other options, the possible sale 
of Navigist.

RESULTS OF OPERATIONS

As discussed in the Company's annual report on Form 10-K for the fiscal year 
ended December 31, 1995, the Company's business changed substantially in 1995 
due to the discontinuance of the CD-ROM software business and the 
acquisitions of Navigist and Cimarron. The results of operations for the 
quarter ended September 30, 1995 include the results of the operations for 
Cimarron and Navigist from May 23, 1995, and August 23, 1995, respectively, 
which was the date the Company acquired Cimarron and Navigist.  For the  nine 
months ended September 30, 1995, $107,361 of the Company's revenues related 
to the sales of software distributed via CD-ROM. The results for  the three 
and nine months ended September 30, 1996 reflect the operations of Cimarron 
and Navigist, the Company's previous CD-ROM software distribution business as 
all operations in this business were discontinued in the third quarter of 
1995.

THREE AND NINE MONTHS ENDED SEPTEMBER 30,1996 COMPARED TO THE THREE AND NINE 
MONTHS ENDED SEPTEMBER 30, 1995

Total sales decreased by 15% for the three months ended September 30, 1996 
and increased 79%, for the nine months ended September 30, 1996 when compared 
to the same periods in the prior year. The decrease for the three month 
period ended September 30, 1996 relates to 29% and 27% declines in revenues 
of Cimarron and Navigist, respectively when compared to the same period a 
year ago. These declines were due primarily to lower revenues in the 
Interactive Media Group of Cimarron and the closure of the Navigist network 
communications engineering and

                                     8 
<PAGE>

consulting practice in Denver. These decreases were offset somewhat by
increases in revenues from the Internet Products Group which began service of
its FindNow-SM- system in the third quarter and generated approximately $183,000
in revenues from those activities during the three months ended September 30,
1996. The increases for the nine month period ending September 30, 1996 are the
result of the acquisition of the of the operations of Cimarron and Navigist and
revenues generated from the Internet Products Group, which increased by
$396,000, $479,000 and $294,000, respectively. These increases were offset by a
decrease  of $107,000 in revenues from the Company's previous business of
selling software distributed via CD-ROM. The Company ceased all activity in this
business during the quarter ending September 30, 1995.

The net loss of the Company increased by approximately 810% and 177% for the
three months and nine months ended September  30, 1996, respectively, compared
to the same periods in the prior year. The results for the current year include
a non-cash charge of $2,010,599 for the impairment of goodwill related to the
acquisition of Navigist. Without this non-cash charge, the net loss of the
Company increased by 29% for the three months ended September  30, 1996 and
decreased by 3% for the nine months ended September 30, 1996 compared to the
nine months ended September 30, 1995. When excluding the non-cash charge for the
impairment of goodwill, the net loss in the quarter ended September 30, 1996,
decreased significantly (40%) compared to the previous quarter ended June 30,
1996 due primarily to the elimination of losses incurred in the Denver Navigist
operations which were closed in the second quarter.

The cost of sales as a percent of revenues increased 24% and 7% for the three 
and nine month period ending September 30, 1996, respectively when compared 
with the prior year's periods. This increase is primarily related to the 
reclassification of production labor in the Navigist operations from selling, 
general and administrative to the cost of sales. When adjusting for the 
reclassification of these expenses, the gross margins of the business  have 
significantly improved over the prior year primarily due to the replacement 
of revenues generated from the sales of software distributed on CD-ROM with 
the sales of the Company's FindNow-SM- system. This change in the source of 
business revenues resulted in a reduction of  cost of sales as a percent of 
revenues from 68% of sales for the nine month period ending September 30, 
1995 to 32% of sales for the comparable nine month period in 1996. The 
Company anticipates that future revenues from its Internet Products Group may 
contain continuing service fees, either on a fixed monthly, or transaction 
basis which may cause variances the overall gross margin levels depending on 
the structure of the arrangements ultimately consummated with customers.

Selling, general and administrative expenses of the Company decreased as a
percent of sales from 13% for the three month period ending September 30, 1996
and increased by 25% for the nine month period ending September 30, 1996 when
compared to the prior year's periods. Selling,  general and administrative
expenses have declined 19% in the quarter ended September 30, 1996, compared
to the quarter ended June 30, 1996 and have declined 24% from the quarter ended
March 31, 1996. The increases in the nine month period compared to the prior
year relate to the added costs of operations from the acquisitions of Navigist
and the formation of the Internet Products Group. The addition of revenues from
these operations resulted in selling general and administrative expenses
declining as a percent of sales from 205% in the nine month period ended
September 30, 1995, to 112% for the nine month period ending September 30, 1996.
The decline of selling, general and administrative expenses in the third quarter
of 1996 compared to the first and second quarter of 1996 is the result of the
effect of further management cost reductions in several areas, elimination of
certain operating expenses related to the closure of the Navigist Denver
operations, and reclassification of production labor in the Navigist operations
from selling, general and administrative to cost of sales.

LIQUIDITY AND CAPITAL RESOURCES; NEED FOR ADDITIONAL FINANCING

The Company had cash and equivalents of $187,266 at September 30, 1996, 
compared to $182,854 at June 30, 1996 and $231,781 as  of December 31 , 1995. 
Although the Company has made progress in commercializing its FindNow-SM- 
service with the implementation of two clients and the addition of five other 
clients as of the date of this report, the Company continued to sustain 
continued operating losses during the third quarter. In addition, the Company 
expects that the implementation of these new clients and the planned addition 
of new customers in the fourth quarter will not generate sufficient cash to 
sustain operations in the fourth quarter and make investments that the 
Company believes are necessary to successfully commercialize its FindNow-SM- 
service that include, but are not 

                                    9 
<PAGE>

limited to, hiring of additional sales personnel, the purchase of approximately
$350,000 in hardware and software to implement additional server capacity, and
the hiring of additional technical personnel to continue development and
enhancement of the FindNow-SM- service. The Company used cash of $201,554 and
$237,199 in its operations during the quarters ended June 30, 1996 and September
30, 1996 respectively.

The Company has a working capital deficit of $634,078 as of September 30, 
1996 compared to a working capital deficit of $646,836 at June 30, 1996 and a 
working capital surplus of $155,815 at January 1, 1996. This change in 
working capital from the beginning of the year relates to short term 
financing from an officer of the Company in the amount of $100,000.  This 
loan is intended to provide "bridge" capital until the Company is able to 
obtain permanent equity capital. In addition, the Company also recorded a 
short term obligation of $350,000 related to computer hardware and software 
licenses obtained from ESRI in connection with the initial development of the 
Company s FindNow-SM- system. Cash payments of $150,000 have been made 
towards this obligation during the nine months ended September 30, 1996. The 
reductions of accounts payables and short term notes during the quarter ended 
September 30, 1996 have been offset by an increase in unearned revenues 
related to FindNow-SM- projects currently in process which have increased by 
approximately $167,000 since June 30, 1996. These three transactions 
increased net current liabilities by approximately $500,000 during the nine 
months ending September 30, 1996. During the same period, current assets were 
reduced by approximately $178,000 primarily due to the reduction in 
receivables related to the closure of the Navigist Denver operations, and 
collection of receivables in the normal course of the Company's operations.

During the quarter ended June 30, 1996, the Company received approximately
$208,000 in proceeds from the exercise of warrants to purchase common stock of
the Company. In addition, in the quarter ended September 30, 1996 the Company
completed a small private placement which provided $45,000 in additional cash
and reduced current liabilities of the Company by $143,000. The Company believes
that it will require additional cash to fund operations for  the remainder of
1996 in order to continue operations as currently planned. The Company is in
discussion with several parties regarding an equity financing which is intended
to raise gross proceeds sufficient to meet the Company s capital needs for
the next 12 months. The proceeds will be used to continue development of the
FindNow-SM- system, increase sales and customer support resources in the 
Internet Products Group, purchase computer hardware and software to expand 
server capacity and provide for general corporate working capital. No assurance
can be given that this financing will be completed. 

The Company is currently in discussions with a number of potential clients 
for its FindNow-SM- service. As of November 8, 1996, three customers had 
contracted with the Company to utilize the FindNow-SM- service. An additional 
four customers have selected the FindNow-SM- service and are currently 
negotiating contracts with the Company for the service. The Company believes 
that it has  a viable commercial market for its FindNow-SM- service based on 
the results achieved to date and the contacts and inquiries from prospective 
customers received since the deployment of FindNow-SM-. However, there can be 
no assurance that the Company will be able to generate sufficient cash flow 
from anticipated sales of FindNow-SM- service to cover operating costs of the 
Internet Products group or related corporate administrative costs.

In addition to its activities with respect to additional equity financing, the
Company has also taken  steps to minimize its operating cash needs including
reductions in operating expenses. In addition, voluntary salary deferrals for
certain of its officers amounted to $136,779 for the nine months ended September
30, 1996. Approximately $78,000 of these deferrals were eliminated in
conjunction the completion of a small private placement in which two officers of
the Company forgave this indebtedness in exchange for common shares and warrants
of the Company. Without additional financing, sales of FindNow-SM- service or
additional changes in the Company's operations, the Company believes that it
does not have sufficient working capital to continue operations through the end
of 1996. In the event that the Company can not obtain additional funding, the
Company believes that it can make additional changes in its operations to
further reduce the Company's cash requirements. However, the Company believes
that these changes would significantly reduce its chances of successfully
marketing its FindNow-SM- service and there can be no assurance that the Company
could continue as a going concern even with additional cost reduction measures. 
There is an explanatory paragraph in the auditors report describing
uncertainties concerning the Company's ability to continue as a going concern
included in the Company s audited financial statements dated December 31, 1995.

FORWARD LOOKING STATEMENTS AND RELATED BUSINESS RISKS AND ASSUMPTIONS
 
The Company's actual results may vary materially from the forward looking
statements made above. The Company intends that such statements be subject to
the safe harbor provision of the Securities Act. The Company's

                                          10

<PAGE>

forward-looking statements include the plans and objectives of management for 
future operations and relate to: (i) the ability of the Company to generate 
future sales of the Company's FindNow-SM- service, (ii) market acceptance of 
the FindNow-SM- service, (iii) success of the Company in forecasting and 
meeting the demand of the customers of the FindNow-SM- service, including 
maintaining technical performance of the system as new FindNow-SM- customers 
are added, (iv) ability to obtain financing to purchase equipment needed to 
provide service to additional FindNow-SM- customers, (v) ability to maintain 
pricing and there by maintain adequate profit margins on its products and 
services (vi) ability to retain qualified technical personnel (vii) ability 
of the company to maintain current pricing and sales volume in its operations 
of Cimarron and Navigist (viii) ability to control development costs of 
FindNow-SM- service with in current budgeted levels, (ix) and the ability of 
the Company to raise additional capital.

The foregoing 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 the Company's ability to control. There are also other
risks which could cause the Company's revenues or costs to vary markedly from
the forward-looking statements made above, such as the risk that the market
demand for  the FindNow-SM- may not develop as expected or if it does develop,
that the Company will be able to generate sufficient sales to fund its
operations. Accordingly, although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any such assumption
could prove to be inaccurate and therefore there can be no assurance that the
results contemplated in forward-looking statements will be realized and any
statements should not be regarded as are presentation by the Company or any
other person that the Company's objectives or plans will be achieved.

                                        11


<PAGE>


PART II.   OTHER INFORMATION


Item 1.    Legal Proceedings

           None.

Item 2.    Changes in Securities

           None.

Item 3.    Defaults Upon Senior Securities

           None.

Item 4.    Submission of Matters to a Vote of Security Holders

           None.

Item 5.    Other Information

           None

Item 6.    Exhibits and Reports on Form 8-K

     (a)   Reports on Form 8-K
    
           None

                                          12

<PAGE>

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

                                                              Sequentially 
     Exhibit                                                  Numbered     
     Number            Exhibit                                Page         
     -------           -------                                -------------
     27.1*             Financial Data Schedule

     3.1--             Certificate of Incorporation of InfoNow      
                       Corporation. (Incorporated by Reference      
                       to Exhibit 3.1 of Registration               
                       No.33-43035 on Form S-1).                    

                       By-Laws of InfoNow Corporation (Incorporated 
                       by Reference to Exhibit 3.3 of Registration  
                       No.33-43035 on Form S-1).                    
     3.3--
                       Form of Common Stock Certificate for the   
                       Registrant's common stock, $0.01 par value 
                       per share (Incorporated by Reference to    
                       Exhibit 4.1 of Registration No.33-43035    
                       on Form S-1).                              
     4.1--


     *  FILED HEREWITH

                                          13


<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.

Dated:  November 13, 1996

                                    INFONOW CORPORATION
                                    (Registrant)
                                   
                                   
                           
                                    /s/ Michael W. Johnson
                                    ----------------------------------
                                    Michael W. Johnson
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)
                                   
 
                                   
                                    /s/ Kevin D. Andrew      
                                    ----------------------------------
                                    Kevin D. Andrew
                                    Chief Financial Officer, Treasurer
                                    and Secretary
                                    (Principal Financial and Accounting
                                    Officer)


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