<PAGE>

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

                                  FORM 10-KSB

/X/    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
       ACT OF 1934 (FEE REQUIRED)

       FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997

                                      OR

/ /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

       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
      incorporation or organization)          Identification No.)

                              2540 REDHILL AVENUE
                             SANTA ANA,  CA  92705
                   (Address of principal executive offices)

                                 714-225-6000
             (Registrant's telephone number, including area code)

          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

      TITLE OF EACH CLASS:         NAME OF EACH EXCHANGE ON WHICH REGISTERED:

  Common Stock, $.001 Par Value                Nasdaq SmallCap Market


   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
filing requirements for the past 90 days.

                               Yes /X/   No / /

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulations S-K is not contained herein and will not be contained to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-KSB or any
amendment to this Form 10-KSB [ X ].

   For the Fiscal Year Ended December 31, 1997, the Registrant's revenues
were $2,037,900.

   The aggregate market value of the voting stock held by non-affiliates of
Registrant as of March 10, 1998, computed by reference to the closing sale
price of such stock on the Nasdaq SmallCap Market, was approximately
$4,063,242.

   At March 10, 1998, Registrant had 5,501,214 shares of Common Stock, $.001
par value, issued and outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant's definitive Proxy Statement for its 1998 Annual
Meeting of Stockholders are incorporated by reference into Part III of this
report.


===============================================================================
<PAGE>

WHEN USED HEREIN, THE WORDS "ANTICIPATE," "ESTIMATE," "PROJECT," "EXPECT" AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS
WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED (THE "EXCHANGE ACT"), AND ARE INTENDED TO BE COVERED BY THE
SAFE HARBORS CREATED THEREBY.  ALTHOUGH SCOOP, INC. BELIEVES THAT THE
EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT
CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT.
 SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS.
 SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD
UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY
FROM THOSE ANTICIPATED, ESTIMATED, PROJECTED OR EXPECTED.  AMONG THE KEY
FACTORS THAT MAY HAVE A DIRECT BEARING ON THE COMPANY'S OPERATING RESULTS ARE
THOSE LISTED IN THE SECTION TITLED "RISK FACTORS" IN PART I HEREOF.

                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

INTRODUCTION

   Scoop, Inc. ("Scoop" or the "Company") is engaged in the business of
obtaining information content from third party providers and delivering the
content to customers in customized hard copy format through its Scoop Media
Services business and via the Internet through its Scoop Information Services
business.

   Scoop Media Services is engaged in the business of selling custom-designed
reprints and framed wall displays of published articles from newspapers,
magazines and on-line publications.  Scoop Media Services is currently the
exclusive provider of reproduction and reprint services for INVESTOR'S
BUSINESS DAILY, American City Business Journals and several other
publications. Scoop Media Services also sells reprints of news articles on a
non-exclusive basis for approximately 24 other publications. Scoop Media
Services products generated net sales of approximately $968,900 in 1995, $1.4
million in 1996, and $2.0 million in 1997.  Currently, the Company derives
all of its sales from the Scoop Media Services division.  See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

   Scoop Information Services is a provider of personalized news services
designed to meet the needs of business professionals.   On September 15, 1997
the Company launched its first Internet service, "SCOOP! DIRECT."  Due to the
availability of several competitive products, the Company began work on an
upgraded version of SCOOP! DIRECT immediately following the September 15,
1997 product launch.  This upgrade was introduced February 2, 1998 and was
called "INTELLISEARCH."  The Company used substantially all of the proceeds
from its April 1997 initial public offering for the development of SCOOP!
DIRECT and INTELLISEARCH, capital equipment acquisitions and other operations
costs related to the services and on sales and marketing efforts associated
with the launch of the services.  Unfortunately, Scoop has not been able to
generate revenue from these services or raise additional capital to continue
to fund the marketing and distribution of these services, nor has it been
able to find a strategic investor to provide such additional capital.
Consequently, in February 1998, the Company's Board of Directors voted to
stop development of SCOOP! DIRECT and INTELLISEARCH, lay off all staff
assigned to SCOOP! DIRECT and INTELLISEARCH and seek a buyer for Scoop
Information Services.  There can be no assurance that the Company will be
successful in selling Scoop Information Services on favorable terms or at all.

THE COMPANY'S HISTORY

   The Company commenced business operations in May 1990.  The Company's
original business focused on the sale of media products promoting the re-use
or re-sale of articles published in business or financially-oriented
newspapers, trade and consumer magazines and other periodicals.  The
Company's Scoop Media Services products currently include customized media
reprints of published articles and FAMEFRAME wall displays depicting articles
or cover pages from publications.

                                       1
<PAGE>

   In late 1993, the Company formed its Scoop Information Services division
which introduced business information products.  This portion of the
Company's business originally involved the distribution of business
information electronically to customers by means of direct broadcast
facsimile and a private electronic mail, or e-mail, system.  The Company's
first such product, MEDIAALERT, was introduced in late 1993.  The Company
introduced a second product, HEALTHALERT, in mid-1994, focusing on medical
device manufacturers and the pharmaceutical industry.

   The Company soon realized that its direct broadcast facsimile and private
e-mail delivery systems inevitably led to "information overload" on the part of
its customers and, as a result, ceased providing such earlier generation
business information products and commenced the development of technology for
its information services.  The Company has spent approximately $3.5 million
since 1994 developing its on-line information services. See "Management's
Discussion and Analysis of Financial Condition and Results of Operation."

   In 1996, the Company began developing a web-accessible, personalized news
service designed to meet the needs of business professionals.  The Company
launched its first Internet service, "SCOOP! DIRECT," in September 1997 and an
upgraded version called "INTELLISEARCH" in February 1998.  Due to a lack of
capital resources, the Company's Board of Directors voted in February 1998 to
stop development and marketing of SCOOP! DIRECT and INTELLISEARCH effective
February 12, 1998 and to actively seek a buyer for Scoop Information Services.

PRODUCTS AND SERVICES

     SCOOP MEDIA SERVICES. Scoop Media Services specializes in converting
published articles from newspapers, magazines and on-line publications into
high-quality promotional tools to help businesses successfully promote their
products and services. Through relationships with approximately 24
publications throughout the United States, Scoop Media Services provides
custom-designed article reprints in hardcopy format, custom-designed article
reprints in an Internet-compatible format for Web posting and framed
promotional displays of printed articles.

     SCOOP! DIRECT AND INTELLISEARCH. Through SCOOP! DIRECT and
INTELLISEARCH, the Company offers customers access to full-text articles from
1500 news and information sources, including well-recognized publications
such as THE WASHINGTON POST, FORBES, THE ECONOMIST and AMERICAN BANKER

   Due to the unavailability of capital required for effective marketing and
distribution, Scoop has been unable to continue to market and distribute SCOOP!
DIRECT and INTELLISEARCH and instead is now actively searching for a purchaser
of the services.

SALES AND MARKETING STRATEGY

   The Scoop Media Services business has a four person outbound telemarketing
team that actively solicits sales from companies that are the subject of
favorable news and media coverage.  The Scoop Information Services business
discontinued sales and marketing efforts effective in February 1998 due to a
lack of capital.

RELATIONSHIP WITH CONTENT PROVIDERS

   The Company's Scoop Media Services division has exclusive agreements with
seven publishers to produce and market media reprint products.  One such
exclusive content provider, INVESTOR'S BUSINESS DAILY, presently accounts for
approximately 45.8% of the Company's annual revenue.  Scoop Media Services also
markets reprints from many other publications on a non-exclusive basis.  The
Company generally pays publishers a percentage royalty or a flat fee for
publication content.

COMPETITION

   Scoop Media Services competitors generally fall into two categories.  The
first of these is reprint service providers, which directly compete with Scoop
Media Services for exclusive publisher reprint contracts and for


                                      2
<PAGE>

individual reprint projects.  The two largest of these competitors are
Reprint Management Services and Reprint Services.  The second category of
competitors is in-house reprint departments of certain publishers.  These
in-house operations typically handle the majority of their publication's
reprint requests, but do not actively pursue reprint projects unrelated to
their publication.

TRADEMARKS AND PROPRIETARY RIGHTS

   The Company has relied, and intends to continue to rely, upon trademark
and copyright law and trade secret protection.  In addition, the Company
relies on confidentiality and/or license agreements with its employees,
strategic partners and others to protect its proprietary rights.  The Company
has registered its FAMEFRAME trademark in the United States.  There can be no
assurance that the steps taken, and anticipated to be taken, by the Company
to protect its intellectual property rights will be adequate or that third
parties will not infringe or misappropriate the Company's copyrights,
trademarks, tradenames, trade secrets, patents (if any) and similar
proprietary rights.  In addition, there can be no assurance that other
parties will not assert infringement claims against the Company.

GOVERNMENT REGULATION

   The Company is not currently subject to direct regulation by any
government agency, other than regulations applicable to business generally.

EMPLOYEES

   As of March 1, 1998, the Company employed a total of 14 persons, including
four in sales and marketing, six in layout and operations and four in general
and administrative functions.  None of the Company's employees is represented
by a labor union or is subject to a collective bargaining agreement.  The
Company has never experienced a work stoppage and believes that its relations
with its employees are good.

RISK FACTORS

   In addition to the matters set forth in the foregoing discussion of the
Company's business, the operations and financial results of the Company are
subject to the risks described below.

     ABILITY TO CONTINUE AS A GOING CONCERN. The Company reported net losses
of approximately $602,700, $2,168,900, and $5,048,500 for 1995, 1996 and
1997, respectively.  In addition, at December 31, 1995, 1996, and 1997 the
Company had an accumulated deficit of approximately $928,900, $3,374,100, and
$8,480,000, respectively, and stockholder equity (deficit) of approximately
($914,400), ($2,453,500), and $946,600, respectively.  In light of the
Company's financial condition, the Company's ability to continue as a going
concern is dependent upon future events, including the profitability of its
Scoop Media Services business and its ability to secure additional sources of
financing.  The Company's independent auditor has stated in its opinion that
these factors raise substantial doubt about the Company's ability to continue
as a going concern.

     NEED FOR FUTURE FINANCING. The Company estimates that its current
financial resources will be sufficient to satisfy the Company's anticipated
working capital and capital expenditure requirements for the first four
months of 1998.  The Company's operating plan anticipates that at the end of
April 1998, the Company will likely require substantial additional capital.
Thereafter, the Company may be required from time to time to seek additional
financing to fund operating losses and finance its business strategy,
including product development, expansion of sales and marketing and capital
expenditures.  The Company may attempt to meet its capital requirements by
incurring indebtedness, issuing debt or selling assets, including its Scoop
Information Services division. There can be no assurance, however, that funds
will be available on terms favorable to the Company, that such funds will be
available when needed, or that the Company will have adequate cash flows from
operations for such requirements. Incurrence of debt or issuance of equity
securities could have an adverse effect on the price


                                      3
<PAGE>

of the Common Stock, could restrict the Company's ability to pay dividends
and could result in further dilution to existing investors.

     COMPETITION. The reprint business in which the Company's Scoop Media
Services unit competes is highly competitive.  The Company competes for
exclusive reprint contracts and for individual reprint projects with other
reprint service providers, including Reprint Management Services and Reprint
Services.  In addition, the Company competes for reprint projects with
in-house reprint departments of certain publishers.  There can be no
assurance that the Company will be able to compete successfully with its
existing and future competitors.

     DEPENDENCE UPON INVESTOR'S BUSINESS DAILY. The Company presently derives
paproximately 45.8% of its annual net sales from the sale of Scoop Media
Services products and services through its relationship with INVESTOR'S
BUSINESS DAILY.  In March 1998, the Company entered into a new one year
distribution agreement with INVESTOR'S BUSINESS DAILY.  If the agreement
between the Company and INVESTOR'S BUSINESS DAILY is terminated or the sales
generated through such relationship otherwise materially decrease, there is
no assurance that the Company will be able to replace lost revenue from Scoop
Media Services, which would have a material adverse effect upon the Company's
business, results of operations and financial condition.

     MAINTENANCE CRITERIA FOR NASDAQ LISTING OF COMMON STOCK; RISKS OF
LOW-PRICED SECURITIES. The Common Stock has been trading on The Nasdaq
SmallCap Market.  To maintain inclusion on The Nasdaq SmallCap Market, the
Company's Common Stock must continue to be registered under Section 12(g) of
the Exchange Act, and the Company must continue to have (i) net tangible
assets of at least $2,000,000 or net income of at least $500,000 in two of
the three previous years or market capitalization of at least $35,000,000,
(ii) a public float of at least 500,000 shares with a market value of at
least $1,000,000, (iii) at least 300 stockholders, (iv) a minimum bid price
of $1.00 per share and (v) at least two market makers. Unless the price of
the Company's Common Stock and the Company's financial condition improve from
their current state, the Company is at risk of being delisted from the Nasdaq
SmallCap Market.  If the Company fails to maintain Nasdaq SmallCap Market
listing, the market value of the Common Stock would likely decline.

   If the Common Stock ceases to be included on the Nasdaq SmallCap Market,
the Common Stock could become subject to rules adopted by the Securities and
Exchange Commission (the "Commission") regulating broker-dealer practices in
connection with transactions in "penny stocks."  Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities
registered on certain national securities exchanges or quoted on Nasdaq,
provided that current price and volume information with respect to
transactions in such securities is provided).  The penny stock rules require
a broker-dealer, prior to engaging in a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Commission which provides information
about penny stocks and the nature and level of risks in the penny stock
market.  The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the
customer's account.  The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or
in a writing prior to effecting the transaction and must be given to the
customer in writing before or with the customer's confirmation. In addition,
the penny stock rules require that prior to a transaction in a penny stock
not otherwise exempt from these rules, the broker-dealer must make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to
these penny stock rules.


   POSSIBLE ADVERSE EFFECT OF FUTURE SALES OF SECURITIES ON MARKET PRICE. The
availability for public sale of additional shares of Common Stock could have
a material adverse effect on the price of and any market for the Common
Stock.  As of March 10, 1998, there were 5,501,214 shares of Common Stock
outstanding, excluding 2,077,054 shares underlying warrants and options.  In
addition, the Company may issue additional Common Stock or preferred stock or
other securities convertible into Common Stock in connection with future
financing transactions or acquisitions, which issuance could have a material
adverse effect on the market price of the Common Stock.

   Of the 5,501,214 shares outstanding as of March 10, 1998, 2,716,148 shares
were registered under the Securities Act in connection with the Company's
initial public offering and are therefore freely tradeable without further
registration following the expiration or termination of any "lock-up"
agreements unless owned by an "affiliate" of the Company.  The Company also
has granted certain registration rights with respect to the Common Stock
underlying all of the Company's outstanding warrants and intends to register
the resale of the Common Stock underlying the options granted under the
Company's Stock Incentive Plan.  Approximately 2.3 million outstanding shares
of Common Stock are "restricted securities" as defined in Rule 144 under the
Securities Act and may not be sold unless registered under the Securities Act
or sold pursuant to an exemption therefrom.  Substantially all of the shares
of Common Stock which are "restricted securities" have satisfied the holding
period under Rule 144.

   Approximately 1.1 million of the registered shares of Common Stock and
approximately 2.1 million restricted shares of Common Stock are subject to
lock-up agreements which prohibit the holder from transfering the shares
without the prior written consent of Shamus Group, Inc., the managing
underwriter for the Company's initial public offering.  These lock-up
agreements expire on April 8, 1998.  Accordingly, on April 9, 1998,
approximately 3.2 million shares will be released from the lock-up
restrictions and available for trading.  Sales of these shares could adversely
affect prevailing market prices for the Common Stock.

ITEM 2.  DESCRIPTION OF PROPERTIES

   The Company presently leases approximately 6,400 square feet of office
space in Santa Ana, California.  The lease rate for the Company's Santa Ana
office space is currently $7,607 per month with certain increases over time.
The lease expires in September 2000.


                                      4
<PAGE>

   In August 1997, the Company entered into a non-cancelable lease of office
space in Irvine, California.  The initial lease rate for the Irvine facility
was $24,572 per month, and the initial termination date of the lease was
September 2000.  The Company vacated the Irvine facility in February 1998 and
is currently negotiating a termination of the lease with its landlord.

ITEM 3.  LEGAL PROCEEDINGS

   On February 6, 1998, Marc Levin and Arnold H. Simon, two of the Company's
stockholders, filed an action against the Company, as well as The Boston
Group, L.P. ("Boston Group") and Shamus Group, Inc., ("Shamus").  Boston
Group acted as the dealer-manager in the Company's private equity offering in
May 1996, and Shamus served as the managing underwriter in the Company's
initial public offering in April 1997.  The complaint alleges, among other
things, that the Company "intentionally interfered" with the plaintiffs'
economic advantage by "conspiring" with Boston Group to arrange for the
withdrawal of an alleged consent given to plaintiffs by Shamus concurrently
with the Company's initial public offering in which plaintiffs were released
from lock-up provisions contained in the private offering documents.  The
complaint seeks compensatory damages and exemplary damages against the
Company, Boston Group and Shamus, as well as declarative and injunctive
relief against Shamus.  The Company intends to vigorously defend itself
against these charges.

   On February 26, 1998, The Irvine Company filed a complaint against the
Company alleging, among other things, that the Company breached the lease
agreement between the Company and The Irvine Company dated August 6, 1997
(the "Irvine Lease").  The complaint seeks compensatory damages against the
Company.  The Company is currently negotiating a settlement with The Irvine
Company with respect to this matter.

   Except as described above, there are no material legal proceedings pending
or, to the knowledge of management, threatened against Scoop.

ITEM 4.  SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

   None


                                      5
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

   The common stock of the Company commenced trading on April 9, 1997 on the
Nasdaq SmallCap Market under the symbol "SCPI".  The following table sets forth
for the fiscal periods indicated the high and low closing prices for the Common
Stock as reported by Nasdaq.

<TABLE>
<CAPTION>
                                                                  1997
                                                            ------------------
                                                            HIGH          LOW
                                                            -----        -----
      <S>                                                   <C>          <C>
      Quarter Two (Commencing April 9, 1997)                  $7         $4 1/4
      Quarter Three                                            5 1/6      2 21/32
      Quarter Four                                             5 1/8      0 3/4

</TABLE>
   As of March 25, 1998, there were approximately 270 holders of record of the
Company's Common Stock.  The Company does not intend to declare any cash
dividends in the foreseeable future.

ITEM 6.  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 YEARS ENDED DECEMBER 31, 1996 AND 1997
SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND
RELATED NOTES THERETO INCLUDED ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

   Since the Company began operations in May 1990, it has provided publishing
services while also developing its information service business.  The
Company's Scoop Media Services unit sells custom-designed reprints and framed
wall displays of published articles from newspapers, magazines and on-line
publications.  Prior to February 1998, the Company's Scoop Information
Services division was developing a web-accessible personalized news service
design to meet the needs of business professionals.

   The Scoop Media Services business information product line has generated
substantially all of the Company's net sales to date.  In 1997, the Company
focused its sales efforts on the growth of the reprint business. In line with
this focus, the Company has entered into exclusive contracts with seven
publishers, including INVESTORS BUSINESS DAILY and American City Business
Journals, to produce and market reprint products from such publications.  The
Company intends to attempt to further increase its sales of media reprints
through the addition of new contractual relationships.

   The Company initiated development of its Scoop Information Services
division technology in early 1994.  These efforts were principally financed
through contributions by the Scoop Media Services business in 1994 and 1995.
In the first half of 1996, the Company completed various rounds of private
funding. The private placements completed in April through July 1996 netted
the Company approximately $1.4 million and enabled the Company to accelerate
its pace of investment in the Scoop Information Services business.  Since
1994, the Company has invested approximately $3.5 million in the development
of the its two on-line news services, SCOOP! DIRECT and INTELLISEARCH
including expenditures in development expenses, capital equipment, and
content acquisition.

   Due to a lack of capital resources, the Company's Board of Directors voted
to stop development and marketing of SCOOP! DIRECT and INTELLISEARCH and the
related technology in February 1998 and to actively seek a buyer for Scoop
Information Services.



                                      6
<PAGE>

RESULTS OF OPERATIONS

   The following table sets forth for the periods indicated, certain financial
data as a percentage of total net sales for the fiscal years ended December 31,
1996 and 1997.

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                            -----------------------
                                                              1996          1997
                                                             -------        ------
<S>                                                          <C>             <C>
Net sales                                                     100.0%         100.0%
Cost of sales                                                  59.7%          53.0%
                                                             -------        ------
  Gross profit                                                 40.3%          47.0%
Operating expenses:
  Research and development                                     43.1%         125.1%
  Sales and marketing                                          28.4%          49.7%
  General and administrative                                  122.2%         104.9%
  Other operating expenses                                      0.0%          19.0%
                                                             -------        ------
    Total operating expenses                                   193.7%         298.8%
                                                             -------        ------
Operating loss                                               (153.4)%       (251.8)%
Interest expense                                                1.9%          (4.1)%
                                                             -------        ------
Loss before provision for income taxes                       (155.3)%       (247.7)%
Provision for income taxes                                      0.1%           0.1%
                                                             -------        ------
Net loss                                                     (155.4)%       (247.8)%

</TABLE>

YEAR ENDED DECEMBER 31, 1997, AS COMPARED TO THE YEAR ENDED DECEMBER 31, 1996

     NET SALES.  Net sales increased 46.0% for the year ended December 31,
1997 to $2,037,900 from $1,395,900 in the year ended December 31, 1996. The
Company continued sales efforts on the growth of the Scoop Media Services
product line while introducing the SCOOP! DIRECT service in September 1997.
Net sales from Scoop Media Services accounted for effectively all of the
Company's net sales for 1997.

   Net sales from the Company's new product line, SCOOP! DIRECT, totaled
$3,000 for the year ended December 31, 1997. No net sales are expected in
1998 from Scoop Information Services as the Company decided to lay off sales
and engineering staff and stop developing its Scoop Information Services in
February 1998.  The Company has announced plans to seek partners or a buyer
for Scoop Information Services.

   Net sales of the Scoop Media Services product line increased 45.8% for the
year ended December 31, 1997 to $2,034,900 from $1,395,900 in the year ended
December 31, 1996. The growth in net sales was principally driven by the
Company's focused efforts to expand sales of reprints.  Net sales of reprints
increased 68.9% for the year ended December 31, 1997 to $1,575,400 from
$932,600 in the year ended December 31, 1996.  This growth in reprint sales
resulted primarily from the increased sales generated through the Company's
relationship with INVESTOR'S BUSINESS DAILY and expansion of reprint sales
from non-exclusive publication relationships.  The Company has been the
exclusive provider of content reprints for INVESTOR'S BUSINESS DAILY since
August 1995 and derived approximately 45.8% of total net sales for the year
ended December 31, 1997 from the sale of reprints of INVESTOR'S BUSINESS
DAILY content.

     COST OF SALES.  Cost of sales increased 29.7% for the year ended
December 31, 1997 to $1,080,800 from $833,200 in the year ended December 31,
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 increased $394,400 for the year ended December 31,
1997 compared to the same period of 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 Scoop Media Services'
product line.

                                     7

<PAGE>

   Costs for the operation of Scoop Information Services were included in
research and development expense for the years ended December 31, 1997 and
1996.

     RESEARCH AND DEVELOPMENT EXPENSES.  Research and development ("R&D")
expenses increased 323.5% for the year ended December 31, 1997 to $2,548,500
from $601,700 in the year ended December 31, 1996.  The increase in R&D
expenses was primarily driven by additional development team staffing,
technology license fees, and the creation of the Scoop Information Services
operations center.

   R&D expenses in the 1997 and 1996 periods also include the cost of content
acquisition from UMI Company ("UMI"), the principal content supplier of Scoop
Information Services, and a prior content supplier for the purpose of
developing Scoop Information Services technology.  Expenses for content
acquisition in the year ended December 31, 1997 were $164,000 versus
$269,800 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 in 1996 and 1997.

   The license fees and costs associated with software licensed from third
parties for the development of the Company's information service have all
been expensed.

   Also driving the increase in R&D expenses was the creation of the Scoop
Information Services operations data center.  Operations data center expenses
include the cost of networking, telecommunications, computer equipment, and
computer operators.

   In February 1998, the Company decided to significantly reduce R&D expenses
as a result of the decision to discontinue the marketing and development of
Scoop Information Services.

     SALES AND MARKETING EXPENSES.  Sales and marketing expenses increased
155.5% for the year ended December 31, 1997 to $1,013,000 from $396,500 in
the year ended December 31, 1996.  The increase was driven by increased sales
and marketing activity related to the launch of SCOOP! DIRECT.  Also
contributing to the sales and marketing cost increase in 1997 was the
addition of a direct corporate sales force focused on SCOOP! DIRECT.

   Scoop Media Services sales and marketing expenses increased with the
higher sales volumes; sales commissions and marketing expenses were higher as
sales increased and the Company introduced new promotion materials.

   The Company's February 1998 decision to discontinue the Scoop Information
Services business resulted in the elimination of sales and marketing
positions directly related to that business.

     GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative ("G&A")
expenses increased 25.0% for the year ended December 31, 1997 to $2,137,700
from $1,710,300 in the year ended December 31, 1996.  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.

   The Company has decided to significantly reduce overall expenses in
conjunction with Company's decision to discontinue the Scoop Information
Services business.  The Company significantly decreased its G&A support staff
until future financing can be achieved.

     OTHER OPERATING EXPENSES.  Other operating expenses totaling $338,800
were reported in the year ended December 31, 1997.  The expense reflects the
estimated settlement costs of the Company's vacated facility.  Also included
is the net book value of the leasehold improvements at the Company's vacated
facility.  No comparable expenses were reported in 1996.

     INTEREST INCOME.  Interest income, net of expense, for the year ended
December 31, 1997 was $82,400 compared to $21,500 of net expense in the year
ended December 31, 1996.  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.

                                       8
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

   The Company has financed its operations to date primarily from the $5.9
million in proceeds from its initial public offering in April 1997 and the
proceeds of earlier private sales of Common Stock totaling approximately $2.5
million.  At December 31, 1997, the Company had approximately $1.5 million in
cash and cash equivalents.  Subsequent to December 31, 1997, the Company
continued to experience operating losses and, as a result, the Company had
approximately $340,000 in cash and cash equivalents at March 25, 1998.

   In 1997 and 1996, the Company used $4.1 million and $1.7 million,
respectively, in operating cash flows primarily to fund the creation of
SCOOP! DIRECT and INTELLISEARCH and additional expenses including expansion
of the management team in 1996.  The Company is committed under its contract
with UMI to pay minimum royalty payments of approximately $570,000 in 1998
and $652,500 in 1999.  In addition, the Company is committed under its
contract with INVESTOR'S BUSINESS DAILY to pay minimum royalty payments of
approximately $400,000 in 1998.

   At December 31, 1997, the Company had obligations of approximately
$116,500 under equipment leases and debt instruments under which it financed
the capital equipment purchases.  The lease on the Company's office space in
Santa Ana, California is at a rate of $7,607 per month, subject to certain
increases, and expires in September 2000.  The Company vacated its Irvine,
California facility in December 1997 and is currently negotiating a
termination of the lease agreement with respect to that facility.

   In February 1998, the Company stopped development and marketing of its
Scoop Information Services unit.  As a result, the Company's capital
requirements for 1998 are expected to decrease from those in 1997.

   The Company's ability to continue as a going concern is dependent upon
future events, including its ability to secure additional sources of
financing or find a strategic investment partner.  These factors raise
substantial doubt about its ability to continue as a going concern.  The
Company believes that its existing cash and cash equivalents will be adequate
to meet its capital needs for the first four months of 1998.  The Company's
current operating plan shows that at the end of April 1998, the Company will
require substantial additional capital.  The Company has not been successful
in obtaining additional financing to date and there can be no assurance that
it will be able to obtain such additional financing at all or that, if it
does, that such additional financing will be obtainable on terms favorable to
the Company.

YEAR 2000

   The Company has conducted a review of its computer systems to identify the
systems that could be affected by the "Year 2000" issue and is developing an
implementation plan to resolve the issue.  The Year 2000 problem is a result
of computer programs being written using two digits (rather than four) to
define the applicable year.  Any of the Company's programs that have
time-sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000.  This could result in major system failure or
miscalculations.  The Company presently believes that, with modifications to
existing software and converting to new software, the Year 2000 problem will
not pose significant operational problems for the Company's computer systems
as so modified and converted.

RECENTLY ISSUED ACCOUNTING STANDARDS

   In June 1997, Financial Accounting Standards Board ("FASB") issued 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 is effective for fiscal years beginning after December
15, 1997 and will result in an additional statement that reports comprehensive
income.


                                      9

<PAGE>

   In June 1997, FASB also issued SFAS 131, "Disclosures about Segments of an
Enterprise and Related Information."  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 periods 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.

ITEM 7.  FINANCIAL STATEMENTS

   The financial statements of the Company and its subsidiaries required to be
included in this Item 7 are set forth in Item 13 of this report.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

   None

                                   PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

   Incorporated by reference to Registrant's definitive Proxy Statement for its
annual meeting of stockholders, which will be filed with the Securities and
Exchange Commission within 120 days from December 31, 1997.

ITEM 10.  EXECUTIVE COMPENSATION

   Incorporated by reference to Registrant's definitive Proxy Statement for its
annual meeting of stockholders, which will be filed with the Securities and
Exchange Commission within 120 days from December 31, 1997.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   Incorporated by reference to Registrant's definitive Proxy Statement for its
annual meeting of stockholders, which will be filed with the Securities and
Exchange Commission within 120 days from December 31, 1997.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

   Incorporated by reference to Registrant's definitive Proxy Statement for its
annual meeting of stockholders, which will be filed with the Securities and
Exchange Commission within 120 days from December 31, 1997.

                                    PART IV


ITEM 13.  EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULE, AND REPORTS ON
          FORM 8-K

1.   Financial Statements of the Company

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Report of Independent Auditors............................................   F-1
Balance Sheet as of December 31, 1997.....................................   F-2
Statements of Operations for the years ended
      December 31, 1997 and 1996..........................................   F-3
Statements of Stockholders' Equity (Deficit)

</TABLE>

                                   10
<PAGE>

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                   <C>
      for the years ended December 31, 1997 and 1996.................        F-4
Consolidated Statements of Cash Flows for the years
      ended December 31, 1997 and 1996...............................  F-5 - F-6
Notes to Consolidated Financial Statements........................... F-7 - F-16

</TABLE>

                                    11

<PAGE>

2. (a)    The following documents are filed as part of this report:

<TABLE>
               <S>  <C>
               3.1  Certificate of Incorporation of Registrant*
               3.2  By-laws of Registrant*
               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 issued to Bell & Howell*
               4.5  Form of Subscription Supplement and Registration Rights
                    Agreement*
               4.6  Form of Lock-Up Agreement*
              10.1  1996 Stock Incentive Plan of Scoop, Inc. dated April
                    23, 1996*
              10.2  Promissory Note dated February 19, 1997 payable to City
                    National Bank C/F Gabriel Kaplan, Trustee, Rotunda
                    Productions, Inc. MPPP ("Kaplan")*
              10.3  Common Stock Purchase Warrant dated February 19, 1997
                    granted to Kaplan*
              10.4  Contract between the Company and INVESTOR'S BUSINESS
                    DAILY*
              10.5  Lease Agreement between Scoop, Inc. and Village Plaza
                    Associates, LLC dated September 9, 1996*
              10.6  Agreement between the Company and UMI Company dated
                    October 17, 1996*
              10.7  Form of Indemnification Agreement*
              10.8  Consulting Agreement with Michael Baum*
              10.9  Settlement Agreement and General Release dated February
                    24, 1997 between the Company and Stanley Berk, et al*
              10.10 Common Stock Purchase Warrant dated February 24, 1997
                    granted to Stephen P. Gromson*
              10.11 Option Agreement between Karl Karlsson and Stanley Berk
                    dated February 24, 1997*
              10.12 Lease Agreement between Scoop, Inc. and The Irvine
                    Company dated August 6, 1997**
              10.13 Distribution Agreement between the Company and
                    INVESTOR'S BUSINESS DAILY dated as of February 1, 1998
              10.14 Stock Option Agreement between the Company and Rand
                    Bleimeister
              10.15 Stock Option Agreement between the Company and Michael
                    Baum
              11.1  Statement re computation of per share earnings
              27.1  Financial Data Schedule
</TABLE>
               *    Incorporated by reference to the Registrant's
Registration Statement on Form SB-2 (No. 333-15129) declared effective on
April 9, 1997.

                                        12

<PAGE>
              **    Incorporated by reference to the Registrant's Form 10-
QSB for the quarter ended September 30, 1997.

b)   Report on Form 8-K

     None

                                      13
<PAGE>
                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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: March 30, 1998             Scoop, Inc.



                                  By: /s/ Rand Bleimeister
                                     __________________________________________
                                     Rand Bleimeister, Chief Executive Officer,
                                     President and Chairman of the Board


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

SIGNATURE                      TITLE                                        DATE


<S>                            <C>                                          <C>
/s/ Rand Bleimeister
__________________________     Chief Executive Officer, President,           March 30, 1998
Rand Bleimeister               Chief Financial Officer and Chairman
                               of the Board

/s/ Kristy Allan
__________________________     Controller
Kristy Allan                   (Principal Accounting Officer)                 March 31, 1998


/s/Michael Baum
__________________________      Director                                      March 31, 1998
Michael Baum


/s/ Karl Magnus-Karlsson
__________________________      Director                                      March 31, 1998
Karl Magnus-Karlsson

</TABLE>


<PAGE>



                             INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
   Scoop, Inc.:

     We have audited the accompanying balance sheet of Scoop, Inc. (the Company)
as of December 31, 1997 and the related statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1997 and 1996.  These
financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Scoop, Inc. as of December
31, 1997 and the results of its operations and its cash flows for the years
ended December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.

     The accompanying financial statements have been prepared assuming Scoop,
Inc. will continue as a going concern.  As more fully described in Notes 1 and
11 to the financial statements, the Company has incurred recurring operating
losses, has an accumulated deficit of $8,480,400 and has limited working capital
at December 31, 1997.  The Company's ability to continue as a going concern is
dependent upon future events, including its ability to secure sufficient
additional sources of financing to repay its obligations as they become due and
generate revenues sufficient to cover its cost structure.  These factors raise
substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 1.  The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.



/s/ DELOITTE & TOUCHE LLP
Costa Mesa, California
March 5, 1998

                                         F-1
<PAGE>


                                     SCOOP, INC.
                                    BALANCE SHEET
                                  DECEMBER 31, 1997
<TABLE>
<CAPTION>

                                        ASSETS
                                                                       1997
CURRENT ASSETS:
<S>                                                             <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . .     $    1,512,600
Accounts receivable, net of allowance for
   doubtful accounts of $37,500 . . . . . . . . . . . . . .            141,100
Prepaid expenses  . . . . . . . . . . . . . . . . . . . . .             47,000
Income tax refund receivable. . . . . . . . . . . . . . . .

                                                                --------------
   Total current assets . . . . . . . . . . . . . . . . . .          1,700,700

EQUIPMENT, net (Note 3) . . . . . . . . . . . . . . . . . .            792,100
                                                                --------------
      . . . . . . . . . . . . . . . . . . . . . . . . . . .     $    2,492,800
                                                                --------------
                                                                --------------

                    LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:

Accounts payable. . . . . . . . . . . . . . . . . . . . . .     $      567,800
Accrued payroll (Note 10) . . . . . . . . . . . . . . . . .            165,900
Accrued royalty (Note 10) . . . . . . . . . . . . . . . . .            406,200
Other accrued liabilities (Note 9). . . . . . . . . . . . .            289,800
Current portion of capital lease obligations (Note 9) . . .             73,500
                                                                --------------
   Total current liabilities. . . . . . . . . . . . . . . .          1,503,200

CAPITAL LEASE OBLIGATIONS, net of current
   portion (Note 9). .. . . . . . . . . . . . . . . . . . .             43,000

COMMITMENTS AND CONTINGENCIES (Note 9). . . . . . . . . . .

STOCKHOLDERS' EQUITY:
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 (Notes 2 and 5). . . . . . . . . . . . . . .              5,400
Additional paid-in capital. . . . . . . . . . . . . . . . .          9,146,000
Accumulated deficit . . . . . . . . . . . . . . . . . . . .         (8,480,400)
Deferred compensation . . . . . . . . . . . . . . . . . . .            275,600
                                                                --------------
   Total stockholders' equity . . . . . . . . . . . . . . .            946,600
                                                                --------------
                                                                $    2,492,800
                                                                --------------
                                                                --------------
</TABLE>
                    See accompanying notes to financial statements

                                         F-2
<PAGE>

                                     SCOOP, INC.
                               STATEMENTS OF OPERATIONS
                        YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                        1997           1996
<S>                                                 <C>            <C>
Net sales. . . . . . . . . . . . . . . . . . . . .  $ 2,037,900    $ 1,395,900
Cost of sales. . . . . . . . . . . . . . . . . . .    1,080,800        833,200
                                                    ------------   ------------
     Gross profit. . . . . . . . . . . . . . . . .      957,100        562,700

Operating expenses:
   Research and development (Note 11). . . . . . .    2,548,500        601,700
   Selling and marketing . . . . . . . . . . . . .    1,013,000        396,500
   General and administrative. . . . . . . . . . .    2,137,700      1,710,300
   Other expense . . . . . . . . . . . . . . . . .      388,800              0
                                                    ------------   ------------
                                                      6,088,000      2,708,500

Operating loss . . . . . . . . . . . . . . . . . .   (5,130,900)    (2,145,800)
Interest income (expense), net (Note 4). . . . . .       82,400        (21,500)
                                                    ------------   ------------
Loss before provision for income taxes . . . . . .   (5,048,500)    (2,167,300)
Provision for income taxes (Note 8). . . . . . . .       (1,600)        (1,600)
                                                    ------------   ------------
Net loss.. . . . . . . . . . . . . . . . . . . . .  $(5,050,100)   $(2,168,900)
                                                    ------------   ------------
                                                    ------------   ------------
Basic and diluted loss per share
   (Note 1). . . . . . . . . . . . . . . . . . . .  $     (1.01)   $     (0.68)
                                                    ------------   ------------
                                                    ------------   ------------
</TABLE>



                    See accompanying notes to financial statements

                                         F-3
<PAGE>

                                     SCOOP, INC.
                    STATEMENTS OF STOCKHOLDERS'  (DEFICIT) EQUITY
                    FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996


<TABLE>
<CAPTION>
                                                                       Additional
                                                Common Stock            Paid-in      Accumulated       Deferred
                                           Shares          Amount       Capital        Deficit       Compensation     Total
                                           ------          ------       -------        -------       ------------     -----
<S>                                      <C>              <C>          <C>          <C>              <C>           <C>
BALANCE, January 1, 1996                 2,516,635        $ 2,500      $  12,000    $  (928,900)                   $ (914,400)
Issuance of shares in repayment of
   debt (Note 10)                           71,760            100        154,900                                      155,000
Net proceeds form issuance of
   common stock (Note 6)                   113,248            100        224,900                                      225,000
Proceeds from issuance of common
   stock (Note 10)                          20,000                        40,000                                       40,000
Stock bonus (Note 6)                        39,663                        81,800                                       81,800
Ascribed value of transferred shares
   (Note 6)                                                               50,800                                       50,800
Issuance of shares (Note 10)                64,527            100        161,200       (161,300)                            0
Increase in redemption value of
 redeemable common stock (Note 5)                                                      (115,000)                     (115,000)
Net loss                                                                             (2,168,900)                   (2,168,900)
Deferred compensation
   (Notes 6 and 7)                                                                                     192,200        192,200
                                        -------------------------------------------------------------------------------------
BALANCE, December 31, 1996               2,825,833          2,800        725,600     (3,374,100)       192,200     (2,453,500)


Increase in redemption value of
   redeemable common stock (Note 5)                                                     (56,200)                      (56,200)
Termination of redemption rights
   associated with certain shares
   of common stock (Notes 2 and 5)         926,664            900      2,357,800                                    2,358,700
Issuance of common stock in initial
   public offering, (Note 2)             1,657,050          1,700      5,842,700                                    5,844,400
Stock options and warrants exercised        91,667                       219,900                                      219,900
Deferred compensation
   (Notes  4, 6 and 7)                                                                                  83,400         83,400
Net loss                                                                             (5,050,100)                   (5,050,100)
                                        -------------------------------------------------------------------------------------
BALANCE, December 31, 1997               5,501,214       $  5,400     $9,146,000    $(8,480,400)      $275,600     $  946,600
                                        -------------------------------------------------------------------------------------
                                        -------------------------------------------------------------------------------------

</TABLE>

                   See accompanying notes to financial statements

                                         F-4
<PAGE>

                                     SCOOP, INC.
                               STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                       1997            1996
                                                       ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                <C>             <C>
Net loss. . . . . . . . . . . . . . . .            $(5,050,100)    $(2,168,900)
Adjustments to reconcile net loss to net cash
  Used in operating activities:
  Depreciation and amortization . . . . . . . .        195,000         105,400
  Stock bonus (Note 6). . . . . . . . . . . . .                         81,800
  Ascribed value of transferred shares (Note 6)                         50,800
  Deferred compensation . . . . . . . . . . . .         83,400         192,200
  Changes in:
    Accounts receivable . . . . . . . . . . . .        (25,200)        (93,800)
    Publishing materials. . . . . . . . . . . .                         14,600
    Income tax refund receivable. . . . . . . .         15,400           1,800
    Other assets. . . . . . . . . . . . . . . .          8,200          (8,200)
    Prepaid expenses. . . . . . . . . . . . . .        140,500        (187,500)
    Accounts payable. . . . . . . . . . . . . .        152,800         187,000
    Accrued payroll . . . . . . . . . . . . . .         32,900          36,000
    Accrued royalty . . . . . . . . . . . . . .        122,000         134,200
    Other accrued liabilities . . . . . . . . .        257,500          (1,600)
                                                   -----------     -----------
       Net cash used in operating activities. .     (4,067,600)     (1,656,200)


CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment . . . . . . . . . . . .      (611,600)       (166,700)
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. . . .      (122,300)        (56,300)
   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). . . . . .      300,000         400,000
   Repayment of bridge notes (Note 4). . . . . .      (300,000)       (400,000)
   Repayment of covenant-not-to-compete
      obligation . . . . . . . . . . . . . . . . .     (12,600)        (16,700)
   Proceeds from issuance of common stock
      Note 2). . . . . . . . . . . . . . . . . .     6,064,300         265,000
   Proceeds from issuance of redeemable
      common stock. . . . . . . . . . . . . . . .                    2,187,500
                                                   -----------     -----------
       Net cash provided by financing activities.    5,929,400       2,084,000
                                                   -----------     -----------
INCREASE IN CASH AND CASH EQUIVALENTS. . . . . .     1,250,200         261,100

CASH AND CASH EQUIVALENTS:
   Beginning of period. . . . . . . . . . . . . .      262,400           1,300
                                                   -----------     -----------
   End of period . . . . . . . . . . . . . . . . . $ 1,512,600     $   262,400
                                                   -----------     -----------
                                                   -----------     -----------

</TABLE>

                    See accompanying notes to financial statements

                                         F-5
<PAGE>

                                     SCOOP, INC.
                         STATEMENTS OF CASH FLOWS (CONTINUED)
                    FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>

                                                      1997                 1996
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
<S>                                                 <C>              <C>
Cash paid during the period for:
   Interest . . . . . . . . . . . . . . . . . .     $   27,700       $  32,200
                                                    ----------       ---------
                                                    ----------       ---------
   Income taxes . . . . . . . . . . . . . . . .     $    1,600       $   3,200
                                                    ----------       ---------
                                                    ----------       ---------

SCHEDULE OF NONCASH INVESTING AND FINANCING
TRANSACTIONS
   Contractual obligations incurred for the
      acquisition of equipment. . . . . . . . .     $   61,100       $ 125,000
                                                    ----------       ---------
                                                    ----------       ---------
   Release of contractual obligation under
      noncompetition agreement. . . . . . . . .     $   68,000
                                                    ----------
                                                    ----------
   Increase in redemption value of redeemable
      shares of common stock (Note 5) . . . . .     $   56,200       $ 115,000
                                                    ----------       ---------
                                                    ----------       ---------
   Common stock issued in repayment of  debt. .                      $ 155,000
                                                                     ---------
                                                                     ---------
   Termination of  redemption rights associated
      with certain shares of Common stock
      (Notes 2 and 5) . . . . . . . . . . . . .     $2,357,800
                                                    ----------
                                                    ----------

</TABLE>

                    See accompanying notes to financial statements
                                         F-6
<PAGE>

                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          BASIS OF PRESENTATION--Scoop, Inc. (the Company), was incorporated in
     California in May 1990.  On November 5, 1993, the Company formed a
     wholly-owned subsidiary, Newsmakers Information Services, Inc. (Newsmakers
     or the subsidiary).  In November 1996, the Company merged the subsidiary
     into itself.  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 resulting
     increase in the number of common stock authorized to 20,000,000 shares and
     the authorization of 5,000,000 shares of preferred stock.

          DESCRIPTION OF BUSINESS--The Company has been principally engaged in
     developing SCOOP!, an internet delivered business information service, and
     marketing printed media reproductions.  In February 1998, the Company
     announced its plan to discontinue the marketing and further development of
     Scoop!. During the years ended December 31, 1997 and 1996, the Company had
     incurred approximately $2,548,000 and $601,700 respectively, for the
     research and development of Scoop! and as discussed in Notes 7 and 9 has
     entered into long-term contractual agreements enabling the Company to
     access certain proprietary database information utilized in the Scoop!
     business. The Company plans to continue its printed media production
     business which for the years ended December 31, 1997 and 1996 provided
     substantially all of the Company's revenues.

          GOING CONCERN AND MANAGEMENT'S PLANS--Through December 31, 1997, the
     Company has incurred significant operating losses, has an accumulated
     deficit of $8,480,400 and has limited working capital.  The Company's
     ability to continue as a going concern is dependent upon future events,
     including 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 December 31, 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 period, the Company will require
     substantial additional capital.  The Company is in the process of seeking
     additional capital and assessing their ability to sell assets as a means of
     raising funds.  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.

          USE OF ESTIMATES--The preparation of financial statements in
     conformity with generally accepted accounting principles requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting years.  Actual
     results could differ from those estimates.

          CONCENTRATION OF CONTENT PROVIDERS--The Company's content providers
     for its media services include approximately four content providers for
     which the Company acts on an exclusive outsourcing agency basis, and
     approximately 24 additional content providers for which the Company acts as
     outsourcing agent on a nonexclusive basis and a smaller number of content
     providers for which the Company acts on a project-by-project basis.  One
     exclusive content provider presently provides the content for approximately
     45.8% of the Company's annual revenue.

          CASH AND CASH EQUIVALENTS--Cash and cash equivalents include cash on
     hand and investments purchased with original maturities of three months or
     less.

                                         F-7
<PAGE>

 SCOOP, INC.

NOTES TO FINANCIAL STATEMENTS



1.   SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (CONTINUED)

          EQUIPMENT--Equipment is stated at cost, net of accumulated
     depreciation.  Depreciation is computed using the straight-line method over
     a four-year period for computer and office equipment.  Leasehold
     improvements are amortized over the term of the related lease if less than
     the estimated service life.

          The Company accounts for long-lived assets (primarily equipment) under
     Statement of Financial Accounting Standards (SFAS) No. 121, ACCOUNTING FOR
     THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE
     DISPOSED OF.  This statement requires impairment losses to be recognized
     for long-lived assets used in operations when indicators of impairment are
     present and the undiscounted cash flows are not sufficient to recover the
     assets' carrying amount.  The statement also requires that assets to be
     disposed of should be written down to fair value less selling costs.

          REVENUE RECOGNITION--Revenues from product sales are recognized upon
     shipment of product to customers who principally consist of corporate and
     professional entities.  The Company offers credit to its customers,
     performs ongoing credit evaluations and generally does not require
     collateral.

          INCOME TAXES--Income taxes are recorded in accordance with SFAS No.
     109, ACCOUNTING FOR INCOME TAXES.  This statement requires the recognition
     of deferred tax assets and liabilities to reflect the future tax
     consequences of events that have been recognized in the Company's financial
     statements or tax returns.  Measurement of the deferred items is based on
     enacted tax laws.  In the event the future consequences of differences
     between the financial reporting basis and tax basis of the Company's assets
     and liabilities result in a deferred tax asset, SFAS No. 109 requires an
     evaluation of the probability of being able to realize the future benefits
     indicated by such asset.  A valuation allowance related to a deferred tax
     asset is recorded when it is more likely than not that some portion or all
     of the deferred tax asset will not be realized.

          SOFTWARE DEVELOPMENT COSTS--Development costs incurred in the
     research and development of new software products and enhancements to
     existing software products are expensed as incurred until technological
     feasibility has been established.  After technological feasibility is
     established, any additional costs would be capitalized in accordance with
     SFAS No. 86, ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE TO BE SOLD,
     LEASED OR OTHERWISE MARKETED.  Through December 31, 1997, software
     development has been substantially completed concurrent with the
     establishment of technological feasibility, and accordingly, no costs have
     been capitalized to date.

          STOCK SPLIT--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.

          NET LOSS PER COMMON SHARE--As of December 31, 1997, the Company
     adopted SFAS 128, Earnings Per Share.  SFAS No. 128 requires the Company to
     report basic earnings per share, as defined therein, which excludes common
     share equivalents from the earnings per share computation, and diluted
     earnings per share, as defined therein, which is calculated similar to the
     Company's primary earnings per share.  Earnings per share amounts for all
     periods presented have been restated to conform to the requirements of
     SFAS 128.  The weighted average number of common shares and redeemable
     common shares outstanding used in determining basic and diluted loss per
     share was 5,022,000 in 1997 and 3,213,000 in 1996.

                                         F-8
<PAGE>



                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS


          RECENTLY ISSUED ACCOUNTING STANDARDS--In June 1997, the Financial
     Accounting Standards Board (FASB) issued 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 is effective for fiscal years beginning after December 15, 1997
     and will result in an additional statement that reports comprehensive
     income.

           In June 1997, FASB issued SFAS 131, DISCLOSURES ABOUT SEGMENTS OF AN
     ENTERPRISE AND RELATED INFORMATION.  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 years
     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.

2.   INITIAL PUBLIC OFFERING

            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. (Note
     5)

3.   EQUIPMENT

          Equipment consists of the following at December 31, 1997:

<TABLE>
<CAPTION>
               <S>                                            <C>
               Computer equipment                             $  905,400
               Furniture and fixtures                            143,300
               Leasehold improvements                             96,600
                                                              ----------
                                                               1,145,300
               Accumulated depreciation and amortization        (353,200)
                                                              ----------
                                                              $  792,100
                                                              ----------
                                                              ----------
</TABLE>
          Included in equipment is equipment held under capital leases amounting
     to $316,300 at December 31, 1997, net of accumulated depreciation of
     $199,800.

4.   LINE OF CREDIT AND BRIDGE NOTES

          BRIDGE NOTES--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, provided for

                                         F-9


<PAGE>



                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS


     interest at 9.5% and matured upon the completion of the initial public
     offering.   In April 1997, the Company repaid both bridge notes in full.

          In February 1997, the Company borrowed $150,000 from a shareholder of
     the Company.  The loan was unsecured, accrued interest at 9.75% and matured
     April 30, 1997.  As additional consideration of the loan, the Company
     granted to this shareholder a warrant to purchase 15,000 shares of the
     Company's common stock at $4.50 per share.  The estimated fair value
     (determined using an option pricing model) of the warrants, $30,100, was
     recorded as an increase to paid-in capital and was amortized over the term
     of the two-month loan.  The warrants became exercisable in February 1998.
     The Company repaid the bridge note in full in April 1997.

          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 collateralized by accounts
     receivable, accrued interest at 9.5% and had a commitment term expiring in
     August 1997.  In lieu of paying a loan processing fee, the Company granted
     to this individual a warrant to purchase up to 15,750 shares of the
     Company's common stock at $5.50 per share.  The Company recorded expense
     equivalent to the fair value of the warrants (determined using an option
     pricing model) totaling approximately $19,400.  The warrants became
     exercisable in March 1998.  The Company repaid all borrowings and
     terminated the credit facility in June 1997.

5.   REDEEMABLE SHARES OF COMMON STOCK

          In July 1996, the Company completed two separate private placements
     (the May and June Private Placements) aggregating 926,664 shares of common
     stock (the Redeemable Shares) for $2,178,200 (net of offering costs of
     $592,400).  The Redeemable Shares were to be redeemed by the Company in the
     event that the Company failed to complete an initial public offering of its
     common stock and to have it's common stock quoted for trading on a national
     securities exchange or NASDAQ by December 1998.  The redemption price was
     equal to the greater of the issuance price plus a return of 10% compounded
     annually, or the aggregate fair market value.  During the year ended
     December 31, 1997 and 1996, the Company increased the manditorily
     redeemable common stock and accumulated deficit by $56,200 and $115,000,
     respectively, to increase the carrying value of the Redeemable Shares to
     approximate redemption value.

          In connection with the May and June Private Placements, the Company
     issued to each purchaser of redeemable common stock an equal number of
     cancelable warrants for aggregate consideration of $9,300, the deemed value
     of the warrants.

          Upon completion of the Company's initial public offering (Note 2), the
     mandatory redemption rights associated with the 926,664 shares of common
     stock terminated and the cancelable warrants became null and void.  As a
     result of the termination of the redemption rights and cancellation
     warrants, the Company reclassified the redeemable shares to equity.

6.   STOCKHOLDERS' EQUITY

          STOCK BONUS--In April 1996, the Company issued an aggregate of 34,663
     shares of the Company's common stock at a deemed fair market value of $2.00
     per share as a stock bonus to 14 key employees or consultants of the
     Company.  Compensation expense of $69,300 was recorded in connection with
     this stock bonus.

                                         F-10

<PAGE>


                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS



          In July 1996, the Company issued 5,000 shares of the Company's common
     stock as a stock bonus to an employee.  Compensation expense of $12,500
     ($2.50 per share) was recorded concurrent with the issuance of the common
     stock, which the Company's Board of Director's deemed to be the fair value
     of the stock at the date of grant.

          PRIVATE PLACEMENT OF STOCK - In April 1996, the Company completed the
     private placement of 113,248 shares of its common stock, yielding net
     proceeds of $225,000.

          OTHER - During the year ended December 31, 1996, the Company's then
     president and majority stockholder gifted certain shares of his
     personally-held common stock to various directors, consultants and
     employees of the Company. These transactions resulted in the Company's
     recording an increase to general and administrative expense and additional
     paid-in capital of $50,800 for the year ended December 31, 1996.

          OPTIONS - In February 1997, in settlement of various disputes arising
     between the Company, the Company's chairman and two stockholders of the
     Company, the Company agreed to pay to these stockholders a total of
     $60,000 in twelve equal monthly payments of $5,000 and granted to one
     stockholder a warrant to purchase 11,250 shares of the Company's common
     stock.  Additionally, the Chairman has granted to the other stockholder an
     option to purchase 11,250 shares of his personally- held stock.  Both the
     option and the warrant expire in three years, are exercisable and have
     exercise prices of $5.40.

7.   STOCK OPTION PLANS

          STOCK OPTION PLAN - In April 1996, the Company adopted its 1996 Stock
     Incentive Plan (the 1996 Plan), as subsequently amended in October 1996,
     which provides for the grant of stock options and other awards to certain
     officers, key employees, consultants or other persons affiliated with the
     Company.  The maximum number of shares of common stock that may be issued
     pursuant to the 1996 Plan is 1,500,000.  As of December 31, 1997, the
     Company has granted options to purchase an aggregate of 662,500 shares of
     the Company's common stock at prices ranging from $2.00 to $5.00 per share,
     which the Company's Board of Directors deemed to be equal to, or in excess
     of, fair market value of the common stock at the dates of grants, to
     employees of the Company.  Additionally, options have been granted for the
     purchase of up to 276,063 common shares at prices ranging from $2.00 to
     $5.00 per share to certain nonemployees of the Company.  The Company will
     record compensation expense equivalent to the fair value of the options
     granted to nonemployees, totaling approximately $150,000. The compensation
     expense will be recorded ratably over the vesting periods of the
     respective options.  For the years ended December 31, 1996 and 1997, the
     Company has recorded $41,000 and $83,400, respectively, of deferred
     compensation expense associated with these option grants.

          In September 1997, the Company adopted the Rand Bleimeister Stock
     Option Plan (the Bleimeister Plan), which provided for the grant of stock
     options and other awards to the Company's Chief Executive Officer.  The
     maximum number of shares of common stock that may be issued pursuant to the
     Bleimeister Plan is 350,000.  Following the adoption of such plan, the
     Company granted options to purchase an aggregate of 350,000 shares of the
     Company's common stock at a price of $3.75 per share.

                                         F-11


<PAGE>


                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS




          CONSULTANT WARRANTS - In June 1996, the Company granted warrants to
     purchase up to 200,000 shares of the Company's common stock at a price of
     $2.55 per share, which the Company deemed to be equal to the fair market
     value of the stock at the date of grant, to certain consultants of the
     Company.  As these warrants vested upon grant, the Company recorded
     compensation expense equivalent to the fair market value of these warrants,
     totaling $119,200.  In connection with the May and June Private Placements,
     the Company granted warrants to purchase up to 92,667 shares of common
     stock at a price of $3.30 to its underwriter.

          CONTENT PROVIDER WARRANTS - In October 1996, the Company entered into
     an agreement with a third party giving the Company the right to access and
     resell certain proprietary database information.  Pursuant to such
     agreement, the Company granted warrants to purchase up to 550,000 shares of
     the Company's common stock with exercise prices of $6.50 (300,000 shares),
     $10.00 (150,000 shares), and $15.00 (100,000 shares) to a third party.  As
     these warrants vest immediately, the Company recorded compensation expense
     equivalent to the fair value of the warrants totaling approximately
     $32,000.

          The following table summarizes the activity under the 1996 Plan, the
     Rand Bleimeister Plan, and with common stock warrant activity for the
     periods indicated:

<TABLE>
<CAPTION>

                                                     WEIGHTED           WEIGHTED
                                                     AVERAGE            AVERAGE
                                           OPTIONS   EXERCISE           EXERCISE
                                         OUTSTANDING   PRICE   WARRANTS   PRICE
                                         ----------- --------- -------- -------
<S>                                      <C>         <C>       <C>      <C>
     Outstanding at December 31, 1995            -
        Granted                              242,500  $2.00    200,000   $ 2.55
                                             245,000   2.50     92,667     2.30
                                              20,000   3.00    300,000     6.50
                                              14,000   4.00    150,000    10.00
                                             101,000   5.00    100,000    15.00
                                           ---------           -------
       Outstanding at December 31, 1996      622,500   2.76    842,667   $ 6.84

        Granted                            1,299,063   4.00    203,667     5.31
        Exercised                            (25,000)  2.00    (66,667)    2.55
        Cancelled                           (269,000)  2.98    (92,667)    2.75
                                           ---------           -------
       Outstanding at December 31, 1997    1,627,563   3.76    887,000     7.24
                                           ---------           -------
                                           ---------           -------
       Options and warrants exercisable
     at December 31, 1997                    305,688   2.96    683,333     7.74
                                           ---------           -------
                                           ---------           -------

</TABLE>

                                         F-12


<PAGE>



                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS





<TABLE>
<CAPTION>

                                   Options Outstanding          Options Exercisable
                         ------------------------------------   -------------------
                                         Weighted
         Range of                         Average    Weighted              Weighted
         Exercise                        Remaining    Average               Average
          Prices           Shares          Life        Price     Shares      Price
          ------           ------          ----        -----     ------      -----
                                          (Years)
<S>                      <C>             <C>         <C>         <C>       <C>
      $2.00 - $4.00        920,188           9.0       $3.02     220,813     $2.32
      $4.00 - $5.00        706,875           9.0        4.72      84,875      4.64
                         ---------                               -------
                         1,627,063           9.0        3.76     305,688      2.96
                         ---------                               -------
                         ---------                               -------

<CAPTION>
                                   Warrants Outstanding        Warrants Exercisable
                         ------------------------------------  --------------------
                                         Weighted
         Range of                         Average    Weighted              Weighted
         Exercise                        Remaining    Average               Average
          Prices           Shares          Life        Price     Shares      Price
          ------           ------          ----        -----     ------      -----
                                          (Years)
<S>                      <C>             <C>         <C>         <C>       <C>
     $2.55 - $  6.50       337,000           9.0        $4.22     133,333    $2.55
     $6.50 - $15.00        550,000           9.0         9.00     550,000     9.00
                         ---------                               --------
                           887,000           9.0         7.18     683,333     7.74
                         ---------                               --------
                         ---------                               --------
</TABLE>


          SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, encourages but
     does not require companies to record compensation cost for employees stock
     option grants. The Company has chosen to continue to account for employee
     option grants using Accounting Principles Board (APB) No. 25.  No
     compensation expense has been recognized for employee stock option grants.
     Had compensation expense for the employee stock option grants been
     determined based on fair value at the grant dates consistent with SFAS No.
     123, the Company's net loss and net loss per share for the year ended
     December 31, 1997 and 1996 would have been reduced to the pro forma amounts
     indicated   below:

<TABLE>
<CAPTION>

                                                       1997            1996
                                                       ----            ----
<S>                                                <C>              <C>
     Pro Forma Net Loss                            $(5,693,200)     $(2,425,100)
     Basic and Diluted Loss Per Share (Pro Forma)  $(1.13)          $(0.75)

</TABLE>

          The fair value of each option grant is estimated on the date of grant
     using the Black-Scholes option-pricing model with the following
     weighted-average assumptions used for grants in 1996: zero dividend yield,
     expected volatility of  80% (1997), 1% (1996), risk-free interest rate of
     6.5% (1997), 5.2% (1996) and expected lives of ten years.

                                         F-13
<PAGE>


                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS




8.    INCOME TAXES

          The reconciliation of income tax expense computed at U.S. federal
     statutory rates to income tax expense is as follows for the years ended
     December 31:

<TABLE>
<CAPTION>
                                                    1997             1996
                                                    ----             ----

<S>                                            <C>               <C>
     Tax at U.S. federal statutory rates       $(1,701,000)      $ (759,000)
          State income taxes                      (223,000)        (107,200)
          Other                                     26,600           10,300
          Change in valuation allowance          1,899,000          857,500
                                               -----------       ----------
      Total income tax expense                 $     1,600       $    1,600
                                               -----------       ----------
                                               -----------       ----------
</TABLE>

          Deferred income taxes reflect the net effects of temporary differences
     between the carrying amounts of assets and liabilities for financial
     reporting purposes and the amounts used for income tax purposes.
     Significant components of the Company's deferred tax assets and
     (liabilities) are as follows at December 31, 1997:

<TABLE>
<CAPTION>
          <S>                                     <C>
          Deferred tax assets:
           State income taxes                      $       500
           Depreciation                                (17,700)
           Accruals not currently deductible            89,200
           Net operating losses                      3,006,000
                                                   -----------
                                                     3,078,000
           Valuation allowance                      (3,078,000)
                                                   -----------
                Total net deferred tax assets      $     -
                                                   -----------
                                                   -----------
</TABLE>

          At December 31, 1997, the Company has federal and state tax loss
     carryforwards of approximately  $7,500,000 and $3,800,000 which expire in
     2011 and 2001, respectively.  Utilization of these federal and state loss
     carryforwards is limited to approximately $300,000 annually as a result of
     Internal Revenue Code Section 382 change of ownership rules

9.    COMMITMENTS AND CONTINGENCIES

          In August 1997, the Company entered into a non-cancelable operating
     lease for its principal facility (Irvine) which extended through September
     2000.  The Company vacated its prior facility (Santa Ana) and moved into
     the Irvine facility October 1997.  The Company recorded a reserve of
     approximately $330,000 which was equal to the net present value of the
     remaining lease payments and the net book value of the leasehold
     improvements associated with the vacated Santa Ana facility.

          In December 1997, the Company determined it would vacate the Irvine
     facility and return to the Santa Ana facility.  The Company recorded a
     $370,000 reserve associated with vacating the Irvine facility which equals
     the initial cash settlement offer from the Irvine landlord for early
     termination of the lease and the net book value of the leasehold
     improvements. The remaining reserve originally  established for vacating
     the Santa Ana facility was reversed.

                                         F-14
<PAGE>

                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS




          The Company leases certain equipment under capital lease agreements.
     Rent expense for the years ended December 31, 1997 and 1996, exclusive of
     the reserves for early termination of facility leases, was $178,600 and
     $39,000, respectively.

          Minimum annual payments under these lease agreements, excluding the
     vacated Irvine facility, as follows:

<TABLE>
<CAPTION>

                                                       Capital       Operating
                                                        Leases         Leases
                                                        ------         ------
          Year ending December 31:
<S>                                                  <C>             <C>
             1998                                    $  87,400       $  92,200
             1999                                       40,000          96,000
             2000                                        7,200          74,100
                                                     ---------       ---------
          Total minimum lease payments                 134,600       $ 262,300
          Amount representing interest                 (18,100)      ---------
                                                     ---------       ---------
          Present current value of future
             minimum lease payments                    116,500
          Current Portion                              (73,500)
                                                     ---------
          Long-term portion                          $  43,000
                                                     ---------
                                                     ---------

</TABLE>

          CONTRACTUAL AGREEMENTS - As discussed in Note 7, the Company has
     entered into an agreement with a third party enabling the Company to access
     and resell certain proprietary database information.  The terms of the
     agreement provide for minimum royalty payments of $570,000 (1998) and
     $652,500, (1999) during the initial term of this agreement.

          During the year ended December 31, 1997, the Company entered into an
     agreement with an independent third party enabling the Company to reprint
     certain newspaper articles.  The terms of the agreement provide for minimum
     royalty payments of $400,000 for the year ending December 31, 1998.

          LITIGATION - The Company is currently involved in litigation
     incidental to its business.  In the opinion of management, the ultimate
     resolution of such litigation will not have a significant effect on the
     accompanying financial statements.  Additionally, in February 1998, two of
     the Company's  shareholders filed suit against the Company.  The suit
     alleges among other things, that the Company conspired with each of the
     underwriters involved with the Company's private and public stock offerings
     to prevent the plaintiffs from being released from certain lock-up
     provisions contained in the private offering documents.  The Company
     believes these charges are without merit and intends to vigorously defend
     itself against these charges.  The Company does not believe that the
     ultimate outcome will have a significant effect on its financial position
     or result of operations.

10.  RELATED PARTY TRANSACTIONS

          CONVERTED NOTE PAYABLE - In October 1995, a stockholder loaned the
      Company $150,000 in exchange for an 8% promissory note convertible into
      71,760 shares of the Company's common stock.  In June 1996, the Company
      exercised its right of redemption and issued to this stockholder 71,760
      shares of common stock.

                                         F-15


<PAGE>


                                     SCOOP, INC.

                            NOTES TO FINANCIAL STATEMENTS



          REPURCHASE OF STOCK - Pursuant to an agreement dated October 5, 1995,
     as subsequently amended, the Company repurchased all of the shares that
     were then owned by a co-founder and former officer of the Company in
     exchange for a $12,000 cash payment and a $88,000 promissory note.  This
     stock repurchase resulted in a decrease in capital of $2,500 and an
     increase of $97,500 in accumulated deficit.  In addition, the Company
     agreed to issue to this former officer 64,527 shares of the Company's
     common stock.  In July 1996, the Company issued these shares and recorded
     an addition to common stock and paid-in capital and a reduction to
     accumulated deficit of $161,300 ($2.50 per share).

          The unsecured noninterest-bearing $88,000 note payable issued in
     connection with the stock repurchase from the co-founder was repaid in full
     in January 1996.

          The Company also entered into a noncompetition agreement with the
     former officer.  Under the terms of the agreement, payments of $2,000 were
     to be made in monthly installments over a term of five years, beginning
     December 1995.  The Company established the related asset and liability
     associated with this agreement, based upon an imputed interest rate of 8%.
     Amortization expense of $9,300 and $19,700 was recorded for the years ended
     December 31, 1997 and 1996, respectively.  In October  1997, the Company
     and the former officer agreed to terminate the non-competition agreement,
     resulting in the Company reversing the $68,000 obligation and asset under
     the non-competition agreement

          OTHER - In April 1996, the Company entered into an agreement with its
     former counsel to issue 20,000 shares of common stock for $2.00 per share,
     which the Company's Board of Directors deemed to be the fair value of the
     stock at the date of the agreement.  The Company issued the shares in June
     1996, yielding net proceeds of $40,000.

          SEVERANCE - In February 1997, a co-founder resigned from the positions
     of President and Chief Executive Officer of the Company.  The Company and
     the co-founder entered into a severance agreement providing for twelve
     equal monthly payments of approximately $12,000.  As of December 31, 1997,
     the Company has approximately $48,000 of remaining payments under such
     agreement, which is included within accrued payroll in the accompanying
     balance sheet.


11.  SUBSEQUENT EVENTS

          In December 1997, the Company determined that it would discontinue the
     marketing and further development of Scoop!.  The plan for such
     discontinuance was approved by the Board of Directors and announced in
     February 1998.  During the years ended December 31, 1997 and 1996, the
     Company had incurred approximately $2,548,000 and $601,700, respectively,
     for the research and development of Scoop! and as discussed in notes 7 and
     9, has entered into long-term contractual agreements enabling the Company
     to access certain  proprietary database information utilized in the Scoop!
     business.  As a result of this determination, the Company recorded expense
     associated with the write-off of certain software licensing rights of
     approximately $229,000, which is included within research and development
     expense in the accompanying statement of operations.  In order to further
     reduce costs, the Company terminated several employees in February 1998.
     As a result, the Company will record expense for severance pay of
     approximately $250,000 during the three months ended March 31, 1998.


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