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

                                  FORM 10-QSB/A

                                   (Mark one)
  (X)                                Quarterly  Report under Section 13 or 15(d)
                                     of the Securities Exchange Act of 1934.

                FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
                                --------------

     ( ) Transition Report under Section 13 or 15(d) of the Exchange Act.

               For the transition period from ______________ to
                   ------------------- -------------------

                        COMMISSION FILE NUMBER: 000-21775

                              THINK NEW IDEAS, INC.
      (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

                                          DELAWARE
                                  95-4578104
               (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
                INCORPORATION OR ORGANIZATION) IDENTIFICATION
                                     NUMBER)

            45 WEST 36TH STREET, 12TH FLOOR, NEW YORK, NEW YORK 10018
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (212) 629-6800
                           (ISSUER'S TELEPHONE NUMBER)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class                                                 Outstanding At May 2, 1997
-----                                                 --------------------------
Common Stock, par value $.0001 per share                          6,416,667
shares

Transitional Small Business  Disclosure Format (check one) Yes   No  X

<PAGE>

                            THINK New Ideas, Inc.

                                      INDEX

Part I - Financial Information
Page
Item 1.    Condensed Consolidated Financial Statements
     Condensed Consolidated Balance Sheet as of March 31, 1997..............   3
     Condensed  Consolidated  Statements  of  Operations  for 
     the three and nine month periods ended March 31, 1997 and 1996.........   4
     Condensed  Consolidated  Statement  of  Shareholders'  Equity  for the nine
     months ended March 31, 1997............................................   5
     Condensed  Consolidated  Statements of Cash Flows for the Nine months ended
     March 31, 1997 and 1996................................................   6
     Notes to Condensed Consolidated Financial Statements...................   7
Item 2.    Management's Discussion and Analysis or Plan ofOperation.........  10

Part II - Other Information
          Item 1.    Legal Proceedings......................................  19
          Item 2.    Changes in Securities..................................  19
          Item 3.    Defaults Upon Senior Securities........................  19
          Item 4.    Submission of Matters to a Vote of Security Holders....  19
          Item 5.    Other Information......................................  19
          Item 6.    Exhibits and Reports on Form 8-K.......................  19


<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

                                                                March 31,
                                                                  1997
                                                            (Restated - Note 1)
ASSETS
Current assets:
  Cash and cash equivalents                                      $9,303,481
  Accounts receivable, net of allowance for doubtful
    accounts of $213,000                                          3,891,869
  Unbilled receivables                                            1,312,112
  Prepaid expenses and other assets                                 440,261
  Deferred income taxes                                             201,000
                                                                    -------

Total current assets                                             15,148,723

Property, plant and equipment, net                                1,395,512
Software development costs                                          739,143
Goodwill, net of accumulated amortization of $810,000             1,348,500
Other assets                                                        446,121
                                                                    -------
                                                                  
                                                                $19,077,999
                                                                ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Note payable to bank                                              $34,426
  Accounts payable                                                1,969,561
  Accrued expenses and other                                        800,375
  Deferred revenue                                                   97,245
                                                                     ------

Total current liabilities                                         2,901,607

Note payable to related party                                       515,760
                                                                    -------
Total liabilities                                                 3,417,367
                                                                  ---------

Shareholders'  equity Preferred stock,  $.0001 par value;
5,000,000  shares   authorized;   none  issued  and  none
outstanding

  Common  stock,  $.0001  par  value;  50,000,000  shares
  authorized; 6,416,667 shares issued                                   641
  Additional paid in capital                                     18,444,686
  Accumulated deficit                                            (2,784,695)
                                                                  ---------
Total shareholders' equity                                       15,660,632
                                                                 ----------

                                                                $19,077,999
                                                                ===========

   See accompanying notes to condensed consolidated financial statements.


                                    -3-
<PAGE>




PART I - FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL
             STATEMENTS

                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                   THREE MONTHS ENDED           NINE MONTHS ENDED
                                                        MARCH 31,                  MARCH 31,

                                                  1997             1996         1997           1996
                                                  ----             ----         ----           ----
<S>                                              <C>               <C>          <C>             <C>       
                                          (Restated - Note 1)             (Restated - Note 1)

Revenues                                       $4,211,334     $1,951,809   $12,254,066     $6,637,403

Operating expenses:
 Direct salaries and related expenses           2,565,314        648,747     6,501,401      2,336,093
 Other direct expenses                          1,247,612        815,568     3,563,587      2,962,957
 Selling, general and administrative expenses   1,736,569        352,177     3,695,205      1,269,367
 Depreciation and amortization                    385,452         37,071     1,059,920        146,823
 Merger expenses                                       --         70,735        57,395         70,735
                                                  -------         ------        ------         ------

Operating (loss)/profit                        (1,723,613)        27,511    (2,623,442)      (148,572)

Interest income/(expense) and other net            63,092        (15,761)      (27,877)      (115,998)
                                              -----------        --------      --------      ---------

(Loss)/profit before provision for taxes       (1,616,521)        11,750    (2,651,319)      (264,570)
Provision for income taxes                         40,000         36,279        28,061        124,726
                                              -----------     ----------   -----------     ----------

Net loss                                      $(1,700,521)      $(24,529)  $(2,679,380)     $(389,296)
                                              ============      =========  ============     ==========

Net loss per share                                 $(0.30)        $(0.01)       $(0.63)    $    (0.16)
                                                   =======        =======       =======    ===========

Weighted average shares outstanding             5,591,667      2,449,592     4,265,463      2,449,592
                                                =========      =========     =========      =========

</TABLE>


   See accompanying notes to condensed consolidated financial statements.


                                    -4-
<PAGE>


                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>


                                       COMMON STOCK        ADDITIONAL                     TOTAL
                                                            PAID-IN     ACCUMULATED  SHAREHOLDERS'
                                     SHARES     AMOUNT      CAPITAL       DEFICIT         EQUITY
                                     ------     ------      -------       -------         ------
<S>                                  <C>        <C>         <C>            <C>             <C>      

Balance, June 30, 1996            2,894,673     $289       $1,334,630     $(105,315)        1,229,604
  Issuance of common stock          938,667       94        4,947,968            -          4,948,062
  Conversion of convertible debt    433,327       43          189,452            -            189,495
  Issuance of common stock        2,150,000      215       11,972,636            -         11,972,851
  Net loss for the period                -         -               -     (2,679,380)       (2,679,380)
                                  ---------      ---       ----------    ----------        ---------- 


Balance March 31, 1997            6,416,667     $641       18,444,686   $(2,784,695)      $15,660,632
              === ====            =========     ====       ==========   ===========       ===========

</TABLE>



   See accompanying notes to condensed consolidated financial statements.



                                      -5-
<PAGE>


                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                         NINE MONTHS ENDED MARCH 31,
                                                                          1997                1996
                                                                  (Restated - Note 1)

<S>                                                                   <C>                    <C>       
CASH FLOW FROM OPERATING ACTIVITIES: Net loss                           $ (2,679,380)        $(389,296)
  Adjustments to reconcile net loss to net cash provided by
    (used in) operating activities
    Depreciation                                                             190,743       146,823
    Amortization of intangibles and deferred financing costs                 941,985            -
    Deferred income taxes                                                    (12,000)           -
    Bad debt expense                                                          81,664            -
    Changes in assets and liabilities:
      Accounts receivable                                                 (1,578,801)     (606,046)
      Unbilled receivables                                                (1,015,209)      347,954
      Accounts payable                                                       725,504       702,779
      Accrued expenses and other                                               5,084       433,362
      Deferred revenue                                                      (355,714)           -
      Other assets and liabilities                                          (528,644)     (507,842)
                                                                       --------------     ---------

Net cash provided by (used in) operating activities                       (4,224,768)     127,734
                                                                         ------------    --------

CASH FLOW FROM INVESTING ACTIVITIES:
Additions to software development costs                                     (518,957)    (126,218)
  Purchases of property and equipment                                       (887,224)    (336,584)
                                                                       --------------   -----------

Net cash used in investing activities                                     (1,406,181)    (462,802)
                                                                        -------------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from insurance (repay) promissory notes                          (1,880,505)     270,000
  Net proceeds from initial public offering of common stock               11,972,851          656
  Due to shareholders                                                       (500,000)     (51,644)
  Increase in notes payable to related party                                    -         268,500
  Borrowings (repayment) on operating lines of credit                        (35,574)      52,500
  Net proceeds from private placement                                      4,948,062         -
  Distributions to shareholders                                                 -        (133,377)
                                                                            ---------    -------- 


Net cash provided by financing activities                                  14,504,834     406,635
                                                                           ----------     -------


Net increase in cash and cash equivalents                                   8,873,885      71,567
Cash and cash equivalents, beginning of period                                429,596     334,174
                                                                              -------     -------


Cash and cash equivalents, end of period                                   $9,303,481    $405,741
                                                                           ==========    ========


Supplemental Cash Flow Information:
  Cash paid during the period for
:     Income taxes                                                           $101,000     $70,000
      Interest                                                               $125,244         -
</TABLE>

   See accompanying notes to condensed consolidated financial statements.

                                      -6-
<PAGE>

THINK NEW IDEAS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1.  FINANCIAL STATEMENTS

The accompanying  condensed  consolidated  financial statements presented herein
have been prepared in accordance with generally accepted  accounting  principles
for  interim  financial  information,   the  instructions  to  Form  10-QSB  and
Regulation  S-B  (including  Item 310(b)  thereof) and do not include all of the
information  and note  disclosures  required by  generally  accepted  accounting
principles for complete financial statements. In the opinion of management, such
condensed consolidated financial statements include all adjustments,  consisting
only of normal recurring adjustments,  necessary to present fairly the Company's
financial  position as of March 31, 1997 and the results of  operations  for the
three and nine month  periods  ending  March 31,  1997 and 1996.  The results of
operations  for the three and nine month  periods  ended  March 31,  1997 or any
other period may not be  indicative  of the results that may be expected for the
year ending June 30, 1997.  It is suggested  that these  condensed  consolidated
financial  statements  be read in  conjunction  with  the  audited  consolidated
financial  statements  and the notes  thereto of the  Company for the year ended
June 30, 1996.

   
The financial statements for the three and nine months ended March 31, 1997 have
been restated from those previously  issued to increase other direct expenses by
$212,000, selling, general, and administrative expenses by $289,000, and the net
loss, and accounts payable, by $501,000 for costs incurred in the late stages of
the completion of contracts  completed in the third quarter of fiscal 1997 which
previously were not identified and accrued.  The Company  identified these items
in the preparation of its financial statements for the year ended June 30, 1997,
and determined that the omission of their accrual in the originally issued March
31,  1997  financial   statements   resulted  from  failure  of  the  production
departments to advise  accounting and financial  functions of certain late stage
expenses  on a basis  timely  enough  to  allow  their  consideration  when  the
contracts were closed and billed to the client. In the first and second quarters
of fiscal 1998 the Company  implemented  certain new job  budgeting  and closing
systems and  procedures  to improve  the  control  over both the amount of costs
incurred  in  performing  client  services  and the  timely  identification  and
consideration  of such items.  The  restatement had the effect of increasing the
net loss per share by $.09 and $.12 for the three and nine  months  ended  March
31, 1997, respectively.
    

2.  BUSINESS ACQUISITIONS

On June 30, 1996, the Company acquired all of the issued and outstanding  shares
of common stock of the following  entities in exchange for 491,595 shares of the
Company's common stock:

<TABLE>
<CAPTION>

                                                                       Number of Shares
Entity/date Operations Commenced                                       Issued To Effect Acquisition
--------------------------------                                       ----------------------------
<S>                                                                             <C>    

Scott Mednick & Associates, Inc.("Mednick")/October 1992                        208,084
Creative Resources Agency, Inc.
("Creative Resources")/November 1994                                            3,970

The S.D. Goodman Group ("Goodman")/July  1993                                   49,623
Internet One, Inc. ("Internet One")/November 1993                               34,736
NetCube Corporation (Del); NetCube Corporation (NJ)/February 1978               195,182
</TABLE>

Mednick,  Creative  Resources  and Goodman  provide a wide variety of marketing-
related  services.  Internet One is principally a provider of new media services
and NetCube  provides data mining  software.  The  acquisition  of each of these
companies  has been  accounted  for using the  pooling  of  interests  method of
accounting,  and accordingly,  the accompanying condensed consolidated financial
statements give retroactive  effect to these  acquisitions,  as if the companies
had always operated as a single entity.


                                      -7-
<PAGE>



                     THINK NEW IDEAS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)

2.  BUSINESS ACQUISITIONS (CONTINUED)

On June 30, 1996,  the Company also  acquired all of the  outstanding  shares of
common stock of On Ramp, Inc. ("On Ramp"), a provider of new media services,  in
exchange for 231,572 shares of the Company's  common stock.  The acquisition has
been accounted for using the purchase method of accounting, and accordingly, the
accounts of On Ramp have been reflected in the condensed  consolidated financial
statements from the date of acquisition. The purchase price of $1,338,000 (which
includes transaction costs of approximately  $250,000) has been allocated to the
assets  purchased and the  liabilities  assumed based upon their  estimated fair
values at the date of  acquisition.  The excess of the  purchase  price over the
carrying values of the net assets acquired was approximately  $2,310,000 and has
been allocated as follows:

Goodwill.....................................................  $2,159,000
Purchased software and other intangible assets...............     251,000
Deferred income taxes........................................    (100,000)
                                                               -----------

                                                               $2,310,000
                                                               ==========

Prior to the acquisition, the Company loaned $1,494,000 to On Ramp.

3.  INITIAL PUBLIC OFFERING

In November 1996, the Company completed its initial public offering of 2,150,000
shares  of  Common  Stock.  Proceeds  from  the  offering  (after  deduction  of
transaction costs of approximately $3,077,000) amounted to $11,973,000.

4.  PRIVATE PLACEMENT

In August 1996, the Company sold equity securities in a private placement.  As a
result, the Company issued an aggregate of 938,667 shares of its common stock in
exchange for net proceeds (after deduction of transaction costs of approximately
$50,000)  of  $4,948,000.  Additionally,  certain  of  the  Company's  principal
shareholders  transferred  to the purchaser an additional  124,667 shares of the
Company's  common  stock  held by them for no  consideration.  A portion  of the
proceeds of the private  placement was used to repay amounts  outstanding  under
certain convertible promissory notes described in Note 5 below.


                                      -8-
<PAGE>



THINK NEW IDEAS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)



5.  CONVERTIBLE PROMISSORY NOTE CONVERSIONS AND EXTINGUISHMENTS

In March 1996,  the  Company  borrowed  $270,000  pursuant to the terms of three
separate  convertible  promissory  notes.  Two of  the  notes,  having  original
principal balances of $225,000 and $20,000, were payable to an entity controlled
by a shareholder of the Company and to a shareholder,  respectively. Each of the
notes bore  interest at 10% and were due upon the earlier of September  30, 1996
or the  Company's  receipt  of  $2,000,000  in  proceeds  from a debt or  equity
financing.  Pursuant  to the  terms of the  notes an  aggregate  of  $27,000  in
principal  was  converted  by the  holder  thereof  into  216,667  shares of the
Company's common stock.

In April 1996, the Company raised $1,583,000, net of placement fees of $218,000,
through a private  placement of 12% convertible  promissory notes. The principal
balance,  together with accrued interest,  was due upon the earlier of April 30,
1997 or the  Company's  receipt of  $3,000,000 in proceeds from a debt or equity
financing.  The notes were secured by the pledge of all of the then  outstanding
shares of  common  stock of On Ramp.  Pursuant  to the  terms of the  notes,  an
aggregate of $162,000 in  principal  was  converted by the holders  thereof into
216,660 shares of the Company's common stock.

During the nine months  ended  March 31,  1997,  the holders of the  convertible
promissory notes, as discussed above, converted such notes, aggregating $189,000
into 433,327 shares of common stock.  In addition,  a portion of the proceeds of
the private  placement  discussed in Note 4 was used to extinguish the remaining
$1,881,000 of such notes.


                                      -9-
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW

The Company was  incorporated  in the State of Delaware in January  1996 for the
purpose of creating a corporate  structure to  facilitate  the  combination  and
integration of  specialized  businesses  operating in the areas of  advertising,
marketing, Internet and intranet services and data management. On June 30, 1996,
in exchange for the issuance of an aggregate of 723,167  shares of Common Stock,
the Company  acquired all of the issued and  outstanding  capital stock of seven
companies:  Scott Mednick & Associates,  Inc.  ("Mednick");  On Ramp,  Inc. ("On
Ramp");  Internet One, Inc.  ("Internet One");  Creative Resources Agency,  Inc.
("Creative Resources");  The S.D. Goodman Group, Inc. ("Goodman Group"), NetCube
Corporation  of Delaware and NetCube  Corporation  of New Jersey  (collectively,
"NetCube").  Each of the foregoing business acquisitions was accounted for using
the pooling of interests  method  except for On Ramp,  which was  accounted  for
using the purchase  method.  The foregoing  companies  have been defined and are
collectively  referred to hereinafter as the  "Subsidiaries".  Accordingly,  the
results of  operations  for each of the  Subsidiaries  (other than On Ramp) have
been included in the Company's  Financial  Statements for all periods presented.
The  results  of  operations  of On Ramp have  been  included  in the  Company's
financial statements since June 30, 1996.

The Company  generates  revenue from  Internet and  interactive  media  services
including Website  development and hosting,  corporate  internal  communications
solutions,  database  marketing,  corporate  identity  and product  branding and
packaging,  advertising,  and interface solutions that provide high-speed access
via the  Internet  to  off-line  databases.  Historically,  revenues  from these
services have been derived on a  project-by-project  basis, which tends to cause
fluctuations in revenues between  reporting  periods.  A substantial  portion of
those  revenues  have been fixed fees for  services to be  delivered.  While the
Company has recently entered into a number of contracts for ongoing maintenance,
content  updates,  server  hosting  and  software  licensing,  which will create
recurring revenue streams for the life of their respective  contracts (typically
12  months),  it is  anticipated  that  project  revenue  will  continue to be a
significant  component of total  revenues and therefore  revenue may continue to
fluctuate significantly from quarter to quarter.

The Company  generally  provides  Website design and development and traditional
marketing  services under contracts that vary in duration from two to four weeks
in the case of  smaller  projects  and up to five  months  in the case of larger
projects.

                                     -10-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

OVERVIEW (CONTINUED)

In connection with Website design and development,  the Company typically enters
into 12  month  arrangements  providing  for  maintenance,  content  updates  of
Websites and software licensing and hosting of a client Website on the Company's
servers.  Revenues from contracted  services are generally  recognized using the
percentage of completion  method based upon the ratio of costs incurred to total
estimated costs of the project.  Revenues from hosting,  maintenance and updates
are recognized as the services are provided.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 AND 1996

REVENUES.  Consolidated  revenues  increased to  $4,211,334  for the three month
period  ended March 31, 1997 from  $1,951,809  for the three month  period ended
March  31,  1996  (116%).   Revenues  for  interactive   services  increased  to
approximately  $2,080,000  during the third quarter of fiscal 1997 from $784,000
during  the  third  quarter  of fiscal  1996  (165%),  substantially  due to the
accounting  treatment  associated with the acquisition of On Ramp.  Revenues for
traditional strategic marketing operations increased to approximately $2,131,000
during the third  quarter of 1997 from  $1,168,000  during the third  quarter of
fiscal 1996 (82%) primarily as a result of revenue  generated by new clients and
increased revenue from additional services provided to existing clients.

OPERATING EXPENSES.

DIRECT SALARIES AND RELATED  EXPENSES  increased to $2,565,314  during the third
quarter of fiscal  1997 from  $648,747  during the third  quarter of fiscal 1996
(295%)  partially as a result of the accounting  treatment  associated  with the
acquisition  of On  Ramp,  which  accounted  for an  increase  of  approximately
$1,097,000.  Also,  the  Company  had a  significant  increase  in the number of
employees employed by the Company to meet its higher level of operations and its
expected growth from existing outstanding project proposals.

   
OTHER DIRECT EXPENSES increased to $1,536,612 during the third quarter of fiscal
1997 from $815,568  during the third quarter of fiscal 1996 (88%) as a result of
the increase in revenues,  as well as the accounting  treatment  associated with
the  acquisition of On Ramp,  which  accounted for an increase of  approximately
$384,000,  partially offset by decreases primarily at NetCube which approximated
$164,000  due to the shift in  business  direction  from  consulting  to product
development.     

SELLING,  GENERAL AND ADMINISTRATIVE EXPENSES increased to $1,447,569 during the
third  quarter of fiscal 1997 from  $352,177  during the third quarter of fiscal
1996 (311%),  primarily  due to the  accounting  treatment  associated  with the
acquisition of On Ramp which accounted for an increase of approximately $576,000
and the formation and expansion of the Company's corporate infrastructure during
fiscal 1997.

                                     -11-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1997 AND 1996 (CONTINUED)

DEPRECIATION AND AMORTIZATION  increased to $385,452 during the third quarter of
fiscal  1997 from  $37,071  during  the third  quarter  of  fiscal  1996  (940%)
primarily  due to the  amortization  of  goodwill  and other  intangible  assets
arising from the  accounting  treatment  associated  with the  acquisition of On
Ramp.

INTEREST INCOME/EXPENSE AND OTHER NET. The $63,092 in net other income reflected
in the third quarter of fiscal 1997 compares  favorably to the net other expense
of $15,761  reflected in the third  quarter of fiscal 1996  primarily due to the
effect of the investment of the cash proceeds from the Company's  initial public
offering.

   
PRE-TAX LOSS.  The Company had a pre-tax loss of $1,616,521 in the third quarter
of fiscal 1997  compared to a pre-tax  profit of $11,750 in the third quarter of
fiscal  1996.  The  loss in 1997  included  non-cash  charges  of  approximately
$385,000 for depreciation  and amortization of fixed assets,  goodwill and other
intangibles  incurred in the  acquisition of On Ramp (this related  amortization
amounted to $295,000 in the  quarter.)  Also  contributing  to the third quarter
pre-tax loss of fiscal 1997 is the $319,000 loss for On Ramp. On Ramp's  results
were not included in the pre-tax loss in the third quarter of fiscal 1996. 
    

INCOME  TAXES.  The  Company  had an income tax  expense of $40,000 in the third
quarter of fiscal  1997  compared to income tax  expenses of $36,279  during the
third quarter of fiscal 1996.  Given that certain of the  Subsidiaries  were not
subject to taxation (as such Subsidiaries had elected S corporation status under
applicable  provisions  of the Internal  Revenue Code of 1986,  as amended,  and
certain state  statutes) and the remaining  Subsidiaries  were subject to income
taxes  based  on  their  respective  operations,  the  effective  tax  rate on a
consolidated  historical  basis  is not  meaningful.  The  Company  will  file a
consolidated Federal tax return beginning with the year ending June 30, 1997.

                                     -12-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

NINE MONTHS ENDED MARCH 31, 1997 AND 1996

REVENUES.  Consolidated  revenues  increased to  $12,254,066  for the nine month
period  ended March 31, 1997 from  $6,637,403  for the nine month  period  ended
March  31,  1996  (85%).   Revenues  for  interactive   services   increased  to
approximately  $6,398,000  during  the first  nine  months  of fiscal  1997 from
approximately  $1,938,000  during the first nine  months of fiscal  1996  (230%)
substantially due to the accounting treatment associated with the acquisition of
On Ramp and the strength of  corporate  demand for  Internet  related  services.
Revenues  for   traditional   strategic   marketing   operations   increased  to
approximately $5,856,000 during the first nine months of 1997 from approximately
$4,699,000  during the first nine  months of fiscal  1996 (25%)  primarily  as a
result of revenue generated by new clients and increased revenue from additional
services provided to existing clients.

OPERATING EXPENSES.

DIRECT SALARIES AND RELATED  EXPENSES  increased to $6,501,401  during the first
nine  months of fiscal  1997 from  $2,336,093  during the first  nine  months of
fiscal 1996 (178%) primarily as a result of the accounting  treatment associated
with  the   acquisition  of  On  Ramp,   which  accounted  for  an  increase  of
approximately  $2,538,000.  Also, the Company had a significant  increase in the
number  of  employees  employed  by the  Company  to meet  its  higher  level of
operations and its expected growth from existing outstanding project proposals.

   
OTHER DIRECT  EXPENSES  increased to $3,852,587  during the first nine months of
fiscal 1997 from $2,962,957 during the first nine months of fiscal 1996 (30%) as
a result  of the  increase  is  revenues,  as well as the  accounting  treatment
associated with the  acquisition of On Ramp,  which accounted for an increase of
approximately  $997,000,  an increase at Mednick and Creative Resources totaling
approximately  $478,000 due to costs  related to  increases in client  projects,
partially offset by decreases totaling approximately  $1,054,000 at Internet One
due to a low volume of  hardware  sales and NetCube due to the shift in business
direction from consulting to product development. 
    

SELLING,  GENERAL AND ADMINISTRATIVE EXPENSES increased to $3,406,205 during the
first nine months of fiscal 1997 from $1,269,367 during the first nine months of
fiscal 1996 (168%) which is primarily due to the accounting treatment associated
with the acquisition of On Ramp which accounted for an increase of approximately
$1,426,000   and  the  formation  and  expansion  of  the  Company's   corporate
infrastructure during late fiscal 1996.

DEPRECIATION  AND  AMORTIZATION  increased to  $1,059,920  during the first nine
months of fiscal 1997 from $146,823  during the first nine months of fiscal 1996
(622%) primarily due to the amortization of goodwill and other intangible assets
arising from the  accounting  treatment  associated  with the  acquisition of On
Ramp.

INTEREST  INCOME/EXPENSE  AND OTHER  NET.  The  $27,877  of other net  expense
reflected in the nine month period  ending March 31, 1997  compares  favorably
to the  $115,998 of other

                                     -13-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS

NINE MONTHS ENDED MARCH 31, 1997 AND 1996 (CONTINUED)

net expense  reflected in the nine month period ending March 31, 1996  primarily
due to the effect of the  investment  of the cash  proceeds  from the  Company's
initial public offering.

   
PRE-TAX  LOSS.  The Company had a pre-tax loss of  $2,651,319  in the first nine
months of fiscal 1997  compared to a pre-tax  loss of $264,570 in the first nine
months  of  fiscal  1996.  The  loss  in  1997  includes   non-cash  charges  of
approximately  $1,060,000 for  depreciation and  amortization,  primarily of the
goodwill  and other  intangibles  incurred in the  acquisition  of On Ramp (this
related  amortization  amounted  to  $885,000  in the nine month  period.)  Also
included in this pre-tax loss are losses from Netcube of approximately  $908,000
and other costs  incurred in the  Company's  software  development  operation of
approximately  $205,000 compared with pre-tax losses of NetCube of approximately
$822,000 in the first nine months of fiscal  1996.  During the fiscal year ended
June 30, 1996,  Netcube modified its business so as to emphasize the development
of its proprietary Netcube data applications and de- emphasize hourly consulting
services,  resulting  in a  significant  decrease  in  revenue  effect  on  1997
revenues. 

INCOME TAXES. The Company had an income tax expense of $28,061 in the first nine
months of fiscal 1997  compared to an income tax expense of $124,726  during the
same period of fiscal  1996.  Given that  certain of the  Subsidiaries  were not
subject to taxation (as such Subsidiaries had elected S corporation status under
applicable  provisions  of the Internal  Revenue Code of 1986,  as amended,  and
certain state  statutes) and the remaining  Subsidiaries  were subject to income
taxes  based  on  their  respective  operations,  the  effective  tax  rate on a
consolidated  historical  basis  is not  meaningful.  The  Company  will  file a
consolidated federal tax return beginning with the year ending June 30, 1997.
    

LIQUIDITY AND CAPITAL RESOURCES

Since  their  respective  formations,   the  Subsidiaries  have  financed  their
operations primarily through cash generated from operations, bank borrowings and
shareholder contributions and financing.

During 1996, the Company  entered into a series of transactions in order to fund
the operations of the  Subsidiaries and to prepare itself for its initial public
offering. The Company raised $270,000 through the issuance of three 10% Notes.

                                     -14-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Proceeds obtained from the issuance have been used to cover costs related to the
Company's  acquisitions of the Subsidiaries and the initial public offering. The
Company  raised an  additional  $1,800,000  through a private  placement  of 12%
Notes.  Proceeds received by the Company,  after deducting  placement agent fees
and other expenses,  totaled $1,583,000.  Of the funds received from the private
placement,  $1,000,000  was loaned to On Ramp in order to complete a transaction
in which On Ramp redeemed  outstanding shares of its common stock. The remaining
funds  received  from the private  placement  have been used to provide  working
capital for On Ramp and Internet One.

In August 1996, the Company received proceeds of $4,948,000 through the issuance
of 938,667 shares of common stock.  Proceeds raised from this  transaction  were
used by the  Company to retire the  non-convertible  portion of the  outstanding
principal and accrued  interest  under the 10% Notes and 12% Notes  (aggregating
$1,881,000),  to retire certain other debt and outstanding obligations,  to fund
the operations of the  Subsidiaries  and to cover expenses and costs incurred in
connection  with the  acquisitions  of the  Subsidiaries  and the initial public
offering. In November 1996, the Company completed its initial public offering of
2,150,000 shares of Common Stock.  Proceeds from the offering (after transaction
costs of approximately $3,077,000) amounted to $11,973,000.

   
At March 31, 1997, the Company had cash and cash  equivalents  of  approximately
$9,303,000  and working  capital of  approximately  $12,247,000,  primarily as a
result of  effecting  the  following  transactions  during the nine months ended
March 31, 1997:  (i) the sale of 938,667  shares of common stock and the receipt
of net  proceeds  therefrom  of  $4,948,000,  (ii)  the  repayment  of the  non-
convertible portion of the 10% Notes and the 12% Notes,  aggregating  $1,881,000
from the proceeds of the private placement discussed above; (iii) the payment of
a  finder's  fee in  consideration  for the  termination  of a certain  finder's
agreement using proceeds from the private  placement  discussed above;  (iv) the
renegotiation  on the terms of a note payable to a related party,  providing for
liquidation of $288,000 of such debt using  proceeds from the private  placement
discussed above and extending the maturity of the remaining  balance of $500,000
until March 1998;  and (v) the sale of  2,150,000  shares of common stock of the
Company in an initial public offering and the receipt of net proceeds  therefrom
of $11,973,000. 
    

During the nine month  period ended March 31, 1997,  the Company  increased  its
cash and cash equivalents position by approximately  $8,874,000 to approximately
$9,303,000.

                                     -15-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

This  resulted  from  cash  used  in  operating  and  investing   activities  of
approximately $4,225,000 and approximately $1,406,000,  respectively,  offset by
cash provided by financing activities of $14,505,000.

   
The cash used in operating  activities of approximately  $4,225,000  principally
resulted from a loss from ongoing operations of approximately $2,178,000, offset
by non-cash charges of  approximately  $885,000 for amortization of the goodwill
and other  intangibles  incurred in the acquisition of On Ramp and  depreciation
and amortization  charges and other non-cash charges of approximately  $248,000,
which total approximately  $1,133,000.  Additionally  contributing to the use of
cash was a combined  increase in accounts  receivable and unbilled  receivables,
and  a  decrease  in  deferred   revenue  of   approximately   $2,594,000,   and
approximately  $356,000,  respectively.  As well as the net use of cash  for net
other assets and liabilities of  approximately  $460,000.  Offsetting these uses
was a net increase in accounts  payable and accrued expenses which provided cash
of approximately $731,000. 
    

The  increase  in  unbilled  receivables  is  principally  due to one  web  site
development project undertaken by the Company's  interactive  division for which
significant  work has  been  performed  in  advance  of the  dates  billings  as
permitted  under the contracts with the client.  Accounts  receivable  increased
primarily  due to the  increased  volume  of  work  performed  by the  Company's
interactive  division  and,  to  a  lesser  extent,  the  Company's  traditional
strategic marketing services division.

Accounts  receivable greater than sixty days old increased from $494,000 at June
30, 1996 to $1,003,000 at March 31, 1997.  The increase in such  receivables  is
primarily due to certain  receivables  arising from ongoing strategic  marketing
and  branding  assignments  undertaken  for  certain  significant  long-standing
customers which the Company believes are credit-worthy. Such amounts were either
collected  subsequent  to March  31,  1997 or the  Company  believes  them to be
collectible.  The  Company  believes  the  allowance  for  doubtful  accounts of
approximately  $213,000 at March 31, 1997 is  sufficient  to adjust the carrying
amount of its receivables at March 31, 1997 to an amount which  approximates net
realizable value.

The cash used in investing activities of approximately  $1,406,000 resulted from
increased software development costs of approximately  $519,000 and additions to
leasehold  improvements  and other  purchases of computer  related  hardware and
facilities of approximately $887,000.

The cash  generated by financing  activities  of  $14,505,000  is  principally a
result of the net proceeds of the Company's  initial public offering  undertaken
in  November  1996 of  $11,973,000  and the  issuance  in August 1996 of 938,667
shares of common stock to

                                     -16-


<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)

Omnicom  Group Inc. for  $4,948,000,  offset in part by the repayment of certain
promissory  notes,  lines of credit for cash and payments to shareholders in the
amount of $1,881,000, $36,000, and $500,000 respectively.

The Company has entered  into  employment  agreements  ranging  from one year to
three years  (exclusive of  extensions)  with several of its executive  officers
pursuant  to which the company is  obligated  to pay such  individuals  up to an
aggregate of $1,365,000 per year.

The Company anticipates significant changes in its operating cost structure once
the Subsidiaries have been completely integrated, and administration and control
of the Company's future  operations have been  centralized.  The Company expects
that the cash generated from future  operations  combined with its existing cash
balances will be sufficient to fund the  anticipated  expenditures  required for
product  development,   organizational   infrastructure   (including  additional
personnel  and upgraded  telecommunications  and  computer  systems) and general
corporate needs for the next 12 months.

In connection with the acquisition of On Ramp, the Company recorded goodwill and
other intangible assets in the aggregate amount of $2,410,000, substantially all
of which is being amortized using the straight-line  method over a period of two
years. As a result,  the Company incurred during the nine months ended March 31,
1997, a non-cash charge to operations of approximately $885,000.


In connection with the initial public offering,  certain holders of common stock
placed,  on a pro rata basis,  825,000 shares into escrow (the "Escrow  Shares")
pursuant to an escrow  agreement  between  such  holders and  Continental  Stock
Transfer  &  Trust  Company,   as  escrow  agent.  The  Escrow  Shares  are  not
transferable  or  assignable;  however,  the  Escrow  Shares may be voted by the
beneficial  holders  thereof.  In the event of the release of the Escrow Shares,
the Company will  recognize  during the period in which the earnings  thresholds
are probable of being met or such stock levels achieved,  a substantial non-cash
charge to earnings  equal to the fair market value of such shares on the date of
their  release,  which  would have the effect of  significantly  increasing  the
Company's  loss or reducing or eliminating  earnings,  if any, at such time. The
recognition  of such  compensation  expense may have a depressive  effect on the
market  price  of  the  Company's  securities.   Notwithstanding  the  foregoing
discussion,  there can be no assurance  that the Company will attain the targets
which would enable the Escrow Shares to be released from escrow.

                                     -17-


<PAGE>



IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-based
Compensation"  ("SFAS No. 123")  issued by the  Financial  Accounting  Standards
Board  ("FASB")  is  effective  for  specific  transactions  entered  into after
December 15, 1995, while the disclosure requirements are effective for financial
statements for fiscal years beginning after December 15, 1995. The new standards
establish a fair value method of accounting for stock-based  compensation  plans
and for  transactions  in which  an  entity  acquires  goods  or  services  from
nonemployees  in exchange  for equity  instruments.  However,  it also allows an
entity to  continue  to  measure  compensation  cost for those  plans  using the
intrinsic  value based method of  accounting  prescribed  by APB Opinion No. 25,
"Accounting for Stock Issued to Employees." Entities electing to remain with the
accounting in APB Opinion No. 25 must make pro forma  disclosures  of net income
and earnings per share, as of the fair value based method of accounting  defined
in the  Statement  had been  applied.  The  Company  elected  to make pro  forma
disclosures  as allowed by SFAS No. 123, and the Company's  adoption of SFAS No.
123 during the first  quarter of fiscal  1997 did not have a material  effect on
the Company's financial position or results of operations.

SFAS No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived  Assets  to Be  Disposed  Of"  ("SFAS  No.  121"),  issued  by the FASB is
effective for financial statements for fiscal years beginning after December 15,
1995.  The new standard  establishes  new guidelines  regarding when  impairment
losses on  long-lived  assets,  which  include  plant and  equipment and certain
identifiable  intangible  assets  and  goodwill,  should be  recognized  and how
impairment  losses should be measured.  The Company  adopted SFAS No. 121 during
the first  quarter  of  fiscal  1997 with no  material  effect on its  financial
position or results of operations.

                                     -18-


<PAGE>


PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company is not a party to any pending or ongoing  litigation  required to be
disclosed pursuant to this item.

ITEM 2.  CHANGES IN SECURITIES

There have been no changes  in the  securities  of the  Company  required  to be
disclosed pursuant to this item.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

There have been no material  defaults  with respect to any  indebtedness  of the
Company required to be disclosed pursuant to this item.

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

There have been no matters  submitted to a vote of security  holders  during the
period ended March 31, 1997.

ITEM 5.  OTHER INFORMATION AND SUBSEQUENT EVENTS

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS.  There are no  exhibits  incorporated  herein by  reference;  (b)
REPORTS on Form 8-K. There were no Current Reports on Form 8-K filed
   by the Company during the period ended March 31, 1997.

                                     -19-


<PAGE>



SIGNATURES

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


THINK NEW IDEAS, INC.   May 4, 1998


By:  /S/ Scott A. Mednick
     ----------------------------------
        Scott A. Mednick
        Chief Executive Officer


By:  /S/ Melvin Epstein
     ----------------------------------
        Melvin Epstein
        Chief Financial Officer

                                     -20-