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

                                 FORM 10-QSB
                                  (Mark one)
  (X)             Quarterly  Report under Section 13 or 15(d)
                    of the Securities Exchange Act of 1934.

              FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 November 13, 1997
-----                                           --------------------------------
Common Stock, par value $.0001                          6,941,471
 per share shares

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


<PAGE>


                            THINK NEW IDEAS, INC.

                                 FORM 10-QSB

                                    INDEX

                                                                            Page
PART I - FINANCIAL INFORMATION................................................1
  Item 1.  Consolidated Financial Statements..................................1
     Condensed Consolidated Balance Sheet as of September 30, 1997............1
     Condensed Consolidated Statements of Operations for the three
     month periods ended September 30, 1997 and 1996..........................2
     Condensed Consolidated Statements of Cash Flows for the three
     months ended September 30, 1997 and 1996.................................3
     Notes to Condensed Consolidated Financial Statements.....................4
  Item 2.  Management's Discussion and Analysis or Plan of Operation..........7
PART II - OTHER INFORMATION..................................................15
  Item 1.  Legal Proceedings.................................................15
  Item 2.  Changes in Securities.............................................15
  Item 3.  Defaults Upon Senior Securities...................................15
  Item 4.  Submission of Matters to a Vote of Security Holders...............15
  Item 5.  Other Information and Subsequent Events...........................15
  Item 6.  Exhibits and Reports on Form 8-K..................................15



<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

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

                                                                   SEPTEMBER 30,
                                                                       1997
                                                               -----------------
ASSETS
Current assets:
   Cash and cash                                                 $   5,585,966
equivalents
   Marketable securities                                               250,283
   Accounts receivable, net of allowance for doubtful
      accounts of $614,137                                          15,729,275
   Unbilled receivables                                              4,442,434
   Prepaid expenses and other assets                                 2,074,557
                                                               -----------------
      Total current assets                                          28,082,515

Property, plant and equipment, net                                   2,461,074
Software development costs                                              97,500
Goodwill, net of accumulated amortization of $1,553,813              1,199,187
Other assets                                                           353,972
                                                               =================
      Total assets                                               $  32,194,248
                                                               =================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                         $   5,117,266
   Accrued restructuring costs                                         501,746
   Deferred revenue                                                 11,889,139
   Income taxes payable                                                 40,571
   Due to related party                                              1,906,512
   Current portion of obligations under capital leases                 156,867
                                                               -----------------
      Total current liabilities                                     19,612,101

   Obligations under capital leases                                    233,826
   Note payable to related party                                       515,760
   Other long-term liability                                                --
                                                               -----------------
      Total liabilities                                             20,361,687
                                                               -----------------
Commitments and contingencies Shareholders' equity:
   Preferred stock, $.0001 par value; 5,000,000 shares
     authorized; none issued and outstanding                                --
   Common stock, $.0001 par value; 50,000,000 shares
     authorized; 6,611,667 shares issued and outstanding                   662
   Additional paid in capital                                       19,447,542
   Accumulated deficit                                              (7,615,643)
                                                               -----------------
      Total shareholders' equity                                    11,832,561
                                                               =================
      Total liabilities and shareholders' equity                 $   32,194,248
                                                               =================

        See accompanying notes to condensed consolidated financial statements.


                                       1
<PAGE>




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

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

Revenues                                          $ 6,956,480    $ 4,238,968

Operating expenses:
   Direct salaries and related expenses             3,440,264      1,770,617
   Other direct expenses                            1,565,687      1,172,999
   Selling, general and administrative expenses     1,456,322        993,495
   Depreciation and amortization                      427,595        415,241
                                                  -----------    -----------

Operating profit/(loss)                                66,612       (113,384)

Interest income/(expense) and other net                (1,197)       (61,097)
                                                  -----------    -----------
Profit/(loss) before provision for taxes               65,415       (174,481)
Provision for income taxes                              4,580         26,774
                                                  ===========    ===========
Net (loss) income                                 $    60,835    $  (201,255)
                                                  ===========    ===========

Net income (loss) per share - primary             $      0.01    $     (0.06)
Weighted average shares outstanding                 6,151,789      3,035,575

Net income per share - fully diluted              $      0.01           --
Weighted average shares outstanding                 7,257,489           --


        See accompanying notes to condensed consolidated financial statements.




                                       2
<PAGE>



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

                                                       THREE MONTHS ENDED
                                                          SEPTEMBER 30,
                                                 -------------------------------
                                                      1997             1996
                                                 ---------------  --------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income (loss)                                $    60,835      $   (201,255)
Adjustments to reconcile net income (loss) to
   net cash provided by
   (used in) operating activities:
   Depreciation  and amortization                     84,364            62,918
   Amortization of intangibles and deferred          
          financing costs                            343,231           351,723
   Deferred income taxes                                  --           (12,000)
   Bad debt expense                                       --            41,664
   Consulting fees                                    38,000                --
   Changes in assets and liabilities:
      Accounts receivable                         (6,414,424)         (447,084)
      Unbilled receivables                        (1,945,045)         (895,647)
      Accounts payable and accrued expenses         (407,932)          (89,374)
      Deferred revenue                            10,935,583          (168,000)
      Other assets and liabilities                (1,273,438)         (333,087)
                                                 ---------------  --------------
Net cash provided by (used in) operating           
     activities                                    1,421,174        (1,690,142)
                                                 ---------------  --------------

CASH FLOW FROM INVESTING ACTIVITIES:
Additions to software development costs                   --           (94,057)
Purchases of marketable securities                (3,262,464)               --
Sales of marketable securities                     4,221,140                --
Purchases of property and equipment                 (214,685)         (156,108)
                                                 ---------------  --------------
Net cash provided by (used in) investing             743,991          (250,165)
activities
                                                 ---------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of promissory notes                             --        (1,880,505)
Deferred offering costs                                   --          (289,276)
Distributions to shareholders                             --           (80,000)
Proceeds from private placement                           --         4,948,062
Repayments on operating lines of credit                   --           (70,000)
Principal payments on long-term capital leases       (30,546)               --
                                                 ---------------  --------------
Net cash (used in) provided by financing             
     activities                                      (30,546)        2,628,281
                                                 ---------------  --------------
Net increase in cash and cash equivalents          2,134,619           687,974
Cash and cash equivalents, beginning of period     3,451,347           429,596
                                                 ===============  ==============
Cash and cash equivalents, end of period         $  5,585,966     $  1,117,570
                                                 ===============  ==============

Supplemental Cash Flow Information:
  Cash paid during the period
   Income taxes                                  $     9,880      $     90,000
   Interest                                            4,917           116,891

Noncash investing and financing activities:
   Conversion of convertible promissory notes             --           189,495
   into Common Stock
   Issuance of Common Stock to settle long-term      206,250                --
   liability

        See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>



                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note 1 - Financial Statements

      The accompanying  condensed  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and 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 at September 30, 1997 and the results of operations  for the
three  month  periods  ending  September  30,  1997 and  1996.  The  results  of
operations  for the three  month  period  ended  September  30,  1997 may not be
indicative  of the results  that may be expected for the fiscal year ending June
30, 1998. These condensed  consolidated  financial  statements should be read in
conjunction with the audited  consolidated  financial  statements of the Company
and the notes thereto for the fiscal year ended June 30, 1997.

      Certain  amounts for the three months ended  September  30, 1996 have been
reclassified to conform to the  presentation of the three months ended September
30, 1997.

Note 2 - Business Acquisitions

     On May 31, 1997,  the Company  acquired  certain  assets and  operations of
Fathom  Advertising  Agency,  Inc.  ("Fathom"),  a provider of traditional  full
service advertising services, from Ketchum Communications,  Inc. ("Ketchum"),  a
wholly-owned   subsidiary  of  Omnicom  Group  Inc.  ("Omnicom"),   a  principal
shareholder  of the  Company,  in exchange for 120,000  shares of the  Company's
common  stock  (the  "Common  Stock").  Fathom  had  revenues  of  approximately
$1,800,000  for the year ended December 31, 1996,  which were derived  primarily
from one customer.  The  acquisition  has been  accounted for using the purchase
method of accounting and, accordingly,  the results of operations of Fathom have
been reflected in the consolidated  financial statements of the Company from the
date of  acquisition.  In  connection  with the  acquisition,  the Company is to
return the  excess of media  accounts  receivable  purchased  ($3,012,592)  over
accounts payable assumed ($1,106,080) to Ketchum in the amount of $1,906,512, as
collected.  The  purchase  price of  $442,500,  which equals the excess over the
carrying  values of the net assets  acquired,  is being amortized by the Company
over two years.

Note 3 - Private Placement

      In August 1996,  the Company issued shares of Common Stock to Omnicom in a
private  placement.  As a result,  the Company  issued an  aggregate  of 938,667
shares of Common Stock in exchange for net proceeds (after  transaction costs of
approximately  $50,000) of  $4,948,000.  Additionally,  certain of the Company's
principal shareholders gave Omnicom an additional 124,667 shares of Common Stock
owned by them for no additional consideration.




                                       4
<PAGE>



                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


Note 4 - Convertible Promissory Note Conversions and Extinguishments

      In March 1996,  the  Company  borrowed  $270,000  pursuant to the terms of
three  separate  10%  convertible  promissory  notes.  Two of the notes,  having
original principal  balances of $225,000 and $20,000,  were payable to Benchmark
Equity Group, Inc. (`Benchmark"),  which is controlled by Frank DeLape, a former
director  and  a  principal  shareholder  of  the  Company  and  to  Mr.  DeLape
individually.  Amounts  outstanding  under  each of the  promissory  notes  were
payable  upon the earlier of  September  30, 1996 or a debt or equity  financing
resulting  in  proceeds to the Company of  $2,000,000  or more.  Such notes were
repaid and an  aggregate  of $27,000 in  principal  thereof was  converted  into
216,667 shares of Common Stock in August, 1996.

      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 a debt or  equity  financing  resulting  in  proceeds  to the
Company  of  $3,000,000  or more.  Such notes were  repaid and an  aggregate  of
$162,000 in principal  thereof was converted  into 216,660  shares of the Common
Stock in August, 1996.

      In August 1997, the Company conducted the private  placement  described in
Note 3 above,  a portion of the  proceeds  of which was used to  extinguish  the
unconverted   principal  and  interest  of  $1,881,000   under  the  convertible
promissory notes.

Note 5 - Restructuring Costs

     In June 1997, the Company  implemented a plan for two of its  subsidiaries,
NetCube Corporation ("NetCube") and Internet One, Inc. ("Internet One") to close
the  operations  of these  subsidiaries  and  dispose of  related  assets due to
continued  decline  in such  entities'  performance.  The cost of this  plan was
accounted for in accordance  with the guidance set forth in Emerging Issues Task
Force  Issue  94-3  "Liability  Recognition  for  Certain  Employee  Termination
Benefits and Other Costs to Exit an Activity  (Including  Certain Costs Incurred
in a Restructuring)" ("EITF 94-3").

     The pretax costs of approximately  $1,732,000 which were incurred as a part
of this plan represent employee  termination and severance costs, the write-down
of  capitalized  software  costs and other related costs that were incurred as a
direct result of the plan. As of September 30, 1997,  approximately $634,000 was
paid under this arrangement.  The components of the  restructuring  costs are as
follows:

     Write-down of capitalized software costs            $597,000
     Severance benefits and employee termination costs    681,000
     Disposal of fixed assets and other assets            369,000
     Other                                                 85,000
                                               ===================
                                                       $1,732,000
                                               ===================



                                       5
<PAGE>




                     THINK NEW IDEAS, INC. AND SUBSIDIARIES
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


Note 5 - Restructuring Costs (Continued)

    Aggregate  revenues  and  operating  losses for NetCube and Internet One for
fiscal 1997 and 1996 were as follows:

                                              1997               1996
                                        -----------------  -----------------
      Revenues                             $1,253,000         $2,740,000
      Operating loss                       (1,746,000)        (1,073,000)


Note 6 - Consulting Agreement

      On June 30, 1997, the Company entered into a one year consulting agreement
with an  individual  whereby the Company  agreed to issue up to an  aggregate of
200,000  shares of Common  Stock and options to acquire up to 150,000  shares of
Common Stock. The agreement,  which may be terminated by the Company at any time
upon  delivery of thirty (30) days  notice,  provides for the issuance of 50,000
shares  within 15 days of signing for services  rendered  prior to such issuance
and the issuance of 12,500 shares of Common Stock and options to purchase 12,500
shares of Common Stock at the end of each month of the agreement. The fair value
of the shares of Common Stock and options will be charged to  operations  on the
date of issuance and grant,  respectively.  For the period ended  September  30,
1997, the Company charged approximately $122,000 to operations.

Note 7 - Subsequent Events

     On November 3, 1997,  the Company  entered  into an  agreement  and plan of
merger  (the  "BBG  Agreement")  with  BBG  New  Media,  Inc.,  a  Massachusetts
corporation ("BBG"),  which provides interactive marketing services, in exchange
for:  (i) the  issuance of 303,334  shares of Common Stock and $175,000 in cash;
and (ii) the  subsequent  issuance  of  shares  of  Common  Stock  based  upon a
percentage  of sales  growth of BBG  during  the period  from  November  1, 1998
through  October 31,  1999.  The  acquisition  will be  accounted  for using the
purchase method of accounting and, accordingly, the results of operations of BBG
will be reflected in the Company's financial  statements from the effective date
of the merger.



                                       6
<PAGE>




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

      The  following  discussion  and  analysis  of the  Company's  consolidated
financial condition and results of operations should be read in conjunction with
the Company's  Condensed  Consolidated  Financial  Statements and Notes thereto.
This  document may contain  forward-looking  statements  that involve  risks and
uncertainties.  The Company's actual results may differ  significantly  from the
results  discussed in the forward looking  statements.  Factors that might cause
such a  difference  include,  but are not limited  to,  those  discussed  in the
section entitled "Business--Factors Affecting Operating Results and Market Price
of Stock" included in the Company's Form 10-KSB for the year ended June 30, 1997
filed with the Securities and Exchange Commission in October 1997.

Corporate Background

      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,  the Company  completed  the  acquisition  of all of the
outstanding  shares of  capital  stock of Scott A.  Mednick &  Associates,  Inc.
("Mednick"),  On  Ramp,  Inc.  ("On  Ramp"),  Internet  One,  NetCube,  Creative
Resources,  Inc.  ("Creative  Resources")  and  the  S.D.  Goodman  Group,  Inc.
("Goodman") in exchange for an aggregate of 723,167 shares of Common Stock.  The
Company's  acquisition of On Ramp was accounted for using the purchase method of
accounting. Each of the Company's other acquisitions was accounted for using the
pooling of interests method. Accordingly,  the results of operations for each of
the  Company's  subsidiaries  (other  than On Ramp)  have been  included  in the
Company's financial statements since the earlier of July 1, 1993 or each of such
subsidiary's inception.  The results of operations of On Ramp have been included
in the Company's financial statements since July 1, 1996.

      On May 31, 1997,  the Company  acquired  certain  assets and operations of
Fathom,  a  full  service  advertising  agency,  from  Ketchum,  a  wholly-owned
subsidiary  of Omnicom,  in exchange for the issuance of an aggregate of 120,000
shares of Common Stock.  The Company's  acquisition of the assets and operations
of  Fathom  was  accounted  for  using  the  purchase   method  of   accounting.
Accordingly,  the  results of  operations  of Fathom  have been  included in the
Company's  financial  statements  since June 1, 1997.  Fathom's  single  largest
client  accounts for virtually  all of its revenue.  See Note 2 to the Condensed
Consolidated  Financial  Statements included elsewhere herein. Larry Kopald, the
individual who was  responsible  for the this principal  client account while at
Fathom,  joined  the  Company  as an  officer  and  employee  of the  Company in
connection with its acquisition of Fathom.

      In June 1997, the Company made the decision to restructure  the operations
of Internet  One in Boulder,  Colorado  and  NetCube in  Edgewater,  New Jersey.
Internet One had become a production  facility for high level technology  client


                                       7
<PAGE>




services,  but with limited sales and marketing efforts.  The Company determined
it could  effectively  consolidate  the  client  relationships  of its  Boulder,
Colorado  office  into its New  York and Los  Angeles  facilities  with  minimal
impact,  and  therefore,  the  facility  was closed and all of the  employees of
Internet One were terminated.  NetCube had developed proprietary data mining and
analysis  software for large data base and data  warehousing  applications.  The
Company determined that the marketing of  "shrink-wrapped"  software was not its
core competency and would both confuse the Company's focus and involve too great
an  investment  for the  anticipated  return.  The Company has hired several key
developers from NetCube for its New York interactive group,  ceasing the ongoing
marketing and helpdesk development at its New Jersey facility. This has resulted
in the  termination  of the  remaining  employees  of  NetCube.  The  Company is
currently discussing the sale of the remaining assets of NetCube,  primarily the
software  code,  with  several  different   companies.   Total  estimated  costs
associated  with the  above  in the  amount  of  approximately  $1,732,000  were
included in the Company's  financial  statements  for the fiscal year ended June
30, 1997. As of September 30, 1997,  approximately  $634,000 was paid under this
arrangement.  See Note 5 to the Condensed  Consolidated  Financial Statements of
the Company included elsewhere herein.

      On November 3, 1997, the Company entered into the BBG Agreement,  pursuant
to which the Company  acquired BBG in exchange  for: (i) the issuance of 303,334
shares of Common Stock and $175,000 in cash; and (ii) the subsequent issuance of
shares of Common Stock based upon a percentage of sales growth of BBG during the
period from November 1, 1998 through October 31, 1999. The  acquisition  will be
accounted for using the purchase  method of  accounting  and,  accordingly,  the
results  of  operations  of BBG will be  reflected  in the  Company's  financial
statements  from the effective  date of the merger.  See Note 7 to the Condensed
Consolidated Financial Statements included elsewhere herein.

Overview of Operations and Revenue

      The Company generates revenue from both traditional marketing and 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 media  placement
services,  and  interface  solutions  that  provide  high-speed  access  via the
Internet to off-line  databases.  Historically,  revenues from these services by
the Company  have been  derived on a  project-by-project  basis,  which tends to
cause fluctuations in revenues between reporting periods.  Substantial  portions
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  and  subscription
services,  which will  create  recurring  revenue  streams for the life of their
respective  contracts  (typically  twelve (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


                                       8
<PAGE>




larger projects. In connection with Website design and development,  the Company
typically  enters into  twelve-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.

Business Strategy

      Part of the Company's overall business strategy is to continue to increase
the  percentage  of revenue  that is  recurring  and to continue to increase the
number of services provided to a particular  client. The Company is implementing
this strategy by increasing its over-all marketing and cross-marketing efforts.

      Another  part of the  Company's  business  strategy is to grow through the
acquisition  and  integration  of  synergistically  compatible  businesses.  The
Company  believes  that there  will be a  consolidation  among  technology-based
marketing solution providers and that this consolidation will continue to create
opportunities for the Company to expand through acquisitions and joint ventures.
In addition to its  acquisition  of the assets and  operations of Fathom and its
acquisition of and merger with BBG, the Company has undertaken  discussions with
several  companies engaged in businesses that are complementary or supplementary
to those of the Company. The Company's acquisition  strategies include acquiring
companies that will be integrated  into the Company's  existing  infrastructure,
enabling  the  Company  to  acquire  access to  additional  product  or  service
offerings,  experienced  management that can contribute to building the business
in  a  profitable  manner,  and  potentially,  provide  international  expansion
(through the acquisition of companies outside of the United States).

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996

Revenues

      Consolidated  revenues  increased to $6,956,000 for the three months ended
September 30, 1997 from $4,239,000 for the three months ended September 30, 1996
(64%).  Revenues for  interactive  services  increased to $3,065,000  during the
three months ended  September 30, 1997 from  $2,455,000  during the three months
ended  September 30, 1996 (25%).  Revenues for traditional  strategic  marketing
operations  increased to $3,891,000  during the three months ended September 30,
1997 from  $1,822,000  during the three months ended  September  30, 1996 (114%)
primarily  as a result of the  inclusion  of revenues  from Fathom for the first
full  quarter as well as new  clients  and  increased  revenue  from  additional
services provided to existing clients.



                                       9
<PAGE>





OPERATING EXPENSES

Direct Salaries And Related Expenses

Direct salaries and related expenses consist  primarily of wages for regular and
temporary  employees,  as well as  incentive  bonus  payments  and  benefits for
regular employees.  The Company's direct salaries and related expenses increased
to $3,440,000  during the three months ended  September 30, 1997 from $1,771,000
during the three months ended  September 30, 1996 (94%)  principally as a result
of the Company's investment in additional marketing and creative employees since
the three months ended September 30, 1996 to meet its higher level of operations
and  its  expected   growth  from  existing   outstanding   project   proposals.
Additionally, approximately $409,000 of the increase resulted from the inclusion
of the  operations  of Fathom  (acquired in May 1997) for the three months ended
September 30, 1997.

Other Direct Expenses

      Other  direct  expenses  include  materials,   contract  freelance  talent
(independent  consultants and contractors),  facilities and equipment  expenses.
Other  direct  expenses  increased to  $1,566,000  during the three months ended
September 30, 1997 from  $1,173,000  during the three months ended September 30,
1996 (34%).  The increase was primarily  related to increased  costs  associated
with the Company's higher level of revenues.

Selling, General And Administrative Expenses

      Selling,   general  and  administrative   expenses  include   headquarters
expenses, insurance, personnel costs for finance and administration,  accounting
and legal fees, bad debt expense,  management  information systems expenses, and
employee benefits.  Selling,  general and  administrative  expenses increased to
$1,456,000 during the three months ended September 30, 1997 from $993,000 during
the three months ended  September  30,  fiscal 1996 (47%),  primarily due to the
formation and continued expansion of the Company's corporate  infrastructure for
both internal growth and growth through acquisition.

Depreciation and Amortization

      Depreciation  and  amortization  increased  to  $428,000  during the three
months  ended  September  30, 1997 from  $415,000  during the three months ended
September 30, 1996.  Depreciation and amortization includes $300,000 and $50,000
for the amortization of goodwill and other intangibles  relating to the purchase
method of accounting required for the Company's  acquisitions of On Ramp in June
1996 and Fathom in May 1997, respectively.

Interest Income/Expense and Other Net

      The  $1,200 in net  other  income  reflected  in the  three  months  ended
September  30,  1997  compares  favorably  to the net other  expense  of $61,100


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<PAGE>




reflected in the three  months ended  September  30, 1996  primarily  due to the
effect of the investment of the cash proceeds from the Company's  initial public
offering in November 1996 (the "Initial Public Offering").

Pre-Tax Profit/Loss

      The  Company  had a pre-tax  profit of $65,000 in the three  months  ended
September  30, 1997  compared to a pre-tax  loss of $174,000 in the three months
ended September 30, 1996. This represents the Company's first profitable  fiscal
quarter since the Initial Public Offering.

Income Taxes

      The  Company had an income tax  expense of $5,000,  primarily  relating to
state taxes,  in the three months ended September 30, 1997 compared to an income
tax  expense  of $27,000 in the three  months  ended  September  30,  1996.  The
decrease is a result of accumulated net operating loss carryforwards the Company
is able to apply against  pre-tax  profit.  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  Company's  subsidiaries  (the
"Subsidiaries")  have financed their operations primarily through cash generated
from  operations,   bank  borrowings,   shareholder  contributions  and  private
financings.  Since the Initial Public Offering in November 1996, the Company has
financed its operations with the proceeds of such offering and cash generated by
operations.

      During 1996, the Company entered into a series of transactions in order to
fund the  operations of the  Subsidiaries  and to prepare itself for the Initial
Public  Offering.  In March  1996,  the  Company  raised  $270,000  in a private
offering,  pursuant to which the Company issued three 10% convertible promissory
notes (the "10% Notes").  Proceeds of the private  placement  were 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 in another private
offering  in April  1996,  pursuant  to which the  Company  issued  several  12%
convertible  promissory  notes  (the  "12%  Notes").  Proceeds  received  by the
Company, after deducting placement fees and other expenses,  totaled $1,582,500.
An aggregate of $1,000,000 of the proceeds  received from this private placement
was  loaned  to On Ramp in  order to  complete  a  transaction  in which On Ramp
redeemed  outstanding  shares  of its  capital  stock.  The  remaining  proceeds
received from this private placement were used to provide working capital for On
Ramp and  Internet  One.  See  Note 4 to the  Condensed  Consolidated  Financial
Statements included elsewhere herein.

      In August 1996,  the Company  received net proceeds of $4,948,000  through
the issuance of 938,667  shares of Common Stock to Omnicom.  Proceeds  from this
transaction (the "Omnicom  Transaction")  were used by the Company to retire the
nonconvertible  portion of the outstanding  principal and accrued interest under
the 10% Notes and 12% Notes  (aggregating  $1,880,505),  to repay  certain other
debt and outstanding obligations, to fund the operations of the Subsidiaries and


                                       11
<PAGE>




to cover expenses and costs incurred in connection with the  acquisitions of the
Subsidiaries  and the  Initial  Public  Offering.  See  Note 3 to the  Condensed
Consolidated Financial Statements included elsewhere herein.

      In November 1996, the Company completed its Initial Public Offering, which
has provided  significant  working capital to the Company and its  Subsidiaries.
The Company issued 2,150,000 shares of Common Stock and received net proceeds of
$11,973,000.

      At  September  30,  1997,  the  Company had cash and cash  equivalents  of
approximately  $5,586,000  and  working  capital  of  approximately  $8,470,000,
primarily as a result of receipts of the proceeds of the Initial Public Offering
and receipt of payments for services rendered to clients.

      Net cash  provided by  operating  activities  for the three  months  ended
September 30, 1997 of $1,421,000  resulted primarily from net income of $61,000,
offset by noncash  charges for: (i)  depreciation  and  amortization of $428,000
(including amortization of intangibles of $343,000), and (ii) consulting fees of
$38,000, combined with an increase in deferred revenue of $10,936,000, offset by
a decrease in accounts  receivables  and unbilled  receivables of $6,414,000 and
$1,945,000,  respectively,  and an  increase  in  accounts  payable  and accrued
expenses of $408,000. The increase in unbilled receivables is principally due to
two Website  development  projects  undertaken by On Ramp for which  significant
work has been performed in advance of the dates billings are permitted under the
applicable   contracts.   Accounts   receivable   increased   primarily  due  to
pass-through  costs billed to clients  associated  with the operation of Fathom,
which was acquired in May 1997,  and  increased  volume of work  performed by On
Ramp.  Accounts  receivable  greater  than  sixty (60) days old  increased  from
$1,582,000 at June 30, 1997 to $3,578,000 at September 30, 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  clients  whom the  Company  believes  to be  credit-worthy.  Such
amounts were either  collected  subsequent  to September 30, 1997 or the Company
believes them to be  collectible in the near future.  The Company  believes that
its reserve for bad debts of approximately  $614,000 is sufficient to adjust the
carrying  amount of its  receivables  at  September  30, 1997 to an amount which
approximates  net  realizable  value.  Accounts  payable  and  accrued  expenses
increased principally due to pass-through costs associated with Fathom which was
acquired in May 1997.

      Net cash provided by investing  activities for the period ended  September
30, 1997 of $744,000 resulted primarily from net sales of marketable  securities
of $959,000, offset in part by capital expenditures of $215,000.

      Net cash used in financing  activities for the period ended  September 30,
1997 of $31,000 resulted from principal payments on long-term capital leases.

      The Company is a party to employment  agreements  ranging in term 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 $1,950,000 per year.

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<PAGE>




      Management  of the Company  anticipates  that the Company will continue to
experience   significant   changes  in  its  operating  cost  structure  as  the
Subsidiaries  continue to be integrated,  and  administration and control of the
Company's future operations become more  centralized.  Management  believes that
the  Company's  existing cash balances and the cash  generated  from  continuing
operations  will  be  sufficient  to  fund  its   operations,   the  anticipated
expenditures required for product development, its organizational infrastructure
(including  additional  personnel and upgraded  telecommunications  and computer
systems) and general  corporate needs for the next twelve (12) months.  However,
there  can be no  assurance  that  the  Company  will  not be  required  to seek
additional  sources of financing within the foreseeable  future.  The failure to
raise the funds  necessary  to finance the  Company's  future cash  requirements
would  adversely  affect  the  Company's   ability  to  pursue  its  operational
strategies.

      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, during the first fiscal quarter of 1997
and over the next  several  fiscal  quarters,  the Company has incurred and will
incur  non-cash  charges to  operations  aggregating  for each full  fiscal year
approximately $1,205,000.

      In connection with the acquisition of the assets and operations of Fathom,
the  Company  recorded  goodwill  in the  amount  of  $442,500,  which  is being
amortized  using the  straight-line  method over a period of two (2) years. As a
result, during the three months ended September 30, 1997, the Company incurred a
non-cash charge to operations of  approximately  $55,000 and will incur over the
next eight (8)  fiscal  quarters  non-cash  charges  to  operations  aggregating
approximately $54,000 per quarter.

      In connection with the Initial Public  Offering,  certain  stockholders of
the  Company  agreed to place  their  shares of Common  Stock in an escrow to be
released upon the Company's attainment of certain performance goals (the "Escrow
Shares").  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  noncash  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.  Similar  accounting  treatment  is
expected to be applied with respect to the issuance in subsequent periods of the
shares of Common Stock and options under a certain consulting  agreement between
the  Company  and  Jason H.  Pollak.  See Note 6 to the  Condensed  Consolidated
Financial Statements included elsewhere herein.



                                       13
<PAGE>




IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

Earnings Per Share

       In February 1997,  the Financial  Accounting  Standards  Board ("FASB")
issued SFAS No.  128,  "Earnings  Per Share"  ("SFAS No.  128").  SFAS No. 128
specifies  the  computation,  presentation  and  disclosure  requirements  for
earnings  per share.  SFAS No.  128 is  effective  for  periods  ending  after
December  15, 1997.  The adoption of this  statement is not expected to have a
material effect on the consolidated financial statements.

Reporting Comprehensive Income

      In June 1997,  the FASB  issued  SFAS No.  130,  "Reporting  Comprehensive
Income" ("SFAS No. 130"), which established  standards for reporting and display
of comprehensive income, its components and accumulated balances.  Comprehensive
income is defined to include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements.

      SFAS No. 130 is effective for financial  statements for periods  beginning
after December 15, 1997 and requires  comparative  information for earlier years
to be restated. Because of the recent issuance of this standard,  management has
been unable to fully  evaluate  the impact,  if any,  the  standard  may have on
future  financial  statement  disclosures.  Results of operations  and financial
position, however, will be unaffected by implementation of this standard.

Reporting Segments of an Enterprise

      In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related  Information"  ("SFAS No. 131"), which supersedes SFAS
No. 14, "Financial  Reporting for Segments of a Business  Enterprise".  SFAS No.
131 establishes  standards for the way that public companies report  information
about operating  segments in annual financial  statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public.  It also establishes  standards for disclosures  regarding
products  and  services,  geographic  areas and major  customers.  SFAS No.  131
defines  operating  segments as  components  of a company  about which  separate
financial  information  is available  that is  evaluated  regularly by the chief
operating  decision maker in deciding how to allocate resources and in assessing
performance.

            SFAS No. 131 is  effective  for  financial  statements  for  periods
beginning  after  December 15, 1997 and  requires  comparative  information  for
earlier years to be restated.  Because of the recent  issuance of this standard,
management has been unable to fully evaluate the impact,  if any, it may have on


                                       14
<PAGE>




future  financial  statement  disclosures.  Results of operations  and financial
position, however, will be unaffected by implementation of this standard.

                          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 September 30, 1997.

ITEM 5.  OTHER INFORMATION AND SUBSEQUENT EVENTS

      On November 3, 1997, the Company entered into the BBG Agreement,  pursuant
to which the Company  acquired BBG in exchange  for: (i) the issuance of 303,334
shares of Common Stock and $175,000 in cash; and (ii) the subsequent issuance of
shares of Common Stock based upon a percentage of sales growth of BBG during the
period from November 1, 1998 through October 31, 1999. The  acquisition  will be
accounted for using the purchase  method of  accounting  and,  accordingly,  the
results  of  operations  of BBG will be  reflected  in the  Company's  financial
statements from the effective date of the merger.

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 September 30, 1997.




                                       15
<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.

November 14, 1997                   THINK New Ideas, Inc.


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


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





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