<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) Quarterly Report Pursuant to Section 12 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 1998
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From ________ To ________
Commission File Number: 0-22281
SCOOP, INC.
(Exact name of Registrant as specified in its charter)
Delaware 33-0726608
(State or other jurisdiction of (I.R.S. Employer ID No.)
incorporation or organization)
2540 Red Hill Avenue 92705
Santa Ana, CA (Zip Code)
(Address of principal
executive offices)
(714) 225-6000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the past 12 months (or for any 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.
Common Stock, par value 5,501,214
$.001 per share (outstanding on August 12, 1998)
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCOOP, INC.
BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS
June 30,
1998
----
<S> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . $ 42,400
Accounts receivable, net of allowance for doubtful accounts of $49,600. 184,400
Prepaid expenses . .. . . . . . . . . . . . . . . . . . . . . . . . . . 65,100
--------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . 291,900
EQUIPMENT, at cost, net of accumulated depreciation and amortization. . 627,900
--------------
$ 919,800
--------------
--------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 710,200
Accrued payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,700
Accrued royalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488,900
Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . 261,400
Current portion of capital lease obligations. . . . . . . . . . . . . . 82,600
--------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . 1,688,800
CAPITAL LEASE OBLIGATIONS, net of current portion . . . . . . . . . . . 42,200
STOCKHOLDERS' DEFICIT:
Preferred stock, $.001 par value; 5,000,000 shares authorized;
No shares issued or outstanding . . . . . . . . . . . . . . . . . .
Common stock, $.001 par value; 20,000,000 shares authorized;
5,501,214 shares issued and outstanding . . . . . . . . . . . . . . 5,400
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . 9,146,000
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . (10,256,400)
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . 293,800
--------------
Total stockholders' deficit . . . . . . . . . . . . . . . . . . . . (811,200)
--------------
$ 919,800
--------------
--------------
</TABLE>
See accompanying notes to financial statements
2
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SCOOP, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ --------------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $ 485,700 $ 633,400 $ 962,000 $ 1,166,100
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . 256,500 408,900 478,500 687,400
----------- ---------- ----------- ------------
Gross profit . . . . . . . . . . . . . . . . . . . . . 229,200 224,500 483,500 478,700
Operating Expenses:
Research and development . . . . . . . . . . . . . . . . 515,500 821,800 265,600
Selling and marketing. . . . . . . . . . . . . . . . . . 199,200 97,300 345,200 345,400
General and administrative . . . . . . . . . . . . . . . 612,100 768,800 975,000 1,649,400
----------- ---------- ----------- ------------
1,326,800 866,100 2,142,000 2,260,400
Operating loss . . . . . . . . . . . . . . . . . . . . . . (1,097,600) (641,600) (1,658,500) (1,781,700)
Other income (expense) . . . . . . . . . . . . . . . . . . 16,100 (1,600) 10,900 5,700
----------- ---------- ----------- ------------
Loss before provision for income taxes. . . . . . . . . . . (1,081,500) (643,200) (1,647,600) (1,776,000)
Provision for income taxes . . . . . . . . . . . . . . . . 1,600
----------- ---------- ----------- ------------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . $(1,081,500) $ (643,200) $(1,649,200) $ (1,776,000)
----------- ---------- ----------- ------------
Basic and diluted loss per share. . . . . . . . . . . . . . $ (0.19) $ (0.12) $ (0.36) $ (0.32)
----------- ---------- ----------- ------------
----------- ---------- ----------- ------------
</TABLE>
See accompanying notes to financial statements
3
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SCOOP, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------------------
1997 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,649,200) $ (1,776,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . 73,400 114,400
Deferred compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,900 18,200
Loss on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,700
Changes in:
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (54,600) (43,000)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,500)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (153,900) (18,100)
Income tax refund receivable . . . . . . . . . . . . . . . . . . . . . . . . 15,400
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,800 190,900
Accrued payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106,800 (20,200)
Accrued royalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,400 82,600
Other accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . 92,800 (28,400)
------------- -------------
Net cash used in operating activities. . . . . . . . . . . . . . . . . . (1,379,700) (1,433,900)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (255,300)
Purchase of equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,000)
Proceeds from sales of assets. . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
------------- -------------
Net cash(used in) provided by investing activities (255,300) 4,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of capital lease obligations . . . . . . . . . . . . . . . . . . . . . (67,500) (40,300)
Borrowings under line of credit. . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Repayment of line of credit. . . . . . . . . . . . . . . . . . . . . . . . . . . (150,000)
Proceeds from bridge notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000
Repayment of bridge notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . (300,000)
Repayment of covenant-not-to compete obligation. . . . . . . . . . . . . . . . . (11,100)
Proceeds from issuance of common stock (Note 2) . . . . . . . . . . . . . . . . 5,844,400
------------- -------------
Net cash provided by(used in) financing activities. . . . . . . . . . . . 5,765,800 (40,300)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . $ 4,130,800 $ (1,470,200)
CASH AND CASH EQUIVELANTS:
Beginning of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262,400 1,512,600
------------- -------------
End of period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,393,200 $ 42,400
------------- -------------
------------- -------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
Cash paid during the period for:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,300 $ 5,700
------------- -------------
------------- -------------
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,600
------------- -------------
------------- -------------
SCHEDULE OF NONCASH INVESTING AND FINANCING TRANSACTIONS
Contractual obligations incurred for the acquisition of equipment. . . . . . . . $ 43,700 $ 48,500
------------- -------------
------------- -------------
Termination of obligations related to redeemable shares of common stock. . . . . $ 2,358,700 $
------------- -------------
------------- -------------
</TABLE>
4
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See accompanying notes to financial statements
5
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SCOOP, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements of Scoop, Inc. (the
"Company") have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, the
financial statements include all adjustments necessary for a fair presentation
of the balance sheet at June 30, 1998 and the results of operations, and the
cash flows for the three and six month periods ended June 30, 1998 and 1997. The
condensed consolidated financial statements should be read in conjunction with
the financial statements and notes thereto included in the Company's Form 10-KSB
for the fiscal year ended December 31, 1997.
In March 1997, the Company reincorporated in the State of Delaware. The
accompanying financial statements include the effects of the reincorporation and
the resulting increase in the authorized common stock to 20,000,000 shares and
authorization of 5,000,000 shares of preferred stock.
2. INITIAL PUBLIC OFFERING
In April 1997, the Company completed its initial public offering of 1,450,000
shares of common stock at $4.50 per share, resulting in proceeds to the Company
of approximately $5.0 million, net of underwriting discounts and commissions and
offering expenses. In May 1997, the Company sold an additional 207,050 shares
of common stock at $4.50 per share pursuant to the exercise of the underwriters'
over-allotment option, resulting in additional net proceeds to the Company of
approximately $800,000. Upon the completion of the initial public offering, the
mandatory redemption rights associated with 926,664 shares of common stock
terminated. As a result of the termination of the redemption rights, the
Company reclassified manditorily redeemable common stock to equity.
3. NET LOSS PER SHARE
NET LOSS PER COMMON SHARE - As December 31, 1997, the Company adopted
Statement of Accounting Financial Standards (SFAS) and No.128, Earnings Per
Share. SFAS No.128 requires the Company to report basic earnings per share,
as defined therein, which excludes common share equivalents from the earnings
per share computation, and diluted earnings per share, as defined therein,
which assumes dilution from outstanding options and warrants. Earnings per
share amounts for all periods presented have been restated to conform to the
requirements of SFAS No.128. The weighted average number of common shares
outstanding used in determining basic and diluted loss per share for the
three month periods ended June 30, 1998 and 1997 was 5,501,000 in 1998 and
5,431,000 respectively. The weighted average number of common shares
outstanding used in determining basic and diluted loss per share for the six
month periods ended June 30, 1998 and 1997 was 5,501,000 in 1998 and
4,546,000 respectively.
6
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4. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board (FASB) issued SFAS No.
130, REPORTING COMPREHENSIVE INCOME. SFAS 130 establishes standards for the
reporting and display of comprehensive income and its components in a set of
general purpose financial statements. There was no difference between
comprehensive income and net income as reported for the three and six months
ended June 30, 1998 and 1997.
In June 1997,the FASB issued SFAS 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION. SFAS 131 establishes standards for the way
public business enterprises are to report information about operating segments
in annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The disclosures
described by SFAS 131 are effective in the year ending December 31, 1998 but are
not required for interim periods in the year of adoption.
5. NASDAQ DE-LISTING
During the 2nd quarter 1998, Scoop Inc. was notified that they did not meet the
minimum listing requirements of the NASDAQ Small Cap Stock Exchange. The company
presented a plan to NASDAQ in May, 1998 in which it asked for a 90 day waiver in
order to complete the sale of certain operating assets, complete the acquisition
of Multimedia KID, an Israeli-based educational software company, and raise up
to $7 million in new financing. The Company expected this plan would bring
the Company back into compliance with NASDAQ listing requirements. On June 24,
1998, Scoop received notification that it was de-listed from the NASDAQ Small
Cap Stock Exchange.
6. SUBSEQUENT EVENTS
MKID ACQUISITION TERMINATED. In May 1998, the Company entered into an
agreement to acquire 100% of the capital stock of MKID. This agreement was
terminated by MKID due to Scoops' being de-listed from the NASDAQ Small Cap
Stock Exchange.
SCOOP, INC. FILES BANKRUPTCY. Through June 30, 1998, the Company has
incurred significant operating losses and has an accumulated deficit
$10,256,000. Because the Company's ability to continue as a going concern is
dependent upon its ability to secure additional sources of financing, and
since the company has been unable to secure additional sources of financing,
Scoop, Inc. filed a voluntary petition for relief under chapter 11 of the
United States Bankruptcy Code July 31, 1998. As part of the Company's
bankruptcy plan the Company anticipates selling its Scoop Media Services and
Scoop Information Services divisions. The proceeds from the anticipated
sales of these divisions is expected to enable the company to pay at least
90% of the amount owed to creditors. The sale of both divisions are expected
to close in September, 1998. The buyer of Scoop Media Services is expected to
be The Call Company of Laguna Hills, California. The Company has signed an
Asset Purchase Agreement with The Call Company in which it is agreed that
Scoop Media Services assets will be sold to them for the
7
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sum of $1.45 million in cash. The buyer for Scoop Information Services is
expected to be Solutions Corporation of America of Nashville, Tennessee. The
Company is negotiating an asset purchase agreement with Solutions Corporation of
America in which these assets will be sold to them for the sum of $300,000.
There can be no assurance, however, that such transactions will occur. All
asset sales require approval of the bankruptcy court.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION AND ANALYSIS IF THE COMPANY'S FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE MONTHS ENDED JUNE 30, 1997 AND 1998 SHOULD BE READ
IN CONJUNCTION WITH THE COMPANY'S FINANCIAL STATEMENTS AND RELATED NOTES THERETO
INCLUDED IN THE COMPANY'S FORM 10KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997.
OVERVIEW
Since the Company began operations in May 1990, it has provided publishing
services while also developing its information service business. The Company's
Scoop Media Services unit sells custom-designed reprints and framed wall
displays of published articles from newspapers, magazines and on-line
publications. Prior to February 1998, the Company's Scoop Information Services
division was developing a web-accessible personalized news service design to
meet the needs of business professionals.
The Scoop Media Services business information product line has generated
substantially all of the Company's net sales to date. In 1997, the Company
focused its sales efforts on the growth of the reprint business. In line with
this focus, the Company has entered into exclusive contracts with seven
publishers, including INVESTORS BUSINESS DAILY and American City Business
Journals, to produce and market reprint products from such publications. The
Company intends to sell Scoop Media Services to The Call Company of Laguna
Hills, California.
The Company initiated development of its Scoop Information Services division
technology in early 1994. These efforts were principally financed through
contributions by the Scoop Media Services business in 1994 and 1995. In the
first half of 1996, the Company completed various rounds of private funding.
The private placements completed in April through July 1996 netted the Company
approximately $1.4 million and enabled the Company to accelerate its pace of
investment in the Scoop Information Services business. Since 1994, the Company
has invested approximately $3.5 million in the development of its two on-line
news services, SCOOP! DIRECT and INTELLISEARCH including expenditures in
development expenses, capital equipment, and content acquisition.
Due to a lack of capital resources, the Company's Board of Directors voted to
stop development and marketing of SCOOP! DIRECT and INTELLISEARCH and the
related technology in February 1998 and to actively seek a buyer for Scoop
Information Services. The Company intends to sell Scoop Information Services
to Solutions Corporation of America of Nashville, Tennessee.
8
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RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain financial
data as a percentage of net sales for the three and six month periods ended June
30, 1997 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
----------------------- ----------------------
1997 1998 1997 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0%
Cost of sales. . . . . . . . . . . . . . . . . . . . . . 52.8% 64.6% 49.7% 58.9%
------------ ------------ ------------ ------------
Gross profit. . . . . . . . . . . . . . . . . . . . 47.2% 35.4% 50.3% 41.1%
Operating expenses:
Research and development. . . . . . . . . . . . . . . 106.1% 15.4% 85.4% 29.6%
Selling and marketing . . . . . . . . . . . . . . . . 41.0% 35.9% 22.8%
General and administrative. . . . . . . . . . . . . . 126.1% 121.3% 101.4% 141.5%
------------ ------------ ------------ ------------
273.2% 136.7% 222.7% 193.9%
Operating loss. . . . . . . . . . . . . . . . . . . . . . (226.0)% (101.3)% (172.4)% (152.8)%
Interest income (expense), net. . . . . . . . . . . . . . 3.3% ( .2)% 1.1 % .5 %
Loss before provision for income taxes. . . . . . . . . . (222.7)% (101.5)% (171.3)% (152.3)%
Provision for income taxes. . . . . . . . . . . . . . . . .2
------------ ------------ ------------ ------------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . (222.7)% (101.5)% (171.5)% (152.3)%
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1998 AND 1997
NET SALES. Net Sales increased 30.4% in the three months ended June 30, 1998 to
$633,400 from $485,700 in the comparable 1997 period. The growth in net sales
was principally driven by the addition of an exclusive sales and distribution
agreement with American Cities Business Journals, of Charlotte, North Carolina.
COST OF SALES. Cost of sales increased 59.4% in the three months ended June 30,
1998 to $408,900 from $256,500 in the comparable period in 1997. The increase
in cost of sales was primarily driven by the aforementioned increase in net
sales and the additional cost of royalty payments to American Cities Business
Journal. Overall, gross profits from the sale of Scoop! Media products
decreased by $4,700 in the three months ended June 30, 1998 compared to the same
period in 1997.
Cost of sales consists primarily of the production costs, subscriptions,
shipping and various usage, permission, and royalty fees arising from the
reproduction of printed and electronic content for the media products.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development ("R&D") expenses
decreased 100% in the three months ended June 30, 1998 to $ 0 from
$515,500 in the comparable 1997 period. This
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decrease was primarily attributable to the Company's decision in February 1998
to terminate all research and development efforts related to its online
information services and to layoff its research and development staff.
SELLING AND MARKETING EXPENSES. Selling and marketing expenses decreased 51.2
% in the three months ended June 30, 1998 to $97,300 from $199,200 in the
comparable 1997 period. This decrease is attributed to termination of all
business activities relating to Scoop Information Services and an overall
cost-cutting measures.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative ("G&A")
expenses increased 25.6% in the three months ended June 30, 1998 to $768,800
from $612,100 in the comparable 1997 period. The increase in G&A expense was
primarily attributable to employee severance, legal expenses associated with the
Company's attempted acquisition of MKID, and accruals for settlements with UMI.
OTHER INCOME (EXPENSE). Interest expense was $1,600 for the three months ended
June 30, 1998 compared to $16,100 of interest income in the comparable 1997
period.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND 1997
NET SALES. Net Sales increased 21.2% in the six months ended June 30, 1998 to
$1,166,100 from $962,000 in the comparable 1997 period. The growth in net sales
was principally driven by the Company's focused efforts to expand sales of
reprints from its Scoop! Media Services product line.
COST OF SALES. Cost of sales increased 43.7% in the six months ended June 30,
1998 to $687,400 from $478,500 in the comparable period in 1997. The increase
in cost of sales was primarily driven by higher royalty fees and production
costs associated with the growth of the aforementioned net sales. Overall,
gross profits from the sale of Scoop! Media products decreased by $4,800 in the
six months ended June 30, 1998 compared to the same period in 1997.
RESEARCH AND DEVELOPMENT EXPENSES. R&D expenses decreased 67.7% in the six
months ended June 30, 1998 to $265,600 from $821,800 in the comparable 1997
period. This decrease was primarily attributable to the Company's decision in
February 1998 to terminate all research and development efforts related to its
online information services and to layoff its research and development staff.
SELLING AND MARKETING EXPENSES. Selling and marketing expenses remained
consistent for the six months ended June 30, 1998.
GENERAL AND ADMINISTRATIVE EXPENSES. G&A expenses increased 69.2% in the six
months ended June 30, 1998 to $1,649,400 from $975,000 in the comparable 1997
period. The increase in G&A expense was primarily attributable to employee
severance, legal expenses associated with the Company's attempted acquisition of
MKID, and accruals for settlements with UMI.
OTHER INCOME (EXPENSE). Interest income, net of interest expense, was $5,700 for
the six months ended June 30, 1998 compared to $10,900 for the comparable 1997
period. Net interest income in the 1998 period was primarily attributable the
Company having interest bearing assets as a result of its initial public
offering.
10
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LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date primarily from the $5.9 million
in proceeds from its initial public offering in April 1997 and the proceeds of
earlier private sales of Common Stock totaling approximately $2.5 million. At
June 30, 1998, the Company had approximately $42,400 in cash and cash
equivalents. Subsequent to June 30, 1998, the Company continued to experience
operating losses and, as a result, the Company had approximately $25,000 cash
and cash equivalents at August 15, 1998.
At June 30, 1998, the Company had obligations of approximately $124,800 under
equipment leases and debt instruments. The lease on the Company's office space
in Santa Ana, California is at rate of $7,607 per month, subject to certain
increases, and expires in September 2000. The Company vacated its Irvine,
California facility in December 1997 and has negotiated a termination of the
lease agreement with respect to that facility for the sum of $200,000.
Because the Company's ability to continue as a going concern is dependent upon
its ability to secure additional sources of financing, and since the company was
unable to secure additional sources of financing, on July 31, 1998 Scoop, Inc.
filed a voluntary petition for relief under chapter 11 of the United States
Bankruptcy Code.
YEAR 2000
The Company has conducted a review of its computer systems to identify the
systems that could be affected by the "Year 2000" issue and is developing an
implementation plan to resolve the issue. The Year 2000 problem is a result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in major system failure or miscalculations. The
Company presently believes that, with modifications to existing software and
converting to new software, the Year 2000 problem will not pose significant
operational problems for the Company's computer systems as so modified and
converted.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997,the FASB issued SFAS 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION. SFAS 131 establishes standards for the way
public business enterprises are to report information about operating segments
in annual financial statements and requires those enterprises to report selected
information about operating segments in interim financial reports issued to
shareholders. It also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The disclosures
described by SFAS 131 are effective in the year ending December 31, 1998 but are
not required for interim periods in the year of adoption.
11
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
11.1 Computation of Net Loss Per Share
27.1 Financial Data Schedule
99.1 Petition for Bankruptcy
(b) Reports on Form 8-K
None
12
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: August 14, 1998 /s/ Rand Bleimeister
----------------------------------------
Rand Bleimeister
Chief Executive Officer, President,
Chief Financial Officer and Chairman of
the Board
/s/ Kristy Allan
----------------------------------------
Controller
(Principal Accounting Officer)
13
<PAGE>
EXHIBIT 11.1
SCOOP, INC.
COMPUTATION OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------- ----------------
1997 1998 1998 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average shares outstanding . . . . . . . . . . . . . . . . 5,341,000 5,501,000 4,546,000 5,501,000
Weighted average shares used in calculation of basic and diluted
net loss per share . . . . . . . . . . . . . . . . . . . . . . . . 5,341,000 5,501,000 4,546,000 5,501,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,081,500) $ (643,200) $(1,649,200) $(1,776,000)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic and diluted loss per share. . . . . . . . . . . . . . . . . . $ (0.20) $ (0.12) $ (0.36) $ (0.32)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 42,400
<SECURITIES> 0
<RECEIVABLES> 234,000
<ALLOWANCES> (49,600)
<INVENTORY> 0
<CURRENT-ASSETS> 291,900
<PP&E> 1,088,200
<DEPRECIATION> (460,300)
<TOTAL-ASSETS> 919,800
<CURRENT-LIABILITIES> 1,688,800
<BONDS> 0
0
0
<COMMON> 5,400
<OTHER-SE> (816,600)
<TOTAL-LIABILITY-AND-EQUITY> 919,800
<SALES> 633,400
<TOTAL-REVENUES> 633,400
<CGS> 408,900
<TOTAL-COSTS> 408,900
<OTHER-EXPENSES> 866,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,600
<INCOME-PRETAX> (643,200)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (643,200)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
FORM 81 UNITED STATES BANKRUPTCY COURT VOLUNTARY PETITION
CENTRAL DISTRICT OF CALIFORNIA
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Name of Debtor (if individual, enter: Last, First, Middle): Name of Joint Debtor (Spouse)(Last, First, Middle):
SCOOP, INC.
- -----------------------------------------------------------------------------------------------------------------------------------
All Other Names used by the Debtor in the last 6 years All Other Names used by the Joint Debtor in the last
(include married, maiden, and trade names) 6 years. (include married, maiden, and trade names);
KARLSSON-DEL REY COMMUNICATIONS, INC.;
NEWSMAKERS
- -----------------------------------------------------------------------------------------------------------------------------------
Soc. Sec./Tax I.D. No. (if more than one, state all); Soc. Sec./Tax I.D. No. (if more than one, state all)
33-0726608
- -----------------------------------------------------------------------------------------------------------------------------------
Street Address of Debtor (No. & Street, City, State & Zip Code); Street Address of Joint Debtor (No. & Street, City,
2540 RED HILL AVENUE State & Zip Code)
SANTA ANA CA 92705
- -----------------------------------------------------------------------------------------------------------------------------------
County of Residence or of the County of Residence or of the Principal Place of
Principal Place of Business: ORANGE Business:
- -----------------------------------------------------------------------------------------------------------------------------------
Mailing Address of Debtor (if different from street address): Mailing Address of Joint Debtor (if different from
street address):
- -----------------------------------------------------------------------------------------------------------------------------------
Location of Principal Assets of Business Debtor
(if different from street address above):
- -----------------------------------------------------------------------------------------------------------------------------------
INFORMATION REGARDING THE DEBTOR (CHECK THE APPLICABLE BOXES)
- -----------------------------------------------------------------------------------------------------------------------------------
VENUE (Check any applicable box)
/X/ Debtor has been domiciled or has had a residence, principal place of business, or principal assets in this District for 180
days immediately preceding the date of this petition or for a longer part of such 180 days than in any other District.
/ / There is a bankruptcy case concerning debtor's affiliate, general partner, or partnership pending in this District.
- -----------------------------------------------------------------------------------------------------------------------------------
TYPE OF DEBTOR (check all boxes that apply) CHAPTER OR SECTION OF BANKRUPTCY CODE UNDER WHICH
/ / Individual(s) / / Railroad THE PETITION IS FILED (check one box)
/X/ Corporation / / Stockbroker
/ / Partnership / / Commodity Broker / / Chapter 7 /X/ Chapter 11 / / Chapter 13
/ / Other ___________ / / Chapter 9 / / Chapter 12
/ / Sec. 304 - Case ancillary to foreign proceeding
- -----------------------------------------------------------------------------------------------------------------------------------
NATURE OF DEBTS (Check one box) FILING FEE (Check one box)
/ / Consumer/Non-Business /X/ Business /X/ Full Filing Fee attached
------------------------------------ / / Filing Fee to be paid in installments
CHAPTER 11 SMALL BUSINESS (check all boxes that apply) (Applicable to individuals only)
/ / Debtor is a small business as defined in 11 U.S.C. Section 101 Must attach signed application for the court's
/ / Debtor is and elects to be considered a small business under consideration certifying that the debtor is
11 U.S.C. Section 1121(e)(optional) unable to pay fee except in installments. Rule
1006(b). See Official Form No. 3.
- -----------------------------------------------------------------------------------------------------------------------------------
STATISTICAL/ADMINISTRATIVE INFORMATION (Estimates only)
/X/ Debtor estimates that funds will be available for distribution to unsecured creditors.
/ / Debtor estimates that, after any exempt property is excluded and administrative expenses paid, there
be no funds available for distribution to unsecured creditors.
--------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S><C>
1-15 16-49 50-99 100-199 200-999
Estimated Number of Creditors / / / / / / / / / /
--------------------------------------------------------------------------------------------------
Estimated Assets
$0 to $50,001 to $100,001 to $500,001 to $1,000,001 to $10,000,001 to $50,000,001 to
$50,000 $100,000 $500,000 $1 million $10 million $50 million $100 million
/ / / / / / /X/ / / / / / /
-------------------------------------------------------------------------------------------------- [STAMP]
Estimated Debts
$0 to $50,001 to $100,001 to $500,001 to $1,000,001 to $10,000,001 to $50,000,001 to
$50,000 $100,000 $500,000 $1 million $10 million $50 million $100 million
/ / / / / / / / /X/ / / / /
--------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
VOLUNTARY PETITION Name of Debtor(s):
(This page must be completed and filed in every case) SCOOP, INC.
- -----------------------------------------------------------------------------------------------------------------------------------
PRIOR BANKRUPTCY CASE FILED WITHIN LAST 6 YEARS (if more than one, attach additional sheet)
- -----------------------------------------------------------------------------------------------------------------------------------
Location Where Filed: Case Number: Date Filed:
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
PENDING BANKRUPTCY CASE FILED BY ANY SPOUSE, PARTNER, OR AFFILIATE OF THIS DEBTOR (if more than one, attach additional sheet)
- -----------------------------------------------------------------------------------------------------------------------------------
Name of Debtor: Case Number: Date Filed:
NONE
- -----------------------------------------------------------------------------------------------------------------------------------
District: Relationship: Judge:
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURES
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE(s) OF DEBTOR(s) (INDIVIDUAL/JOINT) SIGNATURE OF DEBTOR (CORPORATE/PARTNERSHIP)
I declare under penalty of perjury that the information I declare under penalty of perjury that the information
provided in this petition is true and correct. provided in this petition is true and correct and that I
[If petitioner is an individual whose debts are primarily have been authorized to file this petition on behalf of
consumer debts and has chosen to file under chapter 7] the debtor.
I am aware that I may proceed under chapter 7,11,12 or 13 of
title 11, United State Code, understand the relief available The debtor requests relief in accordance with the
under each such chapter, and choose to proceed under chapter 7. chapter of title 11, United States Code, specified in
I request relief in accordance with the chapter of title 11, this petition.
United States Code, specific in this petition.
X NOT APPLICABLE X /s/ Rand Bleimeister
------------------------------------------------- --------------------------------------------
Signature of Debtor Rand Bleimeister
X NOT APPLICABLE RAND BLEIMEISTER
------------------------------------------------- --------------------------------------------
Signature of Joint Debtor Print or Type Name of Authorized Individual
------------------------------------------------- CEO & CHAIRMAN OF THE BOARD
Telephone Number (If not represented by attorney) --------------------------------------------
Title of Authorized Individual
-------------------------------------------------
Date July 31, 1998
--------------------------------------------
Date
- ---------------------------------------------------------------------------------------------------------------------------------- -
SIGNATURE OF ATTORNEY SIGNATURE OF NON-ATTORNEY PETITION PREPARER
X /s/ Robert E. Opera I certify that I am a bankruptcy petition preparer as
---------------------------------------------------- defined in 11 U.S.C. Section 110, that I prepared this
Robert E. Opera document for compensation, and that I have provided the
debtor with a copy of this document.
ROBERT E. OPERA, STATE BAR NO 101182
--------------------------------------------------- NOT APPLICABLE
Printed Name of Attorney for Debtor(s) ---------------------------------------------------
Printed Name of Bankruptcy Preparer
LOBEL & OPERA
---------------------------------------------------
Firm Name ---------------------------------------------------
Social Security Number
19800 MACARTHUR BLVD STE 1100
---------------------------------------------------
Address ---------------------------------------------------
Address
IRVINE CA 92612
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(949) 476-7400 ---------------------------------------------------
--------------------------------------------------- Names and Social Security numbers of all other
Telephone Number individuals who prepared or assisted in preparing
this document:
---------------------------------------------------
Date NOT APPLICABLE
------------------------------------------------------- If more than one person prepared this document, attach
EXHIBIT A additional signed sheets conforming to the appropriate
(To be completed if debtor is required to file periodic official form for each person.
reports (e.g., forms 10K and 10Q) with the Securities
and Exchange Commission pursuant to Section 13 or 15(d) X
or the Securities Exchange Act of 1934 and is requesting --------------------------------------------------
relief under chapter 11) Signature of Bankruptcy Petition Preparer
/X/ Exhibit A is attached and made a part of this petition.
------------------------------------------------------- --------------------------------------------------
EXHIBIT B Date
(To be completed if debtor is an individual
whose debts are primarily consumer debts) A bankruptcy petition preparer's failure to comply
I, the attorney for the petitioner named in the foregoing with the provisions of title 11 and the Federal Rules
petition, declare that I have informed the petitioner that of Bankruptcy Procedure may result in fines or
[he or she] may proceed under chapter 7, 11, 12, or 13 of imprisonment or both. 11 U.S.C. Section 110; 18
title 11, United States Code, and have explained the relief U.S.C. Section 156.
available under such chapter.
X
-------------------------------------------------------
Robert E. Opera Date
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In Re Scoop. Inc. Case No. ________
33-0726608 Chapter 11
EXHIBIT "A" TO VOLUNTARY PETITION
1. If any of debtor's securities are registered under section 12 of the
Securities and Exchange Act of 1934, the SEC file number is 000-22281.
2. The following financial data is the latest available information and
refers to debtor's condition on July 31, 1998.
a. Total assets $ 950,000.00
-------------------
b. Total debts (including debts listed
in 2.c., below) $ 1,431,273.83
-------------------
Approximate
number of
holders
c. Debt securities held by more than 500 holders.
secured / / unsecured / / subordinated / / $ 0.00 0
------------ ----------
secured / / unsecured / / subordinated / / $ 0.00 0
------------ ----------
secured / / unsecured / / subordinated / / $ 0.00 0
------------ ----------
secured / / unsecured / / subordinated / / $ 0.00 0
------------ ----------
secured / / unsecured / / subordinated / / $ 0.00 0
------------ ----------
Number of shares of preferred stock 0 0
------------ ----------
Number of shares of common stock 5,501,214 1,104
------------ ----------
Comments, if any:
3. Brief description of debtor's business:
MEDIA AND INTERNET SERVICE
4. List the name of any person who directly or indirectly owns, controls, or
holds, with power to vote, 5% or more of the voting securities of debtor:
KARL M. KARLSSON
Exhibit A- Page 1
