-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VbpEoCwj4GR+0cnrw15kZQB2cZTKn94FJQwWqXmfhqxnc4A2X0UHlsfJtLR5Z5tC UG7i5THDRlpi+/BdC2NPnA== 0001047469-98-031591.txt : 19980817 0001047469-98-031591.hdr.sgml : 19980817 ACCESSION NUMBER: 0001047469-98-031591 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCOOP INC/DE CENTRAL INDEX KEY: 0001025315 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 330726608 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-22281 FILM NUMBER: 98689572 BUSINESS ADDRESS: STREET 1: 2540 RED HILL AVENUE STREET 2: SUITE 100 CITY: SANTA ANA STATE: CA ZIP: 92705 BUSINESS PHONE: 7142256000 MAIL ADDRESS: STREET 1: 2540 RED HILL AVENUE STREET 2: SUITE 100 CITY: SANTA ANA STATE: CA ZIP: 92705 10QSB 1 10-QSB 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) PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SCOOP, INC. BALANCE SHEET (UNAUDITED)
ASSETS June 30, 1998 ---- 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 -------------- --------------
See accompanying notes to financial statements 2 SCOOP, INC. STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------ -------------------- 1997 1998 1997 1998 ---- ---- ---- ---- 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) ----------- ---------- ----------- ------------ ----------- ---------- ----------- ------------
See accompanying notes to financial statements 3 SCOOP, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, -------------------------------- 1997 1998 ---- ---- 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 $ ------------- ------------- ------------- -------------
4 See accompanying notes to financial statements 5 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 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 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 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.
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ----------------------- ---------------------- 1997 1998 1997 1998 ---- ---- ---- ---- 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)% ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
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 9 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 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 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 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 EX-11.1 2 EXHIBIT 11.1 EXHIBIT 11.1 SCOOP, INC. COMPUTATION OF NET LOSS PER SHARE
THREE MONTHS SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ---------------- ---------------- 1997 1998 1998 1998 ---- ---- ---- ---- 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) ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
14 EX-27 3 EXHIBIT 27
5 6-MOS JUN-30-1998 JAN-01-1998 JUN-30-1998 42,400 0 234,000 (49,600) 0 291,900 1,088,200 (460,300) 919,800 1,688,800 0 0 0 5,400 (816,600) 919,800 633,400 633,400 408,900 408,900 866,100 0 1,600 (643,200) 0 0 0 0 0 (643,200) (0.12) (0.12)
EX-99.1 4 EXHIBIT 99.1
- ----------------------------------------------------------------------------------------------------------------------------------- FORM 81 UNITED STATES BANKRUPTCY COURT VOLUNTARY PETITION CENTRAL DISTRICT OF CALIFORNIA - ----------------------------------------------------------------------------------------------------------------------------------- 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. --------------------------------------------------------------------------------------------
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/ / / / / --------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------- 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 - -----------------------------------------------------------------------------------------------------------------------------------
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 -----END PRIVACY-ENHANCED MESSAGE-----