<PAGE>

                        SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarter ended SEPTEMBER 30, 1995        Commission file number 0-15419

                           TCS ENTERPRISES, INC.
         (Exact name of registrant as specified in its charter)


              CALIFORNIA                             95-3826310
      (State of Incorporation)        (IRS Employer Identification Number)


               10525 Vista Sorrento Parkway, Suite 101

         SAN DIEGO, CALIFORNIA                         92121-2799
 (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code       (619) 452-8000


      Check whether the issuer (1) has 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
                          ----       ----


      As of September 30, 1995, the registrant had outstanding 5,823,025
shares of common stock, no par value.


     Transitional small business disclosure format.    Yes         No   X
                                                           ----        ----



<PAGE>
                             TCS ENTERPRISES, INC.
                       1995 FORM 10-QSB QUARTERLY REPORT
                        Quarter Ended September 30, 1995

                                     INDEX

                                     PART I


                                                                 Page
                                                                 ----
Item 1.   Financial Statements                                     1

Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations                   20

                                    PART II


Item 6.   Exhibits and Reports on Form 8-K                        28


                              (i)
<PAGE>

PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                   TCS ENTERPRISES, INC. AND SUBSIDIARIES
                         Consolidated Balance Sheets

                                   ASSETS

<TABLE>
<CAPTION>
                                                         SEPTEMBER 30, 1995           DECEMBER 31, 1994
                                                         ------------------           -----------------
                                                             (UNAUDITED)                   (AUDITED)
<S>                                                      <C>                          <C>
Current assets:
     Cash and cash equivalents                                        $0                  $        0
     Restricted cash                                              38,000                     398,000
     Mortgage loans held for sale                              2,903,000                     146,000
     Accounts receivable                                         310,000                     113,000
     Current portion of notes receivable
      from related parties                                       248,000                     278,000
     Other current assets                                        114,000                     195,000
                                                              ----------                  ----------
          Total current assets                                 3,613,000                   1,130,000

Property and equipment, net                                      151,000                     229,000
Notes receivable from related parties,
 net of current portion                                          441,000                     403,000
Noncurrent net assets of discontinued operations                       0                      67,000
Other assets, net                                                 87,000                      30,000
                                                              ----------                  ----------
                                                              $4,292,000                  $1,859,000
                                                              ==========                  ==========
                                                                                          (Continued)
</TABLE>

                                       1


<PAGE>

                      TCS ENTERPRISES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS, CONTINUED

                       LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                 SEPTEMBER 30, 1995  DECEMBER 31, 1994
                                                 ------------------  -----------------
                                                    (UNAUDITED)            (AUDITED)
<S>                                                   <C>                  <C>
Current liabilities:
    Cash overdraft                                    $   21,000           $   25,000
    Warehouse lines payable                            2,810,000              143,000
    Current portion of long-term debt                     13,000              343,000
    Short term notes payable                             317,000                    0
    Accounts payable                                     817,000            1,006,000
    Accrued payroll and related taxes                    258,000              260,000
    Accrued commissions                                   52,000               54,000
    Current net liabilities of discontinued
      operations                                         481,000              383,000
                                                      ----------           ----------
      Total current liabilities                        4,769,000            2,214,000

Long-term debt, net of current portion                    91,000               33,000
                                                      ----------           ----------
      Total liabilities                                4,860,000            2,247,000

Stockholders' equity:
Common stock, no par value, authorized
  30,000,000 shares, issued and outstanding
  5,823,000 shares at  September 30, 1995 and
  December 31, 1994                                   10,317,000           10,214,000
Accumulated deficit                                  (10,439,000)         (10,154,000)
Less notes receivable from stockholders                 (446,000)            (448,000)
                                                      ----------           ----------

     Total stockholders' equity                         (568,000)            (388,000)
                                                      ----------           ----------
                                                      $4,292,000           $1,859,000
                                                      ==========           ==========

  The accompanying notes are an integral part of the unaudited financial statements.
</TABLE>




                                       2


<PAGE>

                   TCS ENTERPRISES, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)


<TABLE>
<CAPTION>

                                                  THREE MONTHS          NINE MONTHS           THREE MONTHS           NINE MONTHS
                                                     ENDED                 ENDED                 ENDED                  ENDED
                                               SEPTEMBER 30, 1995    SEPTEMBER 30, 1995    SEPTEMBER 30, 1994    SEPTEMBER 30, 1994
                                               ------------------    ------------------    ------------------    ------------------
<S>                                            <C>                   <C>                   <C>                   <C>
Income:
   Loan fees                                          $565,000            $1,434,000              $501,000             $2,084,000
   Gain on sale of servicing                           100,000               202,000                66,000                743,000
   Interest                                             64,000               158,000                60,000                206,000
   Management fees                                     199,000               500,000               150,000                151,000
   Earnings (loss) from investments                      8,000                11,000                (3,000)                (5,000)
   Other                                                 4,000                20,000                16,000                  2,000
                                                  ----------------     -----------------     -----------------     ----------------
                                                       940,000             2,325,000               790,000              3,181,000
                                                  ----------------     -----------------     -----------------     ----------------
Expenses:
   Salaries, wages and related taxes                  $336,000              $972,000              $443,000             $1,729,000
   Commissions                                         355,000               919,000               454,000              1,582,000
   General and administrative                          149,000               434,000               199,000                982,000
   Promotion, entertainment and travel                  15,000                29,000                33,000                118,000
   Occupancy                                           (10,000)              183,000                99,000                316,000
   Interest                                             35,000                67,000                81,000                214,000
                                                  ----------------     -----------------     -----------------     ----------------
                                                      $880,000            $2,604,000            $1,309,000             $4,941,000
                                                  ----------------     -----------------     -----------------     ----------------

   Income (loss) from continuing operations
      before taxes and minority interest                60,000              (279,000)             (519,000)             (1,760,000)
Income taxes                                                 0                 6,000                (2,000)                  6,000
                                                  ----------------     -----------------     -----------------     ----------------
   Income (loss) from continuing operations
      before minority interest                          60,000              (285,000)             (517,000)             (1,766,000)
Minority interest in (income) loss of subsidiary             0                     0                (1,000)                 38,000
                                                  ----------------     -----------------     -----------------     ----------------
   Income (loss) from continuing operations             60,000              (285,000)             (518,000)             (1,728,000)
Discontinued operations, net of income tax:
   Income (loss) from discontinued operations                0                     0              (749,000)             (2,228,000)
                                                  ----------------     -----------------     -----------------     ----------------
           Net income (loss)                           $60,000             ($285,000)          ($1,267,000)            ($3,956,000)
                                                  ================     =================     =================     ================

                                                                                                                       (Continued)

</TABLE>

                                       3

<PAGE>


                   TCS ENTERPRISES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS, CONTINUED
                                (UNAUDITED)


<TABLE>
<CAPTION>

                                                  THREE MONTHS          NINE MONTHS           THREE MONTHS           NINE MONTHS
                                                     ENDED                 ENDED                 ENDED                  ENDED
                                               SEPTEMBER 30, 1995    SEPTEMBER 30, 1995    SEPTEMBER 30, 1994    SEPTEMBER 30, 1994
                                               ------------------    ------------------    ------------------    ------------------
<S>                                            <C>                   <C>                   <C>                   <C>
Income (loss) per common share:
   Continuing operations                                 $0.01                ($0.05)                ($0.10)              ($0.33)
   Discontinued operations                                0.00                  0.00                  (0.14)               (0.43)
                                                 ----------------     -----------------     -----------------      ----------------

           Net income (loss)                             $0.01                ($0.05)                ($0.24)              ($0.76)
                                                 ================     =================     =================      ================


The accompanying notes are an integral part of the unaudited financial statements.

</TABLE>


                                       4


<PAGE>

                    TCS ENTERPRISES, INC. AND SUBSIDIARIES
                    Consolidated Statements of Cash Flows
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS
                                                                   ------------------------------------------
                                                                         ENDED                   ENDED
                                                                   SEPTEMBER 30, 1995      SEPTEMBER 30, 1994
                                                                   ------------------      ------------------
<S>                                                                <C>                     <C>
Cash flows from operating activities:
     Income (loss) from continuing operations                          ($285,000)             ($1,728,000)
Adjustments to reconcile net earnings (loss) to net cash
     provided by (used in) operating activities:

     Depreciation and amortization                                        69,000                   72,000
     (Earnings) loss from investments in partnerships                    (11,000)                   5,000
     Minority interest in loss of subsidiary                                   0                  (35,000)
     Note receivable from related party                                        0                  508,000
     Decrease (increase) in:
          Mortgage loans held for sale                                (2,757,000)               5,580,000
          Accounts receivable                                           (197,000)                 141,000
          Other current assets                                            81,000                   90,000
          Other assets                                                   (46,000)                  77,000
     Increase (decrease) in:
          Accounts payable                                              (189,000)                (131,000)
          Accrued payroll and related taxes                               (2,000)                (106,000)
          Accrued commissions                                             (2,000)                (116,000)
                                                                       ---------                ---------

     Net cash provided by (used in) continuing operations             (3,339,000)               4,357,000

     Net cash provided by (used in) discontinued operations              165,000               (2,279,000)
                                                                       ---------                ---------
     Net cash provided by (used in) operating activities              (3,174,000)               2,078,000
                                                                       ---------                ---------

Cash flows from investing activities:
     Purchases of property & equipment                                         0                  (70,000)
     Disposal of property and equipment                                    9,000                        0
     Issuance of notes receivable from related parties                   (51,000)                (484,000)
     Collection of notes receivable from related parties                  43,000                  620,000
     Collection of notes receivable from stockholders                      2,000                    2,000
                                                                       ---------                ---------
     Net cash provided by (used in) investing activities                   3,000                   68,000
                                                                       ---------                ---------

                                                                                               (Continued)
</TABLE>

                                       5

<PAGE>


                    TCS ENTERPRISES, INC. AND SUBSIDIARIES
                Consolidated Statements of Cash Flows Continued
                                 (Unaudited)

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS
                                                                   ------------------------------------------
                                                                         ENDED                   ENDED
                                                                   SEPTEMBER 30, 1995      SEPTEMBER 30, 1994
                                                                   ------------------      ------------------
<S>                                                                <C>                     <C>
Cash flows from financing activities:
     Net increase (decrease) in warehouse lines payable                2,667,000               (5,440,000)
     Proceeds from issuance of line of credit                                  0                  262,000
     Repayment of line of credit                                               0                 (262,000)
     Proceeds from issuance of long term debt                             69,000                   30,000
     Repayments of long-term debt                                       (341,000)                  (6,000)
     Proceeds from issuance of related party debt                        371,000                2,870,000
     Repayment of related party debt                                     (54,000)                (311,000)
     Capital contributions                                               103,000                  175,000
                                                                       ---------                ---------

     Net cash provided by (used in) financing activities               2,815,000               (2,682,000)
                                                                       ---------                ---------

Net increase (decrease) in cash and cash equivalents                    (356,000)                (536,000)

Cash and cash equivalents, beginning of period                           373,000                1,093,000
                                                                       ---------                ---------

Cash and cash equivalents, end of period                                 $17,000                 $557,000
                                                                       =========                =========

Supplementary disclosures of cash flow information:
     Cash paid during the period for:
     Interest                                                            $64,000                 $180,000
     Income taxes                                                          6,000                    9,000



The accompanying notes are an integral part of the unaudited financial statements.

</TABLE>

                                       6
<PAGE>
                  TCS ENTERPRISES, INC. AND SUBSIDIARIES
                      NOTES TO UNAUDITED CONSOLIDATED
                           FINANCIAL STATEMENTS

(1) ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

    The consolidated financial statements include the accounts of TCS
Enterprises, Inc. and its wholly-owned and majority-owned subsidiaries (the
"Company").  All significant intercompany balances and transactions have been
eliminated in consolidation.

    During 1994, the Company experienced significant operating losses in most
of its subsidiaries. As a result of losses in 1994 and prior years, at
September 30, 1995 the Company has a deficit in stockholders' equity and
negative working capital. The Company experienced severe liquidity problems
caused, in part, by operating losses in its cultured dairy products,
publishing and environmental subsidiaries. Management is currently discussing
plans to alleviate liquidity problems, however, is unable to predict the
outcome of those discussions or determine when the Company will increase its
capital base. As described below, during the fourth quarter of 1994,
management implemented a plan to dispose of the Company's governmental
consulting, environmental, cultured dairy products and publishing businesses.
These actions have reduced expenses and operating losses as well as focused
management's efforts on the Company's mortgage-banking and real estate
management activities.

    DISCONTINUED OPERATIONS

    During the fourth quarter of 1994, the Company's management decided to
discontinue its governmental consulting operations, and sell its wholly-owned
subsidiary, TCS Governmental Consulting, Inc. ("Governmental"). Effective
November 1, 1994, the Company sold an 80.5% interest in Governmental to
Governmental's president in exchange for a note for $50,000.

    During the fourth quarter of 1994, the Company's management decided to
discontinue its environmental consulting operations, and sell its
wholly-owned subsidiary, TCS Environmental, Ltd., a British Virgin Islands
international business company ("Environmental"). Effective October 20, 1994,
the Company sold a 100%


                                     7

<PAGE>

interest in Environmental to Santa Anita Produce, Inc., an Arizona
corporation ("Santa Anita") in exchange for cancellation of $1,250,000 note
payable to Santa Anita (see Note 3).

    During the fourth quarter of 1994, the Company's management decided to
discontinue the operations of its wholly-owned subsidiary TCS Ventura Dairy
Products, Inc. ("Ventura"). On January 30, 1995, the Company sold
substantially all of Ventura's assets and certain liabilities to Ventura's
management for approximately $52,000 cash and notes aggregating approximately
$181,000. Substantially all of the cash and payments on approximately
$130,000 of the notes were used to satisfy obligations to certain of
Ventura's suppliers.

    During the fourth quarter of 1994, the Company's management decided to
discontinue its publishing operations, conducted through its wholly-owned
subsidiary, TCS Publishing, Inc. ("Publishing"). On December 30, 1994, the
Company signed a letter of intent with an unrelated publishing company (the
"Buyer") whereby the Buyer will acquire Publishing's rights under certain
contracts and certain of Publishing's assets. As consideration, the Buyer
will complete the publishing of certain of Publishing's uncompleted
contracts. The Company will retain substantially all the assets and
liabilities of Publishing, consisting principally of accounts receivable and
deferred revenue.

    The Notes to Unaudited Consolidated Financial Statements exclude
discontinued operations unless stated otherwise.

    The consolidated balance sheets are presented as of September 30, 1995
and December 31, 1994. The consolidated statements of operations are
presented for the nine months ended September 30, 1995 and 1994. The
consolidated statements of cash flows are presented for the same periods.

    The unaudited consolidated financial statements do not include certain
financial presentations normally required under generally accepted accounting
principles. It

                                     8

<PAGE>


should be understood that accounting measurement at interim dates inherently
involves greater reliance on estimates than at year end. The results of
operations for the nine months ended September 30, 1995 and 1994 are not
indicative of results that can be expected for the full year.

    The consolidated interim financial statements included herein are
unaudited; however, they contain adjustments, consisting of normal recurring
accruals, which, in the opinion of the Company, are necessary to present
fairly the consolidated financial position of the Company at September 30,
1995 and the consolidated results of operations for the nine months ended
September 30, 1995 and 1994 and its consolidated cash flows for the same
period.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    MORTGAGE LOANS HELD FOR SALE

    Mortgage loans held for sale are stated at the lower of cost or market in
the aggregate. Cost is determined on an individual loan basis and includes
nonrefundable fees and direct costs associated with the origination of loans.
Market is determined by outstanding commitments and prevailing market prices.

    PROPERTY AND EQUIPMENT

    Property and equipment is carried at cost. Depreciation is provided for
using the straight-line basis with estimated useful life of seven years for
furniture and five years for equipment. Leasehold improvements are amortized
on a straight-line basis over the shorter of their useful lives or the terms
of the lease.

    BROKERED LOAN FEES

    Loan fees include direct origination fees and brokered loan fees.
Deferred origination fees and expenses are recognized at the time a loan is
sold and servicing released. Brokered loan fees represent fees received by
the Company for "placing" a loan with a lender, whereby no further
obligations exist. The fee is recognized when the borrower and lender sign a
loan commitment and the loan is funded.

                                      9

<PAGE>

     GAIN ON SALE OF SERVICING

     Gains on sale of servicing represent
service release premiums on loans originated in-house. The gain on sale of
servicing is recognized as the loan is sold out of the warehouse and no
discount is taken since the fee is received at the same time.

     INCOME TAXES

     In February 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes". SFAS 109 requires a change from the deferred
method of accounting for income taxes of APB Opinion 11 to the asset and
liability method of accounting for income taxes. Under the asset and
liability method of SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.
Effective January 1, 1993, the Company adopted SFAS 109. The adoption of SFAS
109 did not have a material effect on the Company's financial position or
results of operations.

     Pursuant to the deferred method under APB Opinion 11, which was applied
in 1992 and prior years, deferred income taxes are recognized for income and
expense items that are reported in different years for financial reporting
purposes and income tax purposes using the tax rate applicable in the year of
the calculation. Under the deferred method, deferred taxes are not adjusted
for subsequent changes in tax rates.

      EARNINGS (LOSS) PER COMMON SHARE

      Earnings (loss) per common share is computed by dividing net earnings
(loss) by the weighted average number of common shares outstanding and common
stock

                                       10


<PAGE>

equivalents, if dilutive. Common stock equivalents consist of shares issuable
upon the exercise of stock options and warrants. Fully dilutive earnings per
share for the periods presented is the same as primary earnings per share.
See Exhibit 11.1 for the computation of earnings (loss) per share.

     CASH AND CASH EQUIVALENTS

     For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an initial maturity of six
months or less to be cash and cash equivalents.

     RECLASSIFICATIONS

     The 1994 financial statements have been reclassified to conform with
1995 presentation.

(3)  RELATED PARTY TRANSACTIONS

     In March, 1993, the Company assisted with the transfer of real estate
located in Tijuana, B.C., Mexico between Weslow, Ltd., a California Limited
Partnership ("Seller") and SDB Offshore, Ltd., A Bahamian corporation
("Buyer"). The majority owner of the Buyer is Hector Lomeli Villalobos who,
along with immediate family members, controls Santa Anita. Santa Anita became
the majority owner of the Company in 1994. Subsequent to the transaction, a
minority shareholder of the Seller became an employee of the Company and in
September 1993, was appointed to the Company's Board of Directors. This
individual has also maintained an ownership interest in the real estate
through ownership of a minority interest in the Buyer. In consideration for
the Company's role in bringing the parties together, negotiating financing on
behalf of the Buyer, and performing other activities in connection with the
sale, the Company received a fee of $1,350,000 in the form of an unsecured
note from the Buyer. The Buyer paid $350,000 on the note in December, 1993.
The balance of the note was due in six consecutive monthly equal installments
of principal and interest, at 8% per annum, beginning on July 31, 1994. All
unpaid principal and interest was due on December 31,

                                       11


<PAGE>

1994. At September 30, 1995, the balance past due under the note is $239,000.
Concurrently the Company entered into a management agreement with the Buyer
to provide technical assistance and management services for a term of six
years, renewable annually thereafter by mutual agreement. Under the
agreement, the Company was to supervise the development of the industrial
park, operate, manage, and lease the property, and assist the Buyer in the
conduct of its daily business activities. The Company received a monthly
management fee of $50,000 beginning July 1994 through July 1995 when the
contract was terminated. Upon cancellation, the Company earned a termination
fee of $150,000.

     During 1994, the Company borrowed under various note agreements an
aggregate of $2,375,000 from Santa Anita. The notes had interest rates from
10.1 to 10.5 percent and had maturties ranging from November 1995 to July
1996. Such notes, together with accrued interest of approximately $125,000
were forgiven by Santa Anita in connection with the sale of Environmental to
Santa Anita (Note 1) and the purchase of stock by Santa Anita as described
below.

     On October 20, 1994, the Company sold 625,000 restricted shares of the
Company's stock to Santa Anita in exchange for cancellation of $1,250,000
owed to Santa Anita under various notes described above. The market value of
the shares on that date was approximately $1,175,000. The share certificates
have not been issued, however, the shares are considered issued and
outstanding. Concurrently, the Company granted warrants to purchase 175,000
shares of common stock.

     The Company is a partner in a general partnership in which it has agreed
to subordinate any indebtedness from the partnership to a bank. At September
30, 1995 the balance of the subordinated debt is zero. In connection with
this, the Company has guaranteed $125,000 of the partnership note to the bank.

     Notes receivable from related parties totaled $689,000 at September 30,
1995. Notes receivable includes a note with a principal balance of $239,000
as described above.

                                    12
<PAGE>

Another note, with a principal balance of $200,000, bears interest at the
rate of 8.25% per annum, principal and all accrued interest is payable in
full in April 1999. The note is secured by 100,000 shares of the Company's
common stock. Another note, with a principal balance of $30,000, bears
interest at 12% per annum and is payable in monthly installments of principal
and interest of $504 commencing April 1990. The note is secured by a second
deed of trust and has been prepaid through April 1996. The note issued in
connection with the sale of Governmental (Note 1) has a principal balance of
$50,000 bears interest at prime and is payable in quarterly interest only
payments commencing January 1996. Principal and any unpaid interest is due in
November 1999. The notes issued in connection with the sale of Ventura (Note
1) have a principal balance of $52,000 and bear interest at 8.5% per annum.
Interest only is payable monthly beginning March 1, 1995 through February 1,
1996. Beginning March 1, 1996 and continuing until March 1, 1999 interest and
principal are payable monthly. The remaining notes, with a combined balance
of $118,000, bear interest at 8.25% and are due in full in September 1998.

    In prior years, four executive officers exercised options for 481,355
shares of the Company's common stock. Notes receivable totaling $479,000 were
issued by these officers as payment. The notes bear interest at 8.25%
interest payable annually with remaining principal of $436,000 due on
September 20, 1998 and $10,000 due November 1, 1998. The notes are secured by
approximately 433,000 shares of the Company's common stock and are shown as a
reduction of stockholders' equity in the accompanying consolidated balance
sheets. At September 30, 1995 and December 31, 1994, the outstanding
principal amount of these notes is $446,000 and $448,000 respectively.

                                       13
<PAGE>

(4)  PROPERTY AND EQUIPMENT

     Property and equipment at September 30, 1995 and December 31, 1994
is comprised of the following:

                                           SEPT. 30,        DEC. 31,
                                              1995            1994
                                           ---------       ----------
    Furniture and fixtures                  $298,000        $330,000
    Equipment                                888,000         906,000
    Leasehold improvements                   369,000         369,000
                                           ---------       ---------
                                           1,555,000       1,605,000
         Less accumulated depreciation
           and amortization                1,404,000       1,376,000
                                           ---------       ---------
                                            $151,000        $229,000
                                           =========       =========

(5)  WAREHOUSE LINES PAYABLE

     The Company finances its mortgage loans held for sale through warehouse
lines of credit. Mortgage loans held for sale secure such lines of credit. It
is expected that in the normal course of business, warehouse lines of credit
that expire will be renewed or replaced.

     At September 30, 1995 and December 31, 1994, the Company had a warehouse
line of credit as follows:

<TABLE>
<CAPTION>
                                                          SEPT. 30,      DEC. 31,
                                                             1995          1994
                                                          ---------      ---------
<S>                                                       <C>             <C>
Warehouse line of credit of $6,700,000
at December 31, 1994. Interest at prime
plus .5% original expiration of March 15,
1994, with extensions available at the sole
discretion of the lender, secured by a first
priority interest in collateral and a
compensating balance requirement. (The line
was extended by the lender in March 1994
and is now subject to an immediate notice
of cancellation by the lender. On February 1,
1995 the credit limit was decreased to $2,000,000
and the lender has allowed temporary increases.)          2,810,000        143,000
                                                         ----------       --------
                                                         $2,810,000       $143,000
                                                         ==========       ========

</TABLE>

                                       14


<PAGE>

(6)  LONG-TERM DEBT

      Long-term debt at September 30, 1995 and December  31, 1994, is
summarized as follows:

<TABLE>
<CAPTION>
                                                             SEPT. 30,     DEC. 31,
                                                               1995          1994
                                                            ----------   ----------
<S>                                                         <C>           <C>
$331,000 note payable, secured by various
assets, and a $197,000 compensating
balance.  Interest payable monthly at 6%,
due April 8, 1995.                                           $      0      $331,000
Other notes payable                                           104,000        45,000
                                                             --------      --------
                                                              104,000       376,000
Less: current portion                                         (13,000)     (343,000)
                                                             --------      --------
Long-term debt, net of current portion                        $91,000       $33,000
                                                             ========       =======

</TABLE>

(7)   COMMITMENTS AND CONTINGENCIES

      The  Company  leases  all of its  office  space  under operating
leases.  At September 30, 1995, the minimum rental payments due under the
Company's leases are as follows:

     1995                                      $26,000
     1996                                       12,000
                                               -------
     Total minimum lease obligations           $38,000
                                               =======

     Minimum lease payments do not include contingent rental payable under
operating leases which are based on increases in  certain  cost-of-living
indices. Total rental expense under all operating leases, including
discontinued operations, for the nine months ended September 30, 1995 and
1994 was $109,000 and $440,000, respectively.

      Because of the nature of their activities, the Company and its
subsidiaries are subject to pending and threatened legal actions which
arise out of the normal course of business. In the opinion of
management, the disposition of all such matters will not have a material
adverse effect on the consolidated financial statements.

      The  Company is a party to a line of credit agreement whereby it may
have to provide up to $25,000 in short-term advances to an investee company.
The Company has also guaranteed $125,000 of the investee company's bank debt.

                                     15
<PAGE>

(8) COMPENSATING BALANCE ARRANGEMENTS

    The Company is required to maintain compensating balances for its
warehouse line and for certain debt.  At September 30, 1995 and December 31,
1994, cash of $38,000 and $67,000 respectively, was on deposit in a special
bank account to meet the warehouse line requirements and at December 31, 1994
$331,000 of the Company's cash was restricted to meet certain other debt
requirements.  In January 1995, the restricted cash of $331,000 was used to
retire the maturing debt.

(9) EMPLOYEE BENEFIT PLANS

    On October 6, 1983, the directors and shareholders of the Company adopted
the Company's 1983 employee stock option plan, the purpose of which was to
advance the interests of the Company by providing officers, directors, and
key employees an incentive to serve and continue service with the Company.
This plan provided for the grant of options to purchase up to 3,000,000
shares of the Company's common stock.  On August 4, 1993, the directors
approved an amendment to the 1983 plan accelerating the vesting of any
options granted on or after August 4, 1993 in the event of a change in
control of the Company. The 1983 plan expired in 1993 and no further options
may be granted under this plan.

    On December 15, 1986, the directors of the Company adopted the Company's
1986 employee non-qualified stock option plan which provides for the grant of
options to purchase up to 230,000 shares of the Company's common stock. On
May  25, 1994, the shareholders approved  certain amendments to the 1986 plan
in order to: (i) increase the authorized number of shares issuable under the
Nonqualified Plan from 230,000 to 400,000 and (ii) create a sub-plan to
permit  non-employee directors to participate  in  the Nonqualified Plan
under a formula award. The sub-plan calls for the annual grant of eight
thousand (8,000) nonqualified Options to each non-employee board member on
the date of the first Board meeting after the annual meeting of  the
Shareholders. Such Options vest at a rate of 500 shares for each board or
committee meeting that the non-

                                     16
<PAGE>

employee board member attends.  The strike price of the Option is one hundred
ten percent (110%) of the closing market price of the Company's stock,
rounded up to the nearest 1/16 percent, on the first meeting date of the
Board of Directors subsequent to the non-employee board director's election
or appointment to the Board. For those non-employee directors who are members
of the Board of Directors on August 4, 1993, the price of the Option is one
hundred ten percent (110%) of the closing price of the Company's common
stock, rounded up to the nearest 1/16 percent, on August 4, 1993.

    On June 9, 1993, the directors and shareholders of the Company adopted
the Company's 1993 employee stock option plan, the purpose of which is to
advance the interests of the  Company by providing officers, directors and
key management employees with an incentive to serve and to continue service
with the Company. Under the 1993 plan, up to 3,000,000 shares of the
Company's common stock may be issued upon exercise of any granted incentive
stock options, nonqualified stock options, or stock appreciation rights.

    Terms and conditions of the plans (including price, exercise date, and
number of shares) are determined by a committee of the Board of Directors
which administers the plans. For options granted, the exercise price
specified by the committee generally must be 100 percent of the fair market
value of the Company's common stock as of the date of grant. In case of
termination of employment, grants not yet exercisable are subject to
forfeiture, and exercisable options are generally forfeited six months after
the date of termination.

                                     17


<PAGE>

   At September 30, 1995, the following options to acquire common stock were
outstanding:

<TABLE>
<CAPTION>
                              TOTAL
                  PLAN       OPTIONS      OPTIONS     EXERCISE
                  YEAR       GRANTED    EXERCISABLE    PRICE
                  ----       -------    -----------   --------
                  <S>        <C>         <C>          <C>
                  1983       260,000      260,000       1.859
                  1983       100,000      100,000       5.000
                  1986        16,000        2,500       1.650
                  1986        64,000       32,500       1.860
                  1986        16,000        3,500       3.300
                  1986         8,000        2,000       2.070
                  1993        20,000       20,000       2.750
                             -------      -------
                             484,000      420,500
                             =======      =======
</TABLE>

Options vest at different times for different employees over a period from
the date of grant up to ten years subsequent. Options generally expire ten
years from the date of grant.

   The Company has adopted a Stock Bonus and 401 (k) Retirement Plan, which
is organized under Section 401(k) of the Internal Revenue Code, allowing
employees who have completed one year of service and have reached age 21  to
participate. Eligible employees are allowed to contribute up to 15 percent of
their compensation on a pre-tax basis subject to the maximum allowed by the
Internal Revenue Code. Under certain conditions, the Company will make a
matching contribution of 50% of the first six percent contributed by the
employee. A participant's right to  Company contributions vests over a five
or seven year period, based on the participant's date of service.

   The Company has issued warrants to purchase shares of common stock to
former employees of the Company. Management has determined that the value of
these warrants is not material. Accordingly, no value has been attributed to
the warrants  in  the  accompanying consolidated  financial statements.  At
September 30, 1995, the following warrants were outstanding:

                                       18
<PAGE>
<TABLE>
<CAPTION>
                   NUMBER OF    EXERCISE          EXPIRATION
                    SHARES       PRICE               DATE
                   ---------    --------      ------------------
                   <S>           <C>          <C>
                     24,000      $3.50        June 15, 1996
                    700,000      $5.00        August 17, 1996
                    100,000      $2.00        October 26, 1996
                    100,000      $2.25        February 25, 1997
                    200,000      $6.00        February 25, 1997
                    200,000      $8.00        February 25, 1997
                    175,000      $3.00        October 20, 1999
                     65,000      $1.875       September 28, 2003
</TABLE>

(10) INCOME TAXES

    The Company adopted FASB Statement No. 109, Accounting for Income Taxes,
as of January 1, 1993. The adoption of FASB 109 did not have a material
effect on the Company's financial position or results of operations.  A
valuation allowance of $3,297,000 has been recognized to offset the deferred
tax assets as realization of such assets is uncertain.

   At December 31, 1994 the Company had available federal net operating loss
carryforwards and investment tax credits of $4,821,000 and $33,000,
respectively. The net operating loss carryforwards are subject to certain
annual limitations due to the changes in majority ownership of the Company.
Following are the expiration dates of the federal net operating loss and
investment tax credit carryforwards:

<TABLE>
<CAPTION>
                              NET OPERATING        INVESTMENT TAX
                                   LOSS               CREDIT
                              CARRYFORWARDS        CARRYFORWARDS
                              -------------        --------------
                       <S>    <C>                  <C>
                       2000             $0             $3,000
                       2001              0             23,000
                       2002              0              7,000
                       2003              0                  0
                       2004              0                  0
                       2005        373,000                  0
                       2006      2,158,000                  0
                       2007        185,000                  0
                       2008        139,000                  0
                       2009      1,966,000                  0
                                 ---------             ------
                                 4,821,000             33,000
                                 =========             ======
</TABLE>

                                       19
<PAGE>

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

               NINE MONTHS ENDED SEPTEMBER 30, 1995, COMPARED
                  TO NINE MONTHS ENDED SEPTEMBER 30, 1994

RESULTS OF OPERATION

   The Company is engaged, through its wholly-owned subsidiaries, in real
estate related financial services. The Company believes that it is positioned
for future growth and profitability and has aggressively worked to form the
new profile and business plan.  As discussed later, the Company has entered
into an agreement which will result in a change in ownership and anticipates
it will also bring new business opportunities and capital or financing
support. Prior to 1995, the Company was involved in a varied base of
operations and in 1994 committed to turning the Company into a vertically
integrated entity focusing on real estate and related industries.

   During the fourth quarter of 1994, the Company elected to dissolve or
close several lines of business. In October, the  Board  of Directors
approved the  sale  of  TCS Environmental, Ltd. to its majority shareholder,
Santa Anita Produce, Inc.  The Company was unable to sustain TCS
Environmental to the point that it would provide profits and cash flow to the
entity. The nature of the waste-water treatment business is such that it
requires intensive start-up capital and the Company was not in a position to
provide it.  The sale also reduced the debt of the Company as the
consideration for the sale was relief of debt.

   In November, the Board approved the sale of 80.5% of TCS Governmental
Consulting, Inc. Once again it was decided that this business did not fit the
profile of a real estate related, financial services company. The stock was
sold to Joel M. Strobl who had been the President of that subsidiary since
its inception in 1985.

   In December, management entered into negotiations to sell its dairy
products company, TCS Ventura Dairy Products, Inc. This subsidiary also
required substantial

                                       20

<PAGE>

capital and did not fit the new business profile.  The sale  of
substantially all of the assets of TCS Ventura was completed in January 1995.

   Also in December, management entered into negotiations to sell the assets
of TCS Publishing, Inc. To date, the sale has not closed, although the buyer
has completed substantially all of their responsibilities under  the contract
and management expects to sign final documentation shortly.

   The financial statements for 1994 have been revised to conform with the
1995 presentation. The activity from TCS Governmental Consulting, Inc., TCS
Environmental, Ltd., TCS Ventura Dairy Products, Inc. and TCS Publishing,
Inc. is presented under a single line as "discontinued operations". The
following discussion relates to continuing operations only.

   Total revenues decreased $856,000 or 43.8 percent for the nine months
ended September 30, 1995 as compared to 1994.  Total expenses decreased
$2,337,000 or 47.3 percent for same period. The decrease in revenues was
primarily due to the decline in mortgage activity for single family
residential loans throughout the country and especially in Southern
California. With the increase in interest rates in early 1994, the activity
previously generated in the refinance market slowed considerably.  The
decrease in expenses is also related to the decreased mortgage activity.
Related to the drop in loan fees, commissions paid to loan agents decreased.
In addition, the Company reduced its workforce throughout the year and
discretionary costs were reduced or eliminated.

   Loan fees decreased $650,000 or 31.2% for the nine months ended September
30, 1995 over 1994 and gains on sales of servicing decreased $541,000 or 72.8
percent for the same period.  Gains on sale of servicing represent release
premiums on loans originated in-house.  The  gain  is recognized when the
funded loan is sold out of  the warehouse.  The decrease in this area is due
to the decreased activity by TCS Mortgage of its mortgage banking activities,
(i.e. funding fewer mortgage loans in-house). Related to

                                       21

<PAGE>

this drop in loan activity, commission expense decreased $663,000 or 41.9%
for the period 1995 over 1994.

   TCS Mortgage, Inc. receives prorated interest on loans funded in-house, to
offset interest charges on its warehouse lines. Related to the decreased
mortgage activity, interest income decreased $48,000 or 23.3% during the nine
months ended September 30, 1995 over 1994. Similarly, interest expense
decreased $147,000 or 68.7% for the same period.

   Management fees represent fees earned by TCS Real Estate Services, Inc.
for supervising the development of an industrial park as well as managing and
leasing  the property.  TCS Real Estate received $50,000 a month as
management fees beginning in July 1994 until the contract was canceled in
July 1995. Upon cancellation, the Company earned a fee of $150,000.

   Earnings from investments reflect the Company's share of Wateridge
Insurance Services which is accounted for under the equity method.  Earnings
from investments increased $16,000 or 320.0% for the period 1995 over 1994.

   Salaries, wages and related taxes decreased $757,000 or 43.8%, general and
administrative expenses decreased $548,000 or 55.8 percent, and promotion,
entertainment and travel decreased $89,000 or 75.4 percent for the nine
months ended September 30, 1995 as compared to the nine months ended
September 30, 1994. These decreases are attributable to the benefit of
several cost-cutting measures which were previously identified and
implemented by the Company, primarily, the review of critical personnel and
discretionary expenses necessary to support current operations. In addition,
occupancy expenses decreased $133,000 or 42.1% for the same period as the
Company successfully defended a lawsuit from its landlord and negotiated more
favorable rental terms.

                                       22
<PAGE>

LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION

     The Company and its subsidiaries continue to have restricted liquidity.
Working capital decreased $72,000 to a negative $1,156,000 at September 30,
1995 compared to a negative $1,084,000 at December 31, 1994. Although
negative, working capital did improve during the third quarter. The use of
working capital was substantially due to operating activities.

     The Company identified several changes which were implemented in the
fourth quarter of 1994 which have alleviated the use of working capital by
operations. During 1994, the Company had outstanding approximately $2,500,000
in short term loans from related parties. Management negotiated for an
extinguishment of these debts as more particularly described below. The
Company also identified additional assets which were sold to streamline
operations and generate working capital.

     The Company expected to favorably impact its working capital by
collecting the balance of a note receivable from a related party, Santa Anita
Produce, Inc., during the fourth quarter of 1994. The balance outstanding,
plus additional amounts due, of approximately $400,000 in principal and
accrued interest, was expected to be collected by the end of 1994 but,
because of the severe economic problems in Mexico in December 1994, was not
received. The balance due under the note was assumed by the Painter Group
Corporation, an unrelated third party, in the third quarter. These new
developments are more fully discussed below.

     The Company is a partner in one general partnership to which it may have
to provide up to $25,000 in short-term advances in accordance with a line of
credit agreement. The Company has also guaranteed $125,000 of a partnership
note to a bank.

     The Company has adopted a Stock Bonus and 401(k) Retirement Plan. For
the plan year ending December 31, 1994, the Company made a matching
contribution of 50 percent of the first six percent contributed by the
employee. The Company's contribution

                                      23

<PAGE>

for the year ended December 31, 1994 was $31,000. The Company has not decided
if it will make a matching contribution in 1995.

     During the fourth quarter of 1994, the Company completed several changes
which reduced the use of working capital.

     On November 1, 1994, the Company sold 80.5% of the common stock of TCS
Governmental Consulting, Inc. The shares were sold to the individual who was
the president of the subsidiary since its inception in 1985. The subsidiary
experienced losses over the last several years due to the general economic
downturn in Southern California. It is the belief of all involved parties
that the operation may be able to streamline operations and reduce expenses.
The stock was sold at book value in exchange for a long-term note with
quarterly interest payments at prime due beginning January 1, 1996. The
principal and any accrued interest are due in full November 1, 1999. The note
is secured by a pledge of the shares in TCS Governmental Consulting, Inc.
sold by the Company to Joel M. Strobl.

     Also effective October 31, 1994, the Company sold TCS Environmental,
Ltd. in its entirety to a related party, Santa Anita Produce, in lieu of
debt. In a three part transaction the following agreements were completed:
(i) Santa Anita purchased TCS Environmental for relief of $1,250,000 of debt,
(ii) Santa Anita purchased 625,000 shares of the Company's common stock for
$2.00 per share in exchange for relief of the remaining $1,250,000 of related
party debt, and (iii) the Company granted 175,000 common stock warrants with
a five year term at $3 per share to Santa Anita.

     In the fourth quarter of 1994, the Company entered into negotiations to
sell its dairy products operation. It ultimately sold the majority of the
assets to Pacific Dairy Products, Inc. ("PDP") on January 30, 1995. Under the
terms of the sale, PDP paid cash for the year-end inventory of $51,890 and
executed notes for the accounts receivable and the fixed assets. The accounts
receivable note had a stated value of $113,874, but was revised per the
agreement for receivables collected by PDP through June 30, 1995. The

                                      24

<PAGE>

revised balance of the note is $45,315. The stated value of the fixed assets
note was $33,750. This note also was revised and partially paid into escrow
to satisfy creditors. The balance of the note due the Company is $6,174. Both
notes bear interest at 8 1/2% per annum with interest only payments for the
first year. Beginning March 1, 1996 and continuing until March 1, 1999, the
notes fully amortize with interest and principal due monthly.

     In December 1994, management entered into negotiations to sell the
assets of TCS Publishing, Inc. The agreement calls for the buyer to pay all
costs and expenses necessary to print, produce and deliver approximately 14
publications of TCS Publishing, Inc., and to remit, in the future, a royalty
payment based on negotiated sales goals. To date, the sale has not yet
closed, although the buyer has completed substantially all of their
responsibilities under the contract and management expects to sign final
documentation shortly. Once the transaction is finalized, the Company will be
able to recognize deferred revenue associated with the publications of
approximately $350,000.

     In July 1995, the Board of Directors of the Company adopted resolutions,
subject to shareholder approval and final documentation, to: (i) effect a
reverse stock split on a one for two basis of all outstanding shares, options
and warrants, and (ii) issue six million eighty-nine thousand five hundred
post-split shares to the Painter Group Corporation, a Delaware corporation,
("Painter Group") and one hundred thousand shares of preferred stock in
exchange for 100% of the outstanding stock of USA Golf Corporation, a Nevada
Corporation ("USA Golf"). The balance of the preferred shares are to be
canceled, thereby leaving 100,000 shares of preferred stock authorized,
issued and outstanding. After this transaction the Painter Group will hold
approximately 70% of the outstanding common shares of the Company.

     As additional consideration for the issuance of the Company's common and
preferred shares, the Painter Group has agreed to assume and pay certain
indebtedness owing to the Company from SDB Offshore Ltd. and Santa Anita
Produce, Inc. As

                                      25

<PAGE>

consideration for the assumption of the debt, Santa Anita and Hector Lomeli,
an owner of Santa Anita and SDB Offshore, granted irrevocable proxies for
their combined 4,259,254 common shares to Helen Gibbel, President of the
Painter Group, for purposes of voting on the above described stock split and
share issuance.

     The final terms of the agreement between the Company and the Painter
Group will be determined shortly and voted upon at the annual shareholder
meeting which the Company expects to hold in mid-January. This transaction
will result in a change of control of the Company and, upon completion, the
name of the Company will be changed to USA Golf Corporation. The Company will
continue to provide real estate related financial services with the primary
focus on golf course properties.

     During the third quarter, the Painter Group loaned the Company $243,000
in unsecured, short term loans. In addition, the Painter Group signed a note
to TCS Mortgage, Inc. in the amount of $555,000. This note was used to
temporarily satisfy the minimum capital requirement for the Federal Home Loan
Mortgage Corporation ("FHLMC"). It is expected that the note will be replaced
with acceptable assets prior to December 1, 1995.

     In July 1995, the Company also consented to the removal of its common
stock from the American Stock Exchange (AMEX). This action became necessary
because the Company no longer fully satisfied all the financial and market
value guidelines of the AMEX for continued listing. Management intends to
develop a market for its common stock with the NASDAQ over-the-counter market.

     In an effort to assist the Company in meeting its current liquidity
demands, an officer and director of the Company has made several short term
loans. The loans are unsecured and carry interest rates of 11% and 12% per
annum. The balance due by the Company at September 30, 1995 is $74,000 plus
accrued interest.

     The Company has reported improved results in each of the last three
quarters and hopes to continue to report favorable results in the fourth
quarter. Management expects

                                      26

<PAGE>

that the improvement will be due primarily to the operations of its mortgage
operation. Long term interest rates continue to be low and the Company has
increased loan volume. Loans in process are up significantly over last year
and there is less competition in the industry. This positive trend, combined
with savings from the discontinued operations and the results of the
transaction with the Painter Group Corporation, lead to management's
expectation of better results.

     Because of the nature of their activities, the Company and its
subsidiaries are subject to pending and threatened legal actions which arise
out of the normal course of business. In the opinion of management, the
disposition of all such matters will not have a material adverse effect on
the consolidated financial statements.

     The Company does not know of any other demands, commitments, events or
uncertainties, that will result in decreased liquidity, except for the future
minimum lease payments and the repayment of debt as disclosed in footnote (7)
and (6), respectively, of the Consolidated Financial Statements.

     The Company has no present significant commitments for capital
expenditures. Cash flows from operations may not be sufficient to fund
current expenses, although management believes that the third quarter change
in ownership, discussed above, will alleviate the immediate cash deficit and
ultimately restore net worth. However, it is not possible to predict that the
Company will have positive cash flow or net earnings in future periods.

                                      27

<PAGE>

PART II   OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

      Exhibits  filed  as a part of this report  are  listed below.

      EXHIBIT NO.     DESCRIPTION
      -----------     -----------
      10.1            Promissory Note dated June 16, 1995 between registrant
                      and Rick W. Jarrett II

      10.2            Promissory Note dated  June  22, 1995 between
                      registrant and Rick W. Jarrett II

      10.3            Agreement dated July 14, 1995 between registrant, TCS
                      Publishing, Inc. Protocol Communications, Inc. and
                      Robert E. Jones

      10.4            Promissory Note dated  July 21, 1995 between registrant
                      and Rick W. Jarrett II

      10.5            Agreement dated July 21, 1995 between registrant and
                      Painter Group Corporation

      10.6            Promissory Note dated July 28, 1995 between registrant
                      and Painter Group Corporation

      10.7            Promissory Note dated August 3, 1995 between registrant
                      and Painter Group Corporation

      10.8            Promissory Note dated August 3, 1995 between TCS
                      Mortgage, Inc. and Painter Group Corporation

      10.9            Promissory Note dated August 4,1995 between registrant
                      and Painter Group Corporation

      10.10           Promissory Note dated August 11, 1995 between
                      registrant and Painter Group Corporation

      10.11           Promissory  Note  dated  August 15,1995 between
                      registrant and Rick W. Jarrett II

      10.12           Executive Office Suite Sublease dated August 15, 1995
                      between TCS Mortgage, Inc. and Shannon Communities
                      of Nevada, Inc.

                                       28

<PAGE>

      10.13           Promissory Note dated August  22, 1995 between
                      registrant and Painter Group Corporation

      10.14           Promissory Note dated August  30, 1995 between
                      registrant and Painter Group Corporation

      10.15           Promissory Note dated August 30, 1995 between
                      registrant and Painter Group Corporation

      10.16           Promissory Note dated September 1, 1995 between
                      registrant and Rick W. Jarrett II

      10.17           Lease dated September 15, 1995 between TCS Mortgage,
                      Inc. and John E. Colyer and Suzanne  J. Colyer,
                      Co-Trustees of the Colyer Revocable Living Trust
                      dated July 5, 1978.

      10.18           Promissory Note dated September 15, 1995 between
                      registrant and Painter Group Corporation

      10.19           Promissory Note dated September 21, 1995 between
                      registrant and Painter Group Corporation

      10.20           Promissory Note dated September 28, 1995 between
                      registrant and Painter Group Corporation

      10.21           Promissory Note dated September 29, 1995 between
                      registrant and Painter Group Corporation

     (b)  Reports on Form 8-K

     On August 3, 1995, a report on Form 8-K was filed to report a change in
control of the registrant.

                                       29
<PAGE>
                         SIGNATURES


      In  accordance with the requirements of  the  Exchange Act,  the
registrant caused this report to be signed on  its behalf by the undersigned,
thereunto duly authorized.

                    TCS ENTERPRISES, INC.
                        (Registrant)


September 10, 1995                     /s/ Alan Painter
_______________________________        _______________________________
Date                                   Alan Painter
                                       Chairman of the Board
                                       Chief Executive Officer


September 10, 1995                     /s/ Cheryl B. Dodds
_______________________________        _______________________________
Date                                   Cheryl B. Dodds
                                       Chief Financial Officer

                                      30

<PAGE>

                                                                   EXHIBIT 11.1

               TCS ENTERPRISES, INC. AND SUBSIDIARIES
            COMPUTATION OF NET EARNINGS (LOSS) PER SHARE

<TABLE>
<CAPTION>
                                                    THREE MONTHS         NINE MONTHS          THREE MONTHS         NINE MONTHS
                                                       ENDED                ENDED                ENDED                ENDED
                                                 SEPTEMBER 30, 1995   SEPTEMBER 30, 1995   SEPTEMBER 30, 1994   SEPTEMBER 30, 1994
                                                 ------------------   ------------------   ------------------   ------------------
<S>                                              <C>                  <C>                  <C>                  <C>
PRIMARY:

   Average shares outstanding                         5,823,000            5,823,000            5,198,000            5,198,000

   Dilutive common stock options
      based on the treasury stock method                  --                   --                   --                   --

   Dilutive common stock warrants
      based on the treasury stock method                  --                   --                   --                   --
                                                 ------------------   ------------------   ------------------   ------------------

                                                      5,823,000            5,823,000            5,198,000            5,198,000
                                                 ==================   ==================   ==================   ==================

   Net income (loss)                                    $60,000            ($285,000)         ($1,267,000)         ($3,956,000)
                                                 ==================   ==================   ==================   ==================

   Per share income (loss)                                $0.01               ($0.05)              ($0.24)              ($0.76)
                                                 ==================   ==================   ==================   ==================

</TABLE>