SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 10-K

(Mark One)


/X/       ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
          EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1995



/ /       TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from          to

                         Commission file number 0-22922

                      THE WESTERN TRANSMEDIA COMPANY, INC.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

          Delaware                                            06-0995978
------------------------------                      ---------------------------
(State or other jurisdiction                        (IRS Employer Identification
 of incorporation or organi-                         Number)
 zation)

475 Sansome Street, San Francisco, CA                       94111
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                  (Zip Code)

Registrant's telephone number, including area code: (415) 397-3001

Securities registered pursuant to Section 12(b) of the Act:

                                      None

Securities registered pursuant to Section 12(g) of the Act:

         Common Stock, $.60 par value
         Common Stock Purchase Warrants entitling holders to purchase one share
         of Common Stock per Warrant prior to December 31, 1997

          Indicate  by check  mark  whether  the  Registrant  (1) has  filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 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 / /

                                                    (continued next page)

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          Indicate by check mark if disclosure of delinquent  filers pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of the  Registrant's  knowledge,  in definitive proxy or information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |_|

          The  aggregate  market value of voting stock (Common  Stock,  $.60 par
value)  held by  non-affiliates  of the  Registrant  as of  March  1,  1996  was
approximately  $10,011,483  (based on the mean between the closing bid and asked
prices of the Common Stock on such date), which value, solely for the purpose of
this calculation,  excludes shares held by Registrant's  executive  officers and
directors.  Such exclusion  should not be deemed a  determination  by Registrant
that all such individuals are, in fact, affiliates of the Registrant.

          Indicate  the  number of shares  outstanding  of each of the  issuer's
classes of common stock,  as of the latest  practicable  date: At March 1, 1996,
there were outstanding  7,903,421 shares of the Registrant's  Common Stock, $.60
par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

          Certain portions of the Registrant's  definitive proxy statement to be
filed not later than April 29, 1996 pursuant to Regulation 14A are  incorporated
by  reference  in Items 10 through 13 of Part III of this Annual  Report on Form
10-K.


<PAGE>



                                     PART I

ITEM 1.           BUSINESS

GENERAL

          In December 1991, the Company entered into a franchise  agreement (the
"Franchise  Agreement") with Transmedia Network Inc. ("Network") that granted to
the Company the exclusive  right to operate a franchise (the  "Franchise"),  the
primary  business of which is the acquisition of "Rights to Receive" from client
restaurants and other dining establishments  located in California that accept a
charge card,  "The  Transmedia  Card," and the sale of such Rights to Receive to
holders of The Transmedia Card  ("Cardholders").  The Transmedia Card, a private
charge  card  marketed  and  issued  by  Network,   which   utilizes  a  diner's
MasterCard(R),  Visa(R),  American  Express(R) or Discover(R)  charge account to
bill  Transmedia  Card  charges,  is used by  Cardholders  to pay for  food  and
beverages  when  dining  at  restaurants  or other  dining  establishments  (the
"Participating   Restaurants")   that   participate   in  the  network  of  such
establishments  that accept The Transmedia Card (the  "Transmedia  Network(R)").
Rights to  Receive  are the  Company's  rights to food and  beverage  credits of
Participating Restaurants that are purchased by the Company in exchange for cash
in an amount  equal to  approximately  50% of the retail  value of such food and
beverage credits.

          The Transmedia  Network is a unified system that entitles  Cardholders
recruited by Network,  the Company or any other Network  franchisee to a savings
of up to 25% on the  regular  menu prices of food and  beverages  charged on The
Transmedia  Card.  The  Transmedia  Card is accepted  for payment  with very few
restrictions by all Participating Restaurants.  The only significant restriction
is that  Cardholders  must  arrange  reservations  for  parties of more than six
persons by contacting the Company.  Participating  Restaurants  contacted by the
Company  for  purposes  of making  such  reservations  are free to accept or not
accept them.

          The Company derives  substantially all of its revenues from the excess
of the proceeds of Cardholders'  charges on their  Transmedia  Cards incurred at
Participating Restaurants in the territory included within the Franchise (net of
the up to 25%  Cardholder  savings  and of fees and  other  charges  payable  to
Network)  over  the  Company's  cost  of  purchasing   Rights  to  Receive  from
Participating  Restaurants.  Revenues from Cardholders'  membership fees are not
expected  to be  significant  as the  Company  will only  receive 40% of initial
membership  fees (and no portion of renewal fees) and, under  arrangements  with
Network,  such initial fees are  generally  expected to be waived by the Company
during its early years of operations in connection with solicitations of members
of organizations with large enrolled memberships. (See "--


<PAGE>



Recent  Developments"  with  respect to  programs to provide no fee cards in the
future.)

          The Company  commenced its  franchise  operations in the San Francisco
Bay Area in August 1992, in the Los Angeles  metropolitan  area in October 1993,
in Orange County in January  1995,  and in the Lake Tahoe Nevada area in October
1995.  At  December  31,  1995,  there  was an  aggregate  of 553  Participating
Restaurants,  consisting of 265 in the San Francisco  Bay Area  (including  Lake
Tahoe),  231 in the Los Angeles  Metropolitan  Area and 57 in Orange County.  At
December 31, 1994,  there was an  aggregate  of 519  Participating  Restaurants,
consisting  of 304 in the San  Francisco  Bay  Area  and 215 in the Los  Angeles
Metropolitan  Area. At December 31, 1995, there was an average Rights to Receive
balance  (net of Rights to Receive  payable by the  Company)  per  Participating
Restaurant  for the San Francisco Bay Area,  Los Angeles  Metropolitan  Area and
Orange County Area of approximately $4,250, $4,400, and $2,200, respectively. At
December 31, 1994, there was an average Rights to Receive balance (net of Rights
to Receive  payable by the Company)  per  Participating  Restaurant  for the San
Francisco Bay Area and Los Angeles Metropolitan Area of approximately $4,000 and
$6,800,  respectively.  During 1995,  the Company  added 52,000 new  Cardholders
residing in California.  At December 31, 1995, there were  approximately  82,000
Cardholders  after giving effect to non-  renewals  during the year. At December
31, 1994, there were approximately 62,000 California Cardholders.

          In  addition  to  acquiring  the  California  franchise,  the  Company
acquired  options  to  operate  Transmedia  Network  franchises  in  Oregon  and
Washington  upon  payment of certain  prescribed  fees.  In December  1993,  the
Company  exercised  its option to operate the  Transmedia  Network  franchise in
Washington and also agreed with Network to purchase a franchise in Reno,  Nevada
and the Nevada  portion of the Lake Tahoe resort area. In June 1995, the Company
exercised its option to obtain a Transmedia  Network  franchise for the State of
Oregon.  As used  herein,  the term  "Franchise  Territory"  means the States of
California, Oregon and Washington, and Reno and Lake Tahoe, Nevada.

          In 1995,  Network began to offer to holders of The Transmedia Card use
of the card at certain hotels,  resorts,  golf courses,  ski lifts and access to
discount  long  distance  telephone  services.  The  Company's  rights under the
Franchise  Agreement relate only to  Participating  Restaurants in the Franchise
Territory.  The Company does not now have any rights to participate in or derive
any income from these other services.

RIGHTS TO RECEIVE

          The Company's primary business is the acquisition of Rights to Receive
from  Participating  Restaurants that it recruits to join the Transmedia Network
of dining establishments and the


                                       -2-

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sale of such Rights to Receive to Cardholders. The Company derives substantially
all of its  revenues  from  purchasing  Rights  to  Receive  from  Participating
Restaurants  operating  in the  Franchise  Territory  in exchange for cash in an
amount equal to  approximately  50% of the retail value of the food and beverage
credits  underlying  such Rights to Receive and applying  such Rights to Receive
against  Cardholder charges made at Participating  Restaurants  operating in its
Franchise Territory. At December 31, 1995, no Participating  Restaurant's Rights
to  Receive  balance  represented  more than 5% of the total  Rights to  Receive
outstanding at that date.

          Before  becoming a  Participating  Restaurant,  and before the Company
will   purchase   Rights   to   Receive   from  it,  a  dining   establishment's
creditworthiness  is analyzed in relation to certain credit standards  developed
by Network and the  Company.  These  credit  standards  are based upon  criteria
intended to evaluate the dining establishment's  financial viability. As part of
its analysis of the creditworthiness of a prospective  Participating Restaurant,
the owner of such  restaurant  is required to provide the Company with a list of
references for the dining  establishment,  including  references from landlords,
banks and  suppliers.  The owner also is required to respond to a  questionnaire
that requests detailed  information about the dining  establishment's  business,
including  hours of operation,  seating  capacity and types of beverages  (beer,
wine  and/or  liquor)   served.   In  addition,   the  premises  of  the  dining
establishment are physically inspected by the Company's sales employees.  Owners
of  Participating  Restaurants  generally  are  required  to  provide a security
interest in the restaurant and a personal guaranty in support of the obligations
to the  Company  arising  in respect  of Rights to  Receive  purchased  from the
Participating Restaurant.

          The Company  generally  purchases  its  inventory of Rights to Receive
directly  from  a  Participating   Restaurant   through  cash  payments  to  the
Participating  Restaurant in an amount equal to approximately  50% of the dollar
value of the Rights to Receive  being  purchased.  The  Company may also pay for
Rights to Receive by financing the purchase of other services and goods required
by the Participating Restaurant, such as media placement services and restaurant
equipment  utilized by the  Participating  Restaurant.  As of December 31, 1995,
less than 2% of Rights to Receive  purchased  by the Company had been  purchased
for consideration other than cash.

          The Company enters into a contract (a "Restaurant Contract") with each
Participating  Restaurant  in its  Franchise  Territory in  connection  with its
purchase  from it of Rights to  Receive.  At  present,  the  typical  Restaurant
Contract  provides for the purchase by the Company of between  $3,000 and $7,000
in Rights to  Receive.  Generally,  such  Rights to Receive  are paid for by the
Company in installments  during the initial  two-to-three  month period thereof.
Except as discussed below, the Company has no

                                       -3-

<PAGE>


obligation  to purchase  Rights to Receive from a  Participating  Restaurant  in
excess of the amounts  initially  provided  for in the  Restaurant  Contract and
Participating  Restaurants  are under no obligation to sell Rights to Receive in
excess of such amounts. Although a Restaurant Contract provides that the Company
may utilize the Rights to Receive purchased by it during an indefinite period of
time,  Rights to Receive are  generally  intended to be utilized by  Cardholders
during a period of six to 12 months  after the  Restaurant  Contract  is entered
into by the parties.

          Beginning in 1995,  the Company has also entered into nine to 12 month
commitment  agreements with certain  Participating  Restaurants.  The commitment
agreements  establish a minimum  period of  participation  by the  Participating
Restaurant in the event that the initial  credits  purchased by the Company from
the  Participating  Restaurant  are  exhausted  prior to the  expiration  of the
commitment period.  The commitment  agreements provide that during the course of
the commitment,  once the initial credits have been exhausted, the Participating
Restaurant will continue in the program and the Company will purchase additional
Rights to Receive  monthly as Cardholder  charges are  submitted.  The amount of
additional  Rights to Receive to be purchased under the commitment  agreement is
determined  with  reference to the manner in which the initial Rights to Receive
were  utilized.  At December 31, 1995 there were 431  Participating  Restaurants
that had entered into commitment agreements.

          The Company believes that these  commitment  agreements had a positive
effect during 1995 upon restaurant retention and cash flow. The long term impact
of the commitment  agreements  with  Participating  Restaurants  upon restaurant
renewal rates and Rights to Receive balances is not yet known.

          Although  no  assurance  can be given,  based upon the  experience  of
Network and its own experience,  the Company  believes that more than a majority
of Participating Restaurants will extend the Restaurant Contracts to provide for
the purchase by the Company of additional Rights to Receive. It is the Company's
experience that  approximately 70% of all Participating  Restaurants renew their
Rights to Receive after the initial amount of Rights to Receive purchased by the
Company  from such  Participating  Restaurants  are expended and that 70% of all
Participating Restaurants renew their Rights to Receive for a second time. After
the  second  renewal,  renewal  rates drop  sharply  because  the  Participating
Restaurants  with the Company's  help have become more  successful and no longer
wish to sell Rights to Receive at a discount,  the Company  chooses not to renew
the  Participating  Restaurant or the  Participating  Restaurant has gone out of
business.  However,  offsetting this drop is the fact that new restaurants start
up as old ones go out of business,  providing  the Company  with new  restaurant
prospects.


                                       -4-

<PAGE>



          Participating Restaurants are not under any restrictions in respect of
their use of the proceeds of their sale of Rights to Receive.

          The Company solicits Participating Restaurants through full-time sales
employees.  As of March 15, 1996, the Company employed nine such employees,  one
of whom is the general manager of the Los Angeles office.  The Company  attracts
Participating  Restaurants by offering to provide them with two essential needs:
increased  liquidity in the form of cash payments and  additional  patrons.  The
cash  paid by the  Company  in  exchange  for  Rights  to  Receive  may serve to
supplement other sources of funds and financing  available to the  Participating
Restaurants.  It may also  constitute a source of funds that may be  unavailable
from more conventional sources such as banks by reason of economic conditions or
the reluctance of such sources to lend to dining  establishments.  The potential
for new patrons will arise from the pool of  Cardholders  who will want to avail
themselves  of the savings to be realized by dining at  restaurants  that accept
The Transmedia  Card. It is essential  that Network and the Company  continue to
recruit a substantial body of Cardholders  resident in the Franchise  Territory,
because the Company believes that the use by non-resident  Cardholders of Rights
to Receive purchased from Participating  Restaurants in the Franchise  Territory
has not been significant.

TRANSMEDIA CARD

          The Transmedia Card is a private charge card that entitles Cardholders
to a  savings  of up to 25% on the  regular  menu  price of food  and  beverages
purchased  at  any  Participating  Restaurant  within  the  Transmedia  Network.
Participating  Restaurants  solicited  by the  Company  are  located  in the San
Francisco  Bay  Area,   metropolitan  Los  Angeles  and  Orange  County.   Other
Participating  Restaurants  are at  present  located in the  tri-state  New York
metropolitan  area (New York City,  Connecticut  and northern  New Jersey),  the
Chicago, Atlanta, Boston,  Philadelphia and Detroit metropolitan areas, northern
Delaware,  southern New Jersey, the Washington D.C./Baltimore metropolitan area,
southern Florida, North Carolina, South Carolina,  Dallas/Ft.  Worth and Houston
Texas, Georgia and Tennessee,  and in Paris, France, England,  Australia and New
Zealand.  The  Transmedia  Card was  developed  and is issued  and  marketed  by
Network.

          Cardholders may use The Transmedia Card as they would any major credit
card. When paying the check at a Participating Restaurant, a Cardholder presents
The Transmedia Card in payment for the amount of goods and services received, as
well as for taxes and tips,  and signs a Network  credit  card  receipt for such
amount.  Network,  upon receiving the credit card receipt from the Participating
Restaurant,  gives the Participating  Restaurant a credit against the balance of
Rights to Receive that are held by

                                       -5-

<PAGE>



the Company in respect of such Participating  Restaurant.  Network then arranges
for the processing of the receipt for the full amount of the charges through the
major  credit card  account  (Visa,  Mastercard,  American  Express or Discover)
designated by the Cardholder in his or her  application  (the "Major Credit Card
Account") and  simultaneously  issues a credit to the Cardholder's  Major Credit
Card Account in an amount equal to the up to 25% savings on the appropriate food
and beverage charges. Taxes and tips are not eligible for the up to 25% savings.
Upon receipt by Network of payment from the Major Credit Card  Account,  it pays
the  Participating  Restaurant  the taxes and tips  incurred by the  Cardholder,
deducts the fees and expenses  payable to it under the  Franchise  Agreement and
remits the balance to the Company on a weekly basis.

          The  use  of  point  of  sale  equipment  to  electronically   process
Transmedia Card charges became  available to the Company in 1995. As of March 1,
1996, approximately 161 of the Company's 553 Participating  Restaurants utilized
this equipment. The Company plans to expand use of electronic processing in 1996
because the  convenience  and prestige  associated with point of sale processing
enhances  the  Company's   marketing   position  and  because  such   processing
accelerates the Company's cash flow.

          Network issues The Transmedia Card to Cardholders recruited by Network
and the Company on an expedited basis, without lengthy and time consuming credit
checks.  The  creditworthiness  of a  prospective  Cardholder  is  determined by
Network primarily upon the basis of confirmation that the prospective Cardholder
holds a valid Visa,  MasterCard,  Discover, or American Express card or by other
means.  The credit risk of a Cardholder's  failure to pay charges incurred on an
Transmedia  Card are borne by Network,  because  Network is  obligated  to remit
amounts due to the Company  whether or not  Cardholders  pay their  charges.  An
initial  membership  fee of $50,  which may be waived by the Company  during the
first  three  years  of the  Franchise  Agreement,  is  payable  to  Network  by
Cardholders  recruited by the Company.  Thereafter,  a $50 annual renewal fee is
charged by Network to such  Cardholders.  The Company  receives no payments  for
renewal fees paid by Cardholders. Network reports that for its fiscal year ended
September  30,  1995,  between  55  and  60% of all  Cardholders  renewed  their
memberships.  At September 30, 1995, substantially all Cardholders were enrolled
in the 25%  Program.  (See "--  Recent  Developments"  for  discussion  of a new
cardholder program that eliminates any membership fee.)

          Network  maintains  and updates at its own expense a directory  of all
dining establishments that accept The Transmedia Card.  Directories are provided
to all Cardholders by Network at its own expense  approximately every six weeks.
The Company also provides to California  Cardholders a newsletter on a quarterly
basis at the Company's expense.


                                       -6-

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CARDHOLDER MARKETING

          In  1995,  the  Company's   Cardholder   marketing  and   solicitation
activities  were  primarily  coordinated  by its President  and  Executive  Vice
President.  The Company's  sales  employees also engage in such  activities to a
more  limited  extent.  To date,  the Company has  marketed  and  solicited  new
Cardholders  from a wide  variety  of  sources  utilizing  the  basic  marketing
programs  developed  by  Network.  In this  connection,  the  Company  initially
marketed to and solicited California  affiliates of organizations,  associations
and businesses with which Network has established  marketing programs as well as
a substantial  number of other  organizations.  The Company believes that it has
recruited  most  of its  Cardholders  as a  result  of  direct  solicitation  of
businesses  and  organizations  located  in  California  that  are not  directly
affiliated with Network's existing programs. The Company's marketing program has
utilized  direct  written  or mail  solicitation  of  employees  and  members of
targeted   businesses  and  organizations.   Media  advertising   campaigns  for
Cardholders have been limited. See "Recent Developments" for a discussion of new
national  cardholder  programs to be  initiated by Network and their effect upon
the Company's marketing activities.

          The Company commenced active franchise operations in the San Francisco
Bay Area in August 1992.  During 1993, the Company focused its principal efforts
on recruiting  restaurants and other dining establishments doing business in the
San  Francisco  Bay Area to join the  Transmedia  Network and on  marketing  The
Transmedia  Card  to  prospective  Cardholders.   Initial  franchise  activities
concentrated primarily on establishing a base of restaurants in San Francisco as
a  foundation  for  commencing   programs  to  market  The  Transmedia  Card  to
prospective  Cardholders.   Active  marketing  efforts  to  solicit  Cardholders
commenced in late 1992 and were directed primarily to professionals,  investment
banking  and real  estate  firms and  various  small and  mid-sized  businesses.
Marketing  to larger  businesses,  banks,  radio  station  listeners'  clubs and
various  non-profit  organizations  commenced in April 1993. Since May 1993, the
Company  has  initiated   arrangements   with  the  following   businesses   and
organizations  in the San  Francisco  Bay Area to offer The  Transmedia  Card to
their  respective  customers,  employees,  listeners  or  members  on an initial
membership fee waived basis: First Republic Bank,  KKSF-FM Radio,  United Jewish
Community Centers,  California Society of Certified Public Accountants,  the San
Francisco Medical Association,  the Oakland Athletics, the San Francisco 49er's,
the San Francisco Ballet, Cellular One, The San Francisco Jazz Festival, and The
San Francisco Chronicle.

          Active  marketing  efforts to solicit  Cardholders  in the Los Angeles
metropolitan area commenced in January 1994 and have followed the same marketing
strategy  implemented  by the Company in the San Francisco Bay Area.  Cardholder
programs have been initiated through First Republic Bank, L.A. Magazine, the

                                       -7-

<PAGE>



California Society of Certified Public Accountants,  The Neil Bogart Foundation,
KABC  Radio,  the Los Angeles  Medical  Society,  the Los Angeles  Philharmonic,
Air-Touch  Cellular and  Hollywood  Bowl.  Active  marketing  efforts to solicit
Cardholders  in Orange  County  commenced  in  mid-1995.  Although  the  Company
believes that Network will actively  promote  national  Cardholder  programs and
that the Company will continue to have  opportunities  to enter into  California
Cardholder  programs with additional  larger businesses and organizations in the
Franchise Territory in the future, no assurance can be given as to the number of
such  additional  programs  or the number of  additional  Cardholders  that will
result from the Company's or Network's  Cardholder  marketing  programs (See "--
Recent Developments").

TRANSACTION ILLUSTRATION

          The  following  is  a  descriptive   illustration  of  a  hypothetical
transaction in the Network system under the traditional 25% savings arrangement.

          The Company, through its sales employee, recruits Restaurant A, a full
service restaurant operating in California, as a Participating  Restaurant.  The
Company  purchases  Rights to  Receive  valued at $6,000  from  Restaurant  A in
exchange  for cash in the  amount of  $3,000.  John  Smith,  a  Transmedia  Card
Cardholder, enjoys a meal at Restaurant A and pays the $100 check (consisting of
$80 for food and beverages and $20 for taxes and tip) with his Transmedia  Card.
Mr. Smith does not have to present his Major  Credit Card  Account  credit card.
Restaurant  A delivers  The  Transmedia  Card  receipt for Mr.  Smith's  meal to
Network for processing  through the Major Credit Card Account  designated by Mr.
Smith in his Transmedia Card application for payment. Network reduces Restaurant
A's Rights to Receive  balance by $80.  Network  submits a credit to Mr. Smith's
Major Credit Card Account in the amount of $20 (representing 25% of the $80 food
and beverage  portion of his meal check).  Upon receipt from Mr.  Smith's  Major
Credit  Card  Account  company  of $80,  Network  forwards  $20 of  this  amount
(representing the tax and tip portion of Mr. Smith's meal check) to Restaurant A
and forwards $51.80 (representing the balance of $60 less the 10% service charge
of $8.00 and less a $.20 transaction charge retained by Network) to the Company.
This  compares  with a cost to the Company of $40 paid to  Restaurant  A for the
Rights to Receive of $80 utilized in providing Mr. Smith his meal.

RECENT DEVELOPMENTS

          In  January  1996,  Network  initiated  a policy to offer both new and
existing  Cardholders  an alternative  to the  traditional  arrangement of a 25%
savings  with an  annual  membership  fee of  $50.  The new  program  (the  "20%
Program") provides a 20% savings to

                                       -8-

<PAGE>



Cardholders  with no annual  fee so long as  Cardholder  usage is at least  $200
during each membership year.

          Network has  indicated  that  commencing  in 1996,  substantially  all
programs to obtain new Cardholders will utilize the 20% Program and that Network
will take a leading  role to promote  The  Transmedia  Card on a national  basis
utilizing   arrangements  with  large  national  organizations  and  businesses,
including MBNA, United Airlines and Unocal. The Company believes that because of
the size of the  overall  U.S.  population  in  California,  Network's  national
programs  will result in the addition of a meaningful  number of new  California
Cardholders.  The  Company  also  believes  that  a  substantial  number  of new
Cardholders  residing in California will initially enroll in the 20% Program and
that an increasing number of existing  Cardholders in California will convert to
the 20% Program.

          All  costs of such  national  programs  will be borne by  Network.  No
commissions  will be paid by  Network  to the  Company  with  respect to new 20%
Program Cardholders obtained from these national programs.

          Transmedia   restaurant   charges  in  Participating   Restaurants  by
Cardholders who have enrolled in the 20% Program,  will result in the receipt by
the  Company  of net sales  from each such  individual  transaction  that are 5%
greater  than those  received  under the  traditional  25% savings  arrangement.
Accordingly, the Company's gross profit from each such transaction will increase
from  approximately  33% to 37%.  There  will be no change  with  respect to the
Company's  approximately 33% gross profit from individual  Transmedia restaurant
charges by  Cardholders  who remain  enrolled  in the  traditional  25%  savings
program.  No assurance can be given as to the number of Cardholders  residing in
or  outside  California  that will  enroll  in or  convert  to the 20%  Program.
Therefore,  the  Company is  presently  unable to predict the  magnitude  of the
effect  that the 20%  Program  will  have  upon its  overall  net sales or gross
profit.

          The  Company  anticipates  that its own 1996  activities  directed  to
obtaining  new  Cardholders  in  California  will be  reduced as a result of the
national programs of Network discussed above. However, the Company will continue
to solicit  new  Cardholders  utilizing  the 20%  Program  through  programs  in
California with  organizations  and businesses with  significant  memberships or
customers that will involve  distribution  of at least 50,000  Applications  per
program.  The Company anticipates that it will be reimbursed for its expenses by
Network for a significant number of such programs.

          In 1995,  Network began to offer to holders of The Transmedia Card use
of the card at certain  hotels,  resorts,  golf  courses  and ski lifts  located
primarily on the East Coast, and

                                       -9-

<PAGE>



access to discount long distance telephone services.  The Company's rights under
the  Franchise  Agreement  relate  only  to  Participating  Restaurants  in  the
Franchise Territory.  The Company does not now have any rights to participate in
or derive any income from these other services.

          In February 1996, the Company's  obligation to begin  operations under
its  Washington  Franchise  was extended by mutual  agreement  with Network from
April to December 31, 1996.

          On March 7, 1996, the Company's Board of Directors voted to extend the
expiration date of the Company's Common Stock Purchase  Warrants.  The Warrants,
which were due to expire on June 24,  1996,  will now  expire at 5:00 P.M.  (New
York time) on December 31, 1997.

          Each Warrant  entitles the holder thereof to purchase one share of the
Company's  Common Stock,  $.60 par value, at a price of $4.00 per share (subject
to  adjustment  as  provided in the  agreement  under  which the  Warrants  were
issued).


FRANCHISE AGREEMENT

          General Terms.  The Company entered into the Franchise  Agreement with
Network on December  9, 1991.  The  Franchise  Agreement  provides  that (i) the
Company,  as  franchisee,  has the  exclusive  right to utilize  the  Transmedia
Network in the entire State of California  with options for the States of Oregon
and Washington and (ii) the initial term of the Franchise  Agreement is 10 years
ending  December  2001 with an option  exercisable  by the Company to extend the
term, without  additional  initial fees arising solely from such extension,  for
two additional successive 10-year periods,  provided certain conditions are met.
In December 1993, the Company  exercised its option for the State of Washington,
thereby  extending  its option for the State of Oregon until June 1995.  In June
1995, the Company exercised its option for the State of Oregon. The Company also
agreed in December  1993 to purchase  Transmedia  Network  franchises  for Reno,
Nevada and the Nevada  portion of the Lake  Tahoe  resort  area.  Except for the
territories described in this paragraph, Network has not granted the Company any
other  territorial  rights and the  Company  has no rights to  sub-franchise  or
license to third parties in the Franchise Territory.

          Network  does not have the  right of first  refusal  to  purchase  the
business of the Company or any shares of the  Company's  equity,  but  Network's
consent is  required  in  connection  with the sale of the  Company's  business.
However,  the Company may enter into  business  arrangements  with third parties
pursuant to which said third  parties may have rights to share in the  Company's
profits  from  operating  all  or a  part  of the  Franchise  in  the  Franchise
Territory.

                                      -10-

<PAGE>

          No individual,  whether a director, officer or stockholder,  is liable
to Network for any obligation of the Company under the Franchise Agreement.

          The President of the Company has agreed in the Franchise Agreement (i)
to devote his full time to the  management  and  operations of the Company,  and
(ii) not to compete  with the  business of the Company for a period of two years
immediately following his resignation or other termination of employment.

          The  Company  has agreed  during  the  initial  term of the  Franchise
Agreement and any renewal and for a period of two years thereafter that, without
Network's  prior written  approval,  it will not directly or indirectly  compete
with  Network  in  providing  discount  dining  or  restaurant  services  or  in
soliciting of a charge card for discount  services and activities or promoting a
charge card or providing  services the same as or similar to that sold,  offered
or provided by Network.  These restrictions apply within the Franchise Territory
and within a radius of 10 miles of the  Franchise  Territory  or location of any
other business using the Transmedia Network system,  whether franchised or owned
by Network.

          Fees and Charges. Under the original terms of the Franchise Agreement,
the Company was  required to pay Network the  following  fees and  charges:  (i)
$250,000 as an initial  franchise fee (which has been paid); (ii) $250,000 as an
initial  contribution to Network's  advertising  and development  fund, of which
$125,000 has been paid and the remaining $125,000 is payable,  without interest,
in 12 consecutive equal monthly payments commencing July 1993; and (iii) 150,000
shares of the Common  Stock of the Company  valued at  $21,000,  which have been
issued.

          In  September  1993,  the Company and Network  agreed that the Company
would pay for  substantially  all of its  advertising  in California and entered
into an  agreement  providing,  effective as of  September  30, 1993,  for (i) a
refund to the Company of the remaining unused balance (approximately $55,000) of
the Company's  previously  advanced  $145,000 initial  contribution to Network's
advertising  and  development  fund  (which  refund  has been made) and (ii) the
termination   of  the  Company's   obligation  to  pay  the  remaining   monthly
installments of such obligation  (approximately  $105,000). The Company believes
that the agreement to pay for substantially all of its advertising in California
will not result in a material increase or decrease in the Company's  advertising
costs because the Company will be paying its own  advertising  directly,  rather
than funding such advertising  through Network.  In 1995, Network reimbursed the
Company  for  substantially  all  expenses  incurred  in  obtaining   California
Cardholders.

          In addition,  the Company is  obligated  to pay to Network  continuing
service  charges as follows:  (i) a general service charge equal to 7.5%, and an
advertising  fee of 2.5%,  of the total dollar

                                      -11-

<PAGE>

amount of Rights to Receive meal credits used by  Cardholders  at  Participating
Restaurants  within the Franchise  Territory;  (ii) a monthly restaurant service
charge of $1.00 per  Participating  Restaurant  located in the  preceding  month
within the Franchise Territory;  and (iii) a processing charge equal to $.20 per
Cardholder transaction slip forwarded to Network by Participating Restaurants in
the Franchise  Territory.  Such charges are to be deducted by Network from funds
to be paid to the Company.  Network has agreed that the general  service  charge
and the  advertising  fee shall not aggregate  more than 11% during the first 10
year extension,  if any, of the Franchise Agreement and shall not aggregate more
than 12% for the second such extension, if any.

          The  Company  receives  from  Network  an  amount  equal to 40% of the
initial fee paid by new Cardholders  introduced by the Company; to date, amounts
received have not been significant. The Company receives no payments for renewal
fees of such  Cardholders.  Network  agreed for the initial three year period of
the Franchise  Agreement to make available to the Company an unlimited number of
Transmedia  Cards,   which  the  Company  had  the  right  to  distribute  on  a
"complimentary,"  i.e.,  no  initial  fee basis or  reduced  initial  fee basis.
Currently, the availability of an unlimited number of "complimentary" Transmedia
Cards for the Company to distribute continues on a year to year basis subject to
90 days prior written  notice from either  party.  The Company has received from
Network a $5 fee for each complimentary Transmedia Card obtained by the Company.
(See  "--  Recent  Developments"  for a  discussion  of the 20%  Program,  which
eliminates any membership fee.)

          Under the Franchise Agreement, the Company purchased options to obtain
Transmedia  Network  franchises  for the States of Oregon and/or  Washington for
initial  total  franchise  and  advertising   fees  of  $200,000  and  $300,000,
respectively.  In December 1993, the Company  exercised its option for the State
of Washington and in June 1995,  the Company  exercised its option for the State
of Oregon.  In  connection  with the  exercise of such option and the  Company's
assumption of certain advertising costs described above, the Company also agreed
with Network to provide for (i) a reduction in the Company's  exercise price for
the Transmedia  Network  franchises in the States of Oregon and/or Washington to
$100,000 and $150,000, respectively, to reflect the Company's assumption of such
advertising obligations;  (ii) the exercise of the Washington option by issuance
to Network of 50,000  shares of Common Stock (in lieu of the  $150,000  exercise
price) and the  exercise  of the Oregon  option by  issuance  to the  Network of
35,000  shares of Common Stock (in lieu of the  $100,000  exercise  price);  and
(iii) the acquisition of the right to operate the Transmedia  Network  franchise
in limited  areas of Nevada by  issuance  to Network of 10,000  shares of Common
Stock. The Company is required to commence franchise  operations in the State of
Washington, by December 31, 1996 and in the State of Oregon by April 1997.


                                      -12-
<PAGE>

          Network   Obligations.   Network  is  obligated  under  the  Franchise
Agreement  at its own  expense to provide to the Company  operations  assistance
consisting  of advice and guidance with respect to the  following,  among others
(i)  purchase  of  marketing  presentation  packets,  supplies,   equipment  and
materials; (ii) institution of proper administrative,  bookkeeping,  accounting,
supervisory and general operating procedures;  (iii) marketing programs for both
Cardholder  and  restaurant  acquisition;  and (iv)  employment  by  Network  of
supervisors  to visit the Company on a regular basis to provide  assistance  and
assess franchise  performance.  Network is responsible for any bad debt expenses
resulting from Cardholders' failure to pay their food and beverage bills and for
compiling  and  mailing  restaurant  directories  and other  Cardholder  support
materials.

          Network is also  obligated  at its cost to (i) conduct all  monitoring
and  tracking  functions of  Participating  Restaurant  accounts and  Transmedia
Network  franchise credit  transactions and to forward sales tax and tip refunds
and monthly statements of Cardholder usage and Rights to Receive credit balances
directly  to  Participating  Restaurants,  and  (ii)  undertake  all  Cardholder
fulfillment  and  processing   services  and  activities,   including  providing
Transmedia Card charge slips and restaurant contracts.

          Termination.  The Franchise  Agreement may be terminated by Network if
any of the following,  among other events,  occurs:  (i) the Company  commits an
affirmative act of insolvency, or files any petition or action of insolvency, or
for the  appointment  of a receiver or trustee,  or makes any assignment for the
benefit of creditors,  or fails to vacate or dismiss within 60 days after filing
any such proceedings  commenced against the Company by another; (ii) the Company
breaches its covenant not to compete; (iii) the Company fails or refuses to make
payments  due to  Network  within 10 days of notice  of such  failure;  (iv) the
Company fails to maintain  specified minimum quota requirements for Cardholders,
Participating Restaurants and Participating Restaurant renewals; (v) the Company
attempts to sell,  assign or otherwise  transfer all or part of the Franchise or
equity  interests in the Company  other than in  compliance  with the  Franchise
Agreement;  or (vi) the Company fails or refuses to comply with certain terms of
the Franchise Agreement and fails to cure within 30 days after written notice.

          The Franchise Agreement also provides,  with certain exceptions,  that
Network may terminate  the  Franchise  Agreement in the event that any person or
entity becomes the  beneficial  owner of 30% or more of the Common Stock without
Network's prior written consent.

          Under the  Franchise  Agreement,  the  determination  of the breach of
certain  material  conditions and covenants that affect the right of Network and
the Company to terminate the Franchise

                                      -13-

<PAGE>

Agreement  and the  right  of the  Company  to renew  the term of the  Franchise
Agreement  are  subject to  arbitration  with the parties  obligated  to conduct
business in the ordinary course pending  resolution of the matters  submitted to
arbitration.

          Quotas.  Under the  Franchise  Agreement,  the Company was required to
satisfy  certain  quotas  for  the  recruitment  and  renewal  of  Participating
Restaurants and the recruitment of Cardholders in the Franchise  Territory.  The
Company met or exceeded all such quota  requirements.  In October 1994,  Network
agreed with the Company to delete all such quota requirements from the Franchise
Agreement.

EMPLOYEES

          As of March 15, 1996, the Company employed a total of 18 persons,  one
of whom is the general  manager of the Los Angeles  office and one of whom is an
executive officer and director of the Company.

COMPETITION

          The  charge  card  business,  including  the  restaurant  charge  card
business,  is highly  competitive and the Company  competes for both Cardholders
and restaurants.  Competitors  include discount programs offered by major credit
card companies such as American Express(R), Visa, MasterCard and Diners Club(R),
other companies (including Dining a la Card(sm) and Entertainment(R)) that offer
different kinds of discount  marketing  programs and numerous smaller  companies
that may  compete  with the  services  offered or to be offered by the  Company.
Certain of the Company's  competitors may have substantially  greater financial,
personnel,  technological,  marketing and other  resources  than the Company and
expend considerably larger sums than does the Company. Further, the Company must
compete  with many larger and better  established  companies  for the hiring and
retention of qualified marketing and sales personnel.  The Company believes that
the unique features of the Transmedia  program - that The Transmedia Card can be
used by cardmembers at participating  establishments with very few restrictions,
that The Transmedia  Card provides  substantial  savings  without the need for a
cardmember  to  present  discount  coupons  when  paying  for a meal,  and  that
participating  establishments  are  provided  with cash in advance  of  customer
charges - contribute to the Company's  competitiveness  and allow the Company to
offer better value and service to Cardholders.

ITEM 2.   PROPERTIES

          The Company's principal executive and sales offices are located at 475
Sansome  Street,   San  Francisco,   California.   These  premises   consist  of
approximately  3,000 square feet of space  leased  until  August 31,  1999.  The
current  annual  base rental is

                                      -14-
<PAGE>


approximately $55,200. The Company leases an additional executive office located
at 233 Wilshire Boulevard, Santa Monica,  California.  These premises consist of
approximately 2,000 square feet of space leased until February 1997 at a monthly
base rent of approximately  $4,200.  The Company has an option for an additional
two year period at a rental  equal to fair  market  value.  The  Company  leases
approximately  100 square feet of space at an  executive  suite in Costa Mesa in
Orange  County at a cost of $640 per  month.  The  Company  believes  that these
facilities  are  adequate  and  suitable  for  its  current  needs  and  for the
foreseeable future.

ITEM 3.           LEGAL PROCEEDINGS

          There are no pending  material legal  proceedings to which the Company
is a party.

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

9                  Not applicable.


                      ------------------------------------


EXECUTIVE OFFICERS OF THE COMPANY

          The current  executive  officers  of the Company and their  respective
ages and positions with the Company are as follows:

        NAME                     AGE                  POSITION HELD


Stuart M. Pellman                54               President, Chief
                                                  Executive Officer,
                                                  Treasurer and Director
William J. Barrett               56               Director, Assistant
                                                  Treasurer and Secretary


          STUART M. PELLMAN has served as President, Chief Executive Officer and
director of the Company since January 1992.  From May 1989 until September 1991,
he was a corporate securities attorney with, and a member of, the San Francisco,
California law firm of Steefel, Levitt & Weiss. Prior thereto and since 1965, he
was  engaged  in the  private  practice  of law in New York  City.  In 1979,  he
co-founded  the law firm of Slade & Pellman in New York City and was a member of
that firm until December 1988.  Commencing in 1986, Mr. Pellman supervised Slade
& Pellman's representation as general counsel to Network. In his representation,
Mr. Pellman was actively involved in advising Network's executive  management on
various legal issues. From January 1989 to April 1989, he was counsel to Slade &
Pellman.

          WILLIAM   J. BARRETT  has served as a director  of the  Company  since
January  1992 and as Secretary  and  Assistant  Treasurer

                                      -15-

<PAGE>

of the Company since August 1992. Mr. Barrett has been employed as a Senior Vice
President of Janney Montgomery Scott Inc., an investment  banking firm, for more
than five  years.  Mr.  Barrett is a  director  of the  following  publicly-held
corporations:  Supreme Industries,  Inc., a specialized truck body manufacturer,
Fredericks of Hollywood,  Inc., an apparel marketing company, Shelter Components
Corporation,  a distributor to the manufactured  housing and recreation  vehicle
industries and  manufacturer  of carpet and bathroom  products,  TGC Industries,
Inc.,  which  provides  geophysical  services to the oil and gas  industries and
manufactures   and  distributes   specialty   packaging   products,   and  Esmor
Correctional Services, Inc., a manager of correctional  facilities.  Mr. Barrett
is  Secretary  and a  director  of  Contempri  Homes,  Inc.,  a modular  housing
manufacturer.


                                     PART II

ITEM 5.  MARKET FOR THE  REGISTRANT'S  COMMON  EQUITY AND  RELATED  STOCKHOLDER
         MATTERS

          The Company's Common Stock was traded in the  over-the-counter  market
in what is  commonly  referred to as the "pink  sheets" or on the "OTC  Bulletin
Board" of the National Association of Securities Dealers,  Inc. under the symbol
"WTSM" from July 16, 1992 to December 22, 1993.

          The Company's  Common Stock has been traded on NASDAQ under the symbol
("WTSM") since December 23, 1993. The Company's Units are traded on NASDAQ under
the symbol  ("WTSMU").  The  Company's  Warrants  are traded on NASDAQ under the
symbol ("WTSMW").

          The following  table sets forth the high and low bid prices on the OTC
Bulletin Board and the high and low closing bid prices as reported on NASDAQ for
the Company's  Common Stock during the quarters  indicated.  The prices reported
reflect inter-dealer quotations and may not represent actual transactions and do
not include retail mark-ups, mark-downs or commissions.


QUARTER ENDED                                         HIGH                LOW

March 31, 1994 .................................       4.25               3.375

June 30, 1994...................................       3.625              2.50

September 30, 1994..............................       4.25               3.25

December 31, 1994...............................       3.875              3.00



March 31, 1995..................................       3.875              3.25

June 30, 1995...................................       3.75               2.75

                                      -16-

<PAGE>


September 30, 1995..............................       2.75               1.375

December 31, 1995...............................       2.50               1.00



ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

                                                      For the Years Ended December 31,
                                      ------------------------------------------------------------------


                                        1995          1994            1993            1992       1991
                                        ----          ----            ----            ----       ----

SELECTED INCOME STATEMENT
   DATA:
<S>                                 <C>            <C>             <C>           <C>           <C>

Net Sales...........................$11,368,903    $8,698,738       $926,852       $14,023     $      0

Interest Income.....................    146,342        38,941         44,709        16,924          826

Net Income (Loss)...................     10,942     (280,994)      (924,733)     (741,882)     (52,187)

Net Income (Loss) Per Common
   Share*...........................       $0.0        $(.04)         $(.16)        $(.24)       $(.16)

SELECTED BALANCE SHEET DATA:

Total Assets........................ $6,203,976    $6,615,697     $4,017,551    $1,493,718     $145,250

Long Term Obligations...............     15,602         4,108          1,702        64,862            0

</TABLE>

-----------------

   *Based on a weighted  average  number of shares of Common Stock (as restated,
see  Note  8(a)  of  Notes  to  Financial  Statements)  outstanding:  8,030,685,
7,072,754,  5,804,297,  3,123,659, and 326,159 shares, respectively, at December
31, 1995, 1994, 1993, 1992 and 1991.


ITEM 7.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATIONS

GENERAL

          On December 9, 1991, the Company entered into the Franchise  Agreement
with Network,  which  granted to the Company the exclusive  right to operate the
Franchise in the State of  California.  The  Franchise  features The  Transmedia
Card, a private  charge card  developed,  marketed and issued by Network,  which
entitles  Cardholders  to a savings of up to 25% on the  regular  menu prices of
food and beverages when dining at Participating Restaurants.

          The  Company's  franchise  business  activities  under  the  Franchise
Agreement,  which the Company  commenced in August 1992, are (i) to provide cash
payments  to  Participating  Restaurants  that  it  recruits  in  its  Franchise
Territory  to join the  Transmedia  Network in  exchange  for food and  beverage
credits,  known as Rights to Receive,  and (ii) to obtain additional  holders of
the Restaurant Card in the Franchise Territory.  The Company generally purchases

                                      -17-

<PAGE>



its  inventory of Rights to Receive  directly  from a  Participating  Restaurant
through  cash  payments to the  Participating  Restaurant  in an amount equal to
approximately  50% of the dollar value of the Rights to Receive being purchased.
The Company may also purchase Rights to Receive by paying for other services and
goods utilized by the Participating Restaurant, such as media placement services
and restaurant equipment. The Company expects to derive substantially all of its
revenues  from  operations by  purchasing  Rights to Receive from  Participating
Restaurants in its Franchise Territory and the sale of such Rights to Receive to
holders of the Restaurant Card.

          In  December  1993,  the  Company  exercised  its  option  to obtain a
Transmedia  Network franchise for the State of Washington and agreed to purchase
a franchise for Reno,  Nevada and the Nevada  portion of the Lake Tahoe,  Nevada
resort  area  in  exchange  for  50,000  and  10,000  shares  of  Common  Stock,
respectively.  These  shares are valued by the Company at $150,000  and $30,000,
respectively.  In June  1995,  the  Company  exercised  its  option  to obtain a
Transmedia  Network  franchise  for the State of Oregon in  exchange  for 35,000
shares of Common Stock valued by the Company at $100,000.

          In  January  1996  Network  initiated  a policy to offer  both new and
existing  Cardholders  an alternative  to the  traditional  arrangement of a 25%
savings  with an annual  membership  fee of $50.00.  The new  program,  the "20%
Program",  provides a 20% savings to  Cardholders  with no annual fee so long as
Cardholder  usage is at least $200  during  each  membership  year.  See "Recent
Developments"  for  additional  discussion  regarding  the 20%  Program  and new
national cardholder programs to be developed by Network.

          The  Transmedia  Card  may  also  be used to  charge  other  services,
including hotel rooms, recreational,  telephone and other miscellaneous services
(see "--  Recent  Developments").  The  Company's  rights  under  the  Franchise
Agreement relate only to Participating  Restaurants in the Franchise  Territory.
The Company does not now have any rights to  participate in or derive any income
from these other services.

RESULTS OF OPERATIONS

Year Ended December 31, 1995 Compared to Year
Ended December 31, 1994

          Net sales for the year ended December 31, 1995 were $11,368,903.  This
was an increase of $2,670,165, as compared to $8,698,738 in net sales during the
year ended  December 31, 1994.  Sales for the year ended  December 31, 1995 were
negatively  impacted  by a  decrease  in the  average  restaurant  spending  per
Cardholder.  The Company attributes the decrease in average restaurant  spending
per  Cardholder  to general  weakness  in  restaurant  sales and the

                                      -18-

<PAGE>



economy in California as well as increasing  competition  from other  restaurant
promotion  programs that have been  introduced into the California  market.  The
Company does not know what effect these factors will have upon future short term
earnings  trends.  However,  the Company believes that it will realize long term
earnings  growth as a result of both the competitive  advantages  offered by the
Transmedia program compared to other restaurant promotion programs,  and through
continued  expansion  into new  geographical  areas,  including  San  Diego  and
Seattle, Washington (See "Recent Developments"). The Company began operating its
business  under the Franchise  Agreement in the San Francisco Bay Area in August
1992, in the Los Angeles Metropolitan area in November 1993 and in Orange County
in January 1995.

          The  Company  operates  with a gross  profit  margin from net sales of
Rights to Receive to Cardholders of  approximately  33%. The Company's net sales
resulted  in  $3,792,589  and  $2,891,229  in gross  profit for the years  ended
December 31, 1995 and 1994, respectively.

          The Company incurs franchise costs of approximately  14% of net sales.
Franchise  costs were $1,586,781 and $1,212,262 for the years ended December 31,
1995 and 1994, respectively.

          Operating  expenses  (selling,  general and  administrative  expenses)
aggregated  $2,339,648  and $1,996,347 for the years ended December 31, 1995 and
1994,  respectively.  The net increase of $343,301 was primarily due to the fact
that the Company incurred  additional  salaries and associated  payroll expenses
related to the operation of its business in San Francisco and Los Angeles during
the year ended  December  31, 1995 and  initiated  active  operations  in Orange
County  in  January  1995.  The  Company  incurred   approximately  $219,000  in
additional  San Francisco and Los Angeles area salaries and  associated  payroll
expenses,  primarily  attributable  to increased  officers'  and sales  employee
compensation  including  certain bonus and commission  arrangements,  during the
year ended  December 31, 1995 compared to the year ended  December 31, 1994. The
Company also incurred operating expenses for the year ended December 31, 1995 of
approximately $131,000 related to the January 1995 initiation of its business in
Orange  County.  The  Company  did not  operate in Orange  County and  therefore
incurred no such expenses in the year ended December 31, 1994.

          For the year ended  December 31,  1995,  combined  operating  expenses
consisted  primarily of salaries and associated  payroll expenses  ($1,239,000),
professional   and  consulting  fees   ($196,000),   rent  and  office  expenses
($262,000), the Company's reserve for unrealizable Rights to Receive ($194,000),
advertising  and   promotional   expenses  in  connection
                                      -19-

<PAGE>



with  attracting  and  maintaining   California  Cardholders  ($51,000,  net  of
Transmedia  Network  reimbursement),  and promotion  and  marketing  expenses in
connection  with  attracting  and  maintaining   Participating   Restaurants  in
California ($235,000).

          Operating expenses as a percentage of net sales decreased to 20.6% for
the year ended  December 31, 1995 compared to 22.9% for the year ended  December
31, 1994. The 2.3% reduction in operating  expenses as a percentage of net sales
is  attributable  to the  primarily  fixed  nature  of the  Company's  operating
expenses (overhead). As a result, the Company was able to experience an increase
in net sales to their present level in San Francisco and Los Angeles,  without a
corresponding  increase in operating  expenses.  However,  as  discussed  above,
partially  offsetting  this effect were the expenses of initiating the Company's
Orange  County  office in January  1995 and certain  increases  in  compensation
expense.

          For the year ended  December 31,  1994,  combined  operating  expenses
consisted  primarily of salaries and  associated  payroll  expenses  ($934,000),
professional   and  consulting  fees   ($191,000),   rent  and  office  expenses
($224,000), the Company's reserve for unrealizable Rights to Receive ($159,000),
advertising  and   promotional   expenses  in  connection  with  attracting  and
maintaining   California   Cardholders   ($153,000  net  of  Transmedia  Network
reimbursement),  and  marketing  expenses  in  connection  with  attracting  and
maintaining Participating Restaurants in California ($169,000).

          Interest  income was $146,342 and $38,941 for the years ended December
31, 1995 and 1994,  respectively.  Interest  income  increased in 1995 primarily
because of the interest earned on the approximately $2,138,000 net proceeds from
the Company's December 1994 Unit Offer referred to below.

          For the year ended  December 31, 1995, the Company earned a net profit
of $10,942 or $0.00 per share.  For the year ended  December 31, 1994,  however,
the Company incurred a net loss of $280,994 or $.04 per share. The approximately
$292,000  increase in earnings was primarily  due to the increased  gross profit
for the period net of franchise costs and increased  interest income,  partially
offset by increased  operating expenses  (including Orange County expenses),  as
described above.

          Orange  County  operations  resulted  in a net  loss of  approximately
$108,000  for the year ended  December 31, 1995.  Without  giving  effect to the
Orange  County  losses,  the  Company  would  have  generated  a net  profit  of
approximately $119,000, or $.01 per share, for the year ended December 31, 1995.

Year Ended December 31, 1994 Compared to the Year
Ended December 31, 1993


                                      -20-

<PAGE>


          Net sales for the year ended December 31, 1994 were  $8,698,738.  This
was an increase of  $7,771,886,  as compared to $926,852 in net sales during the
year ended December 31, 1993. The sales increase was primarily  attributable  to
the increasing number of Cardholders and Participating  Restaurants available to
Cardholders as the Company continued to grow and expand operations.  The Company
began operating its business under the Franchise  Agreement in the San Francisco
Bay Area in August  1992 and in the Los  Angeles  Metropolitan  area in November
1993.

          The Company  operates with an approximate 33% gross profit margin from
net  sales of  Rights  to  Receive  to  Cardholders.  The  Company's  net  sales
contributed $2,891,229 and $303,140 in gross profit for the years ended December
31, 1994 and 1993, respectively.

          The Company incurs franchise costs of approximately  14% of net sales.
Franchise  costs were  $1,212,262  and $132,103 for the years ended December 31,
1994 and 1993, respectively.

          Operating  expenses  (selling,  general and  administrative  expenses)
aggregated  $1,996,347  and $1,139,905 for the years ended December 31, 1994 and
1993, respectively. The total increase of $856,442 was primarily due to the fact
that the Company  initiated  active  operations in the Los Angeles  Metropolitan
area in November 1993. The Company incurred  operating expenses of approximately
$800,000 related to its business in Southern  California during twelve months of
operations  for the year ended  December  31,  1994,  an  increase  of  $657,000
compared with operating  expenses of approximately  $143,000 incurred during two
months of  operations  for the year ended  December 31,  1993.  The Company also
experienced  increased operating expenses related to its San Francisco office of
approximately  $139,000 for the year ended  December 31, 1994,  primarily due to
the increased  size of the Company's  San  Francisco  operations.  Additionally,
during the year ended  December 31, 1994,  the Company  incurred a  nonrecurring
expense of $60,000 related to the settlement of a former employee claim.

          For the year ended  December 31,  1993,  combined  operating  expenses
consisted  primarily  of  salaries  and  payroll  related  expenses  ($517,000),
professional   and  consulting  fees   ($184,000),   rent  and  office  expenses
($131,000),  advertising and promotional  expenses in connection with attracting
and maintaining  California  Cardholders  ($107,000),  and marketing expenses in
connection  with  attracting  and  maintaining   Participating   Restaurants  in
California ($84,000).

          Interest  income was $38,941 and $44,709 for the years ended  December
31, 1994 and 1993, respectively.

          The  Company  incurred  net losses of  $280,994  or $.04 per share and
$924,733  or $.16 per share  for the years  ended  December

                                      -21-

<PAGE>


31, 1994 and 1993, respectively. The approximately $644,000 reduction in the net
loss was  primarily  due to the  increased  gross  profit,  for the period ended
December 31, 1994 net of franchise costs partially offset by increased operating
expenses.

RECENT DEVELOPMENTS

          In  January  1996,  Network  initiated  a policy to offer both new and
existing  Cardholders  an alternative  to the  traditional  arrangement of a 25%
savings with an annual membership fee of $50. The new program,  the 20% Program,
provides a 20% savings to  Cardholders  with no annual fee so long as Cardholder
usage is at least $200 during each membership year.

          Network has  indicated  that  commencing  in 1996,  substantially  all
programs to obtain new Cardholders will utilize the 20% Program and that Network
will take a leading  role to promote  The  Transmedia  Card on a national  basis
utilizing   arrangements  with  large  national  organizations  and  businesses,
including MBNA, United Airlines and Unocal. The Company believes that because of
the portion of the overall U.S.  population  residing in  California,  Network's
national  programs  will result in the  addition of a  meaningful  number of new
California  Cardholders.  The Company also believes that a substantial number of
new Cardholders  residing in California will initially enroll in the 20% Program
and that an increasing number of existing Cardholders in California will convert
to the 20% Program.

          All  costs of such  national  programs  will be borne by  Network.  No
commissions  will be paid by  Network  to the  Company  with  respect to new 20%
Program Cardholders obtained from these national programs.

          Transmedia   restaurant   charges  in  Participating   Restaurants  by
Cardholders who have enrolled in the 20% Program,  will result in the receipt by
the  Company  of net sales  from each such  individual  transaction  that are 5%
greater  than those  received  under the  traditional  25% savings  arrangement.
Accordingly, the Company's gross profit from each such transaction will increase
from  approximately  33% to 37%.  There  will be no change  with  respect to the
Company's  approximately 33% gross profit from individual  Transmedia restaurant
charges by  Cardholders  who remain  enrolled  in the  traditional  25%  savings
program.  No assurance can be given as to the number of Cardholders  residing in
or  outside  California  that will  enroll  in or  convert  to the 20%  Program.
Therefore,  the  Company is  presently  unable to predict the  magnitude  of the
effect that the 20% Program will have upon overall net sales or gross profit.

          The  Company  anticipates  that its own 1996  activities  directed  to
obtaining  new  Cardholders  in  California  will be  reduced as a result of the
national programs of Network discussed above.

                                      -22-

<PAGE>

However, the Company will continue to solicit new Cardholders  utilizing the 20%
Program through  programs in California with  organizations  and businesses with
significant  memberships or customers that will involve distribution of at least
50,000  applications  per  program.  The  Company  anticipates  that  it will be
reimbursed  for  its  expenses  by  Network  for a  significant  number  of such
programs.

          As mentioned above, in 1995,  Network began to offer to holders of The
Transmedia Card use of the card at certain hotels,  resorts,  golf courses,  ski
lifts and access to discount long  distance  telephone  services.  The Company's
rights under the Franchise Agreement relate only to Participating Restaurants in
the Franchise Territory.  The Company does not have any rights to participate in
or derive any income from these programs.

LIQUIDITY AND CAPITAL RESOURCES

          The  Company  commenced  operations  in  August  1992.  The  Company's
principal  expenditures  are  made  to  (i)  purchase  Rights  to  Receive  from
Participating  Restaurants,  (ii)  advertise  and  market  for  cardholders  and
restaurants in California and (iii) pay for general and administrative expenses,
including  officers'  compensation and compensation to sales employees,  for the
recruitment  of  Participating  Restaurants  in  the  Franchise  Territory.  The
Company's  principal  revenues  result  from the sale of  Rights to  Receive  to
Cardholders.

          The Company is actively  engaged in  acquiring  Rights to Receive from
Participating Restaurants solicited primarily in the San Francisco Bay Area, the
Los  Angeles  Metropolitan  Area,  and the  Orange  County  Area.  The number of
restaurants  that participate in the Transmedia  Network depends  primarily upon
several factors,  including general market acceptance of the Company's  business
in  California,  competition,  economic  trends in the  restaurant  industry  in
California,  the number of sales employees soliciting Participating  Restaurants
and the general  effectiveness  of the Company's and Network's  advertising  and
marketing activities.  These factors make it difficult to estimate the number of
restaurants from which it will purchase Rights to Receive. At December 31, 1995,
there was an aggregate of 553  Participating  Restaurants,  consisting of 265 in
the San Francisco Bay Area, 231 in the Los Angeles  Metropolitan  Area and 57 in
Orange County. At December 31, 1994, there was an aggregate of 519 Participating
Restaurants,  consisting of 304 in the San Francisco Bay Area and 215 in the Los
Angeles  Metropolitan Area. At December 31, 1995, there was an average Rights to
Receive  balance  (net  of  Rights  to  Receive  payable  by  the  Company)  per
Participating  Restaurant  for the  San  Francisco  Bay  Area,  the Los  Angeles
Metropolitan area, and the Orange County area of approximately  $4,250,  $4,300,
and $2,200,  respectively.  At December 31, 1994, there was an average Rights to
Receive  balance  (net  of  Rights  to  Receive  payable  by  the  Company)

                                      -23-

<PAGE>


per  Participating  Restaurant  for the San  Francisco  Bay Area and Los Angeles
Metropolitan area of approximately  $3,900 and $6,800,  respectively.  It is the
Company's  experience  that  approximately  70%  of  all  of  the  Participating
Restaurants listed in the Transmedia Network's published directories renew their
Rights to  Receive  agreements  after the  initial  amount of Rights to  Receive
purchased by the Company from such  Participating  Restaurants  are expended and
additionally that 70% of all Participating Restaurants eligible for their second
renewal  renew their  contract.  After the second  renewal,  renewal  rates drop
sharply  because the  Participating  Restaurants  with the  Company's  help have
become  more  successful  and no  longer  wish to sell  Rights to  Receive  at a
discount,  the Company chooses not to renew the Participating  Restaurant or the
Participant Restaurant has gone out of business.  However,  offsetting this drop
is the fact  that  new  restaurants  start  up as old  ones go out of  business,
providing the Company with new restaurant prospects.

          During the year ended  December 31, 1995,  the Company began  entering
into  nine  to  12  month  commitment   agreements  with  certain  Participating
Restaurants.  The  commitment  agreements  establish  a minimum  time  period of
participation by the restaurant in the event that the initial credits  purchased
by the Company from the restaurant are exhausted  prior to the expiration of the
commitment period.  The commitment  agreements provide that during the course of
the commitment once the initial credits have been exhausted,  the  Participating
Restaurant will continue in the program and the Company will purchase additional
Rights to Receive as  Cardholder  charges are  submitted.  At December 31, 1995,
there  were 431  Participating  Restaurants  that had  entered  into  commitment
agreements. The Company believes that these commitment agreements had a positive
effect in 1995 upon  restaurant  retention and the Company's cash flow. The long
term impact of the commitment  agreements with  Participating  Restaurants  upon
restaurant renewal rates and rights to receive balances is not yet known.

          The  Company's  working  capital  at  December  31,  1995 and 1994 was
approximately $5,165,000 and $5,126,000, respectively.

          The  Company's  cash  balances  were   approximately   $3,041,000  and
$2,674,000 at December 31, 1995 and 1994,  respectively.  The Company's  current
ratio at December 31, 1995 was 12:1 and its debt to net worth was  approximately
 .1:1.

          Cash flow provided by operating  activities  was $391,714 for the year
ended  December 31, 1995,  compared  with cash used by operating  activities  of
$2,072,428  during the year ended  December 31, 1994, and cash used by operating
activities of $1,172,937 in 1993.  During the year ended December 31, 1995, cash
generated  from  Cardholder  restaurant  spending  net  of  franchise  fees  was
approximately   $9,800,000  and  interest  income  was  approximately  $146,000.
Operating  expenditures  during the year ended  December

                                      -24-

<PAGE>


31, 1995  consisted  of  approximately  $7,238,000  paid to  purchase  Rights to
Receive and $2,315,000  paid to suppliers and  employees.  During the year ended
December 31, 1994,  cash generated from  Cardholder  restaurant  spending net of
franchise   fees  was   approximately   $7,344,000   and  interest   income  was
approximately $39,000. Operating expenditures during the year ended December 31,
1994 consisted of  approximately  $7,698,000  paid to purchase Rights to Receive
and $1,755,000  paid to suppliers and employees.  During the year ended December
31, 1993,  cash generated from Cardholder  restaurant  spending net of franchise
fees was approximately  $792,000 and interest income was approximately  $45,000.
Operating  expenditures  during the year ended  December  31, 1993  consisted of
approximately $1,221,000 paid to purchase Rights to Receive and $787,000 paid to
suppliers and employees.

          Cash flow used by investing activities for the year ended December 31,
1995 was $22,829, compared with $63,117 for the year ended December 31, 1994 and
$41,788 in 1993.  Cash flow used by investing  activities  was primarily for the
purchase of office furniture and equipment.

          Cash flow used by financing activities for the year ended December 31,
1995 was $2,674 for payment of capital lease obligations. Net cash flow provided
by financing  activities during the year ended December 31, 1994 was $2,163,909,
compared with cash flow from  financing  activities  of $3,042,487 in 1993.  The
principal  source of cash flow in this category  during the years ended December
31,  1994 and 1993 was the net  proceeds  received  from the  issuance of common
stock and common stock purchase warrants.  The Company did not undertake any new
equity capital raising activities during the year ended December 31, 1995.

          In July 1993, the Company completed the 1993 Unit Private Placement of
1,764,624  units at a price per unit of $1.70.  Each Unit consisted of one share
of Common Stock and one  three-year  Warrant to purchase a share of Common Stock
at an exercise  price of $3.00 per share until December 1994 and $4.00 per share
thereafter.  After payment of fees, commissions, and continuing professional fee
costs  associated  with the  private  placement,  net  proceeds  to the  Company
aggregated approximately $2,625,000.

          In  August  1993,  the  Company  entered  into  an  agreement  with an
institutional investor to sell an additional 294,117 Units at $1.70 per Unit for
a total of $500,000.  After payment of fees and commissions  associated with the
institutional   investor   sale,   net   proceeds  to  the  Company   aggregated
approximately $463,000.

          In December 1994, the Company completed the 1994 Unit Offer of 800,000
units at a price per unit of $3.00.  Each unit  consisted of one share of Common
Stock and one Warrant to purchase a share of Common  Stock at an exercise  price
of $4.00  per  share on or prior to June 24,  1996.  After  payment  of fees and
commissions


                                      -25-

<PAGE>

associated  with  the  unit  Offer,  net  proceeds  to  the  Company  aggregated
approximately  $2,138,000.  The units were offered to and  subscribed for by the
holders of  800,000  outstanding  warrants,  who  exercised  those  warrants  in
acquiring the units.

          The Company  intends to continue  expanding its  operations in the San
Francisco Bay Area, the Los Angeles  Metropolitan Area and in Orange County. The
Company has begun expansion into the Lake Tahoe market and also plans additional
expansion into the States of Washington  and Oregon.  The Company plans to begin
operations in San Diego and Seattle in 1996. The Company's initial obligation to
begin operations under its Washington  Franchise commences December 31, 1996 and
under its Oregon Franchise in April 1997.

          The Company  believes  that cash on hand at December 31, 1995 and cash
flows  from  operations  will  be  sufficient  to  fund  the  Company's  planned
operations  through at least  December  31,  1996.  The Company  generated a net
profit for the year ended  December 31, 1995 and each of the three month periods
ended March 31, 1995,  December 31, 1994 and September  30, 1994.  Additionally,
the  Company  generated  positive  cash flow from  operations  of  approximately
$392,000 during the year ended December 31, 1995.

          On  a  long-term  basis,  the  Company   anticipates  cash  flow  from
operations  as a result  of  increased  usage  of The  Transmedia  Card  through
expansion  of the  number  of  Participating  Restaurants  and  Cardholders.  To
accomplish  this  result,   the  Company  actively   continues  to  recruit  new
Participating  Restaurants  that  will  accept  The  Transmedia  Card and  incur
advertising  and promotion and marketing costs in this  connection.  Through the
year ended  December 31, 1995,  the Company  actively  recruited new  California
Cardholders and also anticipates  that commencing in 1996 additional  California
Cardholders will be recruited as a result of national  cardholder programs to be
conducted by Network.  See "-- Recent  Developments"  for additional  discussion
regarding new national cardholder  programs to be developed by Network.  Network
reports that for its fiscal year ended September 30, 1995, between 55 and 60% of
all Cardholders renewed their memberships.  At September 30, 1995, substantially
all Cardholders were enrolled in the 25% program.

          The Company presently has outstanding  2,052,987 warrants  exercisable
at $4.00 per share.  The warrants  expire  December 31, 1997.  The level of long
term  expansion in California,  Washington,  and in Oregon may be dependent upon
additional  capital  raised  by the  exercise  in 1996 or 1997 of the  Company's
Warrants.  No  assurance  can be given,  however,  that the  Company  will raise
additional  capital  from the  exercise  of its  Warrants  or obtain  additional
financing.  The  Company  presently  has no other  unused  internal  sources  of
liquidity other than cash (or  equivalents)  on hand and no external  sources of
liquidity such as a line of credit from a financial institution.

                                      -26-

<PAGE>

          The  Company  has not made any  significant  expenditures  or  capital
commitments  other  than  such  expenditures  and  commitments  made  under  the
Franchise  Agreement as discussed above. The Company does not anticipate  making
any other  significant  expenditures  or capital  commitments in the foreseeable
future.

INFLATION AND SEASONALITY

          The Company does not  anticipate  that  inflation  will  significantly
impact its business, nor does it believe that its business is seasonal.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

          The  financial  statements  are  included as part of Item 14 with this
Form 10-K.

ITEM 9.   CHANGES  IN AND  DUSAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

          Not applicable.


                                      -27-

<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         See  Part I,  Item  4.  "Executive  Officers  of the  Company."  Other
information  required  by this  item  is  incorporated  by  reference  from  the
Company's  definitive  proxy statement to be filed not later than April 29, 1996
pursuant  to  Regulation  14A of the  General  Rules and  Regulations  under the
Securities Exchange Act of 1934 ("Regulation 14A").

ITEM 11. EXECUTIVE COMPENSATION.

          The  information  required by this item is  incorporated  by reference
from the Company's  definitive  proxy statement to be filed not later than April
29, 1996 pursuant to Regulation 14A.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN
         BENEFICIAL OWNERS AND MANAGEMENT.

          The  information  required by this item is  incorporated  by reference
from the Company's  definitive  proxy statement to be filed not later than April
29, 1996 pursuant to Regulation 14A.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          The  information  required by this item is  incorporated  by reference
from the Company's  definitive  proxy statement to be filed not later than April
29, 1996 pursuant to Regulation 14A.


                                      -28-

<PAGE>


                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)     Financial Statements:                                Page

             Report of Independent Auditors                        F-2

             Consolidated Balance Sheets as of
              December 31, 1995 and 1994                           F-3

             Consolidated Statements of Operations for
              the Three Years in the Period ended
              December 31, 1995                                    F-4

             Consolidated Statement of Stockholders'
              Equity for the Three Years in the Period
              ended December 31, 1995                              F-5

             Consolidated Statements of Cash Flows for
              the Three Years in the Period ended
              December 31, 1995                                    F-6

             Notes to Financial Statements                         F-7

     (b)     Reports on Form 8-K

         No reports on Form 8-K were filed during the last quarter of the period
covered by this report.

     (c)     Exhibits

             3.1      Amended  Certificate  of  Incorporation  of  the  Company,
                      incorporated  by reference to Exhibit 3.1 to the Company's
                      Annual  Report  on Form  10-K for the  fiscal  year  ended
                      December 31, 1991 (the "1991 10- K").

             3.2      Certificate   of  Amendment  to  Amended   Certificate  of
                      Incorporation,  incorporated  by reference to Exhibit 3(d)
                      to the Company's  Registration Statement on Form S-1 (File
                      No. 33-44845) (the "1992 Form S-1").

              3.3     Amended and Restated By-Laws of the Company,  incorporated
                      by reference to Exhibit 3(b) to the Company's Registration
                      Statement on Form S-1 (File No.  33-84234) (the "1994 Form
                      S-1").

              4.1     Form  of  Common  Stock   Certificate,   incorporated   by
                      reference to Exhibit 4(b) to the 1992 Form S-1.


                                      -29-

<PAGE>



              4.2    Form of Warrant Certificate,  incorporated by reference to
                     Exhibit 4(b) to the 1994 S-1.

              4.3    Warrant  Agreement dated as of June 25, 1993,  between the
                     Registrant and American Stock Transfer & Trust Company, as
                     Warrant Agent,  incorporated  by reference to Exhibit 4(c)
                     to the 1994 S-1.

              4.4    Form of Amendment of Warrant  Agreement,  incorporated  by
                     reference to Exhibit 4(d) to the 1994 S-1.

              10.1   Franchise Agreement dated December 9, 1991 between TM West
                     Corp. and Network,  as amended by Amendment dated December
                     9, 1991, incorporated by reference to Exhibit 10(a) to the
                     1992 Form S-1.

              10.2   Employment  Agreement  dated as of October 1, 1991 between
                     the  Company  and  Stuart  M.  Pellman,   incorporated  by
                     reference to Exhibit 10.4 to the 1991 10-K.

              10.3   Amendment  to  Employment  Agreement  dated  May 14,  1992
                     between  the  Company  and Stuart M.  Pellman,  as further
                     amended  by  Amendment  to  Employment   Agreement   dated
                     September 21, 1993,  incorporated  by reference to Exhibit
                     10(r) to the Company's  Registration Statement on Form S-1
                     (Registration No. 33-68884).

               10.4  The  Company's  1992 Stock  Option Plan,  incorporated  by
                     reference to Exhibit 10(b) to the 1992 Form S-1.

               10.5  Form of Indemnification  Agreement between the Company and
                     its officers and directors,  incorporated  by reference to
                     Exhibit 10(d) to the 1992 Form S-1.

               10.6  Amendment No. 2 dated April 1, 1992 to Franchise Agreement
                     between TM Corp. and Transmedia Network Inc., incorporated
                     by reference to Exhibit 10(j) to the 1992 Form S-1.

               10.7  Amendment  No.  3 dated  as of May 1,  1992  to  Franchise
                     Agreement  between TM West Corp.  and  Transmedia  Network
                     Inc.,  incorporated  by reference to Exhibit  10(k) to the
                     1992 Form S-1.

               10.8  Form of Registration  Rights Agreement  between the Company
                     and certain of the Company's stockholders,  incorporated by
                     reference to Exhibit 10(l) to the 1992 Form S-1.

                                      -30-

<PAGE>




               10.9  Amendment No. 4 to Franchise  Agreement between the Company
                     and Transmedia  Network Inc.,  incorporated by reference to
                     Exhibit 10(j) to the 1992 Form S-1.

               10.10 Lease dated December 1993 between West Coast  Freeholds and
                     the Company,  incorporated  by reference to Exhibit 10.9 to
                     the  Company's  Annual  Report on Form 10-K for the  fiscal
                     year ended December 31, 1993 (the "1993 10-K").

               10.11 Letter Agreement dated January 25, 1994 between the Company
                     and  Transmedia  Network  Inc.  relating  to the  Company's
                     exercise  of  its   franchise   option  for  the  State  of
                     Washington   and   portions   of  the   State  of   Nevada,
                     incorporated  by  reference  to  Exhibit  10.10 to the 1993
                     10-K.

               *11.  Computation of earnings per share of Common Stock.

                22.  Subsidiaries of the  Registrant,  incorporated by reference
                     to Exhibit 22 to the 1991 10-K.

-------------------------
*Filed herewith.

     (d)     Financial Statement Schedules:  none


                                      -31-

<PAGE>


                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) 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.


                                       THE WESTERN TRANSMEDIA
                                         COMPANY, INC.


Date:  March 26, 1996                  /s/ Stuart M. Pellman              
                                       -----------------------------------
                                       Stuart M. Pellman
                                       President, Chief Executive Officer
                                       and Director (Principal Executive
                                       Officer, Principal Financial Officer
                                       and Principal Accounting Officer)

                                POWER OF ATTORNEY

          KNOW ALL MEN BY THESE  PRESENTS,  that  each  person  whose  signature
appears below  constitutes and appoints Stuart M. Pellman and William J. Barrett
his true and lawful  attorney-in-fact,  each  acting  alone,  with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all  capacities to sign any and all  amendments to this report,  and to file
the  same,  with  all  exhibits  thereto,  and  other  documents  in  connection
therewith,  with the Securities and Exchange  Commission,  hereby  ratifying and
confirming all that said  attorneys-in-fact  or their  substitutes,  each acting
alone, may lawfully do or cause to be done by virtue thereof.

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Date:  March 26, 1996                  /s/ Stuart M. Pellman              
                                       -----------------------------------
                                       Stuart M. Pellman
                                       President, Chief Executive Officer
                                       and Director (Principal Executive
                                       Officer, Principal Financial Officer
                                       and Principal Accounting Officer)



                                      -32-

<PAGE>





Date:  March 26, 1996                  /s/ William J. Barrett              
                                       -----------------------------------
                                       William J. Barrett
                                       Director


Date:  March 26, 1996                  /s/ C. Scott Bartlett, Jr.              
                                       -----------------------------------
                                       C. Scott Bartlett, Jr.
                                       Director


Date:  March 26, 1996                  /s/ Herbert M. Gardner                  
                                       -----------------------------------
                                       Herbert M. Gardner
                                       Director



Date:  March 26, 1996                  /s/ Howard Graffman                    
                                       -----------------------------------
                                       Howard Grafman
                                       Director


Date:  March 26, 1996                  /s/ Paulette Graffman                   
                                       -----------------------------------
                                       Paulette Grafman
                                       Director


Date:  March 26, 1996                  /s/ Richard O. Starbird                
                                       -----------------------------------
                                       Richard O. Starbird
                                       Director


                                      -33-

<PAGE>


                                  EXHIBIT INDEX

         EXHIBIT
         -------

11.      Computation of earnings per share of Common Stock

27.      Financial Data Schedule
<PAGE>

                          INDEX TO FINANCIAL STATEMENTS



                                                                       PAGE(S)

Independent Auditors' Report                                            F - 2


Financial Statements:

    Consolidated Balance Sheets as of December 31, 1995 and 1994        F - 3

    Consolidated Statements of Operations for the Three Years in the
        Period ended December 31, 1995                                  F - 4

    Consolidated Statement of Shareholders' Equity for the Three Years
        in the Period Ended December 31, 1995                           F - 5

    Consolidated Statements of Cash Flows for the Three Years in
        the Period ended December 31, 1995                              F - 6


Notes to Consolidated Financial Statements                              F - 8
























                                      F - 1


<PAGE>



                          INDEPENDENT AUDITORS' REPORT


To The Board of Directors
The Western Transmedia Company, Inc.
San Francisco, California


We have  audited the  accompanying  consolidated  balance  sheets of The Western
Transmedia  Company,  Inc.,  and subsidiary as of December 31, 1995 and 1994 and
the consolidated  statements of operations,  changes in shareholders' equity and
cash flows for each of the three years in the period  ended  December  31, 1995.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of  The  Western
Transmedia Company, Inc. and subsidiary as of December 31, 1995 and 1994 and the
results of its  operations  and its cash flows for the three years in the period
ended  December  31,  1995 in  conformity  with  generally  accepted  accounting
principles.





                                                LAZAR, LEVINE & COMPANY LLP

New York, New York
February 27, 1996



















                                      F - 2


<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                   - ASSETS -
<TABLE>
<CAPTION>

                                                                                                            December 31,
                                                                                                     ------------------------
                                                                                                     1995                1994
                                                                                                    ------              -----
<S>                                                                                             <C>                <C>

CURRENT ASSETS:
  Cash (including interest bearing deposits) (Note 2b)                                           $  3,040,620       $  2,674,409
  Accounts receivable (Note 2d)                                                                       134,544            149,240
  Rights to receive - net of reserve for unrealizable
      rights to receive (Notes 2b and 2e)                                                           2,321,626          3,268,919
  Prepaid expenses and other current assets                                                           133,590             33,307
                                                                                                 ------------       ------------

TOTAL CURRENT ASSETS                                                                                5,630,380          6,125,875

PROPERTY AND EQUIPMENT - NET  (Notes 2f, 3 and 6)                                                     109,376             98,557

OTHER ASSETS  (Notes 2g, 4 and 5)                                                                     464,220            391,265
                                                                                                 ------------       ------------

TOTAL ASSETS                                                                                     $  6,203,976       $  6,615,697
                                                                                                 ============       ============

                    - LIABILITIES AND SHAREHOLDERS' EQUITY -
CURRENT LIABILITIES:
  Accounts payable - rights to receive (Note 2e)                                                $     365,941      $     778,564
  Accrued liabilities                                                                                  96,681            219,237
  Capitalized lease obligations - current portion (Note 6)                                              2,854              1,832
                                                                                                -------------      -------------

TOTAL CURRENT LIABILITIES                                                                             465,476            999,633
                                                                                                -------------      -------------

LONG-TERM DEBT  (Note 6)                                                                               15,602              4,108
                                                                                                -------------      -------------

COMMITMENTS AND CONTINGENCIES  (Notes 5, 10 and 11)

SHAREHOLDERS' EQUITY (Notes 7 and 8):
  Preferred stock, $.10 par value, 2,000,000 shares authorized;
      none issued or outstanding                                                                       -                  -
  Common stock, $.60 par value, 25,000,000 shares authorized;
      7,903,421 and 7,868,421 issued and outstanding for
      December 31, 1995 and 1994, respectively                                                      4,742,053          4,721,053
  Additional paid-in capital                                                                        5,542,062          5,463,062
  Retained earnings (deficit)                                                                      (4,561,217)        (4,572,159)
                                                                                                 -------------      -------------

TOTAL SHAREHOLDERS' EQUITY                                                                          5,722,898          5,611,956
                                                                                                 -------------      -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                       $  6,203,976       $  6,615,697
                                                                                                 ============       ============

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F - 3

<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>


                                                            For the Year Ended December 31,
                                                    --------------------------------------------------
                                                        1995                1994               1993
                                                        ----                ----               ----

<S>                                                 <C>                  <C>               <C>
NET SALES  (Note 2h)                                $11,368,903          $8,698,738        $   926,852

COST OF SALES  (Note 2h)                              7,576,314           5,807,509            623,712
                                                    -----------          ----------        -----------

GROSS PROFIT                                          3,792,589           2,891,229            303,140
                                                    -----------          ----------        -----------

EXPENSES AND OTHER (INCOME):
  Franchise costs                                     1,586,781           1,212,262            132,103
  Operating expenses                                  2,339,648           1,996,347          1,139,905
  Interest expense                                        1,560               2,555                574
  Interest income                                      (146,342)            (38,941)           (44,709)
                                                    -----------          ----------        -----------
                                                      3,781,647           3,172,223          1,227,873
                                                    -----------          ----------        -----------

INCOME (LOSS) BEFORE PROVISION FOR
  INCOME TAXES                                           10,942            (280,994)          (924,733)

PROVISION FOR INCOME TAXES (Note 2i)                        -                   -                  -
                                                    -----------          ----------        -----------

NET INCOME (LOSS)                                   $    10,942          $ (280,994)        $ (924,733)
                                                    ===========          ==========         ========== 

INCOME (LOSS) PER COMMON SHARE
  (Note 9)                                             $ -                    $(.04)             $(.16)
                                                       ========               =====              ===== 

WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING  (Notes 7 and 9)                 8,030,685           7,072,754          5,804,297
                                                    ===========          ==========         ========== 
</TABLE>








The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                      F - 4

<PAGE>
               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                 Shares                             Additional
                                                               (As Restated        Common            Paid-In  
                                                              Notes 7a and 7b)      Stock            Capital  
                                                              ----------------      -----           ----------
<S>                                                            <C>               <C>                <C>
Balance at December 31, 1992                                    4,897,265        $2,938,359         $1,752,883
Net proceeds from sale of stock (Note 7c)                       2,058,741         1,235,245          1,852,558
Common stock subscribed (Note 7c)                                  -                   -                  -
Compensatory stock (Note 7c)                                        2,500             1,500              4,750
Exercise of stock options                                           1,666               999              1,916
Adjustment for fractional shares resulting from
   reverse stock split                                                 (3)              (2)                  2
Net loss for the year ended December 31, 1993                      -                    -                  -
                                                                ----------       ----------          ----------
Balance at December 31, 1993                                    6,960,169         4,176,101           3,612,109
Shares issued in connection with exercise of franchise
   option (Note 7c)                                                60,000            36,000             144,000
Shares issued re: employment agreement (Note 7c)                   25,000            15,000              31,875
Exercise of stock options                                          17,500            10,500               2,875
Shares issued upon exercise of warrants in unit offering
   (Note 7d)                                                      800,000           480,000           1,658,393
Exercise of warrants (Note 7d)                                      5,754             3,452              13,810
Adjustment for fractional shares resulting from reverse
   stock split                                                         (2)             -                   -
Net loss for the year ended December 31, 1994                       -                  -                   -
                                                                ----------       ----------          ----------
Balance at December 31, 1994                                    7,868,421        4,721,053           5,463,062
Shares issued in connection with exercise of franchise
   option (Note 7e)                                                35,000           21,000              79,000
Net income for the year ended December 31, 1995                     -                -                   -
                                                                ----------      -----------         -----------
BALANCE AT DECEMBER 31, 1995                                    7,903,421       $4,742,053          $5,542,062
                                                                ==========      ===========         ===========
</TABLE>
<TABLE>
<CAPTION>
                                                               Retained        Common                Total
                                                               Earnings         Stock             Shareholders'
                                                              (Deficit)       Subscribed            Equity     
                                                              ---------       ----------          -------------
<S>                                                          <C>             <C>                   <C>
Balance at December 31, 1992                                 $(3,366,432)    $       -             $1,324,810
Net proceeds from sale of stock (Note 7c)                            -               -              3,087,803
Common stock subscribed (Note 7c)                                    -            226,875             226,875
Compensatory stock (Note 7c)                                         -               -                 6,250
Exercise of stock options                                            -               -                 2,915
Adjustment for fractional shares resulting from
   reverse stock split                                               -               -                   -
Net loss for the year ended December 31, 1993                   (924,733)            -              (924,733)
                                                              ----------       ----------          ----------
Balance at December 31, 1993                                  (4,291,165)         226,875          3,723,920
Shares issued in connection with exercise of franchise
   option (Note 7c)                                                  -           (180,000)               -
Shares issued re: employment agreement (Note 7c)                     -            (46,875)               -
Exercise of stock options                                            -               -                13,375
Shares issued upon exercise of warrants in unit offering
   (Note 7d)                                                         -               -             2,138,393
Exercise of warrants (Note 7d)                                       -               -                17,262
Adjustment for fractional shares resulting from reverse
   stock split                                                       -               -                   -
Net loss for the year ended December 31, 1994                   (280,994)            -              (280,994)
                                                              ----------       ----------          ----------
Balance at December 31, 1994                                  (4,572,159)            -             5,611,956
Shares issued in connection with exercise of franchise
   option (Note 7e)                                                  -               -               100,000
Net income for the year ended December 31, 1995                   10,942             -                10,942
                                                             -----------       ----------          ----------
BALANCE AT DECEMBER 31, 1995                                 $(4,561,217)       $    -            $5,722,898
                                                             ============      ==========         ===========
</TABLE>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                      F - 5
<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS            Page 1 of 2

<TABLE>
<CAPTION>

                                                                          For the Year Ended December 31,
                                                                        ----------------------------------------
                                                                        1995                1994            1993
                                                                        ----                ----            ----

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS:

<S>                                                                  <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Cash received from franchisor for cardholder restaurant
      spending                                                       $11,390,947       $  8,533,074    $     923,802
    Cash paid for franchise fees                                      (1,591,277)        (1,188,947)        (132,103)
    Cash paid for rights to receive                                   (7,237,918)        (7,698,146)      (1,221,362)
    Cash paid to suppliers and employees                              (2,314,820)        (1,754,795)        (787,409)
    Interest received                                                    146,342             38,941           44,709
    Interest paid                                                         (1,560)            (2,555)            (574)
                                                                     -----------       ------------     ------------ 

      Net cash provided (utilized) by operating activities               391,714         (2,072,428)      (1,172,937)
                                                                     -----------       ------------     ------------ 

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment                                   (22,024)           (59,053)         (17,583)
    Security deposits                                                       (805)            (4,064)         (24,205)
                                                                     -----------       ------------     ------------ 

         Net cash (utilized) by investing activities                     (22,829)           (63,117)         (41,788)
                                                                     -----------       ------------     ------------ 

CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayment of long-term debt                                           -                  -               (41,667)
    Proceeds from exercise of stock options                               -                  13,375            2,915
    Proceeds from exercise of warrants                                    -                  17,262           -
    Proceeds from sale of units                                           -               2,400,000        3,499,860
    Expenses associated with offering of stock and units                  -                (261,607)        (412,057)
    Payments on capital lease obligations                                 (2,674)            (5,121)          (6,564)
                                                                     -----------       ------------     ------------ 

         Net cash (utilized) provided by financing activities             (2,674)         2,163,909        3,042,487
                                                                     -----------       ------------     ------------ 

NET INCREASE IN CASH AND CASH EQUIVALENTS                                366,211             28,364        1,827,762

    Cash and cash equivalents, at beginning of year                    2,674,409          2,646,045          818,283
                                                                     -----------       ------------     ------------ 

CASH AND CASH EQUIVALENTS, AT END OF YEAR                            $ 3,040,620       $  2,674,409     $  2,646,045
                                                                     ===========       ============     ============

</TABLE>




The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





                                      F - 6


<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS            Page 2 of 2

<TABLE>
<CAPTION>

                                                                                  For the Year Ended December 31,   
                                                                           ------------------------------------------
                                                                              1995              1994            1993
                                                                              ----              ----            ----
<S>                                                                        <C>            <C>               <C>
RECONCILIATION OF NET INCOME (LOSS) TO NET CASH
  PROVIDED (UTILIZED) BY OPERATING ACTIVITIES:
  Net income (loss)                                                        $  10,942      $    (280,994)    $  (924,733)
  Adjustments to reconcile net income (loss) to net cash
    provided (utilized) by operating activities:
       Depreciation and amortization                                          53,348             43,731          36,450
       Reserve for unrealizable rights to receive                            194,112            158,570          18,084
       Compensatory stock                                                        -                               53,125
       Other                                                                     897             -               -
  Changes in assets and liabilities:
    Decrease (increase) in accounts receivable                                14,696           (143,021)         (3,050)
    Decrease (increase) in rights to receive                                 753,181         (2,564,153)       (697,986)
    (Increase) decrease in prepaid expenses and other current assets        (100,283)             4,471          94,144
    (Decrease) increase in accounts payable - rights to receive             (412,624)           672,148         100,336
    (Decrease) increase in accrued expenses                                 (122,555)            36,820         150,693
                                                                          -----------       ------------    ------------
       Net cash provided (utilized) by operating activities               $  391,714        $(2,072,428)    $(1,172,937)
                                                                          ===========       ============    ============
</TABLE>


SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

  a)   During the year  ended  December  31,  1994,  the  Company  acquired  the
       franchise  rights for the states of Washington and Nevada in exchange for
       an aggregate of 60,000 shares of common stock. These shares are valued by
       the Company at $180,000.

  b)   During the year  ended  December  31,  1995,  the  Company  acquired  the
       franchise rights for the state of Oregon in exchange for 35,000 shares of
       its common stock. These shares are valued by the Company at $100,000.

  c)   During the years ended  December  31,  1995 and 1994 the Company  entered
       into  capitalized  lease  obligations  aggregating  $15,190  and  $6,263,
       respectively, for new office equipment.








The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





                                      F - 7


<PAGE>


               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995



NOTE  1  -     DESCRIPTION OF COMPANY:

               The Western Transmedia Company,  Inc. (formerly Vigilance Systems
               Corp.), the "Company",  was incorporated in the State of Delaware
               on May 30, 1978.

               In accordance  with Statement of Financial  Accounting  Standards
               No. 7, the  Company was treated as a  development  stage  company
               from  January  1,  1991,  the date  the  Company  began  devoting
               substantially  all  of its  efforts  towards  establishing  a new
               business,  through  September 30, 1993.  During this period,  the
               Company incurred a cumulative loss of $1,009,443.

               In  December  1991,  the  Company,  through an exchange of stock,
               acquired 100% of the shares of a newly formed affiliate,  TM West
               Corp.  ("TM West").  This  transaction  was  accounted for as the
               reorganization   of  entities   under  common  control  which  is
               accounted for utilizing the pooling of interests  method. TM West
               had raised  approximately  $150,000 in a private  offering of its
               common stock in October 1991.  In December  1991, TM West entered
               into  a  franchise   agreement  with   Transmedia   Network  Inc.
               (Network). See also Note 5.

               The  franchise  agreement  (which was  assigned by TM West to the
               Company  in May 1992)  allows the  Company  to acquire  rights to
               receive goods and services from restaurants  ("Rights to Receive"
               -  see  Note  2e)  which  are  then  sold  to  the   franchisors'
               cardholders  for  cash.  The  Rights  to  Receive  are  primarily
               purchased for cash or obtained in exchange for media  advertising
               and other  services  purchased  by the  Company  on behalf of the
               restaurants.


NOTE  2  -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

               The  Company's  financial  statements  are prepared in accordance
               with  generally  accepted  accounting  principles  (GAAP).  Those
               principles  considered  particularly   significant  are  detailed
               below.   GAAP   requires   management   to  make   estimates  and
               assumptions,  if  applicable,  affecting the reported  amounts of
               assets, liabilities,  revenues and expenses. Actual results could
               differ from these estimates.

        (a)    PRINCIPLES OF CONSOLIDATION:

               The consolidated financial statements include the accounts of The
               Western Transmedia Company, Inc. and its wholly-owned subsidiary,
               TM West, an inactive company. All material  intercompany balances
               and transactions have been eliminated.









                                      F - 8


<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  2  -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (Continued):

        (b)    CONCENTRATION OF CREDIT RISK:

               Financial  instruments  that  potentially  subject the Company to
               concentrations  of  credit  risk  consist   principally  of  cash
               investments and rights to receive.

               The Company maintains significant cash investments,  which exceed
               the Federal depository  insurance coverage limit,  primarily with
               one financial institution.  The Company performs periodic reviews
               of the relative credit rating of this  institution as part of its
               investment strategy.

               Concentration  with  regards  to rights to  receive  (see Note 2e
               below) are  limited due to the  Company's  large  customer  base.
               However,  at December  31, 1995 all of these rights to receive do
               pertain to the restaurant industry.

        (c)    STATEMENTS OF CASH FLOWS:

               For  purposes  of the  statements  of  cash  flows,  the  Company
               considers all highly liquid investments with an original maturity
               of three months or less to be cash equivalents.

        (d)    ALLOWANCE FOR DOUBTFUL ACCOUNTS:

               An allowance for doubtful accounts has not been established as of
               December  31,  1995  and  1994,  since  accounts   receivable  as
               reflected  on  the  balance  sheet  consists   entirely  of  cash
               collected by and in transit from the franchisor (see Note 5).

        (e)    RIGHTS TO RECEIVE:

               Rights to Receive (see Note 5) are composed primarily of food and
               beverage  credits  due from  restaurants.  Rights to Receive  are
               stated at cost  which  approximates  50% of the  retail  value of
               Rights to Receive  obtained.  Cost is determined by the first-in,
               first-out method. Accounts payable - Rights to Receive represents
               the unfunded portion of the total commitment.

               The Company reviews the realizability of the Rights to Receive on
               a periodic basis and  writes-off  those amounts  receivable  from
               restaurants that have ceased  operations or whose credits are not
               utilized by the franchisors' cardholders.  The analysis of rights
               to receive is as follows:










                                      F - 9


<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  2  -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (Continued):

        (e)    RIGHTS TO RECEIVE:
<TABLE>
<CAPTION>

                                                                              December 31, 1995            
                                                               --------------------------------------------
                                                                 Total            Funded           Unfunded
                                                               ---------        -----------        --------
               <S>                                             <C>              <C>                 <C>

               Cost                                            $2,616,041       $2,250,100          $365,941
               Reserve for unrealizable rights to receive        (294,415)        (294,415)             -   
                                                               -----------      -----------         --------
               Net                                             $2,321,626       $1,955,685          $365,941
                                                               ===========      ===========         ========

</TABLE>

<TABLE>
<CAPTION>

                                                                              December 31, 1994            
                                                               --------------------------------------------
                                                                 Total            Funded           Unfunded
                                                               ---------        -----------        --------
               <S>                                             <C>              <C>                 <C>
               Cost                                            $3,437,154       $2,658,590          $778,564
               Reserve for unrealizable rights to receive        (168,235)        (168,235)           -     
                                                               -----------      -----------         --------

               Net                                             $3,268,919       $2,490,355          $778,564
                                                               ===========      ===========         ========
</TABLE>


        (f)    PROPERTY AND EQUIPMENT:

               Property  and  equipment  are  stated  at cost.  Depreciation  on
               property and equipment is provided on a straight-line  basis over
               the  estimated  useful  lives  of  the  assets  of 5 to 7  years.
               Leasehold  improvements are amortized over the term of the lease.
               Maintenance  and  repairs are  charged to  operating  expenses as
               incurred; renewals and betterments are capitalized.

               Depreciation  expense for the years ended December 31, 1995, 1994
               and 1993 aggregated $25,498, $16,631 and $9,350, respectively.

        (g)    AMORTIZATION:

               The cost of the franchise  rights  acquired (see Note 5) is being
               amortized  on a  straight-line  basis  through  the  end  of  the
               franchise  term.  Amortization  expense charged to operations for
               the years  ended  December  31,  1995,  1994 and 1993  aggregated
               $27,850, $27,100 and $27,100, respectively.

               The costs of an advertising  and promotion fund (see Note 5) were
               being  amortized on a  straight-line  basis over its  contractual
               life of two years.  Effective  September  30,  1993,  the Company
               entered into an agreement with Network whereby  substantially all
               local advertising expenses would be paid directly by the Company,
               instead of through the advertising and promotional  fund to which
               the Company had contributed (see Note 5 regarding reimbursement).


                                     F - 10

<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  2  -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (Continued):

        (h)    NET SALES/COST OF SALES:

               Net sales  represent  the  retail  value of the Rights to Receive
               sold,   less  the  25%  savings   offered  to  the   franchisors'
               cardholders.  A sale is recognized  when the franchisor (see Note
               5) receives a restaurant charge card receipt from a restaurant in
               the Company's  franchise  area,  indicating that a cardholder has
               charged a meal. The cost of a sale consists of the actual cost of
               rights to receive from a restaurant (see Note 2e above).

               Revenues from card membership fees have not been material to date
               and are not  expected  to become  material  since the Company has
               waived substantially all first year membership fees. In addition,
               the Company  receives no portion of renewal  fees.  If these fees
               become  material,  they will be reflected as deferred  membership
               fees and amortized over the period benefitted.

               See also Note 5.

        (i)    INCOME TAXES:

               At  December   31,   1990,   the  Company  had   operating   loss
               carryforwards,  aggregating approximately $2,600,000.  Due to the
               change in the Company's  type of business (see Note 5),  benefits
               from the  aforementioned  loss carryforwards are not available to
               offset future income.

               In February 1992, the Financial Accounting Standards Board issued
               Statement  No. 109,  "Accounting  for Income Taxes" ("SFAS 109").
               SFAS 109 requires the use of the asset and liability  approach of
               providing for income taxes and required  implementation  no later
               than  for  fiscal  years   beginning  after  December  15,  1992.
               Effective  January 1, 1993 the Company  adopted the provisions of
               SFAS 109. These  provisions have not had a material impact on the
               Company's financial statements.

               The tax effects of the  temporary  differences  that give rise to
               deferred tax assets and liabilities at December 31, 1995 and 1994
               are as follows:


                                                  December 31,     December 31,
                                                     1995              1994
                                                  ------------      -----------
         Deferred tax assets:
            Allowance for rights to receive      $  115,000       $   65,000
            Net operating loss carryforward         680,000          731,000
                                                 ----------       ----------
                                                    795,000          796,000
         Less valuation allowance                  (792,500)        (793,000)
                                                 ----------       ----------

         Net deferred tax asset                       2,500            3,000
         Deferred tax liabilities:
            Property and equipment                   (2,500)          (3,000)
                                                 ----------       -----------
         Net deferred tax asset                  $      -           $    -   
                                                  ==========       ===========



                                     F - 11


<PAGE>



               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995



NOTE  2  -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICES  (Continued):

        (i)    INCOME TAXES (CONTINUED):

               The Company has  available  at December  31, 1995 and 1994 unused
               operating  loss  carryforwards  of  approximately  $1,744,000 and
               $1,881,000,  respectively,  which may be applied  against  future
               taxable  income  expiring in various  years  through  2008. At an
               assumed tax rate of 39%, these  carryforwards and other items may
               result in  deferred  tax  assets of  approximately  $795,000  and
               $796,000,  respectively.  Since  there is no  assurance  that the
               Company  will  generate  future  taxable  income to utilize  this
               asset, a valuation allowance has been provided as of December 31,
               1995 and 1994.

        (j)    RECLASSIFICATIONS:

               Certain   reclassifications  were  made  to  the  1994  and  1993
               financial  statements to conform to the current year's  reporting
               format.


NOTE  3  -     PROPERTY AND EQUIPMENT:

               Property and equipment consists of the following:

<TABLE>
<CAPTION>

                                                                                   December 31,   
                                                                             ---------------------
                                                                                1995          1994
                                                                             ---------     --------
               <S>                                                           <C>           <C>
               Furniture and fixtures                                        $  69,990     $  68,592
               Office equipment                                                 89,594        56,771
               Leasehold improvements                                            1,285         1,285
                                                                             ---------     ---------
                                                                               160,869       126,648
               Less:  accumulated depreciation and amortization                 51,493        28,091
                                                                             ---------     ---------
                                                                              $109,376     $  98,557
                                                                             =========     =========
</TABLE>

NOTE  4  -     OTHER ASSETS:

<TABLE>
<CAPTION>

                                                                                    December 31,  
                                                                             ----------------------
                                                                                 1995          1994
                                                                             ----------       -----

               <S>                                                           <C>           <C>
               Other assets consists of the following:

               Franchise agreement - net of accumulated amortization of
                 $95,600 and $67,750 for 1995 and 1994, respectively
                 (Notes 2g and 5)                                            $455,400      $383,250
               Security deposits                                                8,820         8,015
                                                                             --------      --------
                                                                             $464,220      $391,265
                                                                             ========      =========
</TABLE>

                                     F - 12


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995



NOTE  5  -     FRANCHISE AGREEMENT:

               TM West, a  wholly-owned  subsidiary of the Company (see Note 1),
               was formed for the purpose of  negotiating  and  entering  into a
               franchise  agreement with Network.  This franchise  agreement was
               executed  in  December,  1991,  and  assigned  by TM  West to the
               Company in May 1992.  The term of the franchise  agreement is for
               10  years  with an  option  exercisable  by the  Company  for two
               additional   successive   10  year  periods,   provided   certain
               conditions  are met.  In  connection  with  this  operation,  the
               Company changed its name to The Western Transmedia Company,  Inc.
               (see Note 1).

               Under the initial franchise  agreement,  the Company acquired the
               exclusive   right  to  operate  a  franchise   in  the  state  of
               California,  the primary  business of which is the acquisition of
               "Rights to Receive" from  restaurants  located in California that
               accept the  Transmedia  Card (a private  charge card marketed and
               issued by  Network)  and the sale of such  Rights to  Receive  to
               holders of the card who are then  entitled to a 25% savings  from
               listed menu prices when dining at participating restaurants.

               Restaurants  that join the  Transmedia  program are provided with
               two of their essential  needs:  advance  financing and additional
               diners.  The Company  purchases for cash, and in some  instances,
               prepaid  advertising,  from full  service  restaurants,  food and
               beverage  credits (Rights to Receive) which are then used by card
               members when patronizing such restaurants.  Rights to Receive are
               purchased in an amount equal to  approximately  50% of the listed
               menu prices of such food and beverage credits.

               The Company derives its revenues from the difference  between the
               amount it pays to restaurants  for the food and beverage  credits
               and the  cardmember's  charges at such restaurants net of the 25%
               savings  (exclusive  of tip and  applicable  taxes) and franchise
               fees  payable to Network.  The Company  also  receives 40% of the
               Restaurant Card membership fee for the initial year of membership
               of  cardholders  solicited  by the  Company and no portion of any
               renewal  fees.  However,  the  Company  and  Network  have waived
               substantially  all first year  membership fees in connection with
               its marketing programs.

               The franchise agreement to operate in California, provided for an
               initial  franchise fee of $250,000  (which was paid in July 1992)
               as well as 150,000  shares of common  stock of the  Company  (see
               Note 7b), which shares were issued in January 1992. The franchise
               agreement also provided for payments to Network's advertising and
               promotion  fund in the amount of $250,000;  one-half of which was
               paid with the initial franchise fee and the balance to be paid in
               12 equal  consecutive  monthly  installments,  without  interest,
               commencing in July 1993. The funds for  advertising and promotion
               were to be used by  Network  for  the  exclusive  benefit  of the
               Company  during the two year period  following the effective date
               of the  franchise  agreement.  Effective  September  30, 1993 the
               Company   entered   into  an  agreement   with  Network   whereby
               substantially  all  local  advertising  expenses  would  be  paid
               directly by the Company,  instead of through the  advertising and
               promotional  fund to which  the  Company  had  contributed.  As a
               result of this  agreement,  the  Company's  remaining  obligation
               under this note was terminated.  In addition,  Network reimbursed
               the Company  approximately  $55,000 for the unused portion of the
               fund contributed by the Company.


                                     F - 13


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  5  -     FRANCHISE AGREEMENT  (Continued):

               In December  1993,  the Company  exercised it's option to acquire
               the franchise to operate in the state of  Washington  through the
               issuance of 50,000  shares of common  stock to Network  valued by
               the Company at $150,000.  The Company also acquired the franchise
               to operate in the City of Reno,  Nevada and the Nevada portion of
               the Lake Tahoe  resort  area by issuing  10,000  shares of common
               stock  to  Network  at a  value  of  $30,000.  The  Company  also
               exercised  an option  in June,  1995 to  operate  in the state of
               Oregon for an initial  payment of  $100,000.  The Company  issued
               35,000 shares of its common stock to effect this payment.

               For each of the  franchises,  the Company is also required to pay
               Network a 7 1/2% general service charge and a 2 1/2%  advertising
               fee based on the gross dollar amount of food and beverage credits
               used by cardmembers  within each  territory.  The Company is also
               required to pay a miscellaneous administrative fee based upon the
               number of participating  restaurants and charge card transactions
               during any given month. Additionally, the Company is subject to a
               non-compete agreement.


NOTE  6  -     LONG-TERM DEBT:

               The  Company  is the  lessee of  office  and  computer  equipment
               through  leases which expire in years  through  2000.  The assets
               (and  liability)  under these leases are recorded at the lower of
               the  present  value of the  minimum  lease  payments  or the fair
               market value of the asset.  The assets are depreciated over their
               estimated   productive   lives.   Depreciation  of  assets  under
               capitalized  leases,  included  in  depreciation  expense for the
               years ended  December  31, 1995 and 1994,  aggregated  $3,381 and
               $2,914, respectively.

               Minimum  future lease  payments  under  capitalized  leases as of
               December  31, 1995 and for each of the next five fiscal years and
               in the aggregate are as follows:

                       1996                                       $  6,544
                       1997                                          6,544
                       1998                                          5,583
                       1999                                          4,349
                       2000                                          6,324
                                                                  --------
               Total minimum lease payments                         29,344
               Less: amount representing interest                   10,888
                                                                  --------
                                                                   $18,456
                                                                  ========



                                     F - 14


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  6  -     LONG-TERM DEBT:

               The interest rate has been  calculated at  approximately  10% and
               was based upon the lower of the Company's  incremental  borrowing
               rate at the inception of the lease or the lessor's  implicit rate
               of return.


NOTE  7  -     COMMON STOCK:

        (a)    In December 1991,  the Company  effected a reverse stock split of
               its issued and  outstanding  common stock on a one (1) for thirty
               (30) basis. The number of authorized shares  (25,000,000) was not
               changed.

               In May 1992, the Company effected a second reverse stock split on
               a one (1) for two (2) basis resulting in 1,500,000  shares,  $.60
               par value,  issued  and  outstanding.  The  number of  authorized
               shares was not changed.

               All  references  to the  number  of common  shares  and per share
               amounts  in the  accompanying  financial  statements,  have  been
               restated to reflect the reverse stock splits.

        (b)    In January 1992, the Company issued 150,000 shares,  as restated,
               of its common  stock to Network (see Note 5) in  connection  with
               the  franchise  agreement.  These  shares  were  issued at a post
               reverse stock split price of $.14 per share.

               In July  1992,  the  Company  completed  a private  placement  of
               3,397,317 shares of its common stock at a price of $.60 per share
               (par  value)  which   yielded  net   proceeds  of   approximately
               $1,966,000.  With the completion of this private  placement,  the
               Company had 4,897,265 shares of its common stock outstanding.  In
               addition,   during  1991  and  1992  the  Company  also  expended
               approximately  $369,000  in costs  associated  with a  terminated
               public offering.

        (c)    In July  1993,  the  Company  completed  a private  placement  of
               1,764,624  units  (each  unit  consisting  of one share of common
               stock and one common stock purchase  warrant) at a price of $1.70
               per unit which yielded net proceeds of approximately  $2,625,000.
               In November 1993, the Company also completed a private  placement
               of 294,117  units  (each unit  consisting  of one share of common
               stock and one common stock purchase  warrant) at a price of $1.70
               per unit for net proceeds of approximately $463,000. The warrants
               are  exercisable  at a price of $3.00 per share through  December
               1994 and at $4.00 per share thereafter and through June 1996. The
               warrants are also redeemable at a price of $1.00 per warrant,  at
               the option of the Company, based upon certain circumstances.



                                     F - 15


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  7  -     COMMON STOCK  (Continued):

        (c)    In July 1993,  the  Company  also issued  2,500  shares of common
               stock in lieu of consulting fees aggregating $6,250.

               Pursuant to the terms of a employment  agreement  with an officer
               of the Company (see Note 10a) the Company has  reflected  $46,875
               as additional  compensation for the year ended December 31, 1993.
               Payment was made by issuing  25,000 shares of common  stock.  The
               value of the shares is included in common stock  subscribed as of
               December 31, 1993.

               As payment for the exercise of  franchise  options for the states
               of Washington and the City of Reno, Nevada and the Nevada portion
               of the Lake  Tahoe  resort  area (see Note 5),  the  Company  has
               agreed to issue 60,000  shares of common stock to Network.  These
               shares are valued by the Company at $180,000. This amount is also
               included in common stock subscribed as of December 31, 1993.

        (d)    In December  1994,  through a unit offering,  warrant  holders of
               800,000  warrants  exchanged  their  warrants  and paid $3.00 per
               warrant for a unit  consisting  of a share of common  stock and a
               new  warrant.  This  offering  resulted  in net  proceeds  to the
               Company of  $2,138,393.  These new warrants are  exercisable at a
               price of $4.00 per share through  December 31, 1997. In addition,
               in December 1994,  holders of 5,754 existing  warrants  exercised
               their  right to  purchase  common  stock at a price of $3.00  per
               share.

        (e)    In June 1995,  as payment for the exercise of a franchise  option
               for the state of Oregon,  the Company issued 35,000 shares of its
               common  stock to Network.  These shares are valued by the Company
               at $100,000.


NOTE  8  -     STOCK OPTION PLAN:

               The Company has  established  a Stock  Option  Plan,  as amended,
               under which options to purchase up to a maximum of 750,000 shares
               of  common  stock  may be  granted  to  officers  and  other  key
               employees.  Stock options  granted under this plan,  which may be
               either incentive stock options or nonqualified  stock options for
               federal income tax purposes, expire up to ten years after date of
               grant and become exercisable over a three year period.  Employees
               who have left the Company have 90 days to exercise their options.




                                     F - 16


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE  8  -     STOCK OPTION PLAN  (Continued):

               As of December 31, 1995 options  granted  under this plan were as
               follows:

<TABLE>
<CAPTION>


                                                                                                               Total Option
                                                                           Shares          Option Price            Price   
                                                                           ------          ------------        -------------

               <S>                                                         <C>            <C>     <C>          <C>
               Balance outstanding at December 31, 1992                    159,000         $.60 - $1.75        $   177,750

               Granted                                                      20,000                 2.75             55,000
               Granted                                                     125,000                1.875            234,375
               Granted                                                      50,000               2.8125            140,625
               Exercised                                                    (1,666)                1.75             (2,915)
               Canceled                                                     (3,334)                1.75             (5,835)
                                                                           --------       -------------         -----------
               Balance outstanding December 31, 1993                       349,000                                 599,000

               Granted                                                      32,500                 3.25            105,625
               Exercised                                                   (15,000)                 .60             (9,000)
               Exercised                                                    (2,500)                1.75             (4,375)
               Canceled                                                     (5,000)                1.75             (8,750)
               Canceled                                                     (7,500)               1.875            (14,062)
                                                                           --------       -------------         -----------
               Balance outstanding December 31, 1994                       351,500                                 668,438

               Granted                                                     320,000        $2.00 - $3.75            568,128
               Canceled                                                     (2,500)                1.75             (4,375)
                                                                           --------                             -----------

               Balance Outstanding December 31, 1995                       669,000                              $1,232,191
                                                                           ========                             ===========
</TABLE>


               The Company has not adopted SFAS No. 123 -  accounting  for stock
               based  compensation for the year ended December 31, 1995 but will
               adopt this  standard for the year ended  December  31,  1996,  as
               required.


NOTE  9  -     EARNINGS (LOSS) PER SHARE:

               Earnings  (loss) per share has been  computed on the basis of the
               weighted  average  number of common shares and common  equivalent
               shares  outstanding  during each period presented.  The effect on
               earnings  (loss) per share  resulting from the exercise of common
               stock warrants is antidilutive and therefore not shown.

               A detailed  computation  of earnings per common share  appears in
               Exhibit 11 of this Form 10-K.


                                     F - 17

<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE 10  -     COMMITMENTS AND CONTINGENCIES:

         (a)   EMPLOYMENT/CONSULTING AGREEMENTS:

               The Company  entered  into a new  employment  agreement  with its
               Chief Executive  Officer,  which agreement  commenced  January 1,
               1995 and expires on December 31, 1996. The agreement provides for
               a base annual  salary of $175,000 for the first year and $200,000
               for 1996.  This employee is also entitled to a bonus,  based upon
               pre-tax earnings, of 5% on the first $2,000,000 and 6 1/2% on all
               earnings in excess of  $2,000,000.  The employee was also granted
               options  to  acquire  150,000  shares of  common  stock at prices
               ranging from $2.82 to $3.75 per share.  The employment  agreement
               also  contains  provisions  for a covenant  not to compete in the
               event of termination and various buy-out  provisions in the event
               of  termination,  disability,  death  or a sale of a  controlling
               interest or substantially all the assets of the Company.

               The Company also entered into an agreement with an Executive Vice
               President. This agreement was effective as of January 1, 1995 and
               would  have  expired  on  December  31,  1996.  The terms of this
               agreement  provided for an annual base salary of $115,000 for the
               first year and $140,000 for the second  year.  This  employee was
               also granted options to acquire 105,000 shares of common stock at
               prices ranging from $2.82 to $3.75 per share.  The Executive Vice
               President resigned from the Company in January 1996.

               The Company  also  entered  into a  consulting  agreement  with a
               company in which a director and its executive  vice president are
               shareholders.  The agreement provided for monthly consulting fees
               of $2,500 for the first 12 months, increasing to $2,917 per month
               thereafter  through  December 1996. This agreement was terminated
               effective December 31, 1995.

         (b)   OPERATING LEASE:

               The Company has entered  into  operating  leases for office space
               which expire in various years through 1999 with renewal  options.
               The  leases  provide  for  payment  of  taxes  and the  Company's
               proportionate share of basic operating costs.

               Minimum future base rental payments under these leases,  for each
               of the next four years and in the aggregate are as follows:

                   Year ending December 31, 1996             $102,882
                   Year ending December 31, 1997               60,078
                   Year ending December 31, 1998               58,874
                   Year ending December 31, 1999               40,399
                                                             --------
                                                             $262,233
                                                             ========


                                     F - 18


<PAGE>

               THE WESTERN TRANSMEDIA COMPANY, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   FOR THE THREE YEARS ENDED DECEMBER 31, 1995




NOTE 10  -     COMMITMENTS AND CONTINGENCIES  (Continued):

         (b)   OPERATING LEASE (CONTINUED):

               Rent expense for the years ended December 31, 1995, 1994 and 1993
               aggregated $113,859, $91,931 and $46,707, respectively.

               The  Company  also  leases   office   space  in  Orange   County,
               California,  on a  month-to-month  basis,  at a cost of $640  per
               month.


NOTE 11 -      BUSINESS CONCENTRATIONS:

               Most of the Company's  participating  restaurants  are located in
               the San  Francisco/Los  Angeles  areas.  No single  participating
               restaurant  accounted for more than 5% of the Company's  sales in
               any fiscal year presented.

               One  participating  restaurant's  Rights to receive  balance  was
               greater than 5% (5.2%) of the total Rights to receive  balance at
               December 31, 1994. No single participating restaurant's Rights to
               receive  balance  was  greater  than 5% of the  total  Rights  to
               receive balance at December 31, 1995.












                                     F - 19