FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000
                                       OR

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

         FOR THE TRANSITION PERIOD FROM______________TO_________________

                         COMMISSION FILE NUMBER 0-26368

                          TRANSMEDIA ASIA PACIFIC, INC.
                          -----------------------------
             (exact name of registrant as specified in its charter)

                Delaware                                   13-3760219
   ---------------------------------               -------------------------
     (State or other jurisdiction of                        (I.R.S.
     incorporation of organization)                   Identification No.)

                 11 ST. JAMES'S SQUARE, LONDON SW1Y 4LB, ENGLAND
  ----------------------------------------------------------------------------
                    (Address of principal executive offices)

  Registrant's telephone number, including area code: U.K. 011-44-207-930-0706

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

                    Common Stock, par value $.00001 per share
                    -----------------------------------------
                                (Title of class)

Indicate by (X) 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 |_|

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 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 held by non-affiliates of the
Registrant as of January 11, 2001 was $10,561,068 based upon the closing sale
price of a share of Common Stock on The National Association of Securities
Dealers Automated Quotation ("NASDAQ") Small Cap Market System.

        Number of shares outstanding of the Registrant's Common Stock as
                      of January 11, 2001 was 37,086,441.

                    Documents incorporated by reference: None

<PAGE>

                          Transmedia Asia Pacific, Inc.

                 Form 10-K for the year ended September 30, 2000

                                      Index

                                                                           Page

PART I

         Item 1.   Business                                                  3
         Item 2.   Properties                                               15
         Item 3.   Legal Proceedings                                        17
         Item 4.   Submission of Matters to a Vote of
                   Security Holders                                         18

PART II

         Item 5.   Market for Registrant's Common Stock and
                   Related Stockholder Matters                              19
         Item 6.   Selected Financial Data                                  23
         Item 7.   Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                      25
         Item 7A.  Quantitative and Qualitative Disclosure
                   About Market Risk                                        34
         Item 8.   Financial Statements and Supplementary Data              34
         Item 9.   Changes in and Disagreements with Accountants on
                   Accounting and Financial Disclosure                      34

PART III

         Item 10.  Directors and Executive Officers of the Registrant       35
         Item 11.  Executive Compensation                                   37
         Item 12.  Security Ownership of Certain Beneficial
                   Owners and Management                                    39
         Item 13.  Certain Relationships and Related Transactions           40
         Item 14.  Exhibits, Financial Statement Schedules and
                   Reports on Form 8-K                                      43

Signatures                                                                  46


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This Annual Report on Form 10-K and the documents incorporated herein contain
"forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in this
Annual Report, statements that are not statements of current or historical fact
may be deemed to be forward-looking statements. Without limiting the foregoing,
the words "anticipate", "plan," "intend," "expect," "may," "believe", "estimate"
and similar expressions are intended to identify such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Except as
required by law, the Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information, future events
or otherwise.

ITEM 1. BUSINESS.

Transmedia Asia Pacific, Inc. ("the Company") is a provider of membership-based
consumer benefit programs and marketing programs for businesses on an
international scale through its subsidiaries and affiliates. The Company has
developed/acquired in recent years a range of consumer benefits included
discount shopping, dining, travel, hotel accommodation and telephone helpline
services. The Company sells access to these benefits directly to consumers and
also uses them to develop marketing programs for corporations. The marketing
programs provided by the Company to corporations comprise specifically designed
benefit based consumer loyalty programs to assist such corporations with
customer acquisition, customer activation and customer retention. The Company's
various membership-based consumer benefit and loyalty programs are currently
offered in 28 countries and globally via the Internet. The Company estimates
that it currently has over 8 million members participating in one or more of its
programs. The business of the Company currently comprises three segments: (i)
member benefits/loyalty marketing, (ii) e-commerce and Internet services and
(iii) direct marketing.

History

The Company was incorporated under the laws of the State of Delaware in March
1994. On May 2, 1994 the Company acquired the right, pursuant to a Master
License Agreement ("License Agreement") dated March 21, 1994, an exclusive
license ("License") to use certain trademarks and service marks, proprietary
computer software programs and know-how of Transmedia Network, Inc. ("Network")
to establish and operate a discount restaurant charge card business in clearly
defined geographical areas. The License was limited to Australia and New Zealand
(the "Licensed Territories"). The Company commenced operations as a discount
restaurant charge card business in Sydney, Australia in November 1994. Network
was issued 590,790 shares of common stock, par value $.00001 per share ("Common
Stock") of the Company, as part consideration for the License and had the right
to designate one director to the board of directors of the Company, which right
was not exercised. Additionally, under the License Agreement certain changes in
key executives and principal shareholdings in the Company required the prior
written approval of Network.

Through 1996 the operations of the Company consisted of a discount restaurant
charge card business in Australia. In 1996 management decided to expand the
Company's operations by providing broader based "member benefits" to its
corporate clients and individual members. Such benefits included discount
shopping, travel, hotel accommodation and telephone helpline services.
Transmedia Europe, Inc. ("TME") made a similar strategic decision. TME is a
company which acquired a similar license to that of the Company to operate a
discount restaurant charge card business in Europe, Turkey and certain other
countries outside of


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Europe. TME commenced operations in the United Kingdom in January 1994. The
Company and TME share common management and through October 1999 had identical
boards of directors and officers.

As a result of their working closely in implementing the strategy outlined
above, the Company and TME jointly acquired in April 1997 Countdown Holdings
Limited ("Countdown"), an international provider of membership-based discount
shopping services. See "Countdown". In December 1997 the Company and TME
acquired control of NHS Australia Pty Limited ("NHS"). NHS owned the business
operations of Nationwide Helpline Services Pty Limited ("Nationwide"). NHS is a
provider of telephone helpline services covering advice on legal, tax,
accounting, medical and home emergency. In addition, NHS offered travel related
products such as airline tickets, vacation packages, insurance through a
division known as Teletravel ("Teletravel") and provides international medical
case management and repatriation services to a number of insurance companies
through a division known as IMAN ("IMAN"). See "Nationwide Helpline Services".

On May 14, 1998 the Company and TME jointly acquired Porkpine Limited
("Porkpine"). Porkpine trades as Logan Leisure, a business which produces and
sells discount shopping and services directories in Ireland. See "Logan
Leisure/Porkpine". On May 22, 1998 the Company and TME jointly acquired
Breakaway Travel Club Pty Limited ("Breakaway"). Breakaway is a licensed travel
agent specializing in discount packaged vacations for individuals employed in
the travel industry in Australia. See "Breakaway". In July 1998 the Company and
TME jointly established Countdown USA, Inc. ("Countdown USA"), to offer member
benefits in the United States and in November 1998 Countdown USA acquired the
membership base and certain assets of National Association of Mature Americans,
Inc. ("NAMA"), a provider of discounted mail order and retail pharmacy products
as well as other benefit programs such as discounted eyewear, dental services
and leisure products. On November 17, 1998 Transmedia Australia acquired the
balance of 49% of the shares of common stock of NHS. Finally, on June 15, 1999
the Company and TME jointly acquired DSS Direct Connect, L.L.C. ("DBS Direct"),
a marketer and full-service installer of DirecTV in the United States. See "DBS
Direct".

On April 7, 2000 the Company and Network executed a Termination Agreement
pursuant to which the License was cancelled in return for forgiveness of a
$250,000 promissory note plus accrued interest of approximately $73,000 and
forgiveness of $51,000 of royalty payments. Net of the carrying value of the
License, the Company recorded a loss on termination of approximately $256,000.
The Company believed that termination of the License was in the best interests
of the Company since it eliminated substantial indebtedness.

On April 13, 2000 the Company acquired MonsterBook.com, Inc. ("MonsterBook").
MonsterBook produces and distributes a printed e-business directory for the
Internet. Additionally, the e-business directory is available via the Internet
at http://www.monsterbook.com.

Proposed Merger of the Company and Transmedia Europe, Inc.

In light of the close collaboration between the Company and TME since
incorporation and, more particularly, in view of their joint ownership of
Countdown, NHS, DBS Direct, Countdown USA, Logan Leisure and Breakaway Travel,
management of the Company and TME assessed the rationale of a merger of the two
entities. Management believed that keeping the two companies distinct and
separate was not appropriate or advantageous to shareholders and therefore on
December 28, 1999 the Company and TME executed a definitive merger agreement.
("Merger Agreement"). Under the terms of the Merger Agreement, the Company will
issue one share of its common stock for each share of common stock of TME. The
merger, is subject to a number of conditions, including shareholder


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approval. The Company and TME each established independent committees to
determine the fairness of the proposed transaction from a financial point of
view. In September 2000 the Company and TME filed a Preliminary Joint Proxy
Statement/Prospectus on Form S-4 and Schedule 14A with the Securities and
Exchange Commission (the "SEC") with respect to a forthcoming meeting of
stockholders being convened to, inter alia, consider, and if deemed appropriate
approve, the proposed merger. The SEC staff provided comments on the Preliminary
Joint Proxy Statement/Prospectus by letter dated October 25, 2000. The Company
expects to submit its response to the SEC staff comments and file a revised
Preliminary Joint Proxy Statement/Prospectus in the first quarter of 2001.

Recent Developments

Upon termination of the License Agreement, management of the Company conducted a
detailed review of the restaurant card business in Australia and concluded that
it would not be commercially viable to develop and establish a new dining
product in Australia. In deciding not to continue its restaurant card business
in Australia, management considered a number of factors including declining
revenues in recent years and significant operating losses since commencement of
operations in 1994. Additionally, management believed that its declining
restaurant cardholder base in Australia could not be rebuilt without significant
investment of management time and marketing expense.

On December 8, 2000 the Company sold its travel services business, located in
Australia, to an unaffiliated third party in a transaction valued at
approximately $213,000. The travel services business was owned and operated by
Taste Card Pty Limited (formerly known as Transmedia Australia Travel Holdings
Pty Limited) a subsidiary of the Company jointly owned by the Company and TME.
The travel services business historically consisted of Breakaway and Teletravel.
In April 2000 the business of Teletravel was re-branded as Co-travel,
transferred to Breakaway and became a subsidiary of Breakaway. On December 8,
2000 Taste Card Pty Limited sold Breakaway. The sale was completed following an
evaluation by the Company of the rationale for owning and operating its own
travel businesses. Management concluded that the travel products and services
included in its loyalty programs could be more efficiently sourced by
negotiating alliances with third party travel product and service providers.
Additionally, outsourcing travel products would enable the Company to re-deploy
the working capital used by its travel businesses, Breakaway and Teletravel. See
"Business Disposition".

Current Business Operations

The business of the Company currently comprises three segments: (i) member
benefits/loyalty marketing, (ii) e-commerce and Internet services and (iii)
direct marketing.

Member Benefits/Loyalty Marketing Business

The Company's member benefit business is comprised of Nationwide Helpline
Services and the various discount benefits offered by its affiliates Countdown,
Countdown USA and Logan Leisure. The Company is increasingly positioning its
member benefit business as a loyalty and affinity marketing service to its
corporate clients.

Nationwide Helpline Services

NHS is a loyalty marketing business, based in Australia, which sells its member
benefit programs on a wholesale basis to a wide range of corporations who
typically brand the services under their own name. The programs offered by NHS
enable it's corporate clients to provide additional benefits to their own
customer base. As of September 30, 2000 NHS had approximately 850,000 members
entitled to use the services.


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<PAGE>

The NHS member benefit programs consist primarily of telephone helpline
services, credit card registration and international medical case management and
repatriation services. The NHS telephone helpline services include telephone
advice lines covering legal, tax and accounting issues as well as some medical
and home emergency problems. NHS through a separate division known as IMAN, also
provides international medical case management and repatriation services for
travelers on behalf of a number of major insurance companies.

The Telephone Helpline Services business operates through NHS's retention of the
services of outside lawyers, accountants and others ("Service Providers") to
provide a fixed amount of free advice to its members over the telephone. NHS
pays a retainer to such Service Providers in return for their being available to
provide advice to members. In addition to the retainer, Service Providers hope
to benefit by securing new clients when a member requires assistance beyond the
initial telephone advice. Members are recruited by NHS by the sale of its
Telephone Helpline Services to corporations such as banks and insurance
companies who make it available to their customers as a benefit to such
customers. NHS contracts to provide the Telephone Helpline Services to its
corporate clients for a period of 1 to 3 years. Such corporations benefit by
retaining existing customers and/or gaining new customers through offering a
product not offered by their competitors. NHS charges client corporations an
annual fee per customer. In order to provide the Telephone Helpline Services NHS
operates a 24-hour call center. The call center receives calls from members and
then redirects the call to the relevant Service Provider. Members are given a
unique telephone number for each category of help/advice offered. In addition,
such unique telephone numbers are different for each corporate client enabling
the call center to answer member calls as the corporate client's helpline
service. Members can be connected to the same advisor each time they call if a
matter is on going. The range of help/advice offered is broad, covering all
types of legal, tax and accounting issues that members may encounter in their
daily lives. In addition, NHS offers a stress and bereavement counseling service
and help and advice on a broad range of other issues from home emergency, home
maintenance and security to credit card registration and social security advice.

IMAN provides international medical case management and repatriation services
for travelers. IMAN has established an international network of doctors, nurses
and medical advisors who are available to assist travelers who require medical
assistance while abroad. The service extends to repatriation in cases where the
traveler must return home to receive treatment. The IMAN product is sold to a
number of insurance companies who incorporate the services of IMAN within their
travel insurance coverage.

The Company has effective control over the operating and financial decisions of
NHS and IMAN and accordingly these operations are consolidated in the financial
statements of the Company.

Countdown

The Countdown business is primarily a membership-based business which arranges
discounts with suppliers of goods and services for its members. Countdown has
approximately 7 million members and approximately 75,000 participating merchants
in 28 countries. Over 25,000 of these merchants are located in the United
Kingdom. Countdown operates through licensees in the Asia-Pacific region, the
Caribbean, Benelux, Russia and Israel. In fiscal 2000, Countdown reacquired the
Countdown operation in Italy from a licensee. The Countdown business described
below has expanded into e-commerce by developing an online discount shopping web
site, countdownarcade.com, as separately described later in this section.

Countdown markets membership on a retail and corporate basis. Retail marketing
involves selling membership to individuals. Memberships sold on this basis
represent a very small


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portion of total membership. Members pay an annual membership fee, currently
approximately $75, which entitles them to a Countdown card. Members present
their Countdown card at the point of sale when making purchases from
participating merchants. Presentation of the Countdown card entitles the
cardholder to a discount, at the time of purchase, of between 5% and 50% off the
merchant's normal selling price. When members receive their Countdown card they
also receive a directory of participating merchants. Directories are prepared on
a geographical and product and service basis, enabling Countdown to supply a
directory of participating merchants to cardholders specific to the geographical
area in which the cardholder lives.

Corporate membership marketing involves the sale of membership packages to
corporations, professional organizations, trade unions, etc. Countdown currently
has over 100 corporate clients representing over 6 million members, 3.5 million
owned by Countdown and 2.5 million controlled by licensees. In essence corporate
marketing is a loyalty marketing service provided to corporate clients. In the
case of corporate loyalty marketing, the group or organization purchases a
tailored membership for its own customers, members or employees. Such customers,
members or employees receive a Countdown card (typically a co-branded card) and
a directory for use as in the case of individual membership described above. The
annual fee charged on a wholesale basis is typically 10% or less of the
individual annual membership fee, and corporate contracts typically have a term
of one to three years.

The Countdown corporate loyalty-marketing program operates as follows:

      o     A corporate client wishes to secure the loyalty of an existing
            customer and retain them as a customer;

      o     The corporate client operates in a competitive environment and must
            have a differentiating factor, as compared to its competitors, to
            dissuade its customers from migrating to a competitor;

      o     Countdown suggests a unique benefit package from its portfolio of
            benefits, tailored to the profile of the corporate client's typical
            customer, for the corporate client to offer to its customers;

      o     Countdown proposes a unique program for the corporate client of
            consumer benefits such as a package of discount dining, discount
            shopping in particular retail outlets and savings on theater and
            theme park entertainment;

      o     To obtain these benefits, the corporate client's customer must
            present a Countdown card which he or she receives from the corporate
            client for being a customer of the corporate client;

      o     Countdown contracts with the corporate client to issue a
            "Countdown/Corporate client" branded Countdown card to the corporate
            client's customers which will enable them to obtain the agreed upon
            benefits;

      o     Because the benefit package has been designed for, and with the
            corporate client's customer in mind, none of the corporate client's
            competitors can offer the same package of benefits;

      o     The corporate client's customer must remain loyal to the corporate
            client to gain access to, and receive, the benefits offered,

      o     The corporate client pays Countdown an annual fee for each
            "Countdown/Corporate client" branded Countdown card issued.

Countdown has approximately 75,000 participating merchants worldwide from over
45 different retail categories including clothing, household and leisure goods
and services. Countdown does not pay or receive any fee or royalty to or from
participating merchants. Countdown benefits from merchant participation by being
able to offer a wider range of discount opportunities to its members.
Participating merchants are carefully selected and benefit by attracting
incremental business.


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<PAGE>

Countdown also operates a voucher system with United Kingdom based participating
merchants and others. This segment of the business involves Countdown purchasing
gift vouchers from major retailers which can be used to pay for goods and
services at such major retailer's outlets. Countdown sells such vouchers to its
members who can use the vouchers at face value to make purchases from the
issuing retailer. These vouchers are typically sold by Countdown to its members
at a discount from face value of approximately 5% - 10%.

Although the Company has significant influence over the operating and financial
decisions of Countdown, TME has effective control over the operations of
Countdown. Accordingly, Countdown's operations are accounted for under the
equity method in the financial statements of the Company.

Logan Leisure/Porkpine

Porkpine operates two businesses trading as Logan Leisure and Logan Leisure &
Entertainment. Both businesses produce and sell books of vouchers ("Voucher
Directories") which entitle the holder to discounts and savings on a range of
products and services including hotel accommodation, restaurants, golf clubs and
general merchandise. Logan Leisure, which operates in Northern Ireland, and
Logan Leisure and Entertainment, which operates in the Republic of Ireland,
negotiate discounts from a range of suppliers of goods and services who agree to
the inclusion of a voucher representing such discount in the Voucher Directory.
Voucher Directories are produced annually and are sold to consumers for
approximately $160. To take advantage of a particular discount, the consumer
extracts the relevant voucher from the Voucher Directory and presents it to the
merchant at the point of sale with his or her membership card.

Although the Company has significant influence over the operating and financial
decisions of Porkpine, TME has effective control over the operations of
Porkpine. Accordingly, the operations of Porkpine are accounted for under the
equity method in the financial statements of the Company.

Countdown USA

Healthcare products and services are the cornerstone of the Countdown USA
benefit programs. These products and services include mail order and retail
pharmacy, eye care and hearing products, medical supplies and equipment. In
addition to its healthcare products and services, Countdown USA offers a range
of leisure benefits including a golf discount program, a hotel/motel discount
program, theme park/ movie theater discount program and a "lowest price"
telephone based home shopping program. These benefit programs are marketed to
individuals, corporations and affinity groups throughout the United States.

Although the Company has significant influence over the operating and financial
decisions of Countdown USA, TME has effective control over the operations of
Countdown USA. Accordingly, the operations of Countdown USA are accounted for
under the equity method in the financial statements of the Company. On March 23,
1999 Countdown USA changed its name to Countdown USA, Inc.

E-Commerce and Internet Services Business

The Company's e-commerce and internet services business is comprised of its
subsidiary MonsterBook and the Countdown-arcade division of the Company's
affiliate Countdown, which is jointly owned by the Company and TME.

Countdown-arcade


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In November 1998 the Company and TME launched an Internet shopping and services
program, Countdown Arcade. Management believes that the development of an
e-commerce business is key to the future success and growth of the Company.
Management further believes that the Countdown-Arcade can be developed to become
a full online international shopping web site offering a broad range of
merchandise and services at discounted prices by utilizing the existing
Countdown participating merchant base. Countdown Arcade, can be found on the
World Wide Web at http://www.countdownarcade.com. Countdown-Arcade offers the
ability to purchase a range of consumer products over the Internet, primarily
from UK suppliers. Countdown Arcade acts as an online aggregator of products and
services supplied participating Countdown merchants. The business is not
involved with owning or warehousing inventory. Shipment of products is handled
by the participating Countdown merchant when a transaction is executed on the
Countdown Arcade website.

New products and services are added continuously to the Countdown Arcade. In
addition, members have the ability to search for merchandise on a
country-by-country basis through a Countdown Arcade link to the Countdown
database of participating merchants outside the UK. The Countdown Arcade
includes a variety of consumer products at deeply discounted prices as well as a
number of services including discounted gift vouchers and a full on-line travel
service.

The Countdown Arcade is available to both members and non-members of the
Countdown program. However, while non-members can make purchases, they cannot
take advantage of the discounts offered unless they become a Countdown member,
which they can do over the Internet at any time.

The Countdown Arcade is also offered as a co-branded product to add additional
services to third party web sites. The software developed is proprietary to the
Company and TME and offers the opportunity for licensing to third parties on a
global basis.

MonsterBook

On April 13, 2000, Transmedia Asia Pacific acquired MonsterBook. MonsterBook is
a provider of printed and online business-to-consumer and business-to-business
Internet e-business directory. MonsterBook's headquarters are located in San
Francisco, California. Founded in February 1999, the company combines
traditional printed directory advertising with the flexibility and growth of the
Internet to create an easy to use, multi-platform guide for consumers to locate
businesses on the web. MonsterBook currently has over 1.2 million subscribers
(750,000 in the United States) registered to receive the printed directory and
more than 5,500 businesses, in over 300 product and service categories, were
listed in the latest edition of the directory. To date the Company has printed
and distributed approximately 115,000 printed directories. The MonsterBook is
delivered free to e-consumers who request their own copy at MonsterBook.com. The
online directory at http://www.monsterbook.com averages approximately 4,500
unique visitors per month.

The MonsterBook suite of products and services provide a complete advertising
solution for businesses of all types to reach a broad consumer base on the
Internet, while providing a more comprehensive solution than traditional
Internet search engines for consumers. The business today comprises (i)
MonsterBook, a printed e-business directory which is a yellow-pages style
business directory for e-commerce distributed to Internet consumers who request
the directory at the MonsterBook website and (ii) MonsterBook.com a find-engine
for e-commerce website targeted to provide consumers with easy and complete
access to e-


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commerce related products and services on the Internet. The website combines
content from the MonsterBook with Internet and yellow page search results.

The MonsterBook online service at www.monsterbook.com is the online companion to
the MonsterBook directory. The Online service offers the same expansive listings
found in the MonsterBook, with the added benefits of special promotions and
shopping tools. The MonsterBook.com online shopping tour allows e-consumers to
quickly and easily move from merchant to merchant within a selected category.

Currently there are four other products available to MonsterBook's subscribers
and advertisers: (i) periodic subscriber emails, (ii) banner advertising, (iii)
inserts with the printed directory and (iv) direct mail promotions. A periodic
email is sent to allow subscribers to participate in promotions offered by
MonsterBook advertisers.

MonsterBook promotes its services to businesses and consumers. Sales and
marketing efforts are currently focused on generating advertising revenue.
MonsterBook utilizes both internal and outsourced services to generate business
customers. Within the media sales industry there are a number of corporations
with established connections who can be contracted to promote MonsterBook's
online and offline products. MonsterBook is currently in the process of
selecting list management corporations to provide this service. In addition to
outsourcing sales, four other methods are currently being used by MonsterBook to
generate advertising revenue (i) The Yellow Pages Publishers Association (YPPA),
(ii) viral marketing, (iii) promotional swaps and (iv) partnerships. MonsterBook
is a member of YPPA, and uses their nationwide sales network to spur
participation in the prototyping campaign. Viral marketing has attracted over
1,500 businesses to MonsterBook. Promotional swaps allow MonsterBook to trade
print, banner or email for similar promotion to the business networks of other
companies.

Direct Marketing Business

The Company's direct marketing business is comprised of its affiliate DBS Direct
which is jointly owned by the Company and TME.

DBS Direct is headquartered in Seattle where it commenced operations in July
1998. DBS Direct has the right, on a preferred basis, to provide localized
turn-key sales and installation services for DirecTV, a leading provider of
digital, "direct-to-the-home" multi-channel video programming services in the
United States. The DBS Direct contracts with DirecTV and its programming partner
allowed it to become the first nationwide telemarketing, door-to-door sales and
full-service installer of DirecTV's Digital Broadcast Satellite in the United
States. DBS Direct has three contracts with DirecTV, one covering Single Family
Units ("SFU's"), one covering Multi-Dwelling Units ("MDU's") and the third
covering commercial establishments such as hotels and restaurants.

Through July 2000 DBS Direct operated as a direct to consumer seller of DirecTV
through a network of regional sales offices. DBS Direct had five sales offices,
two in Seattle, two in Chicago and one in Los Angeles. In addition, DBS Direct
had appointed a franchisee in Phoenix, Arizona. DBS Direct paid a commission to
its franchisee for each DirecTV system sold.

In July 2000 management conducted a strategic review of the DBS Direct business
and concluded that its operating focus should be to market DirecTV through
affinity groups rather than direct to consumers via regional sales offices. This
change in marketing strategy was


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<PAGE>

developed to reduce the operating costs of the business and the total cost per
sale of a DirecTV system. In August 2000 DBS Direct closed its regional sales
offices and concluded a number of affinity marketing contracts. As of the date
hereof, DBS Direct is marketing the DirecTV product through a number of affinity
channels including Movers Guide, AFL-CIO and AARP. DBS Direct markets to the
members of such affinity groups through in-bound and outbound telemarketing,
mailings, publications and credit card statement inserts. DBS Direct offers
customers a full professional installation service, which it has outsourced from
an unaffiliated third party. As a result of the change in marketing strategy DBS
Direct has achieved significant sales growth in the first quarter of fiscal 2001
at reduced cost.

Although the Company has significant influence over the operating and financial
decisions of DBS Direct, TME has effective control over the operations of DBS
Direct. Accordingly, the operations of DBS Direct are accounted for under the
equity method in the financial statements of the Company.

Acquisitions

NHS

On December 2, 1997, Transmedia Australia purchased 51% of the shares of common
stock of NHS. NHS purchased the net assets and business of Nationwide. The total
consideration paid by Transmedia Australia for its 51% interest in the equity
capital of NHS was Aus$6,000,000 (approximately $4,290,000 as of December 2,
1997). Transmedia Australia also agreed to purchase the balance of the equity
capital of NHS for Aus$2,500,000 (approximately $1,787,500) on June 30, 1998
with the right to extend such obligation ("Balance Obligation") until September
30, 1998. Transmedia Australia agreed to pay interest at 5% per annum on the
Balance Obligation for the three months ended September 30, 1998. Transmedia
Australia exercised the extension right. In addition, the Company and TME agreed
to pay Aus$4,000,000 in sign-on fees to the two former executive directors of
Nationwide, payable in two equal installments. The first installment was payable
on January 31, 1998 and the second installment was due for payment on June 30,
1998 but was deferred until September 30, 1998.

Transmedia Australia was unable to make the payments due on September 30, 1998.
However, Transmedia Australia commenced negotiations with Nationwide and on
October 21, 1998 reached an agreement pursuant to which the settlement date for
the Balance Obligation and the final settlement of the sign-on fees was extended
to November 16, 1998. In addition, the second installment of the sign-on fees
was reduced from Aus$1 million for each of the Company and TME (a total of Aus$2
million) to Aus$500,000 for each of the Company and TME (a total of Aus$1
million). Finally, it was agreed that the employment contracts of Messrs.
Bostridge and Swinbourn be terminated effective November 16, 1998 upon payment
of three months salary to each. On November 17, 1998 the Balance Obligation, the
reduced final installment of the sign-on fees and the three months salary to
Bostridge and Swinbourn were paid in full. In addition, accrued interest in the
amount of Aus$47,557 (approximately $29,960) was paid.

The final payments to Nationwide and Bostridge and Swinbourn were funded from
the proceeds of a One Year Secured Promissory Note ("Promissory Note") in the
principal sum of $3.4 million executed on November 16, 1998 between the Company
and FAI General Insurance, a shareholder of the Company. Interest on the
Promissory Note accrued at the rate of 10% per annum and was payable quarterly
in arrears. The Promissory Note was secured by a charge over Transmedia
Australia and was guaranteed by TME. FAI General Insurance received a three-year
warrant to purchase 1 million shares of Common Stock at an exercise price of
$1.00 per share. In addition, the Company agreed to exchange warrants to
purchase 633,366 shares of Common Stock at exercise prices of $1.00 to $1.40,
already held by the


                                       11
<PAGE>

Promissory Note holder, for a warrant to purchase 633,366 shares of Common Stock
at an exercise price of $1.00. The warrant is exercisable at any time from
November 16, 1998 through November 15, 2001. The Promissory Note holder also
held warrants on similar terms to purchase 633,366 shares of the common stock of
TME. Such warrants were exchanged by TME for a new warrant on the same terms as
those of the Company. Interest on the Promissory Note was paid to November 15,
1999 and the Company repaid $400,000 of principal in November 1999. On November
30, 1999 the Promissory Note holder and the Company executed a new note
representing the balance of principal of $3 million. The new note was payable on
February 15, 2000, together with accrued interest at the rate of 10% per annum.
The new note was secured by a charge over Transmedia Australia and was
guaranteed by TME. The new note was repaid in full on March 30, 2000.

DBS Direct

On June 15, 1999 the Company and TME each purchased 50% of DBS Direct.

The transaction (the "Acquisition") was consummated pursuant to an Equity
Purchase Agreement dated May 10, 1999, as amended June 11, 1999 (the
"Acquisition Agreement") among the Company, DBS Direct, the Sellers and TME.
Prior to its amendment, the purchase agreement provided that the aggregate
purchase price to be paid by the Company would be the number of shares of Common
Stock that would constitute 16% of the issued and outstanding shares of Common
Stock after giving effect to a proposed offering of common stock by both the
Company and TME, and the aggregate purchase price to be paid by TME would be the
number of shares of TME common stock that would constitute 16% of the issued and
outstanding shares of TME common stock after giving effect to the proposed
offering. Additionally, the Company and TME each agreed to contribute $1,500,000
to the capital of DBS Direct at closing. To give the Company and TME time to
complete the offering of common stock, the equity purchase agreement was amended
such that the Company and TME each contributed $500,000 to the capital of DBS
Direct at closing and each agreed to contribute an additional $1,000,000 to the
capital of DBS Direct within 30 days of closing to fund the expansion of the
network of sales offices of DBS Direct nationally. The capital contributions of
the Company and TME at closing were used to repay existing indebtedness of DBS
Direct. The Company and TME failed to make the necessary additional capital
contributions to DBS Direct within the 30-day period. However, the Company and
TME did make periodic cash contributions to the capital of DBS Direct through
December 1999 such that on December 29, 1999 they had each contributed the
agreed additional $1,000,000. The Company issued 4,589,732 shares of Common
Stock in exchange for its 50% interest in DBS Direct and TME issued 4,831,057
shares of its common stock in exchange for the remaining 50% interest in DBS
Direct.

The purchase agreement also provides that in the event the proposed merger of
the Company and TME is consummated and the 9,420,789 shares of the Company's
Common Stock issued to the sellers (assuming the conversion of TME common stock
into Company Common Stock on a ratio of 1 for 1) is less than 16% of the issued
and outstanding shares of Transmedia Asia Pacific common stock as of the
effective date of the merger (excluding the sellers' 9,420,789 shares), then the
Company must issue the sellers additional shares of Common Stock such that the
aggregate number of shares of Company Common Stock issued to the sellers equals
16% of the issued and outstanding shares of Company Common Stock as of the
effective date of the merger (excluding the sellers' 9,420,789 shares). Based on
the number of shares of Company Common Stock and TME common stock issued and
outstanding as of January 11, 2001, assuming such date to be the effective date
of the merger, the sellers will have been issued approximately 13.4% of the
issued and outstanding shares of Company Common Stock as of the effective date
of the merger (excluding the sellers' 9,420,789 shares), and the Company would
have to issue 3,974,301 additional shares of Common Stock to the sellers. The
Company is currently in negotiation with the Sellers' and the Sellers' have
agreed in principle that, in the event that the proposed merger is consummated,
the Company's obligation to issue additional shares of Common Stock to the
Sellers', will be restricted to a maximum of one million shares of Common Stock.
However, there can be no assurance given that final agreement will be reached
with the Sellers', prior to consummation of the proposed merger.


                                       12
<PAGE>

Pursuant to the terms of the Acquisition Agreement, William D. Marks entered
into an employment agreement with DBS Direct and joined the board of directors
of the Company and TME. Mr. Marks resigned as a director of TME on October 25,
1999. The employment agreement was for a period of three years and provided for
an annual salary of $175,000. Mr. Marks served as President of DBS Direct under
the terms of the employment agreement until his resignation in June 2000, at
which time the employment agreement was terminated.

MonsterBook.com

On April 13, 2000 (the "Effective Date") the Company, Asia Merger Sub II, Inc.,
a wholly owned subsidiary of the Company ("Merger Sub"), and MonsterBook
consummated a merger (the "Merger") of Merger Sub with and into MonsterBook
pursuant to which MonsterBook became a wholly owned subsidiary of the Company.
The Merger was consummated pursuant to the terms of an Agreement and Plan of
Merger (the "Merger Agreement"), dated as of March 8, 2000, by and among the
Company, Merger Sub, MonsterBook and William H. McKee and Frank T. Vega. The
merger was accounted for as a purchase.

Pursuant to the terms of the Merger Agreement, as of the Effective Date, each of
the outstanding shares of common stock of MonsterBook, par value $0.0001 per
share, was converted into the right to receive either (a) $0.27105114 in cash,
without interest (the "Cash Consideration") or (b) 0.0735054 of a share of
Common Stock of the Company, par value $0.00001 per share (the "Stock
Consideration" and, together with the Cash Consideration, the "Merger
Consideration"). The Merger Consideration was negotiated by the parties at the
time they entered into the Merger Agreement. The Stock Consideration issued by
the Company was approximately 2,962,773 shares of Common Stock, and the Cash
Consideration paid by the Company was approximately $138,000. Based on the
average price of the Company's common stock on the two days pre and post April
13, 2000 of $4.17 per share, the Stock Consideration had a value of
approximately $12,355,000, and the Merger Consideration had a value of
approximately $12,493,000. Additionally, the Company incurred legal fees
totaling approximately $17,000 to complete the acquisition. The funds used by
the Company to pay the Cash Consideration were supplied by the Company's working
capital. In addition, the Company converted existing MonsterBook options into
options to acquire approximately 362,749 shares of the Company's Common Stock.

Business Disposition

On December 8, 2000 the Company sold its travel services business, located in
Australia, to an unaffiliated third party. The travel services business was
owned and operated by Taste Card Pty Limited (formerly known as Transmedia
Australia Travel Holdings Pty Limited) a subsidiary of the Company jointly owned
by the Company and TME. The travel services business historically consisted of
Breakaway and Teletravel. In April 2000 the business of Teletravel was
re-branded as Co-travel, transferred to Breakaway and became a subsidiary of
Breakaway. On December 8, 2000 Taste Card Pty Limited sold Breakaway.

The transaction was consummated pursuant to the terms of a Share Sale Agreement
dated as of December 8, 2000, by and among the Company, Taste Card Pty Limited,
Online Travel Corporation Pty Ltd ("Online Travel"), Concorde International
Travel Limited ("Concorde"), Online Travel Corporation plc, Transmedia Australia
Pty Ltd, Breakaway and Transmedia Europe, Inc. Pursuant to the terms of the
Share Sale Agreement on December 8, 2000 Taste Card Pty Limited sold 90,000
ordinary shares of Breakaway, being the entire issued and outstanding capital
stock of Breakaway to Online Travel and Concorde. The consideration paid by
Online Travel and Concorde comprised (i) Aus$100,000 in cash (approximately
US$60,000) subject to increase or decrease by an amount equal to the
shareholders' funds of Breakaway as of December 8, 2000 and (ii) 200,000
ordinary shares of the capital stock of Online Travel Corporation plc, a company
listed on the AIM Market on the London Stock


                                       13
<PAGE>

Exchange (the "Share Consideration"). Based on the market price of the Online
Travel Corporation plc ordinary shares on December 8, 2000 of approximately
US$0.64 per share, the Share Consideration had a value of approximately
US$128,000. The shareholders' funds of Breakaway as of December 8, 2000 totaled
Aus$34,000 (approximately US$20,000) and therefore the consideration had a total
value of approximately US$208,000.

Other significant provisions of the Share Sale Agreement included (i) agreement
by the sellers not to dispose of the Share Consideration in the open market
during the six month period commencing December 8, 2000, (ii) the sellers having
the right, three months after December 8, 2000, to sell the Share Consideration
in a single tranche with the prior written approval of Online Travel Corporation
plc using a stockbroker nominated by Online Travel Corporation plc and (iii)
Transmedia Australia Pty Ltd granting Breakaway a license to occupy office space
at the Company's Sydney office until March 31, 2001 for an occupation fee of
Aus$10,000 per month (approximately US$).

Competition

The "membership based" benefits and loyalty marketing business is highly
competitive. The Company competes with a number of other operators, both
internationally and in the individual countries in which it operates. The
Company's competitors range from small private companies to major corporations
who collectively offer a full range of "membership based" benefit programs. Such
benefit programs include discount shopping, hotel accommodation, travel, dining,
and leisure activities. Additionally, the Company competes with other telephone
helpline service operators and loyalty reward programs.

NHS competes with other helpline service providers and membership based benefit
providers. NHS also competes with its product and service providers who promote
their businesses independently of their arrangements with NHS. The principal
methods used by NHS to compete effectively are beneficial prices, quality of
service and the range of products and services offered. The market sector
serviced by NHS is highly attractive to new entrants, particularly insurance and
financial services providers who are seeking to diversify their product
offerings.

The Company's affiliate, Countdown, competes directly with a full range of
discount shopping programs offered by a number of other operators. The Company
believes that the Countdown program, with over 75,000 participating merchants in
28 countries, is broader based than the programs offered by its competitors.
Management believes that the size of its merchant base, the international spread
of such merchants and its varied communication channels such as in-store
shopping, special offers, telephone shopping services and the internet, give
Countdown an advantage over its competitors. The merchant base and program
pricing are the principal methods used by Countdown to retain existing business
and secure new business opportunities over its competitors.

The e-commerce and Internet services business is also highly competitive. While
the Company's e-commerce business competes with other online discount shopping
and services businesses, management believes that the combination of its
proprietary software, its international network of merchants and the range of
product and service providers uniquely position the Company in this sector.

MonsterBook competes with other online and offline directory businesses. Offline
competitors comprise companies that provide directories of e-businesses offering
products and services online. Such companies range from those who charge
e-businesses a listing fee and give the directory to consumers free to those who
charge both e-businesses and consumers to various publications such as "The Best
Online Shopping". The differentiating factors between these competitors are the
number and range of e-businesses listed, ease of use


                                       14
<PAGE>

and pricing models, e.g. the listing fees charged to e-businesses and the cost
to the end user of the directory. Online, MonsterBook competes with a host of
search engine and e-business and shopping directory web sites. The
differentiating factors between these competitors tend to be ease of use and web
site functionality. Additionally, the range and number of e-businesses listed is
a significant differentiating factor.

DBS Direct competes with retail distributors of DirecTV in the United States.
However, its position as an affinity marketer of the DirecTV product
differentiates it significantly from its competitors. DBS Direct prices the
DirecTV product very competitively and benefits from the customer's loyalty to
the relevant affinity group.

The Company is not aware of any dominant operators in its business sector and
geographical markets. However, many of the Company's competitors have
substantially greater financial, personnel, technological, marketing,
administrative and other resources than the Company.

Intellectual Property

COUNTDOWN is a registered trademark of the Company's affiliate, Countdown
Holdings Limited. Countdown has been established for over 28 years and
management believes that the business of Countdown is, to some extent, dependent
on the consumer goodwill and the recognition attaching to the Countdown name.
The trademark is registered and protected in all countries of operation.
Countdown-Arcade operates using proprietary software developed in-house and
wholly owned by the Company and TME. Additionally, MonsterBook is using
proprietary software developed in-house.

Employees

As of September 30, 2000 the Company employed 51 full-time and 8 part-time
employees. None of the Company's employees is represented by a labor union, and
the Company considers its employee relations to be good.

ITEM 2. PROPERTIES.

The Company currently leases office space totaling approximately 11,000 square
feet at 19-31 Pitt Street, Sydney, Australia. The lease expires on August 31,
2004. The rental obligation is approximately Aus $345,000 ($205,000) per annum.
In the fourth quarter of 1998 the Company relocated all its Sydney based
businesses to the Pitt Street office.

Through December 1999 the Company and TME shared offices totaling approximately
2,500 square feet located at 11 St James's Square, London, England. In December
1999 the Company and TME reduced space usage to approximately 1,100 square feet
by sub-letting the ground floor. In June 2000 a lease of the fourth floor at 11
St James's Square, London was executed providing the Company and TME with an
additional 1,200 square feet (approximately) of office space. The leases are
held by TME. The leases expire in February 2004. During the fiscal year ended
September 30, 2000 the Company reimbursed TME the sum of $74,003 (1999: $70,991)
in respect of its share of the rent and service charge cost.

In April 2000 the Company decided to locate its corporate offices in San
Francisco and executed a lease pursuant to which it leases office space totaling
approximately 20,000 square feet at 50 California Street, San Francisco,
California. The lease commenced in October 2000 and expires in October 2010
although the Company has the right to renew the lease for an additional
five-year term. The annual rent payable is approximately $1,546,272, subject to


                                       15
<PAGE>

adjustment as provided in the lease. The Company advanced a security deposit in
the sum of $1.4 million to the landlord in April 2000. The Company subsequently
decided not to re-locate to San Francisco and commenced negotiations with the
landlord of 50 California Street, San Francisco to cancel the lease. As of the
date hereof, agreement has been reached in principal with the landlord to
terminate the lease. The landlord and the Company have agreed a liquidated
damage amount of $630,000 for the termination of the lease, which will be
deducted from the security deposit on termination. Additionally, the landlord
has agreed that no rent will be payable for the months of December 2000 and
January 2001.

MonsterBook.com currently leases office space totaling approximately 6,000
square feet at 555 Beach Street, San Francisco, California. The annual rent
payable is approximately $72,000. The lease expires in April, 2002.


                                       16
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company and its subsidiaries are subject to legal
proceedings and claims in the ordinary course of business.

On September 29, 1999 NAMA of Texas filed a civil action against the Company,
TME and Countdown USA in Harris County, Texas. NAMA of Texas is a licensee of
NAMA, a business acquired by the Company and TME through Countdown USA in
November 1998. NAMA of Texas claimed breach of contract pursuant to a License
and Consulting Agreement for the provision, by NAMA, of medical and other
benefit programs to NAMA of Texas. NAMA of Texas claimed damages for loss of
business and income in the sum of $5 million, punitive damages in the sum of $3
million, interest, attorney fees and all costs including court costs. The
Company, TME and Countdown USA filed their original answer on November 5, 1999
and on November 12, 1999 filed a Notice of Removal to federal court. The federal
court ordered an initial pre-trial conference for May 18, 2000. At the pre-trial
conference the judge dismissed the case against the Company and TME with the
condition that, should Countdown USA ultimately lose the case and not be capable
of paying any judgment against it, the Company and TME could be joined again. In
November 2000, at the direction of the judge, Countdown USA and NAMA of Texas
entered into negotiations to resolve the dispute and agreement was reached which
provided for a dismissal of all complaints with each party bearing their own
legal costs. An Order To Dismiss With Prejudice was issued by the court on
December 13, 2000.

The Company and TME are engaged in a dispute with Edward J. Guinan, III, former
Chief Executive Officer of the Company and TME, with respect to amounts which
TME claims Mr. Guinan owes to TME totaling approximately $347,000 and with
respect to amounts which Mr. Guinan claims are owed to him by the Company of
approximately $237,000 and by TME of approximately $237,000. The amounts claimed
by Mr. Guinan represent salary from August 1, 1999 through February 28, 2001
calculated at an annual rate of approximately $150,000 from each of the Company
and TME. Mr. Guinan's employment contracts with the Company and TME, dated March
2, 1998, reduced his annual salary to approximately $75,000 per annum in each
company and granted him options to purchase 2.5 million shares of each the
Company's and TME's common stock at an exercise price of $1.00, subject to
shareholder approval. Based on other employment, the Company considers Mr.
Guinan's employment agreement to have terminated on September 30, 1999. Mr.
Guinan's attorneys have challenged this position and have also asserted a claim
for $250,000 being the amount of a loan he claims to have advanced to the
Company's affiliate, DBS Direct, in April 1999. Additionally, Mr. Guinan's
attorneys are claiming replacement of, or cash compensation for, 200,000 shares
of the common stock of each of the Company and TME pledged and lost by him in an
aborted joint acquisition by the Company and TME and 2,000,000 shares of the
Company's Common Stock pledged by him to secure a short-term loan advanced by an
unrelated third party to TME in 1998. Mr. Guinan's employment contracts referred
to above included the grant of the options described above in consideration for
his agreeing to a reduction in salary and to compensate Mr. Guinan for pledges
of shares of the common stock of each of the Company and TME owned by him and to
induce him to make further pledges in the future of his shares for the benefit
of the Company and TME. No legal action has been commenced by the Company or Mr.
Guinan. At this time, the Company cannot determine when and if this dispute can
be resolved or what net amount, if any, will be received from Mr. Guinan or paid
to Mr. Guinan by the Company and TME.

The Company and TME are engaged in a dispute with Carl Freyer, a former director
and consultant to the Company and TME. Mr. Freyer claims that an agreement was
reached in December 1999 pursuant to which his affiliate, Caribbean Basin
Capital Consultants, Inc. ("CBCC"), was granted warrants in each of the Company
and TME to purchase shares of their respective common stock at an exercise price
of $0.875 per share plus cash payments of


                                       17
<PAGE>

$200,000, in aggregate in lieu of prior compensation arrangements. The Company
and TME assert that there is no such valid agreement and that the only rights of
Mr. Freyer, or his affiliate, relate to the Company's and TME's obligation to
each submit for shareholder approval, warrants previously granted by each
covering 300,000 shares of their respective common stock, exercisable at $1.00
per share. On August 30, 2000, CBCC filed a complaint against the Company and
TME in the United States District Court - District of Connecticut alleging,
inter alia, breach of contract and claiming compensatory damages in an amount to
be determined at trial (but in excess of $5,000,000), restitution, punitive
damages, costs of the action and such other and further relief as the Court
deems just and proper. The Company and TME filed their answer on October 20,
2000 denying all the material allegations in the complaint and demanding
judgment against CBCC dismissing the complaint in its entirety, with prejudice,
awarding the Company's and TME's costs of the action and such other and further
relief as the Court deems just and proper. The proceeding is currently at
discovery stage. The Company has no basis at this time for determining the
likely outcome of the proceeding.

In January 2000, Monster Cable Products, Inc. filed a complaint in the United
States District Court, Northern District of California, San Jose Division
against the Company's wholly owned subsidiary, MonsterBook, alleging, inter
alia, that MonsterBook (a) infringes plaintiff's trademark rights in and to the
mark MONSTER and the Monster family of marks, (b) dilutes plaintiff's trademark
rights under the Lanham Act and (c) is engaging in unfair competition under both
federal and California law by use in commerce of said marks. The suit seeks
injunctive and monetary relief in excess of $300,000. In February 2000,
MonsterBook filed its answer, denying all of the material allegations in the
complaint and asserting that there can be no likelihood of confusion because,
among other reasons, plaintiff's purported marks are weak and the differences in
the products and services of the parties make confusion highly unlikely. In
February 2000, the parties served their initial discovery disclosures pursuant
to federal and local court rules and have selected mediation of the dispute. As
of the date hereof the parties are in negotiation to settle the dispute.

Except as disclosed above, the Company is not aware of any material pending
legal proceedings or claims against the Company or any of its subsidiaries.

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

No matters were submitted to a vote of stockholders of the Company during the
fourth quarter of the year ended September 30, 2000.


                                       18
<PAGE>

                                     PART II

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

(a)   Market Information. The Company's Common Stock is traded on the Nasdaq
      SmallCap Market under the symbol "MBTA". The following table sets forth
      the high and low bid prices as reported on Nasdaq for the periods
      indicated below. These quotations have been obtained from Nasdaq
      Quotations through September 30, 2000.

      Quarter ended                            High             Low

      December 31, 1998                        2.500           1.000
      March 31, 1999                           1.969           0.625
      June 30, 1999                            1.875           0.281
      September 30, 1999                       1.938           0.875

      December 31, 1999                        4.563           0.750
      March 31, 2000                           6.875           2.688
      June 30, 2000                            6.000           2.094
      September 30, 2000                       3.156           1.313

      December 31, 2000                        1.437           0.250

(b)   Holders. As of January 11, 2001 there were approximately 226 holders of
      record of Common Stock. The Company is aware that a significant number of
      beneficial owners of Common Stock hold their shares in "street name". The
      number of round lot holders of the Common Stock as of January 4, 2001 was
      reported by ADP Proxy Services to be 1,014.

(c)   Dividends. Holders of Common Stock are entitled to dividends when, as, and
      if declared by the Board of Directors out of funds legally available
      therefor. The Company has not paid any cash dividends on its Common Stock
      and, for the foreseeable future, intends to retain future earnings, if
      any, to finance the operations, development and expansion of its business.
      Future dividend policy is subject to the discretion of the Board of
      Directors.

Recent Sales of Unregistered Securities

On February 1, 1998 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on April 30, 1998 upon the sale of 1,950,000 shares of Common Stock at $1.25 per
share resulting in net proceeds to the Company of $2,437,500. For every three
shares purchased each subscriber received a warrant to purchase one share of
Common Stock at an exercise price of $1.00 per share for no additional
consideration. The warrants are exercisable at any time after issuance for a
period of three years.

On April 29, 1998 the Company engaged in a private placement of securities. The
placement was made pursuant to the exemption from registration afforded by
Section 4(2) of the Securities Act of 1933, as amended, and Regulation D
promulgated thereunder. The placement consisted of three 250,000 pounds sterling
(approximately $425,000) face amount 8% promissory notes payable on November 1,
1998 and one 200,000 pounds sterling


                                       19
<PAGE>

(approximately $340,000) face amount 8% promissory note payable on the same
date. The holders of the 250,000 pounds sterling promissory notes each received
a three and a half year warrant to purchase 41,660 shares of the Common Stock at
an exercise price of $2.00 per share and the holder of the 200,000 pounds
sterling promissory note received a warrant to purchase 33,328 shares on the
same terms. The Company failed to pay the promissory notes on the due date and
accordingly, pursuant to the terms of the promissory notes, the holders each
received additional warrants for the same number of shares and exercisable on
the same terms as the original warrants. The warrants are exercisable at any
time after issuance through November 1, 2001. The Company has now repaid all the
promissory notes in full, together with accrued interest. In consideration for
extending the time available to the Company to repay the balance of the
promissory notes, two of the note holders received additional warrants to
purchase in aggregate 74,988 shares of Common Stock at an exercise price of
$1.00 per share. Such warrants are exercisable at anytime through November 1,
2001. In addition, the Company agreed to adjust the exercise price of all
warrants issued to the four note holders to $1.00 per share.

On October 16, 1998 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on November 30, 1998 upon the sale of 842,666 shares of Common Stock at $0.75
per share resulting in net proceeds to the Company of $632,000.

On November 17, 1998 the Company and TME executed a One Year Secured Promissory
Note ("Promissory Note") in the principal sum of $3.4 million with FAI General
Insurance, a shareholder of the Company. Interest on the Promissory Note accrued
at the rate of 10% per annum and was payable quarterly in arrears. The
Promissory Note was secured by a charge over Transmedia Australia and was
guaranteed by TME. The Promissory Note holder received a three-year warrant to
purchase 1 million shares of Common Stock at an exercise price of $1.00 per
share. In addition, the Company agreed to exchange warrants to purchase 633,366
shares of Common Stock at exercise prices of $1.00 to $1.40, already held by the
Promissory Note holder, for a warrant to purchase 633,366 shares of Common Stock
at an exercise price of $1.00. The warrant is exercisable at any time from
November 16, 1998 through November 15, 2001. The Promissory Note holder also
held warrants on similar terms to purchase 633,366 shares of the common stock of
TME. Such warrants were exchanged by TME for a new warrant on the same terms as
those of the Company. Interest on the Promissory Note was paid to November 15,
1999 and the Company repaid $400,000 of principal in November 1999. On November
30, 1999 the Promissory Note holder and the Company executed a new note
representing the balance of principal of $3 million. The new note was payable on
February 15, 2000, together with accrued interest at the rate of 10% per annum.
The new note was secured by a charge over Transmedia Australia and was
guaranteed by TME. The new note was repaid in full on March 30, 2000.

On January 25, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on February 24, 1999 upon the sale of 700,000 shares of Common Stock at $1.25
per share resulting in net proceeds to the Company of $875,000.

On February 5, 1999 the Company commenced a private placement of debt securities
pursuant to the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The
placement consisted of a $500,000 face amount zero coupon promissory note
payable on March 5, 1999. The note holder received a warrant to purchase 100,000
shares of Common Stock at an exercise price of $1.25 per share for no additional
consideration. The warrant is exercisable at any time after issuance through
February 4, 2002. The Company failed to pay the promissory note on the


                                       20
<PAGE>

due date but the holder agreed to extend the payment date to June 21, 1999. In
consideration for the additional time granted by the holder to pay the
promissory note, the Company granted the holder an additional warrant to
purchase 100,000 shares of Common Stock at an exercise price of $1.25 per share
for no additional consideration. The additional warrant is exercisable at any
time after issuance through February 4, 2002. The Company also granted the
holder the right, prior to repayment, to convert the promissory note in whole or
in part into shares of Common Stock at a conversion price of $0.75 per share. On
June 18, 1999 the promissory note holder exercised his conversion privilege and
the Company issued 666,667 shares of Common Stock in full satisfaction of the
promissory note.

On May 11, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on June 25, 1999 upon the sale of 3 million shares of Common Stock at $0.75 per
share resulting in net proceeds to the Company of $2,250,000.

On August 11, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on September 10, 1999 upon the sale of 166,666 shares of Common Stock at $0.75
per share resulting in net proceeds to the Company of $125,000.

On September 30, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on October 5, 1999 upon the sale of 625,000 shares of Common Stock at $0.65 per
share resulting in net proceeds to the Company of $406,250.

On October 21, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on November 20, 1999 upon the sale of 3,906,250 shares of Common Stock at $0.80
per share resulting in net proceeds to the Company of $3,125,000.

During the year ended September 30, 2000 the Company issued 55,370 shares of
Common Stock upon exercise of warrants resulting in net proceeds to the Company
of $97,036.

On March 27, 2000 the Company sold, in a private placement (the "Placement")
pursuant to the exemption from registration afforded by Section 4(2) of the
Securities Act of 1933, as amended, and Regulation D promulgated thereunder,
10,000 shares of a newly designated Series A Convertible Preferred Stock, par
value $.01 ("Preferred Shares") resulting in net proceeds to the Company of
approximately $9,350,000. In connection with the Placement the Company paid due
diligence costs of $50,000 in cash and granted to the purchasers of the
Preferred Shares five year warrants to purchase in aggregate 385,542 shares of
Common Stock at an exercise price of $6.225 per share. Additionally, the Company
paid a cash fee of $600,000 for services in connection with the Placement and
granted them five year warrants to purchase an aggregate of 250,000 shares of
Common Stock at an exercise price of $6.225 per share. The value of the warrants
issued to the purchasers of the Preferred Shares totaled $1,025,542 using the
Black-Scholes model and the Company recorded such amount as preferred stock
dividends in the year ended September 30, 2000, with a related credit to
additional paid-in capital. The cash fee paid for services in connection with
the Placement was applied to additional paid-in capital. As described below, the
Preferred Shares were exchanged for convertible notes and warrants on December
13, 2000 and therefore no longer exist. Accordingly, no description of the
Preferred Shares is contained herein.


                                       21
<PAGE>

On December 13, 2000 the Company issued $10,390,000 of two year convertible
notes (the "Notes") and 2,289,155 five year warrants (the "Exchange Warrants")
in exchange for the retirement of $10,000,000 in aggregate face value of the
Company's outstanding Series A convertible preferred stock ("Series A
Preferred"), accrued but unpaid Series A Preferred dividends and registration
obligations of $390,000 and 2,289,155 five year warrants issuable to the holders
of the Series A Preferred based on prior registration obligations of the
Company. The Notes bear interest at 12% per annum payable quarterly in arrears.
Payment of interest on the first installment of the Notes is due on March 31,
2001 but may be deferred until June 13, 2001 in exchange for an interest rate on
the first installment of 15% per annum. The Notes are convertible into a maximum
of 6,800,000 shares of Common Stock. The conversion price is equal to 95% of the
average of the lowest five closing bid prices for the previous twenty trading
days determined from the date of the notice of conversion. Any principal
payments resulting from a conversion will be applied equally over all
installments due. Installments of principal are due in seven equal quarterly
installments with the first installment to be paid on June 13, 2001. The
Exchange Warrants are non-callable. The company is required to register the
6,800,000 shares subject to conversion as well as the 2,289,155 shares
underlying the Exchange Warrants.

The parties made other agreements in connection with the exchange as follows:

(i)   The Series A Preferred holders agreed not to assert any default rights on
      the prior failure by the Company to register the shares underlying the
      Series A Preferred;

(ii)  Each of the holders of the Notes agreed that they may not own at any time
      more than 3% of the Company's outstanding shares;

(iii) The Company secured its obligations under the Notes with the pledge of the
      stock of MonsterBook and DBS Direct, the guarantees of Transmedia Europe,
      Inc. MonsterBook and DBS Direct and a lien on the assets of MonsterBook
      and a subordinate lien on the assets of DBS Direct;

(iv)  The Noteholders agreed that they would not sell any securities of the
      company short so long as the Notes were outstanding; and

(v)   The Company agreed to register the shares underlying the Notes and
      Exchange Warrants and to pay a monthly fee of $90,000 per month for each
      one month period staring after March 13, 2001, if the registration is not
      effective by such date.

The issuance of the Notes and the Exchange Warrants was except from registration
pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. The
Company did not receive any additional funds as a result of the exchange.


                                       22
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The selected statements of operations and balance sheet data set forth below are
derived from the audited financial statements of the Company. The information
set forth below should be read in conjunction with the audited consolidated
financial statements of the Company and notes thereto. See Item 8, "Financial
Statements and Supplemental Data" and Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations". On December 2, 1997
the Company and TME, through Transmedia Australia, acquired a 51% interest in
NHS. On November 17, 1999 Transmedia Australia acquired the balance of the
issued and outstanding equity capital of NHS. On May 22, 1998 Transmedia
Holdings acquired Breakaway. On April 13, 2000 the Company acquired
MonsterBook.com. The results of NHS, Breakaway and MonsterBook.com have been
consolidated by the Company from the date of acquisition using the purchase
method of accounting.

Income Statement Data

<TABLE>
<CAPTION>
$'000                                    Year Ended      Year Ended      Year Ended      Year Ended      Year Ended
(except net loss per share which      September 30,   September 30,   September 30,   September 30,   September 30,
is stated in $)                                2000            1999            1998            1997            1996
<S>                                        <C>              <C>             <C>             <C>             <C>
Revenues                                   $  1,626         $ 3,560         $ 3,905         $   871         $   792

Cost of revenues                               (335)           (421)           (312)              0               0
                                           --------         -------         -------         -------         -------
Gross profit                                  1,291           3,139           3,593             871             792

Selling, general & admin. expenses           (6,653)         (5,299)         (6,639)         (3,212)         (2,448)

NHS goodwill impairment writedown            (4,316)              0               0               0               0

Impairment to Transmedia License               (630)           (260)              0            (276)              0

Depreciation and amortization                (3,046)           (941)           (442)           (161)           (371)
                                           --------         -------         -------         -------         -------
Loss from operations                        (13,354)         (3,361)         (3,488)         (2,778)         (2,027)

Share of losses and amortization of
goodwill of affiliated companies             (3,663)           (890)           (949)           (203)              0

Interest, net                                  (467)         (1,486)           (258)            (49)             19

Income (tax) benefit                            (55)             30            (188)              0               0

Minority interest                               164            (119)            143               0               0
                                           --------         -------         -------         -------         -------
Net Loss                                    (17,375)         (5,826)         (4,740)         (3,030)         (2,006)

Dividends                                    (1,933)              0               0               0               0
                                           --------         -------         -------         -------         -------
Net loss attributable to common
stockholders                               $(19,308)        $(5,826)        $(4,740)        $(3,030)        $(2,006)
                                           ========         =======         =======         =======         =======

Net loss per share                         $  (0.55)        $ (0.25)        $ (0.27)        $ (0.22)        $ (0.16)
</TABLE>


                                       23
<PAGE>

Balance Sheet Data

<TABLE>
<CAPTION>
                                    --------------------------------As of Sept. 30---------------------------

$'000                                   2000             1999             1998            1997           1996
<S>                                 <C>              <C>              <C>              <C>             <C>
Current Assets                      $  4,433         $  1,852         $  2,765         $   649         $2,065

Total Assets                          23,749           17,677           10,959           4,798          3,955

Working Capital (Deficiency)             (28)          (5,806)          (5,068)         (1,399)         1,289

Preferred stock                       10,000                0                0               0              0

Stockholders Equity                    8,508            9,958            2,496           2,750          3,179
</TABLE>

Selected Quarterly Financial Data

<TABLE>
<CAPTION>
$'000                               Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter     Quarter
(except net loss per share            Ended       Ended       Ended       Ended       Ended       Ended       Ended       Ended
which is stated in $)               9/30/00     6/30/00     3/31/00    12/31/99     9/30/99     6/30/99     3/31/99    12/31/98
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>         <C>         <C>
Revenues                            $   288     $   383     $   440     $   515     $   888     $   869     $   793     $ 1,010

Cost of revenues                        (99)       (100)        (62)        (74)       (143)        (98)        (86)        (94)
                                    -------     -------     -------     -------     -------     -------     -------     -------
Gross profit                            189         283         378         441         745         771         707         916

Selling, general & admin
expenses                             (2,545)     (1,780)     (1,334)       (994)     (1,460)     (1,330)     (1,008)     (1,501)

NHS goodwill impairment
writedown                                 0      (4,316)          0           0           0           0           0           0

Impairment to Transmedia License          0        (630)          0           0        (260)          0           0           0

Depreciation and amortization        (1,746)       (681)       (310)       (309)       (569)        (84)       (151)       (137)
                                    -------     -------     -------     -------     -------     -------     -------     -------
Loss from operations                 (4,102)     (7,124)     (1,266)       (862)     (1,544)       (643)       (452)       (137)

Share of losses and
amortization of goodwill of
affiliated companies                 (1,495)       (800)       (784)       (584)       (582)        (50)        (54)       (204)

Interest, net                           (34)        (44)       (132)       (257)     (1,225)        (46)       (112)       (103)
Income (tax) benefit                    (52)         (2)         (1)          0         (77)         35          59          13
Minority interest                       164           0           0           0        (119)          4         (34)         30
                                    -------     -------     -------     -------     -------     -------     -------     -------
Net Loss                             (5,519)     (7,970)     (2,183)     (1,703)     (3,547)       (700)       (593)       (986)

Dividends                              (777)       (130)     (1,026)          0           0           0           0           0
                                    -------     -------     -------     -------     -------     -------     -------     -------
Net loss attributable to common
stockholders                         (6,296)     (8,100)     (3,209)     (1,703)     (3,547)       (700)       (593)       (986)
                                    =======     =======     =======     =======     =======     =======     =======     =======

Net loss per share                    (0.17)      (0.24)      (0.09)      (0.05)      (0.15)      (0.03)      (0.03)      (0.06)
</TABLE>


                                       24
<PAGE>

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

The following discussion should be read in conjunction with the audited
consolidated financial statements and notes thereto, included in Item 8 of this
report, and is qualified in its entirety by reference thereto. All amounts are
stated in US$ thousand unless otherwise indicated.

General

Historically, the business of the Company was the operation of a restaurant
charge card business offering dining discounts to cardholders. In 1996 the
Company and TME decided to work closely to implement a strategy to create a
broader based international member benefits/loyalty marketing business with the
ability to design and supply of a range of member benefit programs to
corporations, affinity groups and individuals. As a result the Company currently
has established business operations in Australia and the United States and
through its affiliates, Countdown, Countdown USA, DBS Direct and Logan Leisure,
has an interest in business operations in Europe and elsewhere. This expansion
was necessary to enable the Company to offer a full range of member
benefits/loyalty marketing programs on an international scale and to compete
effectively in its markets. However, such expansion was carried out against a
background of limited cash resources. The Company has invested heavily to
acquire businesses such as NHS and its affiliates, Countdown, DBS Direct and
Logan Leisure. While such investment was necessary, it did significantly limit
working capital available to the Company's operations. Limited working capital
has significantly impacted the Company's revenues by, for example, restricting
the Company's ability to recruit and retain key sales and marketing personnel
and in its restaurant card business, add new restaurants to the program.

In 2000 management strategically reviewed each of its operating businesses and,
with TME, each of its affiliated businesses. As a result of such reviews
management decided to discontinue its restaurant charge card business in June
2000 and sold its travel services business in December 2000. In deciding not to
continue its restaurant charge card business in Australia, management considered
a number of factors including declining revenues in recent years and significant
operating losses since commencement of operations in 1994. Additionally,
management believed that its declining restaurant cardholder base in Australia
could not be rebuilt without significant investment of management time and
marketing expense. As regards the Company's travel services business, management
concluded that the travel products and services included in its loyalty programs
could be more efficiently sourced by negotiating alliances with third party
travel product and service providers. Additionally, outsourcing travel products
would enable the Company to re-deploy the working capital used by its travel
businesses, Breakaway and Teletravel.

The business of the Company today comprises three segments:

1.    The design and supply of a range of loyalty marketing and member benefit
      programs to corporations and affinity groups through NHS and its
      affiliates Countdown, Countdown USA and Logan Leisure. Additionally, the
      Company provides member benefit packages to individuals on an
      international scale through such affiliates.

2.    E-commerce and Internet services through the Internet services division of
      its affiliate, Countdown and its wholly owned subsidiary, MonsterBook. The
      Company commenced operations in this segment in fiscal 1999 although the
      operation was insignificant in that year.

3.    Direct marketing through its affiliate DBS Direct.


                                       25
<PAGE>

Management believes that each of its business segments are now structured and
are expected to achieve profitability, before taking corporate overhead into
account, in the second half of fiscal 2001. It is also projected that these
businesses will not contribute sufficient profit to cover corporate overhead
until, at the earliest, fiscal 2002.

The future success of the Company is primarily dependent upon its ability to
fund its current business operations in each of its business segments to achieve
revenue growth. In its member benefit/loyalty marketing, the Company has been
and will continue to focus its sales effort as a loyalty and affinity marketing
service to corporate clients. Management aims to build the Company's membership
base by securing contracts to provide new corporate clients with benefit based
loyalty programs for their customers, members and employees.

Management believes there is significant opportunity for the Company in its
e-commerce and Internet services business. Such opportunity includes revenue
generation, not only through Monster Book and the Countdown-Arcade shopping web
site, but also by licensing software technology to its merchant base, corporate
clients and to Countdown licensees. Such services include web site design, web
site hosting and licensing of software technology. The Company will continue to
develop and evaluate its e-commerce and Internet activities primarily through
developing business relationships with its corporate clients and others.

In July 2000 management conducted a strategic review of the Company's direct
marketing business, DBS Direct, and repositioned its operating focus to market
DirecTV through affinity groups rather than direct to consumers via regional
sales offices. This change in marketing strategy was developed to reduce the
operating costs of the business and improve margins. In August 2000 DBS Direct
closed its regional sales offices and concluded a number of affinity marketing
contracts. DBS Direct is now marketing the DirecTV product through a number of
affinity channels including Movers Guide, AFL-CIO and AARP. As a result of the
change in marketing strategy, DBS Direct has achieved significant sales growth
in the first quarter of fiscal 2001 at reduced cost.

In light of the close collaboration between the Company and TME since
incorporation and, more particularly, in view of the joint ownership of
Countdown, Countdown USA, DBS Direct, NHS, Logan Leisure and Breakaway Travel,
management of the Company and TME have executed a merger agreement, subject to
shareholder approval.

Results of Operations

Although the Company has significant influence over the operating and financial
decisions of its affiliates, TME has effective control over their operations.
Accordingly, the operations of the Company's affiliates are accounted for under
the equity method in the financial statements of the Company. As a result, the
Company does not report the revenues, gross profit or selling, general and
administrative expenses of its affiliates in its Statement of Operations line
items. The profit or loss attributable to the Company from such affiliates is
reported as a single line item, "share of profits/losses and amortization of
goodwill of affiliated companies" in the Consolidated Statement of Operations of
the Company. The effect of this accounting treatment is that the Company's
reported revenue by business segment has been as follows in the three years
ending September 30, 2000:


                                       26
<PAGE>

<TABLE>
<CAPTION>
                                            Year Ended            Year Ended            Year Ended
                                    September 30, 2000    September 30, 1999    September 30, 1998
                                    ------------------    ------------------    ------------------

                                    Revenue       % of    Revenue       % of    Revenue       % of
                                      $'000      total      $'000      total      $'000      total
Business Segment:                              revenue               revenue               revenue
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>
Member benefit/loyalty marketing      1,086       66.8      2,164       60.8      3,099       79.4
E-commerce and Internet services         63        3.9          0        0.0          0        0.0
Direct marketing                          0        0.0          0        0.0          0        0.0
Travel services                         477       29.3      1,396       39.2        806       20.6
                                      -----      -----      -----      -----      -----      -----
Total Reported Revenue                1,626      100.0      3,560      100.0      3,905      100.0
                                      =====      =====      =====      =====      =====      =====
</TABLE>

The revenues of the Company's (i) member benefit/loyalty marketing affiliates
(Countdown, Countdown USA and Logan Leisure) (ii) Internet services affiliate
(Countdown Internet Services) and (iii) direct marketing affiliate (DBS Direct)
were as follows in the three years ending September 30, 2000 but are reported in
the Consolidated Statement of Operations of TME:

<TABLE>
<CAPTION>
                                              Year Ended            Year Ended            Year Ended
                                      September 30, 2000    September 30, 1999    September 30, 1998
                                     -------------------    ------------------    ------------------

                                     Revenue        % of    Revenue       % of    Revenue       % of
                                       $'000       total      $'000      total      $'000      total
Business Segment:                                revenue               revenue               revenue
<S>                                   <C>        <C>        <C>        <C>        <C>        <C>
Member benefit/loyalty marketing       6,481        66.1      6,516       90.3      7,251      100.0
Direct marketing                       3,320        33.9        703        9.7          0        0.0
Travel Services                           --          --         --         --         --         --
                                      ------      ------     ------     ------     ------     ------
Total Reported Revenue                 9,801       100.0      7,219      100.0      7,251      100.0
                                      ======      ======     ======     ======     ======     ======
</TABLE>

The Company's reported operating loss by business segment has been as follows in
the three years ending September 30, 2000:

<TABLE>
<CAPTION>
                                                 Year Ended              Year Ended             Year Ended
                                         September 30, 2000      September 30, 1999     September 30, 1998
                                     ----------------------   ---------------------   ---------------------
                                     Operating         % of   Operating        % of   Operating        % of
                                          Loss        total        Loss       total        Loss       total
                                         $'000    operating       $'000   operating       $'000   operating
Business Segment:                                      loss                    loss                    loss
<S>                                   <C>           <C>        <C>          <C>        <C>          <C>
Member benefit/loyalty marketing       (1,080)          8.1     (1,042)        31.0       (605)        17.3
E-commerce and Internet services       (2,185)         16.3          0          0.0          0          0.0
Direct marketing                            0           0.0          0          0.0          0          0.0
Travel services                           (39)          0.3       (206)         6.1        (24)         0.7
Corporate overhead                    (10,050)         75.3     (2,113)        62.9     (2,859)        82.0
                                      -------       -------    -------      -------    -------      -------
Total operating loss                  (13,354)        100.0     (3,361)       100.0     (3,488)       100.0
                                      =======       =======    =======      =======    =======      =======
</TABLE>


                                       27
<PAGE>

The operating losses of affiliates attributable to the Company by business
segment were as follows in the three years ending September 30, 2000:

<TABLE>
<CAPTION>
                                                   Year Ended                   Year Ended                   Year Ended
                                           September 30, 2000           September 30, 1999           September 30, 1998
                                      -----------------------      -----------------------     ------------------------

                                      Operating          % of      Operating          % of     Operating           % of
                                           Loss         total           Loss         total          Loss          total
                                          $'000     operating          $'000     operating         $'000      operating
Business Segment:                                        loss                         loss                         loss
<S>                                     <C>            <C>           <C>            <C>           <C>            <C>
Member benefit/loyalty marketing          (160)           5.9          (123)          27.8          (712)         100.0
E-commerce and Internet services          (265)           9.8             0            0.0             0            0.0
Direct marketing                        (2,276)          84.3          (320)          72.2             0            0.0
Travel services                              0            0.0             0            0.0             0            0.0
                                        ------         ------        ------         ------        ------         ------
Total attributable affiliate
losses excluding goodwill
amortization                            (2,701)         100.0          (443)         100.0          (712)         100.0
                                        ======         ======        ======         ======        ======         ======
</TABLE>

Fiscal 2000 compared to Fiscal 1999

The Company generated revenues of $1,626 (1999: $3,560) in the year ended
September 30, 2000, a decrease of $1,934 or 54.3% over the corresponding period
in fiscal 1999. The Company's member benefit/loyalty marketing businesses NHS
and the restaurant card business recorded a decline in revenues of $841 and
$237, respectively. Revenues at NHS were impacted by the loss of a number of
client contracts which were not renewed when their term expired. The decline in
revenues in the restaurant card business is in part due to the business only
operating for the 9 months ended June 30, in fiscal 2000 as compared to a full
12 months in fiscal 1999. However, revenues in the restaurant card business had
been declining for some time primarily due to the Company not being able to add
new restaurants due to its inability to fund advances to such restaurants.
Additionally, in recent years the Company has conducted a rationalization of the
participating restaurant base to focus advances on more popular restaurants
among cardholders. This rationalization resulted in reduced card usage by some
cardholders. The travel services business recorded a decrease in revenues of
$919 as compared to fiscal 1999. The decrease in revenue resulted from the
Company's inability to fund marketing programs. In the absence of such marketing
the active membership base at Breakaway declined from over 50,000 to
approximately 12,000. The acquisition of MonsterBook in April 2000 contributed
revenues of $63 (1999: $nil) for the Company's e-commerce and Internet services
business.

Cost of sales totaled $335 (1999: $421) for the year ended September 30, 2000,
generating a gross profit percentage of 79.4% (1999: 88.2%). The decrease in
gross profit percentage reflected the impact of reduced gross profit percentage
achieved by NHS of 69.8% as compared to 77.3% in fiscal 1999. The restaurant
card, Internet services and travel services businesses generate a gross profit
margin of 100%.

Selling, general and administrative expenses totaled $6,653 (1999: $5,299) for
the year ended September 30, 2000, an increase of $1,354 or 25.6% as compared to
fiscal 1999. The member benefit/loyalty marketing business recorded a decrease
in selling, general and administrative expenses of $58 in fiscal 2000. NHS
recorded an increase of $144 and the restaurant card business a decrease of
$202. The increase in selling, general and administrative expenses at NHS was
primarily due to increased sales and marketing staff costs while the restaurant
card business recorded cost reductions due to the lower activity levels in
fiscal 2000 as compared to fiscal 1999. The travel services business recorded a
decrease of $1,239 in selling, general and administrative expenses in fiscal
2000 as compared to fiscal 1999. Such decrease is due to


                                       28
<PAGE>

a reduction in staff costs of $647, marketing and promotion $213, communication
expenses $166 and reduced costs generally across all expense categories due to
significantly reduced revenue levels. The cost structure in the Company's travel
services business was largely variable in line with revenue levels. The
acquisition of MonsterBook in April 2000 resulted in selling, general and
administrative expenses in the Company's Internet services business of $1,602
(1999: nil).

Corporate overhead totaled $2,807 in fiscal 2000, an increase of $1,049 or 50.2%
as compared to fiscal 1999. In addition to a non-recurring expense of $630 to
write down the carrying value of the Company's security deposit in respect of
its office accommodation in San Francisco to fair value, the Company incurred
year-on-year increases in consulting fees ($345), legal fees ($208), marketing
and promotion ($128) and travel and subsistence expenses ($106). These expense
increases primarily resulted from business segment strategic reviews, the
acquisition of MonsterBook and the proposed merger of the Company and TME. The
Company recorded a gain of $374 on termination of the TMNI license, being
forgiveness of indebtedness.

During the quarter ended June 30, 2000 the Company evaluated the carrying value
of the underlying goodwill in the Company's investment in NHS and concluded, in
light of the declining revenues, loss of significant customers and increasing
losses at NHS, that it was no longer appropriate to carry forward any goodwill
in respect of NHS in the financial statements of the Company. Accordingly, the
Company recorded an impairment loss of $4,316 in the quarter ended June 30,
2000.

Depreciation and amortization charges increased in fiscal 2000 as compared to
fiscal 1999 by $2,105. The increase was primarily due to amortization of prepaid
investment banker fees of $1,423 and amortization of the underlying goodwill in
the Company's investment in MonsterBook of $1,228.

The Company's share of losses of its affiliates Countdown, Countdown USA, DBS
Direct and Logan Leisure were $3,663 (1999: $890) for the year ended September
30, 2000, including amortization of underlying goodwill in the Company's
investment in such affiliates of $962. (1999: $447). Countdown generated a
profit of $80 before losses of $265 incurred by the Internet services division.
(1999: $56 and ($nil)). Countdown USA, DBS Direct and Logan Leisure recorded
losses of $224, $2,276 and $16 respectively. (1999: losses of $165, $320 and $14
respectively). The increase in amortization of underlying goodwill in the
Company's investment in its affiliates of $515 is due to DBS Direct goodwill
being amortized for a full 12 months in fiscal 2000 as compared to 3.5 months in
fiscal 1999.

The minority interests in the Company comprise TME's 50% interest in Transmedia
Australia and Transmedia Holdings.

The Company has net operating losses carried forward for income tax purposes. No
deferred tax benefit has been recognized for the year ended September 30, 1999.

Fiscal 1999 compared to Fiscal 1998

During the last quarter of fiscal 2000 the Company retroactively applied the
guidance in Staff Accounting Bulletin ("SAB") 101 and EITF 99-19 by reporting
certain revenues net. The adoption of the guidance in Staff Accounting Bulletin
("SAB") 101 and EITF 99-19 impacts reported revenue from the company's
restaurant charge card business which was discontinued on June 30, 2000. In the
following discussion, revenues from the Company's restaurant card business have
been retroactively restated to comply with the new standard.


                                       29
<PAGE>

The Company generated revenues of $3,560 (1998: $3,905) in the year ended
September 30, 1999, a decrease of $345 or 8.8% over the corresponding period in
fiscal 1998. The Company's member benefit/loyalty marketing businesses NHS and
the restaurant card business recorded a decline in revenues of $670 and $265,
respectively. Revenues at NHS were impacted by the loss of a number of
contracts, in particular its largest contract, which was not renewed by the
client when it expired in November 1998. Additionally, NHS was consolidated with
the Company from December 1997 and therefore fiscal 1998 covered a 10-month
period only. The decline in revenues in the restaurant card business was due in
part to the fact that the Company was not able to add new restaurants to the
program because of its inability to fund advances to such restaurants.
Additionally, lower card usage by some cardholders resulted from rationalization
of the participating restaurant base. Such rationalization was carried out to
focus advances on those restaurants which were most frequently used by
cardholders. The Company recruited additional sales and marketing staff in
fiscal 1999 to progress new business opportunities for its member
benefit/loyalty marketing businesses. The travel services business recorded an
increase in revenues of $590 as compared to fiscal 1998. This increase was
primarily due to Breakaway only being consolidated with the Company from May
1998, the date it was acquired.

Cost of sales totaled $421 (1998: $312) for the year ended September 30, 1999,
generating a gross profit percentage of 88.2% (1998: 92.0%). The decrease in
gross profit percentage reflected the impact of reduced gross profit percentage
achieved by NHS of 77.3% as compared to 87.6% in fiscal 1998. The restaurant
card and travel services businesses generate a gross profit margin of 100%.

Selling, general and administrative expenses totaled $5,299 (1998: $6,639) for
the year ended September 30, 1999, a decrease of $1,340 or 20.1% as compared to
fiscal 1998. The member benefit/loyalty marketing business recorded a decline in
selling, general and administrative expenses of $1,113 in fiscal 1999. NHS
accounted for $880 of such decrease and the restaurant card business $233. The
decrease in selling, general and administrative expenses NHS included a
reduction in doubtful debt provision of $370. Other cost decreases year on year
in the member benefit/loyalty marketing business were recorded in payroll,
professional fees and communication due to lower activity levels in fiscal 1999.
The travel services business recorded an increase of $1,008 in selling, general
and administrative in fiscal 1999 as compared to fiscal 1998 primarily due to
the impact Breakaway only being consolidated from May in fiscal 1998. Head
office expenses totaled $1,758 in fiscal 1999, a decrease of $1,235 or 41.3% as
compared to fiscal 1998. Selling, general and administrative expenses in fiscal
1998 included sign-on fees in relation to the NHS acquisition ($925
approximately) and a write-off of approximately $463 relating to an aborted
acquisition. Such year on year decreases were off set primarily by office
relocation costs of $329.

Depreciation and amortization charges increased in fiscal 1999 as compared to
fiscal 1998 by $499. The increase was primarily due to amortization of prepaid
investment banker fees ($297) and amortization of underlying goodwill relating
to the Company's acquisition of the balance of 49% of NHS in November 1998,
which has been applied effective December 1997, the date of acquisition of the
original 51% interest in NHS ($226).

The Company's share of losses of its affiliates Countdown, Countdown USA, DBS
Direct and Logan Leisure were $890 (1998: $949 Countdown and Logan Leisure only)
for the year ended September 30, 1999, including amortization of underlying
goodwill in the Company's investment in such affiliates of $447. (1998: $237
Countdown and Logan Leisure only).

The minority interests in the Company comprise TME's 50% interest in NHS and the
travel services business.


                                       30
<PAGE>

The Company has net operating losses carried forward for income tax purposes. No
deferred tax benefit was recognized in fiscal 1999 or 1998.

Liquidity and Capital Resources

The following chart represents the net funds provided by or used in operating,
financing and investment activities for each period as indicated:

<TABLE>
<CAPTION>
                                                       Twelve Months Ended
                                                       -------------------

                                            September 30, 2000       September 30, 1999
<S>                                              <C>                      <C>
Cash used in
Operating Activities                             $(3,793)                 $(3,040)

Cash used in
Investing activities                             $(2,297)                 $(2,951)

Cash provided by financing activities            $ 5,218                  $ 5,030
</TABLE>

The Company incurred a net loss of $17,375 for the year ended September 30,
2000. Such loss, adjusted for non-cash items, such as depreciation and
amortization charges $4,008, impairment write-down in respect of NHS goodwill
$4,316, write down of the TMNI license to fair value $630, forgiveness of debt
on termination of the TMNI license ($374), the Company's share of losses
incurred by its affiliates of $2,701, minority interest $719, write down of
security deposit of $630, accrued interest expense of $475, loss on sale of
fixed assets $12 and the value of shares issued on employment termination of
$137, resulted in funds used in operating activities totaling $3,793, net of
working capital movements totaling $328.

The fiscal 2000 net cash used in investing activities of $2,297 comprised the
San Francisco property lease security deposit of $1,529 and the cash elements of
the Company's investments in its subsidiary MonsterBook of $138, its affiliate
DBS Direct of $563 and fixed assets of $67. In fiscal 1999 net cash used in
investing activities of $2,951 comprised the cash elements of the Company's
investments in its subsidiary NHS $1,997, its affiliate DBS Direct $937, its
affiliate Porkpine $26, net of the proceeds of sale of fixed assets ($9).

To meet its cash requirements during fiscal 2000, the Company sold an aggregate
of 4,531,250 shares of Common Stock in equity private placements, resulting in
net proceeds to the Company of $3,531 and received net proceeds of $97 from the
exercise of warrants to purchase 55,370 shares of Common Stock. Additionally, in
March 2000 the Company sold 10,000 shares of Series A Preferred Stock resulting
in net proceeds to the Company of $9,350. Bank credit line movement contributed
a further $2. In fiscal 2000 cash generated by financing activities was
partially off set by the repayment of short-term loans, including accrued
interest, ($3,688) and advances to TME and other related parties to fund the
operations of the Company's affiliates ($4,074).

Historically, the Company's ability to grow and generate cash from operations
has been restricted by a lack of working capital and the implementation of its
strategy to create a broad based international member-benefit/loyalty marketing
business primarily through the joint acquisition of synergistic businesses with
TME. In recent months the Company has strategically reviewed each of its
operating businesses and with TME each of its affiliated businesses. Management
projects that each business will, as a result, be operating cash flow positive
by the second half of fiscal 2001. However, cash projected to be generated by
the operations of the Company's subsidiaries and affiliates in fiscal 2001 will
not be sufficient to


                                       31
<PAGE>

fund corporate overhead or the costs of the proposed merger with TME.
Additionally, on December 13, 2000 the Company issued $10,390,000 of two year
convertible notes and 2,289,155 five year warrants in exchange for the
retirement of $10,000,000 in aggregate face value of the Company's outstanding
Series A convertible preferred stock, accrued but unpaid Series A Preferred
dividends and registration obligations of $390,000 and 289,155 five year
warrants issuable to the holders of the Series A Preferred based on prior
registration obligations of the Company. The notes bear interest at 12% per
annum payable quarterly in arrears. Payment of interest on the first instalment
of the notes is due on March 31, 2001 but may be deferred until June 13, 2001 in
exchange for an interest rate on the first instalment of 15% per annum. The
notes are convertible into a maximum of 6,800,000 shares of Common Stock. The
conversion price is equal to 95% of the average of the lowest five closing bid
prices for the previous twenty trading days determined from the date of the
notice of conversion. Any principal payments resulting from a conversion will be
applied equally over all instalments due. Instalments of principal are due in
seven equal quarterly instalments with the first instalment to be paid on June
13, 2001. Accordingly, the Company will be required to make a principal payment
of approximately $1,485,000 in June 2001 (assuming no repayments of principal
through conversion) and interest payments of approximately $312,000 in each of
March and June 2001. Further, payments of principal and interest may be payable
on a quarterly basis through December 2002.

During fiscal 1997, the Company entered into an agreement with Mr. Joseph
Vittoria, a director and stockholder of the Company, whereby Mr. Vittoria
advanced a loan of $1,000,000 to the Company. The purpose of the loan was to
enable the Company to pay the cash element of the purchase of the Company's
interest in Countdown. The loan, which bears interest at 12% per annum, was
originally scheduled to mature on September 27, 1997. By agreement between the
Company and Mr. Vittoria, the loan was renewed upon maturity for an indefinite
period and was converted to a demand loan callable on 60 days' notice. Payment
of interest was also deferred, although interest continues to accrue at 12% per
annum. The loan is secured by a pledge of the Company's entire interest in
Countdown. While Mr. Vittoria has confirmed that he has no present intention of
demanding repayment within twelve months of the date hereof, there can be no
assurance given that he will not do so in the future.

The Company has no capital expenditure commitments in place. However, the
Company will need to invest in technology and infrastructure in the future when
available cash resources permit.

The Company does not have existing lines of credit and therefore, in light of
the above, the Company will require an additional cash infusion in the second
quarter of fiscal 2001 and may require further cash infusions thereafter.
Management believes that it will be able to secure sufficient funds to operate
in the foreseeable future either independently or via the recovery of short-term
indebtedness from TME. It should be noted however that there is no assurance
that additional funds can be raised or that the cost of such funds and/or the
extent of dilution to existing stockholders would be acceptable to the Company.
The auditors have qualified their opinion based on the need of the Company to
raise additional funds.

The Company currently has established business operations in Australia and the
United States and through its affiliates, Countdown, Countdown USA, DBS Direct
and Logan Leisure, has an interest in business operations in Europe, the United
States and elsewhere. While the Company will continue to operate cash negative
in the short term, management believes that after completion of the proposed
merger with TME, the Company and TME will be well positioned to achieve
profitability in the medium term. However, there can be no assurance given that
the proposed merger will be completed or when, if at all, profitability will be
achieved.

Inflation and Seasonality


                                       32
<PAGE>

The Company does not believe that its operations have been materially influenced
by inflation in the fiscal year ended September 30, 2000, a situation which is
expected to continue for foreseeable future. Some of the Company's revenue
sources such as those relating to travel products and services are seasonal.
However, the Company has no basis at this time on which to project the seasonal
effects, if any, on its business as a whole.

New U.S. Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No.133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes standards for accounting for the various derivative instruments
commonly used in hedging activities. This standard is now effective for fiscal
years beginning after June 15, 2000. The Company has not in the past nor does it
anticipate that it will engage in transactions involving derivative instruments,
and therefore adoption of this pronouncement will not have a significant effect
on its financial statements.

In December 1999, the Securities Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition". This bulletin summarizes views
of the Staff on applying generally accepted accounting principles to revenue
recognition in financial statements. The Company is required to adopt SAB No.
101, as amended by SAB 101B, in the fourth quarter of fiscal 2001, however as
stated in paragraph (h) above this SAB has been adopted in preparing these
financial statements.

In March 2000, the FASB issued Financial Interpretation No. 44, "Accounting for
Certain Transactions involving Stock Compensation an interpretation of APB
Opinion 25". Interpretation No. 44 is effective July 1, 2000. Interpretation No.
44 clarifies the application of APB Opinion 25 for various matters,
specifically: the criteria for determining whether a plan qualifies as a
non-compensatory plan; the accounting consequence of various modifications to
the terms of a previously fixed stock option or award; and the accounting for an
exchange of stock compensation awards in a business combination. Management
believes that the adoption of Interpretation No. 44 note will not have a
material impact on the Company's financial position or results of operations.

In March 2000, the FASB's Emerging Issue Task Force ("EITF") reached a consensus
on EITF 00-2, "Accounting for Web Site Development Costs". EITF 00-2 discusses
how an entity should account for costs incurred to develop a web site. EITF 00-2
is effective in the first quarter of fiscal 2001, in accordance with EITF 00-2
the Company capitalizes certain costs and expenses others. Accordingly the
Company capitalizes a portion of the labor costs associated with substantive
website development and improvement activities. Labor costs associated with
maintenance and routine changes are expensed in the period incurred.
Amortization is recorded using the straight-line method over 5 years. Included
within Other Assets as of September 30, 2000 is the amortized balance of
$137,000 relating to such costs.

ITEM 7 A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's primary market risk is foreign exchange rate variability. The
Company's reporting currency is the United States dollar. However, the
functional currencies of the Company's operating subsidiaries and affiliates
additionally include sterling, the Irish punt and the Australian dollar. Based
on historic exchange rate fluctuations in the Company's reporting and functional
currencies Management believes that fluctuations in currency exchange rates in
the near term will not materially affect the Company's consolidated operating
results, financial position or cash flows.


                                       33
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

This information is submitted in a separate section of this report. See pages
F-1, et. seq.

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

None.


                                       34
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
Name                                Age              Position
----                                ---              --------
<S>                                 <C>              <C>
Joseph V. Vittoria (1)              65               Chairman of the Board of Directors
Grant White                         30               Chief Executive Officer and Principal Financial Officer
Thomas F. Flatley (1)               48               Director
James J. Fyfe (2)                   46               Director
William D. Marks                    35               Director
Ellis Varejes (1)                   48               Director
</TABLE>

----------
(1)   Member of the Audit Committee.
(2)   James J. Fyfe has been a consultant to the Company since April 1998. In
      fiscal 2000 he received fees totaling $500,000 for his services (1999:
      $170,000 and 1998: $60,000)

Directors hold office until the next annual meeting of stockholders and until
their successors are duly elected and qualified. All officers hold office until
the meeting of the Board of Directors following the next annual meeting of
stockholders or until their earlier resignation or removal. There are no family
relationships between any of the directors or executive officers of the Company.

Joseph V. Vittoria

Mr. Vittoria has been a director of the Company since its inception in 1994 and
was appointed Chairman of the Board in August 1999. Mr. Vittoria was Chairman
and Chief Executive Officer of Travel Services International, Inc., an online
and offline travel services company based in Florida, until July 2000, a
position he had held since that company's inception in 1997. From September 1987
to January 1997, Mr. Vittoria was Chairman and Chief Executive Officer of Avis
Inc., having been a senior executive at Avis from 1982. Mr. Vittoria was a
director of TME until he resigned in October 1999.

Grant White

Mr. White has served as Chief Executive Officer of both the Company and TME
since March 2000. Prior to March 2000 Mr. White was a director of Gleacher & Co.
LLC, a New York based merger and acquisition Investment bank. Mr. White joined
Gleacher in 1995. Mr. White is also Chairman of the Board of Directors of TME.

Thomas F. Flatley

Mr. Flatley has been a director of the Company since June 2000. Mr. Flatley has
been President, Chief Executive Officer and a director of Epic Resorts, LLC, a
United States based vacation ownership business and its predecessors, since
1990. From 1983 to 1990, Mr. Flatley was involved with the development and
management of several commercial real estate ventures. From 1974 to 1982, Mr.
Flatley practiced as a Certified Public Accountant with Price Waterhouse, LLC.


                                       35
<PAGE>

William D. Marks

Mr. Marks has been a director of the Company since June 1999 when the Company
and TME jointly acquired DBS Direct Connect L.L.C. Mr. Marks was President of
DBS Direct from its inception in March 1998 until he resigned in June 2000. From
1992 to 1998, Mr. Marks served as Vice President and Chief Operating Officer for
The Marks Group, a multiple system cable television operator serving subscribers
in Southern California. In 1995, Mr. Marks formed Star Cable Services, Inc. to
perform all types of telecommunications construction and installations. Mr.
Marks was a director of TME until he resigned in October 1999.

James J. Fyfe

Mr. Fyfe has been a director of the Company since October 1999. Mr. Fyfe is an
independent business consultant specializing in corporate restructuring,
strategic planning and turn-around situations. Since April 1998 his clients have
included the Company and TME. He has been a director of Corniche Group
Incorporated, an online provider of extended product warranties and service
contracts to consumers, since May 1995 and served that company as Vice President
and Chief Operating Officer from May 1995 until May 1998. From May 1996 through
August 1997 he was a director of Medical Laser Technologies, Inc., a company
engaged in the design of medical imaging technology. Additionally, he has been a
director of Machine Vision Holdings, Inc., a provider of automated control and
monitoring systems for multi-staged manufacturing process industries, since
January 1998.

Ellis Varejes

Mr. Varejes has been a director of the Company since March 2000. Mr. Varejes has
been a partner in the corporate services division of Abbott Tout, solicitors, in
Sydney, Australia since 1997. Prior to joining Abbott Tout, Mr. Varejes
practiced law with Landerer & Company from 1993 to 1996. Mr. Varejes practices
principally in the area of corporate and business transactions, both nationally
and internationally. Mr. Varejes is a graduate in Commerce and in Laws from the
University of Witwatersrand, South Africa. Mr. Varejes was a director of the
Company and TME from January 1997 to March 1998.

Reports under Section 16 (a) of the Securities Exchange Act of 1934.

The Company is not aware of any late filings of reports under Section 16, except
as previously disclosed.


                                       36
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the aggregate compensation paid during the three
years ended September 30, 2000 to the Company's Chief Executive Officer and
former Chief Executive Officer. No other executive officer of the Company earned
in excess of $100,000 for services rendered during fiscal 2000.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                              Annual        Long-Term                     Other
                                                        Compensation     Compensation              Compensation

Name and Principal                Fiscal                                                              All Other
Position                            Year      Notes           Salary    Options/SAR's              Compensation
<S>                                 <C>      <C>            <C>                     <C>                      <C>
Grant White
Chief Executive Officer
(appointed  effective  March
1, 2000)                            2000     (1)(3)         $102,083                0                        $0

Michael R. Chambrello
Chief Executive Officer             2000     (2)(3)           62,500                0                   212,500
(appointed October 1, 1999,
resigned February 28, 2000)
</TABLE>

Notes:

(1)   Mr. White has an employment agreement with TME and provides his services
      to the Company for no additional consideration. The amounts stated are the
      amounts recharged by TME to the Company.
(2)   Other compensation of Mr. Chambrello represents employment termination
      payments of $62,500 in cash and 50,000 shares of Common Stock at market
      value.

Option/SAR Grants in Last Fiscal Year

The Company did not grant any stock options to executive officers during the
fiscal year ended September 30, 2000.

Aggregate Options/SAR Exercises in Last Fiscal Year and FY-End Options/Values

As of September 30, 2000, no executive officer of the Company held exercisable
or non-exercisable options to purchase shares of Common Stock.

Compensation Committee Interlocks and Insider Participation

The Company's Board of Directors serves as the compensation committee. During
the fiscal year ended September 30, 2000 Grant White, and before him Michael R.
Chambrello, served as Chief Executive Officer of the Company and TME. During the
fiscal year ended September 30, 2000 Messrs. Vittoria and Marks and Paul L.
Harrison and Carl Freyer each served as a director of both the Company and TME.
Messrs. Harrison and Freyer resigned as directors of the Company, and Messrs.
Vittoria and Marks resigned as directors of TME, in October 1999.


                                       37
<PAGE>

Stock Option Plans

Effective May 2, 1994, the Company adopted the 1994 Stock Option Plan ("the 1994
Plan"). The 1994 Plan was established to attract and retain personnel of the
highest caliber and to offer an incentive for the Company's officers and
employees to promote the business of the Company. The 1994 Plan authorizes the
grant of incentive stock options or non-qualified stock options to purchase
shares of Common Stock of the Company, subject to adjustment in the event of
stock splits, stock dividends, recapitalizations, mergers, reorganizations,
exchanges of shares and other similar changes affecting the Company's common
stock. Unless terminated earlier, the 1994 Plan expires on April 1, 2004.
Officers, employees and independent contractors who perform services for the
Company or any of its subsidiaries are eligible to receive stock options. The
1994 Plan is administered by the Board of Directors, which determines the
persons to whom awards will be granted, the number of share options to be
granted and the specific terms of each grant. Under the 1994 Plan, no stock
option may be granted having an exercise price less than the fair market value
of the Company's common stock on the date of grant.

In January 1996, the Company's Board of Directors approved, and on April 25,
1996 the Company's stockholders approved, the 1995 Outside Directors Stock
Option Plan (the "Outside Directors Plan"). The purpose of the Outside Directors
Plan is to attract and retain the services of experienced and knowledgeable
independent directors. The Outside Directors Plan provides for the automatic
grant to each non-employee director of the Company of a stock option to purchase
10,000 shares of common stock of the Company on January 1 of each year. In
addition, the Outside Directors Plan provided that Mr. Vittoria and another
non-employee director (who has since resigned) would each receive an option to
purchase an additional 20,000 shares in recognition of their services as
directors prior to adoption of the Outside Directors Plan. The maximum number of
shares of Common Stock which may be issued under the Outside Directors Plan is
300,000, subject to adjustment in the event of stock splits, stock dividends,
recapitalizations, mergers, reorganizations, exchanges of shares and other
similar changes affecting the Company's issued Common Stock. Each option issued
under the Outside Directors Plan will be exercisable by the optionee for a
period of five years from the date of the grant. Unless sooner terminated, the
Outside Directors Plan expires on January 11, 2006. The Outside Directors Plan
is administered by the Company's employee directors. Options granted under the
Outside Directors Plan will have an exercise price equal to the fair market
value of the Common Stock on the last date preceding the date of grant.

As of January 11, 2001, 120,000 options are outstanding under the Outside
Directors Plan.


                                       38
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as to the number of shares of Common
Stock beneficially owned, as of January 11, 2001, by (i) each person or entity
that is known to the Company to be the beneficial owner of more than five
percent of the outstanding Common Stock, (ii) each named executive officer and
director and (iii) all current executive officers and directors of the Company
as a group. All shares are owned both beneficially and of record unless
otherwise indicated. Unless otherwise indicated, the address of each beneficial
owner is c/o Transmedia Asia Pacific, Inc. 11 St. James's Square, London SW1Y
4LB, England.

              Number and Percentage of Shares of Common Stock Owned

<TABLE>
<CAPTION>
                                                                                                        Percentage
                                                                          # of Shares              of Common Stock
Name and Address of Beneficial Owner                   Notes       Beneficially Owned       Beneficially Owned (1)
<S>                                                      <C>                <C>                              <C>
Gleacher & Co. LLC
660 Madison Avenue
New York, NY 10021                                       (2)                3,000,000                        7.48%

FAI General Insurance Company Pty Ltd
333 Kent Street
Sydney, NSW 1026, Australia.                             (3)                2,695,966                        6.96%

Edward J. Guinan III
12 St. James's Square
London                                                   (4)

Pictet & Cie Nominees
Cie 29 Blvd.
Georges Favon1204
Geneva Switzerland                                       (5)                2,658,334                        5.79%

William H. McKee, III
533-B Simonds Loop
San Francisco, CA 94129                                                     2,061,826                        5.56%

Grant White                                                                         0                           0%

Joseph V. Vittoria                                       (6)                1,506,969                        3.87%

William D. Marks                                         (7)                2,226,020                        6.03%

James J. Fyfe                                            (8)                   20,000                        0.05%

Thomas F. Flatley                                        (9)                   10,000                        0.03%

Ellis Varejes                                           (10)                   10,000                        0.03%

All current directors and officers                    (6) to
as a group (six persons)                                (10)                4,982,989                        9.93%
</TABLE>


                                       39
<PAGE>

--------------------------------------------------------------------------------
(1)   Based on 37,086,441 shares of Common Stock outstanding on January 11,
      2001.
(2)   Includes 3,000,000 shares of Common Stock issuable upon exercise of
      warrant granted for services.
(3)   Includes 1,633,366 shares of Common Stock issuable upon exercise of
      warrants granted in November 1998.
(4)   The Company believes that Mr. Guinan, the former Chairman of the Board of
      Directors and Chief Executive Officer of the Company, beneficially owns
      more than 5% of the Common Stock outstanding as of January 11, 2000.
      However, because Mr. Guinan holds some of his shares in "street name" and
      has not made any filings for a number of years with the Securities and
      Exchange Commission, the Company has no basis for determining Mr. Guinan's
      beneficial ownership.
(5)   Includes 200,000 shares of Common Stock issuable upon exercise of warrants
      granted as part of a short-term loan facility in February 1999.
(6)   Includes 80,000 shares of Common Stock issuable upon exercise of warrants
      granted under the Outside Directors Plan, 138,596 shares of Common Stock
      issuable upon exercise of warrants granted in April 1997 in relation to
      the acquisition of Countdown and 167,873 shares of Common Stock issuable
      upon exercise of warrants granted as part of an equity placement of Common
      Stock in August 1997.
(7)   Includes 10,000 shares of Common Stock issuable upon exercise of warrants
      granted under the Outside Directors Plan but excludes 1,858,842 shares of
      Common Stock owned by Mrs. Donna Marks, Mr. Marks stepmother, of which Mr.
      Marks disclaims beneficial ownership of.
(8)   Includes 20,000 shares of Common Stock issuable upon exercise of warrants
      granted under the Outside Directors Plan.
(9)   Includes 10,000 shares of Common Stock issuable upon exercise of warrants
      granted under the Outside Directors Plan.
(10)  Includes 10,000 shares of Common Stock issuable upon exercise of warrants
      granted under the Outside Directors Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In fiscal 2000 the Company was charged a management fee of $1,190,672 (1999:
$1,210,939) by TME in respect of the Company's share of corporate office
expenses comprising salaries, professional fees, rent, travel and other
corporate costs.

As of September 30, 2000 the Company was owed $3,660,798 by Transmedia Europe,
Inc. Such receivable is non-interest bearing and is repayable on demand. The
Company advanced funds to TME to fund the operations of the Company's
affiliates, in particular DBS Direct.

Messrs. White and Harrison are directors of Transmedia Europe, Inc. Messrs
Guinan and Vittoria were directors of Transmedia Europe, Inc. until October
1999.

During fiscal 1997, the Company entered into an agreement with Mr. Joseph
Vittoria, a director and stockholder of the Company, whereby Mr. Vittoria
advanced a loan of $1,000,000 to the Company. The purpose of the loan was to
enable the Company to pay the cash element of the purchase of the Company's
interest in Countdown. The loan, which bears interest at 12% per annum, was
originally scheduled to mature on September 27, 1997. By agreement between the
Company and Mr. Vittoria, the loan was renewed upon maturity for an indefinite
period and was converted to a demand loan callable on 60 days' notice. Payment
of interest was also deferred, although interest continues to accrue at 12% per
annum. The loan is secured by a pledge of the Company's entire interest in
Countdown. In consideration for the loan, the Company granted Mr. Vittoria a
five-year warrant to purchase 138,596 shares of Common Stock at $1.13 per share,
the market price of the shares at the time, and granted piggyback registration
rights with respect to such shares.

On May 11, 1999 the Company commenced a private placement pursuant to the
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, and Regulation D promulgated thereunder. The placement closed
on June 25, 1999 upon the sale of three million shares


                                       40
<PAGE>

of Common Stock at $0.75 per share resulting in net proceeds to the Company of
$2,250,000. Mr. Vittoria purchased 666,666 of the shares sold, an investment of
$500,000. Pursuant to the terms of a letter agreement dated April 20, 1999, as
amended, both the Company and TME engaged Gleacher & Co. LLC to act as their
exclusive financial advisor. Grant White, the current chief executive officer of
both the Company and TME and the chairman of the board of directors of TME, is a
former director of Gleacher. Mr White was unaffiliated with both the Company and
TME prior to their engagement of Gleacher. Gleacher assisted the Company and TME
in connection with:

      o     The acquisition of DBS Direct;
      o     The structure and negotiation of the proposed merger between the
            Company and TME;
      o     The composition of a business plan and financial projections for the
            merged entity;
      o     The restructuring of the Company's and TME's balance sheets and
            negotiation with debtholders; and
      o     Assistance in raising capital.

As compensation for its financial advice and assistance, Gleacher received
warrants to purchase 3,000,000 shares of the Company's Common Stock and warrants
to purchase 3,000,000 shares of TME's common stock. The warrants have an
exercise price of $0.75 per share and expire after a period of five years.
Gleacher has piggyback registration rights with respect to the shares of common
stock issuable upon conversation of the warrants. The Company and TME also
agreed to indemnify and hold harmless Gleacher for liabilities related to or
arising out of the Company's and TME's engagement of Gleacher.

On June 15, 1999, the Company and TME each purchased 50% of DBS Direct. William
D. Marks, a director of the Company and former director of TME and a stockholder
of the Company and TME, owned 48.5% of the equity interest of DBS Direct. The
transaction was consummated pursuant to an Equity Purchase Agreement dated May
10, 1999, as amended June 11, 1999, among the Company, DSS Direct, the sellers
(including Mr. Marks) and TME. Mr Marks was unaffiliated with both the Company
and TME prior to the consummation of the transaction.

Prior to its amendment, the purchase agreement provided that the aggregate
purchase price to be paid by the Company would be the number of shares of Common
Stock that would constitute 16% of the issued and outstanding shares of Common
Stock after giving effect to a proposed offering of common stock by both the
Company and TME, and the aggregate purchase price to be paid by TME would be the
number of shares of TME common stock that would constitute 16% of the issued and
outstanding shares of TME common stock after giving effect to the proposed
offering. Additionally, the Company and TME each agreed to contribute $1,500,000
to the capital of DBS Direct at closing. To give the Company and TME time to
complete the offering of common stock, the equity purchase agreement was amended
such that the Company and TME each contributed $500,000 to the capital of DBS
Direct at closing and each agreed to contribute an additional $1,000,000 to the
capital of DBS Direct within 30 days of closing to fund the expansion of the
network of sales offices of DBS Direct nationally. The capital contributions of
the Company and TME at closing were used to repay existing indebtedness of DBS
Direct, including approximately $212,000 owed to Mr. Marks. The Company issued
4,589,732 shares of Common Stock in exchange for its 50% interest in DBS Direct
and TME issued 4,831,057 shares of its common stock in exchange for the
remaining 50% interest in DBS Direct. Based on his 48.5% equity interest in DBS
Direct, Mr. Marks received 2,226,020 the Company's Common Stock and 2,343,063
shares of TME common stock.

The purchase agreement also provides that in the event the proposed merger is
consummated and the 9,420,789, shares of the Company's Common Stock issued to
the sellers (assuming the conversion of TME common stock into Company Common
Stock) is less than 16% of the issued and outstanding shares of Transmedia Asia
Pacific common stock as of the effective date of the merger (excluding the
sellers' 9,420,789 shares), then the Company must issue the sellers additional
shares of Common Stock such that the aggregate number of shares of Company
Common Stock issued to the sellers


                                       41
<PAGE>

equals 16% of the issued and outstanding shares of Company Common Stock as of
the effective date of the merger (excluding the sellers' 9,420,789 shares).
Based on the number of shares of Company Common Stock and TME common stock
issued and outstanding as of January 11, 2001, assuming such date to be the
effective date of the merger, the sellers will have been issued approximately
13.4% of the issued and outstanding shares of Company Common Stock issued and
outstanding as of the effective date of the merger (excluding the sellers'
9,420,789 shares), and the Company would have to issue 3,974,195 additional
shares of Common Stock to the sellers. Based on his former 48.5% equity interest
in DSS Direct, Mr. Marks would be entitled to approximately 1,927,485 shares of
Common Stock upon consummation of the merger.

The Company is currently in negotiation with the Sellers' and the Sellers' have
agreed in principle that, in the event that the proposed merger is consummated,
the Company's obligation to issue additional shares of Common Stock to the
Sellers', will be restricted to a maximum of one million shares of Common Stock.
If such agreement is finalized, then based on his former 48.5% equity interest
in DBS Direct, Mr. Marks will be entitled to an additional 485,000 shares of
Common Stock. However, there can be no assurance given that final agreement will
be reached with the Sellers', prior to consummation of the proposed merger.


                                       42
<PAGE>

PART IV

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

The following documents are being filed as part of this Report.

(a)(1)      Financial Statements:

            Transmedia Asia Pacific, Inc.
            See "Index to Financial Statements" contained in Part II, Item 8

(a)(2)      Financial Statement Schedules:

            II       Schedule of Valuation and Qualifying Accounts

(a)(3)      Exhibits:

3.1         Certificate of Incorporation of the Company (Note 1).

3.2         By-laws of the Company (Note 1).

4.1         Specimen Certificate of the Company's Common Stock (Note 1).

10.1(a)     Sublease, dated August 31, 1994, between Cambooya Properties Pty.
            Limited to Transmedia Australia Pty. Limited (Note 1).
10.1(b)     1994 Stock Option Plan of the Company (Note 1).
10.1(c)     Common Stock Purchase Warrant dated April 3, 1997 between the
            Company and J. Vittoria (Note 2).
10.1(d)     Loan Facility Agreement dated March 27, 1997 between the Company and
            J. Vittoria (Note 2).
10.1(e)     Share Pledge Agreement dated April 3, 1997 between the Company and
            J. Vittoria (Note 2).
10.1(f)     Registration Rights Agreement dated April 3, 1997 between the
            Company and C.E.C. Radbone (Note 2).
10.1(g)     Agreement dated April 3, 1997 between the Company, Transmedia
            Europe, Inc. and C. E. C. Radbone as to the acquisition of Countdown
            Holdings Limited (Note 2).
10.1(h)     Amendment to loan agreement by a director of the Company in
            connection with a loan of $1,000,000 to facilitate the acquisition
            of Countdown Holdings Limited (Note 3).
10.1(i)     Lease on 1 Hurlingham Business Park, Sulivan Road, London SW6 3DU,
            United Kingdom (Note 3).
10.1(j)     Agreement dated November 6, 1997 for the purchase of the business
            and assets of NHS (Note 4).
10.1(k)     Lease Agreement dated September 23, 1998 between Cambooya Properties
            Pty Limited and Transmedia Australia (Note 5).
10.1(l)     Agreements for the acquisition of 100% of the issued share capital
            of Porkpine Limited among Compass Trustees Limited, Transmedia
            Europe, Inc. and Transmedia Asia Pacific, Inc. and Gavin Logan and
            Joanne Logan, dated May 14, 1998 (Note 6).
10.1(m)     Share sale agreement dated March 26, 1998 re acquisition of
            Breakaway Travel Pty. Limited. (Note 7).
10.1(n)     Equity Purchase Agreement dated May 10, 1999 by and among DSS Direct
            Connect L.L.C., William D. Marks, Donna M. Marks, Kevin R. Drewyer,
            Direct Investors, Inc., Transmedia Europe, Inc. and Transmedia Asia
            Pacific, Inc., as amended June 11, 1999 (Note 8).


                                       43
<PAGE>

10.1(o)     Termination Agreement dated as of April 7, 2000 by and among
            Transmedia Network, Inc., TMNI International Incorporated,
            Transmedia Europe, Inc. and Transmedia Asia Pacific, Inc. (Note 9).
10.1(p)     Agreement and Plan of Merger, dated as of March 8, 2000, by and
            among Transmedia Asia Pacific, Inc., Asia Merger Sub II, Inc.,
            MonsterBook.com, Inc. and William McKee, III and Frank T. Vega (Note
            10).
10.1(q)     Company Press Release dated December 14, 2000 (Note 11).
10.1(r)     Employment Agreement, dated as of March 2, 1998, between the Company
            and Edward J. Guinan, III (Note 5).
10.1(s)     Exchange Agreement dated as of December 12, 2000 by and among
            Transmedia Asia Pacific, Inc., Advantage Fund II Ltd. and Koch
            Investment Group Limited for exchange of Series A Convertible
            Preferred Stock and Warrants for 12% Secured Convertible Notes and
            new Common Stock purchase warrants (Note 16).
10.1(t)     $6,234,000 12% Secured Convertible Note dated as of December 13,
            2000 by and among Transmedia Asia Pacific, Inc. and Advantage Fund
            II Ltd (Note 16).
10.1(u)     $4,156,000 12% Secured Convertible Note dated as of December 13,
            2000 by and among Transmedia Asia Pacific, Inc. and Koch Investment
            Group Limited (Note 16).
10.1(v)     Common Stock Purchase Warrant for 1,373,493 shares of Common Stock
            by and among Transmedia Asia Pacific, Inc. and Advantage Fund II
            Ltd. (Note 16).
10.1(w)     Common Stock Purchase Warrant for 1,373,493 shares of Common Stock
            by and among Transmedia Asia Pacific, Inc. and Advantage Fund II
            Ltd. (Note 16).

21.1        List of subsidiaries (Note 16).

99.1(a)     Consolidated Financial Statements for significant associate
            Countdown Holdings Limited for the year ended September 30, 1998
            (Note 5).
99.1(b)     Audited Financial statements for Letville Holdings limited for the
            year ended March 31, 1998, Floracourt Limited for the 25 months
            ended March 31, 1998 and G. & J. Logan trading as Logan Leisure for
            the year ended March 31, 1998 pro-forma financial information re
            Logan Leisure investment (Note 12).
99.1(c)     Audited financial statements of DSS Direct Connect L.L.C. covering
            the period from inception on March 3, 1998 to September 30, 1998 and
            the period October 1, 1998 to June 14, 1999 together with unaudited
            pro-forma financial information (Note 13).
99.1(d)     Audited financial statements for significant associate DSS Direct
            Connect L.L.C. for the period June 15 to September 30, 1999 (Note
            14).
99.1(e)     Audited financial statements of MonsterBook.com, Inc.covering the
            period from inception on March 1, 1999 to September 30, 1999
            together with unaudited financial statements of MonsterBook.com,
            Inc.covering the period from October 1, 1999 to December 31, 1999
            and unaudited pro-forma financial information (Note 15).

99.2        Risk factors as of January 23, 2001 (Note 16).

Notes:

1.        Incorporated by reference from Registration No. 33-93864.
2.        Incorporated by reference from Form 8-K filed April 18, 1997.
3.        Incorporated by reference from 1997 Form 10-K/A#2 filed March 6, 1998.
4.        Incorporated by reference from Form 8-K filed December 17, 1997.
5.        Incorporated by reference from 1998 Form 10-K filed January 21, 1999.
6.        Incorporated by reference from Form 8-K filed May 29, 1998.
7.        Incorporated by reference from Form 8-K filed June 5, 1998.
8.        Incorporated by reference from Form 8-K filed July 1, 1999.
9.        Incorporated by reference from Form 10-Q filed May 23, 2000.
10.       Incorporated by reference from Form 8-K filed April 28, 2000.
11.       Incorporated by reference from Form 8-K filed December 22, 2000.


                                       44
<PAGE>

12.       Incorporated by reference from Form 8-K/A#1 filed July 31, 1998.
13.       Incorporated by reference from Form 8-K/A#1 filed April 6, 2000.
14.       Incorporated by reference from 1999 Form 10-K filed January 13, 2000.
15.       Incorporated by reference from Form 8-K/A31 filed June 27, 2000.
16.       Filed herewith

(b)       Reports on Form 8-K

          None.


                                       45
<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

                                         TRANSMEDIA ASIA PACIFIC, INC.
                                         (Registrant)

Date:      January 23, 2001              /s/ Grant White
                                         ---------------------------------------
                                         Grant White
                                         Chief Executive Officer and Principal
                                          Financial Officer

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

Date:      January 23, 2001              /s/ Grant White
                                         ---------------------------------------
                                         Grant White
                                         Chief Executive Officer and Principal
                                          Financial Officer.

Date:      January 23, 2001              /s/ Joseph Vittoria
                                         ---------------------------------------
                                         Joseph Vittoria
                                         Chairman and Director

Date:      January 23, 2001              /s/ William D. Marks
                                         ---------------------------------------
                                         William D. Marks
                                         Director

Date:      January 23, 2001              /s/ Thomas Flatley
                                         ---------------------------------------
                                         Thomas Flatley
                                         Director

Date:      January 23, 2001              /s/ Ellis Varejes
                                         ---------------------------------------
                                         Ellis Varejes
                                         Director

Date:      January 23, 2001              /s/ James J. Fyfe
                                         ---------------------------------------
                                         James J. Fyfe
                                         Director


                                       46
<PAGE>

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

                                                                           Page:

Report of BDO Stoy Hayward, Independent Auditors                            F-1

Consolidated balance sheets
as of September 30, 2000 and 1999                                           F-2

Consolidated statements of operations
for the years ended September 30, 2000, 1999 and 1998                       F-4

Consolidated statements of stockholders' equity and comprehensive
loss for the years ended September 30, 2000, 1999 and 1998                  F-5

Consolidated statements of cash flows
for the years ended September 30, 2000, 1999 and 1998                       F-8

Notes to consolidated financial statements                                  F-12

Schedule II - Valuation and qualifying accounts                             F-36

<PAGE>

Independent Auditors' Report

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

Board of Directors and Stockholders
Transmedia Asia Pacific, Inc.

      We have audited the accompanying consolidated balance sheets of Transmedia
      Asia Pacific, Inc. and subsidiaries as of September 30, 2000 and 1999 and
      the related consolidated statements of operations, stockholders' equity
      and comprehensive income (loss), and cash flows for each of the three
      years in the period ended September 30, 2000. We have also audited the
      financial statement schedule listed in the accompanying index. These
      consolidated financial statements and schedule are the responsibility of
      the management of Transmedia Asia Pacific, Inc. and subsidiaries. Our
      responsibility is to express an opinion on these consolidated financial
      statements and schedule based on our audits.

      We conducted our audits in accordance with generally accepted auditing
      standards in the United States. These standards require that we plan and
      perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements and schedule are free from material
      misstatement. An audit includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the consolidated financial
      statements. An audit also includes assessing the accounting principles
      used and significant estimates made by management, as well as evaluating
      the overall consolidated 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 consolidated financial
      position of Transmedia Asia Pacific, Inc. and subsidiaries as of September
      30, 2000 and 1999, and the results of their operations and their cash
      flows for each of the three years in the period ended September 30, 2000
      in conformity with generally accepted accounting principles in the United
      States. Also, in our opinion, the schedule presents fairly, in all
      material respects, the information set forth therein.

      The accompanying consolidated financial statements have been prepared
      assuming that the Company will continue as a going concern. As discussed
      in note 3 to the financial statements, the Company has experienced losses
      during the year ended September 30, 2000 from operations and has a working
      capital deficit that raises substantial doubt about its ability to
      continue as a going concern. The Company has funded operations through
      sales of equity securities and issuance of debt, and its ability to
      continue as a going concern is dependent on the ability to continue to
      effect such sales of securities and issuance of debt. Management's plan in
      regard to these matters are also described in note 3. The consolidated
      financial statements do not include any adjustments which might result
      from this uncertainty.

      BDO Stoy Hayward
      London
      England

      January 16, 2001


                                      F-1
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated balance sheets

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

<TABLE>
<CAPTION>
                                                          September 30,  September 30,
                                                              2000           1999
                                                          ($ thousand)   ($ thousand)
<S>                                                         <C>            <C>
ASSETS

Current assets
   Cash and cash equivalents                                $   444        $   548
   Trade accounts receivable                                    151            268
   Restaurant credits, (net of allowance
    for irrecoverable credits of $61,000 and $66,000)            --            128
   Amounts due from related party                             3,661             23
   Prepaid expenses and other current assets                    177            173
   Prepaid fees                                                  --            712
                                                            -------        -------

Total current assets                                          4,433          1,852
                                                            -------        -------

Non current assets
   Investments in affiliated companies                        5,999          9,438
   Office furniture and equipment (net of accumulated
    depreciation of $584,000 and $648,000)                      168            133
   Goodwill (net of accumulated amortization
    of $2,139,000 and $642,000)                              11,510          4,630
   Other intangible assets (net of accumulated
    amortization and impairment
   of $1,841,000 and $1,149,000 )                                --            692
   Property lease deposit                                       899             --
   Prepaid fees                                                  --            711
   Other assets                                                 740            221
                                                            -------        -------

Total non current assets                                     19,316         15,825
                                                            -------        -------

TOTAL ASSETS                                                $23,749        $17,677
                                                            =======        =======
</TABLE>

See accompanying summary of accounting policies and notes to consolidated
financial statements.


                                      F-2
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated balance sheets (Continued)

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

<TABLE>
<CAPTION>
                                                                 September 30,     September 30,
                                                                     2000              1999
                                                                 ($ thousand)      ($ thousand)
<S>                                                                <C>               <C>
LIABILITIES AND STOCKHOLDERS'
 EQUITY

Current liabilities
   Trade accounts payable                                          $    884          $    631
   Deferred income                                                       55                70
   Dividend payable                                                     257                --
   Payroll taxes                                                        249                76
   Accrued liabilities                                                  856               560
   Amount due to related parties                                      2,058             2,051
   Notes payable                                                         --             3,688
   Deferred payment                                                      --               563
   Bank line of credit                                                   21                19
   Other liabilities                                                     81                --
                                                                   --------          --------

Total current liabilities                                             4,461             7,658
                                                                   --------          --------

Minority interest                                                       780                61
                                                                   --------          --------
Preferred stock

   Authorized 5,000,000 shares of $0.01 par value
   per share.  Issued and outstanding 10,000 Series A
   Convertible Preferred Shares
    at $1,000 per share                                              10,000                --
                                                                   --------          --------

Stockholders' equity

   Common stock $0.00001 par value per share
    Authorized 95,000,000 shares.  Issued and outstanding;
    37,086,441 and 29,487,048 respectively                               --                --
   Additional paid in capital                                        45,231            28,086
   Cumulative foreign currency translation adjustment                   527              (186)
   Accumulated deficit                                              (37,250)          (17,942)
                                                                   --------          --------

Total stockholders' equity                                            8,508             9,958
                                                                   --------          --------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY                                              $ 23,749          $ 17,677
                                                                   ========          ========
</TABLE>

See accompanying summary of accounting policies and notes to consolidated
financial statements.


                                      F-3
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of operations

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

<TABLE>
<CAPTION>
                                                       Year ended            Year ended            Year ended
                                                      September 30,         September 30,         September 30,
                                                          2000                  1999                  1998
                                                                ($ thousands, except loss per share)
<S>                                                   <C>                   <C>                   <C>
Revenues                                              $      1,626          $      3,560          $      3,905

Cost of revenues                                              (335)                 (421)                 (312)
                                                      ------------          ------------          ------------

Gross profit                                                 1,291                 3,139                 3,593

Selling, general and administrative expenses                (6,653)               (5,299)               (6,639)
Impairment writedown of underlying goodwill
 in Nationwide Helpline Services                            (4,316)                   --                    --
Impairment to Transmedia License                              (630)                 (260)                   --
Depreciation and amortization                               (3,046)                 (941)                 (442)
                                                      ------------          ------------          ------------

Loss from operations                                       (13,354)               (3,361)               (3,488)

Share of losses and amortization of goodwill
 of affiliated companies                                    (3,663)                 (890)                 (949)

Net interest expense (including debt discount
 expense of $142,000 in fiscal 2000 and
 $980,000 in fiscal 1999)                                     (467)               (1,486)                 (258)
                                                      ------------          ------------          ------------

Loss before income tax and minority interest               (17,484)               (5,737)               (4,695)

Income tax (charge) credit                                     (55)                   30                  (188)

Minority interest                                              164                  (119)                  143
                                                      ------------          ------------          ------------

Net loss                                                   (17,375)               (5,826)               (4,740)

Preferred stock dividends                                   (1,933)                   --                    --
                                                      ------------          ------------          ------------

Net loss attributable to common stockholders          $    (19,308)         $     (5,826)         $     (4,740)
                                                      ============          ============          ============

Net loss per common share:
   Basic and diluted                                  $      (0.55)         $      (0.25)         $      (0.27)

Weighted average number of  common
 shares                                                 35,057,725            23,323,439            17,691,690
</TABLE>

See accompanying summary of accounting policies and notes to consolidated
financial statements.


                                      F-4
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of changes in stockholders' equity and comprehensive
loss

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

<TABLE>
<CAPTION>
                                                                                                    Cumulative
                                                                                                     foreign
                                                Number of                         Additional         currency
                                                 common             Common         paid-in         translation          Accumulated
                                                 shares              stock         capital          adjustment            deficit
                                                                                       ($ thousand, except number of shares)
<S>                                            <C>                <C>            <C>                <C>                 <C>
As of September 30, 1997                       15,249,221         $       --     $    9,962         $      164          $   (7,376)

Issuance of common stock for cash               3,447,095                 --          3,935                 --                  --
Issuance of common stock relating to
 acquisition of NHS                               500,000                 --            500                 --                  --
Issuance of common stock relating to
 acquisition of Porkpine                          225,000                 --            326                 --                  --
Issuance of common stock relating to
 failed acquisition                               100,000                 --            100                 --                  --
Net loss                                               --                 --             --                 --              (4,740)
Effect of foreign currency translation                 --                 --             --               (375)                 --
                                               ----------         ----------     ----------         ----------          ----------

As of September 30, 1998                       19,521,316         $       --     $   14,823         $     (211)         $  (12,116)

<CAPTION>


                                                     Comprehensive
                                                        income/
                                                         (loss)              Total

<S>                                                   <C>                 <C>
As of September 30, 1997                              $   (7,212)         $    2,750

Issuance of common stock for cash                             --               3,935
Issuance of common stock relating to
 acquisition of NHS                                           --                 500
Issuance of common stock relating to
 acquisition of Porkpine                                      --                 326
Issuance of common stock relating to
 failed acquisition                                           --                 100
Net loss                                                  (4,740)             (4,740)
Effect of foreign currency translation                      (375)               (375)
                                                      ----------          ----------

As of September 30, 1998                              $  (12,327)         $    2,496
</TABLE>


                                      F-5
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of changes in stockholders' equity and comprehensive
loss (Continued)

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

<TABLE>
<CAPTION>
                                                                                                 Cumulative
                                                                                                  foreign
                                                Number of                      Additional         currency
                                                 common         Common          paid-in          translation         Accumulated
                                                 shares          stock          capital          adjustment            deficit
                                                                                      ($ thousand except number of shares)
<S>                                            <C>              <C>           <C>                <C>                 <C>
As of September 30, 1998                       19,521,316       $  --         $   14,823         $     (211)         $  (12,116)

Issuance of common stock for cash               4,709,333          --              3,882                 --                  --
Issuance of common stock relating to
 conversion of notes payable                      666,667          --                500                 --                  --
Issuance of common stock relating to
 acquisition of DBS Direct                      4,589,732          --              6,039                 --                  --
Net loss                                               --          --                 --                 --              (5,826)
Effect of foreign currency translation                 --          --                 --                 25                  --
Debt discount                                          --          --              1,122                 --                  --
Prepaid fees                                           --          --              1,720                 --                  --
                                               ----------         ---         ----------         ----------          ----------

As of September 30, 1999                       29,487,048       $  --         $   28,086         $     (186)         $  (17,942)

<CAPTION>


                                                 Comprehensive
                                                     income/
                                                     (loss)               Total

<S>                                                <C>                 <C>
As of September 30, 1998                           $  (12,327)         $    2,496

Issuance of common stock for cash                          --               3,882
Issuance of common stock relating to
 conversion of notes payable                               --                 500
Issuance of common stock relating to
 acquisition of DBS Direct                                 --               6,039
Net loss                                               (5,826)             (5,826)
Effect of foreign currency translation                     25                  25
Debt discount                                              --               1,122
Prepaid fees                                               --               1,720
                                                   ----------          ----------

As of September 30, 1999                           $  (18,128)         $    9,958
</TABLE>


                                      F-6
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of changes in stockholders' equity and comprehensive
loss (Continued)

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

<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                                                                                      foreign
                                                    Number of                      Additiona          currency
                                                     common         Common          paid-in          translation         Accumulated
                                                     shares          stock          capital          adjustment            deficit
                                                                                      ($ thousand except number of shares)
<S>                                                 <C>              <C>           <C>                <C>                 <C>
As of September 30, 1999                            29,487,048       $  --         $   28,086         $     (186)        $  (17,942)

Issuance of common stock for cash                    4,531,250          --              3,531                 --                 --
Issuance of common stock for cash upon
 the exercise of warrants                               55,370          --                 97                 --                 --
Issuance of common stock relating to
 acquisition of MonsterBook                          2,962,773          --             12,355                 --                 --
Deemed dividend to preferred stockholders
 in relation to warrants issued                             --          --              1,025                 --                 --
Issuance of common stock relating to
 compensation for termination of employment             50,000          --                137                 --                 --
Net loss to common shareholders                             --          --                 --                 --            (19,308)
Effect of foreign currency translation                      --          --                 --                713                 --
                                                    ----------       -----         ----------         ----------         ----------

As of September 30, 2000                            37,086,441       $  --         $   45,231         $      527         $  (37,250)
                                                    ==========       =====         ==========         ==========         ==========

<CAPTION>


                                                        Comprehensive
                                                            income/
                                                            (loss)               Total

<S>                                                        <C>                 <C>
As of September 30, 1999                                  $  (18,128)         $    9,958

Issuance of common stock for cash                                 --               3,531
Issuance of common stock for cash upon
 the exercise of warrants                                         --                  97
Issuance of common stock relating to
 acquisition of MonsterBook                                       --              12,355
Deemed dividend to preferred stockholders
 in relation to warrants issued                                   --               1,025
Issuance of common stock relating to
 compensation for termination of employment                       --                 137
Net loss to common shareholders                              (19,308)            (19,308)
Effect of foreign currency translation                           713                 713
                                                          ----------          ----------

As of September 30, 2000                                  $  (36,723)         $    8,508
                                                          ==========          ==========
</TABLE>


                                      F-7
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of cash flows

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

<TABLE>
<CAPTION>
                                                         Year ended        Year ended        Year ended
                                                        September 30,     September 30,     September 30,
                                                            2000              1999              1998
                                                        ($ thousand)      ($ thousand)      ($ thousand)
<S>                                                       <C>               <C>               <C>
Cash flows from operating activities
   Net loss                                               $(17,375)         $ (5,826)         $ (4,740)

Adjustments to reconcile net loss to net cash
 provided by operating activities
   Depreciation                                                 64                85               113
   Loss from the sale of fixed assets                           12                33                --
   Amortization of license                                      62               121               124
   Amortization of goodwill - subsidiaries                   1,497               438               205
   Amortization of goodwill - affiliates                       962               447                --
   Amortization of prepaid fees                              1,423               297                --
   Forgiveness of debt on termination of
    TMNI licence                                              (374)               --                --
   Impairment of license                                       630               261                --
   Provision for irrecoverable restaurant credits               --                18                --
   Share of loss of affiliates                               2,701               443               949
   Accrued interest expense                                    333               177               252
   Debt discount expense                                       142               980                --
   Accrued sign-on fees                                         --              (296)              296
   Reserve against non-trade receivable                         --                --               453
   Provision against security deposit                          630                --                --
   Minority interest                                           719               119               143
   Shares issued as termination payment                        137                --                --
   Impairment of goodwill - NHS                              4,316                --                --

Changes in assets and liabilities
   Trade accounts payable                                      203                92              (289)
   Accrued liabilities                                          82              (391)              (36)
   Accounts receivable                                         222               178                36
   Restaurant credits                                          128                49               106
   Prepaid expenses and other current assets                   181              (146)             (154)
   Deferred income                                              --              (397)              160
   Advances from affiliate companies                            --               114                --
   Other assets                                               (488)              164              (140)
                                                          --------          --------          --------

Net cash used in operating activities                       (3,793)           (3,040)           (2,522)
                                                          --------          --------          --------
Cash flows from investing activities
   Cash paid for interest in DBS Direct                       (563)             (937)               --
   Cash paid for interest in other affiliates                   --               (26)             (571)
   Net cash paid to acquire NHS                                 --            (1,997)           (1,702)
   Net cash paid to acquire Breakaway                           --                --              (127)
   Cash paid to acquire MonsterBook                           (138)               --                --
   Cash paid for lease deposit                              (1,529)               --                --
   Net proceeds (cash paid) on fixed assets                    (67)                9               (37)
                                                          --------          --------          --------

Net cash used in investing activities                       (2,297)           (2,951)           (2,437)
                                                          --------          --------          --------
</TABLE>


                                      F-8
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of cash flows (Continued)

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

<TABLE>
<CAPTION>
                                                            Year ended        Year ended       Year ended
                                                           September 30,     September 30,    September 30,
                                                               2000              1999             1998
                                                           ($ thousand)      ($ thousand)     ($ thousand)
<S>                                                          <C>               <C>               <C>
Cash flows from financing activities
   Advances to related parties                                 (4,074)           (1,444)               (2)
   Proceeds received from issuance of preferred
    stock                                                      10,000                --                --
   Issue costs of preferred stock                                (650)               --                --
   Net proceeds received from issuance of
    common stock                                                3,531             3,882             3,935
   Net proceeds from issuance of warrants                          97                --                --
   Bank credit line                                                 2                19                --
   Proceeds from notes payable                                     --             3,900             1,615
   Repayment of loans and notes payable                        (3,688)           (1,327)               --
                                                             --------          --------          --------

Net cash provided by financing activities                       5,218             5,030             5,548
                                                             --------          --------          --------

Effects of exchange rate changes on cash                          713                 4              (112)
                                                             --------          --------          --------

Net (decrease) in cash and cash equivalents                      (159)             (957)              477

Cash and cash equivalents at beginning of period                  548             1,505                13
Cash acquired as part of acquisitions                              55                --             1,015
                                                             --------          --------          --------

Cash and cash equivalents at end of period                   $    444          $    548          $  1,505
                                                             ========          ========          ========

Supplemental disclosures of cash flow information

   Cash paid during the year for:
     Interest                                                $      1          $    347          $     75
     Taxes paid                                              $      2          $    Nil          $    Nil
</TABLE>


                                      F-9
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of cash flows (Continued)

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

(1)   In December, 1997, the Company issued 500,000 shares of its common stock
      as part payment for the acquisition by NHS Australia Pty Limited of the
      business of Nationwide Helpline Service Pty Limited. In November, 1998,
      the Company and TME jointly acquired the remaining 49% of NHS. The
      consideration paid totalled $4,199,000 made up as follows:

                                                                    ($ thousand)

         Cash payment                                                $   3,699
         Issuance of 500,000 shares of Common Stock                        500
                                                                     ---------

                                                                     $   4,199
                                                                     =========

(2)   In May, 1998, the Company issued 225,000 shares of its common stock as
      part payment for its investment in Porkpine Limited ("Porkpine"). The
      consideration paid totalled $923,000 made up as follows:

                                                                    ($ thousand)

         Cash payment                                                $     597
         Issuance of 225,000 shares of Common Stock                        326
                                                                     ---------

                                                                     $     923
                                                                     =========

(3)   In June, 1999, the Company issued 4,589,732 shares of its common stock as
      part payment for its 50% investment in DSS Direct Connect, LLC ("DBS
      Direct"). The remaining interest of 50% was acquired by TME. The
      consideration paid totalled $7,538,000 made up as follows:

                                                                    ($ thousand)

         Issuance of 4,589,732 shares of Common Stock                $   6,039
         Capital contribution
            Paid                                                           937
            Deferred                                                       562
                                                                     ---------

                                                                     $   7,538
                                                                     =========

      The deferred capital contribution was paid in November and December 1999.


                                      F-10
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Consolidated statements of cash flows (Continued)

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

(4)   In April, 2000, the Company issued 2,962,773 shares of its common stock as
      payment for its investment in MonsterBook. The consideration paid totalled
      $12,493,000 made up as follows:

                                                                    ($ thousand)

         Issuance of 2,962,773 shares of Common Stock                $  12,355
         Cash paid                                                         138
                                                                     ---------

                                                                     $  12,493
                                                                     =========


                                      F-11
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements

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

1     The Company

      Transmedia Asia Pacific, Inc. ("the Company" or "TMAP" ) is a Delaware
      corporation which was organised in March 1994 and commenced operations in
      Sydney, Australia in November 1994. TMAP is a provider of member benefit
      programs and travel services.

      On December 2, 1997, Taste Card Pty Limited (f.k.a Transmedia Australia
      Travel Holdings Pty Limited) ("Transmedia Australia"), a company owned
      equally by the Company and Transmedia Europe, Inc. ("TME"), purchased 51%
      of the Common Stock of NHS Australia Pty Limited ("NHS"). On November 17,
      1998 Transmedia Australia acquired the remaining 49% of NHS.

      On May 14, 1998 the Company and TME purchased jointly 100% of the
      outstanding Common Stock of Porkpine Limited ("Porkpine").

      On May 22, 1998 Taste Card Pty Limited, a company owned equally by the
      Company and TME acquired 100% of the issued share capital of Breakaway
      Travel Club Pty Limited ("Breakaway").

      In July 1998, the Company and TME jointly incorporated Countdown America,
      Inc. which changed its name to Countdown USA, Inc. on March 23, 1999
      ("Countdown USA").

      On June 15, 1999 the Company and TME purchased jointly 100% of the
      outstanding Common Stock of DSS Direct Connect, LLC ("DBS Direct").

      On April 7, 2000 the Company and Transmedia Network, Inc. ("Network")
      executed a termination agreement pursuant to which the Company agreed to
      cancel the license agreement entered into on May 2, 1994.

      On April 13, 2000 the Company acquired 100% of the outstanding Common
      Stock of MonsterBook.com, Inc ("MonsterBook").

      On December 28, 1999 the Company and TME executed a definitive merger
      agreement ("Merger Agreement"). Under the terms of the Merger Agreement
      the Company will issue one share of its common stock for one common stock
      of TME. The merger is subject to a number of conditions including
      shareholder approval.

      As of September 30, 2000, the Company had the following equity interests
      in its direct subsidiaries and affiliates:

                                                     Country of
                    Name                            incorporation        % owned

       Subsidiaries
          Transmedia Australia Pty Limited            Australia            100
          Transmedia Australasia Limited             New Zealand           100
          MonsterBook.com, Inc                           USA               100
          Taste Card Pty Limited                      Australia             50
          Transmedia Australia Holdings
          Pty Limited                                 Australia             50


                                      F-12
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

1     The Company (Continued)

                                                 Country of
                    Name                        incorporation           % owned

       Affiliates
          Countdown Holdings Limited                 UK                    50
          Porkpine Limited                 Jersey/Channel Islands          50
          DSS Direct Connect, LLC                    USA                   50
          Countdown USA, Inc.                        USA                   50

      All references herein to "Company" and "TMAP" include Transmedia Asia
      Pacific, Inc. and its subsidiaries unless otherwise indicated.

      Although the Company has significant influence over the operating and
      financial decisions of the affiliates the Company does not have effective
      control over their operations and therefore they are accounted for under
      the equity method.

2     Significant accounting policies

      (a)   Principles of consolidation

            The consolidated financial statements include the financial
            statements of the Company and its subsidiaries and affiliates,
            including 50% held subsidiaries where effective control is exercised
            by the Company over the financial and operational decisions of the
            subsidiary. All significant intercompany transactions have been
            eliminated on consolidation.

            Investments in affiliates are accounted for using the equity method
            when the Company owns at least 20% but no more than 50% of such
            affiliates. Under the equity method the Company records its
            proportionate share of profits and losses based on its percentage
            interest in those affiliates.

            The accompanying financial statements have been prepared assuming
            that the Company will continue as a going concern. The Company's
            ability to continue as a going concern depends on its ability to
            obtain outside financing sufficient to support its operations. Refer
            to Note 3.

      (b)   Restaurant credits

            Restaurant credits represent the total advances made to
            participating restaurants in exchange for credits less the amount by
            which these food and beverage credits are recouped by the Company as
            a result of Company cardholders utilising their cards at
            participating restaurants. The amount by which such food and
            beverage credits are recouped amounts to approximately 50% of the
            retail value of food and beverages consumed by cardholders.

            The Company historically reviewed recoverability of restaurant
            credits and established an allowance for restaurant credits to
            restaurants that had ceased operations or whose credits may not be
            utilized by cardholders. The allowance for irrecoverable restaurant
            credits as of September 30, 2000 considers the effect of
            management's decision not to establish a new dining product post
            termination of the Network License.


                                      F-13
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

2     Significant accounting policies (Continued)

      (c)   Long-lived assets

            Long-lived assets, such as office furniture and equipment, goodwill
            and other intangibles, are evaluated for impairment when events or
            changes in circumstances indicate that the carrying amount of the
            assets may not be recoverable through the estimated undiscounted
            future cash flows from the use of these assets. When any such
            impairment exists, the related assets will be written down to fair
            value. During fiscal 2000 an impairment write-down of $4,316,000 was
            recorded against NHS goodwill and $630,000 against the Transmedia
            License (fiscal 1999 - $260,000; fiscal 1998 - $Nil).

      (d)   Intangible assets excluding goodwill

            Other intangible assets consisted primarily of the cost of the
            Transmedia License paid to Network in cash plus the fair value of
            shares of Common Stock granted in exchange for the Transmedia
            License to operate in the licensed territories using the systems,
            procedures and 'know how' of the Transmedia business. The license
            cost was being amortized on a straight-line basis over its estimated
            useful life of 15 years from the commencement of operations in
            November 1994, until terminated in April 2000. On termination the
            unamortized balance of $630,000 was written off in full and included
            in loss from operations.

      (e)   Office furniture and equipment

            Office furniture and equipment are stated at cost less accumulated
            depreciation. Depreciation is calculated using the straight-line
            method over the estimated lives which are between 3-5 years.

      (f)   Goodwill

            The excess of cost of investments over the fair value of net assets
            acquired which is not otherwise allocated is determined to be
            goodwill and is amortized on a straight-line basis over a period of
            five, ten or fifteen years.

      (g)   Income taxes

            The Company recognises deferred tax liabilities and assets for the
            expected future tax consequences of events that have been included
            in the financial statements or tax returns. Accordingly, deferred
            tax liabilities and assets are determined based on the difference
            between the financial statement and tax basis of assets and
            liabilities using enacted rates in effect for the year in which the
            differences are expected to reverse. The effect on deferred tax
            assets and liabilities of a change in tax rates is recognised in
            income in the period that includes the enactment date.

            A valuation allowance is established to reduce the deferred tax
            assets when management determines it is more likely than not that
            the related tax benefits will not be realised.


                                      F-14
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

2     Significant accounting policies (Continued)

      (h)   Revenue recognition

            During the last quarter of fiscal 2000 the Company retroactively
            applied the guidance in Staff Accounting Bulletin ("SAB") 101 and
            EITF 99-19 by reporting certain revenues net.

            Revenues are recognized as follows:

            (i)   the retail value of food and beverages purchased from
                  participating restaurants by the Company's Transmedia.
                  cardholders less the cardholders' 20% or 25% discount net of
                  the cost of providing the restaurant credit are recognized at
                  the time of sale. (Refer to Note 2(b))

            (ii)  membership fees charged to Transmedia card-holders and NHS
                  sponsoring corporations are non-refundable and recognized
                  ratably over the period for which the service is provided.

            (iii) Travel agency commissions are recognized once bookings have
                  been confirmed and payment made.

            (iv)  MonsterBook sells business advertising space on their website
                  and in a hardbound directory distributed for free to
                  subscribers. The price charged to advertisers includes a
                  listing on the website for one year and inclusion in a
                  predetermined amount of hardbound directories. The Company
                  allocates 80% of this type of advertising revenue to the value
                  of the hardbound directory. Once the directory is distributed
                  and collection likely revenue is recognized on this portion
                  ratably over the distribution period; generally three months.
                  The remaining 20% of revenue is allocated to the website
                  listing.

      (i)   Foreign currencies

            The reporting currency of the Company is the United States dollar.
            The Company's functional currencies are the United States dollar,
            the Australian dollar, the UK pound sterling and the Irish punt. The
            Australian dollar is the functional currency of the Company's member
            benefits and travel businesses because it is the primary currency of
            the environment in which the businesses operate as autonomous units.
            All cash generated and expended by these businesses is primarily in
            Australian dollars. For the same reasons the functional currency of
            the company's interest in Countdown is the UK pound sterling because
            that business is located, and primarily operates in, the United
            Kingdom. Similarly the functional currency of the Company's interest
            in Porkpine is the Irish punt because that business is located, and
            primarily operates in the Republic of Ireland. The functional
            currency of the Company's interest in MonsterBook is the United
            States dollar because that business is located and operates in the
            United States.

            For consolidation purposes, the assets and liabilities of overseas
            subsidiaries are translated at the closing exchange rates.
            Consolidated statements of income of such subsidiaries are
            consolidated at the average rates of exchange during the period.
            Exchange differences arising on the translation of subsidiaries'
            financial statements are recorded in the cumulative foreign currency
            translation adjustment account as a component of stockholders'
            equity.

            Transactions in foreign currencies are recorded using the rate of
            exchange ruling at the date of the transaction. Monetary assets and
            liabilities denominated in foreign currencies are translated using
            the rate of exchange ruling at the balance sheet date and the gains
            or losses on translation are included in the consolidated statement
            of operations. In the year ended September 30, 2000 the Company
            recorded an exchange gain of $Nil (fiscal 1999 - gain of $212,000;
            fiscal 1998 - loss of $80,000).


                                      F-15
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

2     Significant accounting policies (Continued)

      (i)   Foreign currencies (Continued)

            The average exchange rates for the years ended September 30, 2000,
            1999 and 1998 and the exchange rates in effect as of September 30,
            2000, 1999 were as follows:

                                               UK pound    Australian    Ireland
                                               sterling      dollar       punt
           Average exchange rates

             Year ended September 30, 2000      1.5265       0.6076      1.2259
             Year ended September 30, 1999      1.6244       0.6649      1.3773
             Year ended September 30, 1998      1.6533       0.6470      1.4215

           Closing exchange rate

             September 30, 2000                 1.4791       0.5417      1.1227
             September 30, 1999                 1.6463       0.6528      1.3513

      (j)   Cash equivalents

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

      (k)   Use of Estimates

            In preparing the consolidated financial statements in conformity
            with generally accepted accounting principles, management is
            required to make estimates and assumptions that affect the reported
            amounts of assets and liabilities and the disclosure of contingent
            liabilities at the date of the consolidated financial statements and
            revenues and expenses during the reported period. Actual results
            could differ from these estimates.

      (l)   Financial instruments

            Financial instruments held by the Company include cash and cash
            equivalents, notes payable, restaurant credits, amounts due from/to
            related parties and investment in affiliates and approximated fair
            value as of September 30, 2000 and 1999 due to either short maturity
            or terms similar to those available to similar companies in the open
            market.

      (m)   Comprehensive income

            The Company adopted Statement of Financial Accounting Standard
            ("SFAS") No.130, "Reporting Comprehensive Income", which establishes
            standards for reporting and display of comprehensive income (loss),
            its components and accumulated balances. Comprehensive income (loss)
            is defined to include all changes in equity except those resulting
            from investments by owners and distributions to owners. Among other
            disclosures, SFAS No.130 requires that all items that are required
            to be recognized under current accounting standards as components of
            comprehensive income (loss) be reported in a financial statement
            that is displayed with the same prominence as other financial
            statements. The only item of comprehensive income (loss) is foreign
            currency translation adjustments.


                                      F-16
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

2     Significant accounting policies (Continued)

      (n)   Stock compensation

            The Company applies the recognition and measurement provisions of
            Accounting Principles Board (APB) Opinion No. 25, "Accounting for
            Stock Issued to Employees" and the disclosure provisions of SFAS No.
            123, "Accounting for Stock-Based Compensation" in accounting for
            stock options issued to employees. The Company follows the fair
            value method of accounting prescribed by SFAS No. 123 for stock and
            warrants issued to non-employees in exchange for services to
            non-employees.

      (o)   Earnings per share

            The Company follows SFAS No. 128, "Earnings per share," which
            requires presentation of basic earnings per share and diluted
            earnings per share by all entities that have publicly traded common
            stock or potential common stock (options, warrants, convertible
            securities or contingent stock arrangements). Basic earnings per
            share is computed by dividing income available to common
            stockholders by the weighted average number of common shares
            outstanding during the period. Diluted earnings per share gives
            effect to dilutive potential common shares outstanding during the
            year. Assumed exercise of options and warrants has not been included
            in the calculation of diluted loss per share since the effect would
            be anti-dilutive. Accordingly, basic and diluted net loss per share
            do not differ for any period presented.

      (p)   Recent accounting pronouncements not yet implemented

            In June 1998, the Financial Accounting Standards Board ("FASB")
            issued SFAS No.133, "Accounting for Derivative Instruments and
            Hedging Activities", which establishes standards for accounting for
            the various derivative instruments commonly used in hedging
            activities. This standard is now effective for fiscal years
            beginning after June 15, 2000. The Company has not in the past nor
            does it anticipate that it will engage in transactions involving
            derivative instruments, and therefore adoption of this pronouncement
            will not have a significant effect on its financial statements.

            In December 1999, the Securities Exchange Commission issued Staff
            Accounting Bulletin ("SAB") No. 101, "Revenue Recognition". This
            bulletin summarizes views of the Staff on applying generally
            accepted accounting principles to revenue recognition in financial
            statements. The Company is required to adopt SAB No. 101, as amended
            by SAB 101B, in the fourth quarter of fiscal 2001, however as stated
            in paragraph (h) above this SAB has been adopted in preparing these
            financial statements.

            In March 2000, the FASB issued Financial Interpretation No. 44,
            "Accounting for Certain Transactions involving Stock Compensation an
            interpretation of APB Opinion 25". Interpretation No. 44 is
            effective July 1, 2000. Interpretation No. 44 clarifies the
            application of APB Opinion 25 for various matters, specifically: the
            criteria for determining whether a plan qualifies as a
            non-compensatory plan; the accounting consequence of various
            modifications to the terms of a previously fixed stock option or
            award; and the accounting for an exchange of stock compensation
            awards in a business combination. Management believes that the
            adoption of Interpretation No. 44 note will not have a material
            impact on the Company's financial position or results of operations.


                                      F-17
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

2     Significant accounting policies (Continued)

      (p)   Recent accounting pronouncements not yet implemented (Continued)

            In March 2000, the FASB's Emerging Issue Task Force ("EITF") reached
            a consensus on EITF 00-2, "Accounting for Web Site Development
            Costs". EITF 00-2 discusses how an entity should account for costs
            incurred to develop a web site. EITF 00-2 is effective in the first
            quarter of fiscal 2001, in accordance with EITF 00-2 the Company
            capitalizes certain costs and expenses others. Accordingly the
            Company capitalizes a portion of the labor costs associated with
            substantive website development and improvement activities. Labor
            costs associated with maintenance and routine changes are expensed
            in the period incurred. Amortization is recorded using the
            straight-line method over 5 years. Included within Other Assets as
            of September 30, 2000 is the amortized balance of $137,000 relating
            to such costs.

3     Going concern

      The financial statements record a loss for the year ended September 30,
      2000 of $19,308,000, which, when taken with the previous years' results,
      result in an accumulated deficit of $37,250,000 at September 30, 2000.

      The Company has strategically reviewed each of its operating businesses
      and with TME each of its affiliated businesses. Management projects that
      each business will, as a result, be operating cash flow positive by the
      second half of fiscal 2001. However, cash projected to be generated by the
      operations of the Company's subsidiaries and affiliates in fiscal 2001
      will not be sufficient to fund corporate overhead or the costs of the
      proposed merger with TME.

      The Company does not have existing lines of credit and therefore, in light
      of the above, the Company will require an additional cash infusion in the
      second quarter of fiscal 2001 and may require further cash infusions
      thereafter. Management believes that it will be able to secure sufficient
      funds to operate in the foreseable future either independently or via the
      recovery of short-term indebtedness from TME. It should be noted however
      that there is no assurance that additional funds can be raised or that the
      cost of such funds and/or the extent of dilution to existing shareholders
      would be acceptable to the Company.

4     Revenues

<TABLE>
<CAPTION>
                                                      Year ended       Year ended       Year ended
                                                     September 30,    September 30,    September 30,
                                                         2000             1999             1998
                                                     ($ thousands)    ($ thousands)    ($ thousands)
<S>                                                    <C>              <C>              <C>
       Revenues comprise of the following:
          Retail value of food and beverage
           purchased from participating restaurants         297              645            1,172
          Cost of revenue                                  (245)            (431)            (762)
                                                       --------         --------         --------

                                                             52              214              410

          Membership fees                                 1,034            1,950            2,689
          Travel agency commission                          477            1,396              806
          Sale of advertising space                          63                -                -
                                                       --------         --------         --------

                                                       $  1,626         $  3,560         $  3,905
                                                       ========         ========         ========
</TABLE>


                                      F-18
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

5     Related party transactions

      Amounts due from/to related parties are made up as follows:

                                                  September 30,  September 30,
                                                      2000           1999
                                                  ($ thousand)   ($ thousand)

        Amounts due from:

          TME                                      $   3,661      $       -
          Countdown                                        -             23
                                                   ---------      ---------

                                                   $   3,661      $      23
                                                   =========      ==========

       Amounts due to:

          J V Vittoria                             $   1,422      $   1,302
          TMNI                                             -            355
          TME                                              -            270
          Countdown USA (see also Note 6)                386            124
          J Vittoria, Jnr                                250              -
                                                   ---------      ---------

                                                   $   2,058      $   2,051
                                                   =========      =========

      Loans to related parties are unsecured, non-interest bearing and repayable
      upon demand except as noted below.

      During fiscal 1997 the Company entered into an agreement with Mr J
      Vittoria, a director and shareholder of the Company, whereby Mr Vittoria
      advanced a loan of $1,000,000 to the Company. The purpose of the loan was
      to enable the Company to pay the cash element of the purchase of the
      Company's interest in Countdown. The loan, which bears interest at 12% per
      annum and is collaterized by a pledge of all the shares of Countdown
      purchased by the Company, was originally scheduled to mature on September
      27, 1997. The loan was renewed upon maturity for an indefinite period by
      agreement between the Company and Mr Vittoria. The loan is repayable on 60
      days notice from Mr Vittoria. A further unsecured amount of $250,000 was
      advanced by Mr Vittoria's son in fiscal 2000.

      During the year ended September 30, 2000, the Company was charged a
      corporate management fee of $1,191,000 (fiscal 1999 - $1,210,000; fiscal
      1998 - $1,060,000) from TME in respect of the Company's share of head
      office expenses, comprising salaries, rent, travel and other associated
      office and professional costs.

      During the year ended September 30, 2000 the Company appointed a Director
      whose own company charged the Company $500,000 for his services as a
      director.


                                      F-19
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

6     Investment in affiliated companies

      (a)   Investments in affiliated companies is made up as follows:

                                                    September 30,  September 30,
                                                        2000           1999
                                                    ($ thousand)   ($ thousand)

       Countdown
          Cost of investment                         $   2,682      $   2,682
          Cost of option                                   172            172
          Shares of losses                                (983)          (798)
          Amortization of goodwill on investment          (633)          (405)
                                                     ---------      ---------

                                                     $   1,238      $   1,651
                                                     ---------      ---------

       Porkpine
          Cost of investment                         $     923      $     923
          Shares of losses                                 (92)           (76)
          Amortization of goodwill on investment          (141)           (82)
                                                     ---------      ---------

                                                     $     690      $     765
                                                     ---------      ---------

       DBS Direct
          Cost of investment                         $   7,538      $   7,538
          Shares of losses                              (2,595)          (319)
          Amortization of goodwill on investment          (872)          (197)
                                                     ---------      ---------

                                                     $   4,071      $   7,022
                                                     ---------      ---------

       Total investment in affiliates                $   5,999      $   9,438
                                                     =========      =========


                                      F-20
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

6     Investment in affiliated companies (Continued)

<TABLE>
<CAPTION>
                                                                   September 30,   September 30,
                                                                       2000            1999
                                                                   ($ thousand)    ($ thousand)
<S>                                                                 <C>              <C>
      Countdown USA
         Cost of investment                                         $      25        $      25
         Shares of losses                                                (411)            (184)
         Amounts due from Countdown USA                                     -               35
                                                                    ---------        ---------

      Included within related parties (See also Note 5)             $    (386)       $    (124)
                                                                    =========        =========

      (b)   DBS Direct summary financial information

      Current assets                                                $   4,191        $     165

      Non current assets                                                  228            1,459
                                                                    ---------        ---------

      Total assets                                                  $   4,419        $   1,624
                                                                    =========        =========

      Current liabilities                                           $   8,191        $     844
                                                                    =========        =========

      Revenues                                                      $   3,321        $   1,564
                                                                    =========        =========

      Gross profit                                                  $     953        $     539
                                                                    =========        =========

      Selling, general and administrative expenses                  $   5,463        $   2,011
                                                                    =========        =========

      Net loss                                                      $  (4,552)       $  (1,518)
                                                                    =========        =========
</TABLE>


                                      F-21
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

7     Goodwill and other intangible assets

       Goodwill is made up as follows:

<TABLE>
<CAPTION>
                                                                    September 30,  September 30,
                                                                        2000           1999
                                                                    ($ thousand)   ($ thousand)
<S>                                                                  <C>            <C>
          Acquisition of NHS                                         $   5,213      $   5,213
          Acquisition of Breakaway                                          59             59
          Acquistion of MonsterBook                                     12,693              -
                                                                     ---------      ---------

                                                                        17,965          5,272

          Less: Accumulated amortization                                (2,139)          (642)
                Impairment write-down of NHS                            (4,316)             -
                                                                     ---------      ---------

                                                                     $  11,510      $   4,630
                                                                     ---------      ---------

        Other intangible assets is made up as follows:

          Transmedia license                                             1,841          1,841

          Less: Accumulated amortization                                (1,211)          (889)
                Impairment write-down of license                          (630)          (260)
                                                                     ---------      ---------

                                                                     $       -      $     692
                                                                     =========      =========
</TABLE>

      The impairment to the carrying value of NHS goodwill arises from the loss
      of significant customers in the year.

      The impairment to the carrying value of the license arises from the
      termination of the Transmedia Licence Agreement during the year.

8     Acquisition

      On April 13, 2000 (the "Effective Date") the Company, Asia Merger Sub II,
      Inc., a wholly owned subsidiary of the Company ("Merger Sub"), and
      MonsterBook.com, Inc. ("MonsterBook") consummated a merger (the "Merger")
      of Merger Sub with and into MonsterBook pursuant to which MonsterBook
      became a wholly owned subsidiary of the Company. The Merger was
      consummated pursuant to the terms of an Agreement and Plan of Merger (the
      "Merger Agreement"), dated as of March 8, 2000, by and among the Company,
      Merger Sub, MonsterBook and William H McKee and Frank T Vega. The merger
      was accounted for as a purchase.

      MonsterBook produces and distributes a printed e-business directory for
      the Internet.


                                      F-22
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

8     Acquisition (Continued)

      Pursuant to the terms of the Merger Agreement, as of the Effective Date,
      each of the outstanding shares of common stock of MonsterBook, par value
      $0.0001 per share, was converted into the right to receive either (a)
      $0.27105114 in cash, without interest (the "Cash Consideration") or (b)
      0.0735054 of a share of common stock of the Company, par value $0.00001
      per share (the "Stock Consideration" and, together with the Cash
      Consideration, the "Merger Consideration"). The Stock Consideration issued
      by the Company was 2,962,773 shares of its common stock, and the Cash
      Consideration paid by the Company was approximately $138,000. Based on an
      average closing price of the Company's common stock around the April 13,
      2000, the date the acquisition was agreed and announced, of $4.17 per
      share, the Stock Consideration had a value of $12,355,000, giving a total
      consideration of $12,493,000. In addition, the Company converted existing
      MonsterBook options into options to acquire approximately 362,749 shares
      of the Company's common stock.

      The total consideration has been allocated to net current liabilities
      acquired of $200,000 and goodwill of $12,693,000. Goodwill is being
      amortized over 5 years.

      The following pro forma consolidated financial information has been
      prepared to reflect the aquisition. The pro forma financial information is
      based on the historical financial statements of the Company and those of
      the aquired business. The accompanying pro forma Operating Statements are
      presented as if the acquisition occurred on October 1, 1998. The pro forma
      financial information is unaudited and is not necessarily indicative of
      what the actual results of operations of the company would have been
      assuming the acquisition had been completed as October 1, 1998, and
      neither is it necessarily indicative of the results of operations for
      future periods.

                                                   Year ended      Year ended
                                                  September 30,   September 30,
                                                      2000            1999
                                                  ($ thousands)   ($ thousands)

          Revenues                                 $   1,640        $   3,734
                                                   =========        =========

          Loss from operations                     $ (14,623)       $  (6,148)
                                                   =========        =========

          Net loss                                 $ (20,577)       $  (8,613)
                                                   =========        =========


The above unaudited pro forma consolidated Financial Information has been
adjusted to reflect amortisation of intangibles as generated by the acquisition
over a five year period.

                                      F-23
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

9     Notes payable

      (a)   On November 16, 1998 the Company entered into a One Year Secured
            Promissory Note ("Note") in the principal sum of $3.4 million
            executed with FAI General Insurance, a shareholder of the Company
            and TME. Interest on the Note accrued at the rate of 10% per annum
            and was payable quarterly in arrears. The Note was secured by a
            charge over Transmedia Australia and was guaranteed by TME. The Note
            was originally repayable on November 16, 1999.

            Interest on the Promissory Note was paid to November 15, 1999 and
            the Company repaid $400,000 of principal in November 1999. On
            November 30, 1999 the Note holder and the Company executed a new
            note representing the balance of principal of $3 million. The new
            note was payable on February 15, 2000 with interest at the rate of
            10% per annum payable at maturity. The new note was secured by a
            charge over Transmedia Australia and was guaranteed by TME. The Note
            was repaid on that date.

            The Note holder received a three year warrant to purchase 1,000,000
            shares of common stock of the Company at an exercise price of $1.00
            per share. In addition the Company agreed to exchange warrants to
            purchase 633,366 shares of common stock exercisable at prices
            between $1.00 and $1.40, for a warrant to purchase shares at an
            exercise price of $1.00.

            The warrants were valued at approximately $1,122,000 using the
            Black-Scholes model and the Company recorded the amount as a debt
            discount, with a related credit to additional paid-in capital. The
            debt discount is being amortized over the life of the Note. As of
            September 30, 2000 the balance of the debt discount, net of
            amortization, was $Nil.

      (b)   On February 5, 1999 the Company engaged in a private placement of
            debt securities. The Placement was made pursuant to the exemption
            from registration afforded by Section 4(2) of the Securities Act
            1933, as amended, and Regulation D promulgated thereunder. The
            placement consisted of a $500,000 face amount zero coupon promissory
            note payable on March 5, 1999. The note holder received a three year
            warrant to purchase 100,000 shares of the common stock of the
            Company at an exercise price of $1.25 per share. The fair value of
            the warrant was assessed using the Black-Scholes model but not
            considered material. The warrant was exercisable at any time after
            issuance, being February 5, 1999 through February 4, 2002. The
            Company failed to pay the Note on the due date but the note holder
            agreed to extend the repayment date to June 21, 1999.

            In consideration for the additional time granted by the holder to
            pay the promissory note, the Company granted the holder an
            additional warrant to purchase 100,000 shares of Common Stock at an
            exercise price of $1.25 per share for no additional consideration.
            The fair value of the warrant was assessed using the Black-Scholes
            model but not considered material. The additional warrant was
            exercisable at any time after issuance, being February 5, 1999
            through February 4, 2002. The Company also granted the holder the
            right, prior to repayment, to convert the promissory note in whole
            or in part into shares of Common Stock at a conversion price of
            $0.75 per share. On June 18, 1999 the promissory note holder
            exercised his conversion privilege and the Company issued 666,667
            shares of Common Stock in full satisfaction of the promissory note.


                                      F-24
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

10    Series A Convertible Preferred Stock

      On March 27, 2000 the Company sold, in a private placement (the
      "Placement") pursuant to the exemption from registration afforded by
      Section 4(2) of the Securities Act of 1933, as amended, and Regulation D
      promulgated thereunder, 10,000 shares of a newly designated Series A
      Convertible Preferred Stock, par value $0.01 at an issue price of $1,000
      per share ("Preferred Shares") resulting in net proceeds to the Company of
      approximately $9,350,000. In connection with the Placement the Company
      paid due diligence costs of $50,000 in cash and granted to the purchasers
      of the Preferred Shares five year warrants to purchase in aggregate
      385,542 shares of the Company's common stock at an exercise price of
      $6.225 per share. Additionally, the Company paid a cash fee of $600,000
      for services in connection with the Placement and granted them five year
      warrants to purchase an aggregate of 250,000 shares of the Company's
      common stock at an exercise price of $6.225 per share. The fair value of
      the warrants issued to the purchasers of the Preferred Shares totalled
      $1,025,000 using the Black-Scholes model and the Company recorded such
      amount as preferred stock dividends in the quarter ended March 31, 2000,
      with a related credit to additional paid-in capital. The cash fee paid for
      services in connection with the Placement has been treated as a deemed
      dividend.

      The Preferred Shares rank senior to all common stock and to all other
      series of preferred stock when and if issued unless otherwise agreed to by
      the holders of the Preferred Shares, and entitle the holder to dividends
      as declared on a non-cumulative basis. The principal terms of the
      Preferred Shares are:

      (i)   Liquidation Preference: $1,000 per share plus 5% per annum subject
            to certain adjustments. Neither a consolidation, merger nor sale of
            all of the Company's assets shall in and of itself be considered a
            liquidation.

      (ii)  Conversion: Preferred Shares can be converted into common stock
            through December 27, 2000 at a price of $6.225 per share. Thereafter
            the conversion ratio shall be the lower of $6.74375 and the average
            market price determined as of December 27, 2000, as reset at the end
            of each six month period thereafter through March 27, 2003. The
            average market price shall be the average of the five lowest sale
            prices for five of the twenty trading days immediately preceding the
            relevant determination date. The applicable conversion price shall
            also be reduced, on a weighted average basis, to adjust for
            issuances of equity at a price per share lower than the conversion
            price then in effect. In addition, adjustments shall be made to
            reflect dividends paid with respect to capital stock ranking junior
            as to dividends or liquidation rights to the Preferred Shares as
            well as the issuance of options or warrants. Additionally, holders
            of the Preferred Shares can require redemption by the Company upon
            the occurrence of certain events, including but not limited to,
            delisting of the Company's shares of common stock from the NASDAQ
            SmallCap market, absence of a closing bid price for five consecutive
            trading days, restriction on sale for thirty or more days after a
            registration statement covering the shares of common stock
            underlying the Preferred Shares has been declared effective or the
            taking of any action without the authorization of a majority in
            interest of the holders of the Preferred Shares which would be
            adverse to their rights.

      (iii) Optional Redemption by the Company: Under certain circumstances
            where the Company is in full compliance with all its obligations to
            the holders of Preferred Shares, the Company shall have the right,
            upon giving notice not later than twenty trading days nor more than
            thirty trading days prior to the proposed redemption date to redeem
            the Preferred Shares at the applicable redemption price. Such
            redemption price shall be the higher of (A.) the product obtained by
            multiplying (i) $1,000 plus (ii) accrued dividends calculated at 5%
            thereof per annum times 120% or (B) the number of shares of common
            stock which would be issuable upon conversion of the Series A
            Convertible Preferred Stock on the date of determination times the
            average closing bid price for the common stock for the five trading
            days immediately preceding the redemption date.


                                      F-25
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

10    Series A Convertible Preferred Stock (Continued)

      (iv)  Final Redemption: The Company shall have the right commencing March
            28, 2003 to redeem the Series A Convertible Preferred Stock at any
            time thereafter so long as it is in compliance with all requirements
            and notice is given not less than thirty trading days nor more than
            fifty trading days prior to the final redemption date. The final
            redemption price shall be the sum of $1,000 plus accrued dividends
            calculated thereon at 5% per annum.

      (v)   Voting Rights: Holders of the Preferred Shares do not have voting
            rights other than with respect to matters adversely affecting the
            rights of such holders.

11    Stockholders equity

      On September 30, 1999 the Company commenced a private placement pursuant
      to the exemption from registration afforded by Section 4(2) of the
      Securities Act of 1933, as amended, and Regulation D promulgated
      thereunder. The placement closed on October 5, 1999 upon the sale of
      625,000 shares of common stock at $0.65 per share resulting in net
      proceeds to the Company of $406,250.

      On October 21, 1999 the Company commenced a private placement pursuant to
      the exemption from registration afforded by Section 4(2) of the Securities
      Act of 1933, as amended, and Regulation D promulgated thereunder. The
      placement closed on November 20, 1999 upon the sale of 3,906,250 shares of
      common stock at $0.80 per share resulting in net proceeds to the Company
      of $3,125,000.

      During the quarter ended March 31, 2000 the Company issued 50,000 shares
      of its common stock in part payment of its obligations pursuant to a
      settlement agreement executed by the Company and Michael R Chambrello,
      former Chief Executive Officer of the Company. The Company issued 55,370
      shares of its common stock upon exercise of a warrant resulting in net
      proceeds to the Company of $97,000.

12    Income (tax) benefit

      Income taxes reflected in the accompanying consolidated statements of
      operations differed from the amounts computed by applying the US federal
      tax rate of 35% to loss before taxes as a result of the following:

<TABLE>
<CAPTION>
                                                    Year ended      Year ended       Year ended
                                                   September 30,   September 30,    September 30,
                                                       2000            1999             1998
                                                   ($ thousands)   ($ thousands)    ($ thousands)
<S>                                                  <C>             <C>              <C>
          Computed 'expected' tax benefit            $   5,672       $   2,068        $   1,122
          Change in valuation allowance against
           deferred tax assets                          (2,984)         (1,455)          (1,036)
          Non deductible expenses                       (2,743)           (583)            (213)
          Other (net)                                        -               -              (61)
                                                     ---------       ---------        ---------

                                                     $     (55)      $      30        $    (188)
                                                     =========       =========        =========
</TABLE>

      As of September 30, 2000 the majority of the losses carried forward arise
      in the Company and expire after twenty years.


                                      F-26
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

12    Income (tax) benefit (Continued)

      The tax effects of temporary differences that give rise to deferred tax
      assets are as follows:

<TABLE>
<CAPTION>
                                                   Year ended      Year ended       Year ended
                                                  September 30,   September 30,    September 30,
                                                      2000            1999             1998
                                                  ($ thousands)   ($ thousands)    ($ thousands)
<S>                                                 <C>              <C>              <C>
       Deferred tax assets:

          Net operating loss carry forwards         $   7,501        $   4,517        $   3,062
                                                    ---------        ---------        ---------

       Total                                            7,501            4,517            3,062
       Less valuation allowance                        (7,501)          (4,517)          (3,062)
                                                    ---------        ---------        ---------

       Net deferred tax assets                      $       -        $       -        $       -
                                                    =========        =========        =========
</TABLE>

13    Loss per common share

      The following table summarises securities that were outstanding at
      September 30, 2000, 1999 and 1998, but not included in the calculation of
      diluted loss per share because such shares are anti-dilutive.

<TABLE>
<CAPTION>
                                                    September 30,   September 30,    September 30,
                                                        2000            1999             1998
<S>                                                  <C>             <C>              <C>
          Stock options and warrants                 9,338,743       7,692,965        3,952,145
</TABLE>


                                      F-27
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

14    Leases

      The Company leases certain office space under lease agreements.

      Future minimum lease payments under non-cancellable operating leases as of
      September 30, 2000, are as follows:

                                                      ($ thousands)

          Year ending September 30, 2001                  1,763
          Year ending September 30, 2002                  1,801
          Year ending September 30, 2003                  1,802
          Year ending September 30, 2004                  1,927
          Year ending September 30, 2005                  1,665
          Thereafter                                      8,564
                                                       --------

                                                       $ 17,522
                                                       ========

      The amount charged to the consolidated statement of operations for rent
      expense in the year ended September 30, 2000 was $278,000 (fiscal 1999 -
      $187,000; fiscal 1998 - $218,000).

      The above reflects a lease agreement existing as of September 30, 2000
      which the Company is seeking to cancel and for which it has made a
      $630,000 provision representing the portion of the deposit not expected to
      be refunded. The annual commitment under this lease is $1,546,000 payable
      for 10 years.

15    Stock options and warrants

      Under the Company's 1994 Stock Option and Rights Plan (the "Plan"), the
      Company may grant stock options and stock appreciation rights to persons
      who are now or who during the term of the Plan become key employees
      (including those who are also directors) and to independent sales agents.
      The Plan provides that the Stock Option Committee of the Board of
      Directors may grant stock options or stock appreciation rights with
      respect to a maximum of 250,000 shares of common stock at an exercise
      price not less than the fair market value at the date of grant for
      qualified and non-qualified stock options.

      The Company issued options for 40,000 shares of Common Stock in 1996 (of
      which 10,000 were cancelled in 1998) and 10,000 in 1997 under the
      Company's 1996 Stock Option Plan for Outside Directors ("the 1996 Plan").
      The 1996 Plan provides that the Stock Option Committee of the Board of
      Directors may grant stock options with respect to a maximum of 300,000
      shares of common Stock. The options have a five year term.

      In April 1997, the Company granted a warrant to purchase up to 277,193
      shares of Common Stock at a purchase price of $0.90 per share to the owner
      of Countdown as part of the consideration given for the 50% purchase of
      Countdown. In addition, the Company issued in April 1997 warrants to
      purchase 138,596 shares of Common Stock at an exercise price of $1.13 per
      share with an expiration date of April 2002. These warrants were
      exercisable from the date of issue.


                                      F-28
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

15    Stock options and warrants (Continued)

      In April and July 1999 the Company issued 3,000,000 warrants in lieu of
      payment to external advisors. The warrants were valued at approximately
      $1,720,000 using the Black-Scholes model and the Company has recorded the
      amount as prepaid fees with a related credit to additional paid-in
      capital. The prepaid fees have been charged to the statement of operations
      over the minimum period of the services provided. These warrants were
      exercisable from the date of issue.

      Stock option and warrant activity during the periods indicated is as
      follows:

<TABLE>
<CAPTION>
                                                 Options      Weighted       Warrants      Weighted
                                                number of      average       number of      average
                                                 shares    exercise price     shares    exercise price
<S>                                            <C>           <C>             <C>          <C>
       As of September 30, 1997                  840,000     $    1.03       1,198,825    $    1.45
       Granted                                   120,000          1.50       1,793,320         1.20
                                              ----------     ---------      ----------    ---------

       As of September 30, 1998                  960,000     $    1.09       2,992,145    $    1.30
       Granted                                    20,000     $    1.59       5,720,802         0.88
       Cancelled                                (100,000)         1.50        (799,982)        1.60
       Expired                                  (800,000)         1.00        (300,000)        1.83
                                              ----------     ---------      ----------    ---------

       As of September 30, 1999                   80,000     $    1.62       7,612,965    $    0.93

       Granted                                 2,357,739          1.69         757,160         6.11
       Cancelled                              (1,250,000)        0.875               -            -
       Expired                                   (20,000)        1.545        (143,751)           2
       Exercised                                       -             -         (55,370)        1.75
                                              ----------     ---------      ----------    ---------
       As of September 30, 2000                1,167,739     $    2.56       8,171,004    $    1.41
                                              ==========     =========      ==========    =========
</TABLE>

      The range of exercise prices for the options is $1.00 to $6.00. The range
      of exercise prices for the warrants is $0.75 to $6.225. All the warrants
      shown as of September 30, 2000 and 1999 were exercisable at that date. All
      options outstanding as of September 30, 1999 were exercisable; however of
      the total increase in the year only 20,000 are exercisable as the others
      are subject to shareholder approval.


                                      F-29
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

15    Stock options and warrants (Continued)

      The Company applies APB Opinion No. 25 in accounting for its stock options
      and warrants and, accordingly, other than in respect of those stated in
      Note 9 and that stated above, no compensation cost has been recognized for
      its employee stock options and warrants in the financial statements. Had
      the Company determined compensation cost based upon the fair value at the
      grant date for its stock options not subject to shareholder approval and
      warrants under SFAS No. 123, the Company's net losses would have been
      increased to the proforma amounts indicated below:

<TABLE>
<CAPTION>
                                                    September 30,    September 30,    September 30,
                                                        2000             1999             1998
                                                    ($ thousands)    ($ thousands)    ($ thousands)
<S>                                                 <C>              <C>              <C>
       Net loss       - As reported                 $   (19,308)     $    (5,826)     $    (4,740)
                      - Proforma                    $   (19,424)     $    (6,103)     $    (4,791)

       Loss per share - As reported
                      - Basic                       $     (0.55)     $     (0.25)     $     (0.27)
                      - Diluted                     $     (0.55)     $     (0.25)     $     (0.27)

       Loss per share - Proforma
                      - Basic                       $     (0.55)     $     (0.26)     $     (0.27)
                      - Diluted                     $     (0.55)     $     (0.26)     $     (0.27)
</TABLE>

      In arriving at such proforma amounts, the Company estimates the fair value
      of each stock option on the grant date by using the Black Scholes
      Valuation Method with the following weighted average assumptions used for
      grants in fiscal 2000, 1999 and 1998 respectively: no dividends paid for
      all years; expected volatility of 87.66% for fiscal 2000, 45.8% for fiscal
      1999 and 1998; a risk free interest rates ranging between 4.13% and 6.7%
      and an expected life being the remaining term of the option. The per share
      weighted fair value of the stock options granted in 2000, 1999 and 1998
      were $ 2.90 $0.42, and $1.05 respectively.

16    Business and credit concentrations

      The Company's customers are primarily located in Australia and the USA. No
      one corporate customer accounts for more than 10% of sales revenue for the
      years ended September 30, 2000, 1999 or 1998.

      No single restaurant credit receivable was greater than 10% of the
      Company's total restaurant credit receivable balance as of September 30,
      2000 or 1999.


                                      F-30
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

17    Commitments and contingencies

      Legal proceedings

            From time to time the Company is subject to legal proceedings and
            claims in the ordinary course of business.

            On September 29, 1999 NAMA of Texas filed a civil action against the
            Company, TME and Countdown USA in Harris County, Texas. NAMA of
            Texas is a licensee of NAMA, a business acquired by the Company and
            TME through Countdown USA in November 1998. NAMA of Texas is
            claiming breach of contract pursuant to a License and Consulting
            Agreement for the provision, by NAMA, of medical and other benefit
            programs to NAMA of Teas. NAMA of Texas is claiming damages for loss
            of business and income in the sum of $5m, punitive damages in the
            sum of $3m, interest, attorney fees and all costs including court
            costs. The Company, TME and Countdown USA filed their original
            answer on November 5, 1999 and on November 12, 1999 filed a Notice
            of Removal to Federal Court. The Federal Court ordered an initial
            pre-trial conference for May 18, 2000. At the pre-trial conference
            the Judge dismissed the case against the Company and TME with the
            condition that should Countdown USA ultimately lose the case and not
            be capable of paying any judgement against it, then the Company and
            TME could be enjoined again. In November 2000, at the direction of
            the Judge, Countdown USA and NAMA of Texas entered into negotiations
            to resolve the dispute and agreement was reached which provided for
            a dismissal of all complaints with each party bearing their own
            legal costs. An Order To Dismiss With Prejudice was issued by the
            Court on December 12, 2000.

            The Company and TME are engaged in a dispute with Edward J Guinan,
            III, former Chief Executive Officer of the Company and TME, with
            respect to amounts which the Company claims Mr Guinan owes to the
            Company and with respect to amounts which Mr Guinan claims are owed
            to him by the Company. Based on other employment the Company
            considers Mr Guinan's employment agreement to have terminated on
            September 30, 1999. Mr Guinan's attorneys have challenged this
            position and have also asserted claims for various advances which Mr
            Guinan asserts were made on behalf of the Company and for which he
            claims to be entitled to reimbursement. No legal action has been
            commenced by the Company or Mr Guinan. At this time, the Company
            cannot determine when and if this dispute can be resolved or what
            net amount, if any, Mr Guinan owes to the Company or the Company
            owes to Mr Guinan.

            The Company and TME are engaged in a dispute with Carl Freyer, a
            former director and consultant to the Company and TME. Mr Freyer
            claims that an agreement was reached in December 1999 pursuant to
            which he, or his affiliate, Caribbean Basin Capital Consultants,
            Inc. ("CBCC"), was granted warrants plus cash payments in lieu of
            prior compensation arrangements. The Company and TME assert that
            there is no such valid agreement and that the only rights of Mr
            Freyer, or his affiliate, relate to the Company's and TME's
            obligation each submit for shareholder approval, warrants previously
            granted by each covering 300,000 shares of their respective common
            stock, exercisable at $1.00 per share. On August 30, 2000 CBCC filed
            a complaint against the Company and TME in the United States
            District Court - District of Connecticut alleging, inter alia,
            breach of contract and claiming compensatory damages, costs of the
            action and such other and further relief as the Court deems just and
            proper. The Company and TME file their answer on October 20, 2000
            denying all the material allegation in the complaint and demanding
            judgement against CBCC, dismissing the complaint in its entirety,
            with prejudice, awarding the Company's and TME's costs of the action
            and such other and further relief as the Court deems just and
            proper. The proceeding is currently at discovery stage. The Company
            has no basis at this time for determining the likely outcome of the
            proceeding.


                                      F-31
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

17    Commitments and contingencies (Continued)

      Legal proceedings (Continued)

            In January 2000, Monster Cable Products, Inc. filed a complaint
            against the Company's wholly owned subsidiary, MonsterBook,
            alleging, inter alia, that MonsterBook (a) infringes plaintiff's
            trademark rights in and to the mark MONSTER and the Monster family
            of marks (b) dilutes plaintiff's trademark rights under the Lanham
            Act and (c) is engaging in unfair competition under both federal and
            California law by use in commerce of said marks. The suit seeks
            injunctive and monetary relief in excess of $300,000. In February
            2000, MonsterBook filed its answer, denying all of the material
            allegations in the complaint and asserting that there can be no
            likelihood of confusion because, among other reasons, plaintiff's
            purported marks are weak and the differences in the products and
            services of the parties make confusion highly unlikely. In February
            2000, the parties served their initial discovery disclosures
            pursuant to federal and local court rules and have selected
            mediation of the dispute. As of the date hereof the parties are in
            negotiation to settle the dispute.

18    Subsequent events

      On December 13, 2000 the Company issued $10,390,000 of two year
      convertible notes (the "Notes") and 2,289,155 five year warrants (the
      "Exchange Warrants") in exchange for the retirement of $10,000,000 in
      aggregate face value of the Company's outstanding Series A convertible
      preferred stock ("Series A Preferred"), accrued but unpaid Series A
      Preferred dividends and registration obligations of $390,000 and 2,289,155
      five year warrants issuable to the holders of the Series A Preferred based
      on prior registration obligations of the Company. The Notes bear interest
      at 12% per annum payable quarterly in arrears. Payment of interest on the
      first instalment of the Notes is due on March 31, 2001 but may be deferred
      until June 13, 2001 in exchange for an interest rate on the first
      instalment of 15% per annum. The Notes are convertible into a maximum of
      6,800,000 shares of the Company's common stock. The conversion price is
      equal to 95% of the average of the lowest five closing bid prices for the
      previous twenty trading days determined from the date of the notice of
      conversion. Any principal payments resulting from a conversion will be
      applied equally over all instalments due. Instalments of principal are due
      in seven equal quarterly instalments with the first instalment to be paid
      on June 13, 2001. The Exchange Warrants are non-callable. The company is
      required to register the 6,800,000 shares subject to conversion as well as
      the 2,289,155 shares underlying the Exchange Warrants.

      The parties made other agreements in connection with the exchange as
      follows:

      (i)   The Series A Preferred holders agreed not to assert any default
            rights on the prior failure by the Company to register the shares
            underlying the Series A Preferred;

      (ii)  Each of the holders of the Notes agreed that they may not own at any
            time more than 3% of the Company's outstanding shares;

      (iii) The Company secured its obligations under the Notes with the pledge
            of the stock of MonsterBook and DBS Direct; the guarantees of TME,
            MonsterBook and DBS Direct; and a lien on the assets of MonsterBook
            and a subordinate lien on the assets of the DBS Direct;

      (iv)  The Noteholders agreed that they would not sell any securities of
            the Company short so long as the Notes were outstanding; and


                                      F-32
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

18    Subsequent events (Continued)

      (v)   The Company agreed to register the shares underlying the Notes and
            Exchange Warrants and to pay a monthly fee of $90,000 for each one
            month period starting after March 13, 2001, if the registration is
            not effective by such date.

      The issuance of the Notes and the Exchange Warrants was exempt from
      registration pursuant to Section 3(a)(9) of the Securities Act of 1933, as
      amended. The Company did not receive any additional funds as a result of
      the exchange.

      Effective December 8, 2000 Taste Card Pty Limited, a company owned jointly
      by the Company and TME sold its interest in Breakaway and Teletravel to an
      unaffiliated third party in a transaction valued at approximately
      $190,000.


                                      F-33
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

19    Industry and geographic area segments

      The Company, its subsidiaries and affiliates are engaged in three lines of
      business: member benefits/loyalty marketing, direct marketing and
      e-commerce and internet services. Additionally the Company operated a
      travel service segment up until December 2000. Operations of the
      subsidiary companies are conducted in Australia and the USA. The following
      is a summary of the Company's operations by business segment and by
      geographical segment. The accounting policies of the segments are the same
      as those described in Note 2 - Significant accounting policies

<TABLE>
<CAPTION>
                                                            Year ended        Year ended        Year ended
                                                           September 30,     September 30,     September 30,
                                                                2000             1999              1998
                                                           ($ thousands)     ($ thousands)     ($ thousands)
<S>                                                           <C>               <C>               <C>
      (a) Statement of operations

      Revenues
         Member benefits/loyalty marketing                    $  1,086          $  2,164          $  3,099
         e-commerce and internet services                           63                --                --
         Travel services                                           477             1,396               806
                                                              --------          --------          --------
         Revenues for reportable segments
          and consolidated revenues                              1,626             3,560             3,905
                                                              --------          --------          --------

      Operating loss
         Member benefits/loyalty marketing                      (1,080)           (1,042)             (605)
         e-commerce and internet services                       (2,185)               --                --
         Travel services                                           (39)             (206)              (24)
         Corporate overhead                                    (10,050)           (2,113)           (2,859)
                                                              --------          --------          --------

         Total operating loss for reportable segments          (13,354)           (3,361)           (3,488)
                                                              --------          --------          --------

      Share of affiliate losses including goodwill
         Member benefits/loyalty marketing                        (712)             (373)             (949)
         Direct marketing                                       (2,951)             (517)               --
                                                              --------          --------          --------

                                                                (3,663)             (890)             (949)
                                                              --------          --------          --------

      Net interest expense                                        (467)           (1,486)             (258)
                                                              --------          --------          --------

      Loss before taxation and minority interests             $(17,484)         $ (5,737)         $ (4,695)
                                                              ========          ========          ========
</TABLE>


                                      F-34
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

19    Industry and geographic area segments (Continued)

<TABLE>
<CAPTION>
                                                 Year ended        Year ended       Year ended
                                                September 30,     September 30,    September 30,
                                                    2000              1999             1998
                                                ($ thousands)    ($ thousands)     ($ thousands)
<S>                                               <C>               <C>               <C>
      (a) Statement of operations (Continued)

      Depreciation and amortization
         Member benefit/loyalty marketing               88             1,066               184
         e-commerce and internet services               16                --                --
         Travel services                                23                25                20
         Corporate                                   3,881               297               238
                                                  --------          --------          --------

                                                  $  4,008          $  1,388          $    442
                                                  ========          ========          ========

      (b) Geographic region

      Revenues
         Australia                                   1,563             3,560             3,905
         United States of America                       63                --                --
                                                  --------          --------          --------

                                                  $  1,626          $  3,560          $  3,905
                                                  ========          ========          ========
      Net loss before taxation, minority
       interests and dividends
         Australia                                  (6,698)           (1,261)             (466)
         United States of America                   (8,122)           (3,240)           (2,017)
         Corporate                                  (2,664)           (1,236)           (2,212)
                                                  --------          --------          --------

                                                  $(17,484)         $ (5,737)         $ (4,695)
                                                  ========          ========          ========

      Long lived assets
         Australia                                     127             4,835
         United States of America                    1,123             8,574
         Corporate                                  18,066             2,416
                                                  --------          --------

                                                  $ 19,316          $ 15,825
                                                  ========          ========
</TABLE>


                                      F-35
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Notes to consolidated financial statements (Continued)

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

19    Industry and geographic area segments (Continued)

                                                   September 30,   September 30,
                                                       2000            1999
                                                   ($ thousands)   ($ thousands)

     (c)  Total assets
          Member benefits/loyalty marketing         $    2,226      $    5,882
          e-commerce and internet services              14,360               -
          Travel services                                  236             554
          Investment in affiliates                       5,999           9,438
          Unallocated                                      928           1,803
                                                    ----------      ----------

                                                    $   23,749      $   17,677
                                                    ==========      ==========


                                      F-36
<PAGE>

TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES

Valuation and qualifying accounts                                    Schedule II
for the years ended September 30, 2000, 1999 and 1998

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

<TABLE>
<CAPTION>
Column A                                  Column B                           Column C               Column D          Column E
                                                                  Additions
Description                                                       Charged to       Acquisition                         Balance
                                          Balance at              costs and            of           Deductions         at end
                                      beginning of period         expenses        subsidiaries      (describe)        of period
<S>                                 <C>               <C>          <C>             <C>              <C>               <C>
Allowances for irrecoverable
 restaurant credits                 1998              114,610                                       (66,577)          48,033
                                    1999               48,033                                        17,728           65,761
                                    2000               65,761                                        (4,507)          61,254
</TABLE>

The credit of $4,507 relates to the write-back of certain irrecoverable
restaurant credits as of September 30, 2000.