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, 1998
                                       OR

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

        FOR THE TRANSITION PERIOD FROM ______________TO_________________

                         COMMISSION FILE NUMBER 0-26368

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

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

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

  Registrant's telephone number, including area code: U.K. 011-44-171-930-0706

           Securities registered pursuant to Section 12(b) 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 |_|  No |X|

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 4, 1999 was $20,040,110 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 4,
1999 was 20,364,649.

                    Documents incorporated by reference: None

<PAGE>

                          Transmedia Asia Pacific, Inc.

                 Form 10-K for the year ended September 30, 1998

                                      Index

                                                                       Page
PART I

      Item 1.     Business                                               3
      Item 2.     Properties                                            15
      Item 3.     Legal Proceedings                                     16
      Item 4.     Submission of Matters to a Vote of Security Holders   16

PART II

      Item 5.     Market for Registrant's Common Stock and
                  Related Stockholder Matters                           17
      Item 6.     Selected Financial Data                               18
      Item 7.     Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                   19
      Item 7A.    Quantitative and Qualitative Disclosure
                  About Market Risk                                     24
      Item 8.     Financial Statements and Supplementary Data           24
      Item 9.     Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure                   25

PART III

      Item 10.    Directors and Executive Officers of the Registrant    26
      Item 11.    Executive Compensation                                27
      Item 12.    Security Ownership of Certain Beneficial
                  Owners and Management                                 31
      Item 13.    Certain Relationships and Related Transactions        32
      Item 14.    Exhibits, Financial Statement Schedules and
                  Reports on Form 8-K                                   34

Signatures


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ITEM 1. BUSINESS.

History

Transmedia Asia Pacific, Inc. ("TMAP" or "the Company") was incorporated under
the laws of the state of Delaware in March 1994. On May 2, 1994 the Company
acquired, from Conestoga Partners II, Inc. ("Conestoga"), the rights Conestoga
had previously acquired from Transmedia Network, Inc. ("Network") an independent
company which, through its affiliate TMNI International Inc., ("TMNI"), is a
shareholder of the Company. The rights acquired, pursuant to a Master License
Agreement ("License Agreement") dated March 21, 1994, were an exclusive license
("License") to use certain trademarks and service marks, proprietary computer
software programs and know-how of Network to establish and operate a discount
restaurant charge card business in clearly defined geographical areas. The
geographical areas covered by the License are substantially all countries in
Asia and the Pacific Rim including Japan, China, Hong Kong, Taiwan, Korea, the
Philippines and India (the "Licensed Territories").

Network, from whose affiliate, TMNI, the License was granted and on whose
business the Company's restaurant charge card operations are modeled, is a
publicly traded company operating in the United States both directly and
indirectly through licensees and franchisees. Pursuant to the terms of the
License the Company is authorized to engage in the restaurant charge card
business within the Licensed Territories in the same manner that Network
operates in the United States. Under the License Agreement the Company must pay
royalties to Network and certain changes in key executives and principal
shareholdings in the Company require the prior written approval of Network. The
Company's restaurant cardholders and cardholders of Network and its franchisees
can use the restaurant card in all territories covered by the Company, Network
and its franchisees. The Company realizes all financial benefits from restaurant
card usage within the Licensed Territories but no financial benefit from usage
outside the Licensed Territories.

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 has
the right to designate one director to the Board of Directors of the Company. To
date Network has not exercised its right to designate a director.

The Company has worked closely with Transmedia Europe, Inc. ("TME") since
inception. 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 the other countries outside of Europe which were formerly part of the Union
of Soviet Socialist Republics. The Company and TME share common directors and
officers. For an initial period post incorporation they also shared common
shareholders. Edward J. Guinan III is Chairman and Chief Executive Officer of
both the Company and TME, as well as a principal shareholder in each.

The Company commenced business operations in Sydney, Australia in November 1994.
TME commenced operations in the United Kingdom in January 1994.

Through 1996 the Company operated a discount restaurant charge card business in
Australia through its wholly owned subsidiary Transmedia Australia Pty Limited.
In late 1996 management identified the need to expand the Company's operations
to become a broader based "member benefits" provider, believing that the Company
needed a range of benefits to offer its corporate clients and individual
members, in addition to discount dining. Such benefits included discount
shopping, travel, hotel accommodation and telephone helpline 


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services. At the same time TME made a similar strategic decision and as a result
the Company and TME decided to work together in expanding their business
operations. In April 1997 they jointly acquired Countdown Holdings Limited
("Countdown"), an international provider of membership based discount shopping
services. See "Countdown". In December 1997 Transmedia Australia Holdings Pty
Limited ("Transmedia Australia"), a company owned jointly by the Company and
TME, purchased 51% of the shares of common stock of NHS Australia Pty Limited
("NHS"). NHS purchased the net assets and 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 offers travel related products such as airline
tickets, vacation packages, insurance and provides international medical case
management and repatriation services to a number of insurance companies. See
"Nationwide Helpline Services".

The close collaboration between the Company and TME has continued and on May 14,
1998 they jointly acquired Logan Leisure, a business which produces and sells
discount shopping and services directories. See "Logan Leisure". On May 22, 1998
the Company and TME jointly acquired Breakaway Travel Club Pty Limited
("Breakaway"). Breakaway, which is based in Sydney Australia, is a licensed
travel agent specializing in discount packaged vacations for individuals
employed in the travel industry in Australia. See "Breakaway".

In light of the close collaboration between the Company and TME since
incorporation and, more particularly, in view of the joint ownership of
Countdown, NHS, Logan Leisure and Breakaway Travel, management of the Company
and TME have been assessing the rational for maintaining two separate corporate
entities. Management feels that keeping the two companies distinct and separate
is no longer appropriate or advantageous to shareholders and therefore announced
its intention to pursue a merger of the two companies. In concluding that a
merger is in the best interests of both the Company and TME management
considered several factors including the confusion of having two separate stock
quotes for essentially the same business (operating in different geographical
regions), the opportunity to reduce corporate overhead and to increase operating
efficiency. The proposed merger is subject to approval of the respective Boards,
fairness opinions by independent investment advisers and the approval of
shareholders of both companies.

Transmedia Restaurant Charge Card

The restaurant charge card business operates under the rights acquired pursuant
to the License Agreement with TMNI. The restaurant card is a charge card used by
a cardholder in lieu of a major credit card to pay for purchases at
participating restaurants. Using the restaurant card for such purchases entitles
the cardholder to a 25% discount on the food and beverage element of purchases
made at participating restaurants (i.e. the total purchase price excluding taxes
and service). The restaurant card charges are collected from a major credit card
nominated by the cardholder when the restaurant card is first issued.

The restaurant charge card business operates as follows:

o     The Company identifies restaurants suitable to participate in the program
      and negotiates an agreement with them pursuant to which they agree to
      become participating restaurants ("Participating Restaurants").

o     The Company advances cash ("Restaurant Credits") to such Participating
      Restaurants.

o     An individual becomes a cardholder ("Cardholder") by completing an
      application at which time they nominate a major credit card through which
      charges incurred against the restaurant charge card will be recovered.


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o     Restaurant Credits entitle the Company to food and beverage at twice the
      value of the Restaurant Credit referred to as "Food and Beverage Credits".
      In effect the Company purchases food and beverage in advance at a 50%
      discount for its cardholders.

o     The Company recovers Food and Beverage Credits when food and beverage is
      purchased at full retail value at Participating Restaurants by Cardholders
      using their restaurant card.

o     As food and beverage is purchased by Cardholders the Food and Beverage
      Credits outstanding are reduced by the retail value of such purchases and
      the Restaurant Credits outstanding are reduced by one-half of such Food
      and Beverage Credits used. The Company recovers the total value of the
      purchase made from the Cardholder's major credit card.

o     The Company pays over to the Participating Restaurant the tax and service
      elements of the total purchase.

o     The Cardholder receives a credit equal to 25% of the value of the food and
      beverage purchased.

o     The Company retains the balance.

o     The Company pays a royalty of 2% of Food and Beverage Credits used to
      Network and 1.3875% of Food and Beverage Credits used as sales
      commissions.

o     The total charge is listed on the cardholder's major credit card statement
      along with a separate credit equal to 25% of the value of food and
      beverage purchased at the participating restaurant.

o     The Company maintains a current record of the amount of Food and Beverage
      Credits outstanding at each Company Participating Restaurant.

The following is an illustration of a hypothetical transaction by a Cardholder
at a Participating Restaurant.

A commissioned sales representative, recruits Restaurant A (a full service
restaurant operating in Sydney) as a Participating Restaurant. The Company
advances Aus$3,000 to Restaurant A in Restaurant Credits. This advance entitles
the Company to collect the proceeds from Aus$6,000 of food and beverage
purchased by cardholders using their restaurant cards at Restaurant A. John
Smith, a Cardholder, purchases a meal at Restaurant A and pays the Aus$100 check
(consisting of Aus$80 for food and beverage and Aus$20 in taxes and tip) using
his Restaurant Card. Mr Smith presents his Restaurant Card which is accepted by
Restaurant A. Restaurant A delivers the Restaurant Card receipt for Mr Smith's
meal to the Company for processing. The Company recovers the Aus$100 value of
the purchase from Mr. Smith's nominated major credit card.

The allocation of the hypothetical Aus$100 check can be summarized as follows:

Name              Amount      Explanation of Allocation

Mr. Smith         Aus$20      25% of food and beverage element of check

Restaurant A      Aus$20      Tip and taxes element of check

TMNI              Aus$1.60    2% royalty fee

Company           Aus$58.40   Aus$100 net of above payments

The Company will use Aus$40 of its net proceeds to reduce the value of the
Restaurant Credit at Restaurant A (i.e. 50% of Aus$100 less Aus$20 tip and
taxes). The balance of Aus$18.40 is retained by the Company as gross profit.
However, the Company will typically pay a sales commission of Aus$1.11 (i.e.
1.3875% of the food and beverage element of the check less the cardholders
discount) in the above transaction to its sales representative.


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<PAGE>

As of September 30, 1998, the Company had approximately 175 (1997: 274) Company
Participating Restaurants and approximately 29,048 (1997: 36,800) Cardholders.
The Company currently operates in Australia and New Zealand, and may expand its
operations within the Licensed Territories.

Nationwide Helpline Services

On December 2, 1997 Transmedia Australia, an Australian company owned equally by
the Company and TME, purchased 51% of the shares of common stock of NHS. NHS
purchased the net assets and business of Nationwide. Nationwide, established in
1989, is an Australian based provider of "member benefit" programs primarily to
organizations with large consumer bases such as banks and insurance companies.
The operations of NHS are controlled by the Company and consolidated within the
Company's financial statements effective December 2, 1997. Transmedia Australia
also acquired an option to purchase the balance of 49% of the shares of common
stock of NHS, which shares were purchased on November 17, 1998. See
"Acquisitions - NHS".

The NHS member benefit programs consist primarily of telephone helpline
services, travel products and international medical case management and
repatriation services. The NHS telephone helpline services include telephone
advice lines covering legal, tax and accounting issues together with medical and
home emergency issues. Travel products, offered through Teletravel, include the
sale of packaged vacations, airline tickets, hotel accommodation and travel
related products such as insurance. Finally, NHS through a wholly owned
subsidiary, IMAN, provides international medical case management and
repatriation services for travelers to a number of major insurance companies.

NHS 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. NHS has approximately five million members.

Telephone Helpline Services

The Telephone Helpline Services business operates through NHS's retention of the
services of outside lawyers, accountants and others ("Service Providers") to
provide 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 through NHS's sale of its Telephone
Helpline Services to corporations such as banks and insurance companies who make
it available to their customers as a benefit of being a customer. 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. 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 use the service as
often as necessary and 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 24 hour medical triage service and help
and advice on a broad range 


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of other issues from home emergency, home maintenance and security to credit
card registration, social security advice, stress and bereavement helplines.

Teletravel

Teletravel is a telephone based travel agency offering a full range of travel
services such as airline tickets, packaged tours, hotel accommodation, auto
rental and other travel related products such as insurance. The Teletravel
business was established to enable NHS to offer travel products to its corporate
clients, in particular those clients who purchase NHS products and services on a
co-branded basis. Teletravel employs its own travel agents who operate a call
center located in Sydney, Australia. Teletravel does not operate any travel
shops for consumers to utilize on a walk-in basis. Instead the business is
entirely telephone based whereby customers call the Teletravel call center where
an experienced travel consultant offers help and advice to the traveler and then
confirms the customers booking. Consumers can pay by check, credit card or money
order. When payment is received tickets and itineraries are forwarded to the
customer. Teletravel generates revenues from commissions received from airlines
and travel product providers. Teletravel believes it enjoys an economic
advantage over traditional travel agents who have to bear the costs associated
with their retail outlets.

IMAN

IMAN was established in 1980 as a telephone doctor service operating throughout
Asia and developed a particular expertise in assisting tropical travelers. In
1995 IMAN was acquired by Nationwide. Today, 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 major insurance companies who
incorporate the services of IMAN within their travel insurance coverage.

Countdown

In April 1997, the Company acquired 50% of the equity capital of Countdown, an
international provider of membership based discount shopping services. The
remaining 50% was simultaneously purchased by TME. See "Acquisitions -
Countdown". 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.

The Countdown business was established in 1970. Its primary business operations
are located in the United Kingdom. Additionally, Countdown has appointed
licensees who operate in nine countries around the world. The Countdown business
is primarily a membership based business which arranges discounts with major
suppliers of goods and services for its members. Countdown has approximately 6.5
million members and over 100,000 participating merchants in 39 countries.

Countdown markets membership on a retail and wholesale basis. Retail marketing
involves selling membership to individuals. Memberships sold on this basis
represent a small portion of total membership. Members pay an annual membership
fee, currently approximately $83, which entitles them to a Countdown card valid
for one year. 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 


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receive their Countdown card they also receive a directory of participating
merchants. Directories are prepared on a geographical basis thereby enabling
Countdown to supply a directory of participating merchants to cardholders
specific to the geographical area in which the cardholder lives.

Wholesale membership marketing involves the sale of membership packages to
corporations, professional organizations, trade unions, etc. In the case of
wholesale marketing, the group or organization purchases membership for its own
members or employees. Such members or employees receive a Countdown 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 5% or less of the
individual annual membership fee.

Countdown has, over a number of years, attracted over 100,000 participating
merchants worldwide from over 45 different retail categories including clothing,
household goods 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.

Countdown also operates a voucher system with participating merchants and
others. This segment of the business involves Countdown's purchase of 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%.

Countdown Arcade

In November 1998 Countdown launched an internet shopping program, Countdown
Arcade. Management believes that the internet is key to the future development
and growth of the Countdown business. Management further believes that the
Countdown Arcade will become a full online international shopping web site
offering a broad range of merchandise and services at discounted prices. The
Countdown Arcade will utilize existing relationships between Countdown and its
participating merchant base numbering over 100,000 worldwide. The Countdown
Arcade, can be found at http://www.countdownarcade.com. As of the date hereof,
the Countdown Arcade offers the ability to purchase over the internet a range of
consumer products from UK suppliers.

New products and services are expected to be added continuously. In addition,
members will have the ability to search for merchandise on a country by country
basis through the Countdown Arcade link to the Countdown database of
internationally participating merchants.

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.

Management believes that Countdown's move into e-commerce will generate new
revenues from transaction commissions on products and services sold, as well as
advertising revenues from corporate sponsors.

Logan Leisure


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On May 14, 1998 the Company and TME purchased from Compass Trustees Limited all
of the outstanding shares of capital stock of Porkpine Limited ("Porkpine"). The
Company and TME each acquired 50% of the outstanding capital stock of Porkpine.
See "Acquisitions - Logan Leisure".

Porkpine, through its wholly owned subsidiaries Letville Holdings Limited
("Letville") and Floracourt Marketing Limited ("Floracourt"), operates two
businesses trading as Logan Leisure and Logan Leisure & Entertainment. Porkpine
trades as Logan Leisure ("LL"). LL was established in 1989 and is based in
Belfast, Northern Ireland. Letville is an intermediary holding company which
owns Floracourt. Floracourt trades as Logan Leisure & Entertainment ("LLE"). LLE
is based in Dublin in the Republic of Ireland and commenced operations in 1992.
Both LL and LLE 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.
LL and LLE negotiate discounts from a range of suppliers of goods and services
who agree to the inclusion of a voucher representing such discount in the LL and
LLE Voucher Directory. Voucher Directories are produced annually and are sold to
consumers for approximately $126. 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.

Breakaway Travel

On May 22, 1998 Transmedia Australia Travel Holdings Pty Limited ("Transmedia
Holdings"), a company owned equally by the Company and TME, acquired from
Gisborne Travel Holdings Pty Limited ("Gisborne"), 100% of the issued share
capital of Breakaway Travel Club Pty Limited ("Breakaway"). See "Acquisitions -
Breakaway".

Breakaway, based in Sydney, Australia, commenced operations in 1995. Breakaway
is a licensed travel agent specializing in discount vacation packages for
individuals employed in the travel industry in Australia. Such individuals are
entitled to become members of Breakaway. Members of Breakaway pay an annual
membership fee of Aus$20 (approximately $12). Breakaway has negotiated
agreements with travel providers pursuant to which it can secure reduced rate
fares from such travel providers. Travel providers include airlines, hotels and
tour operators. These reduced rate fares are marketed to members by Breakaway.

Countdown America

In July 1998 the Company and TME jointly incorporated Countdown America, Inc.
("Countdown America"), a Delaware corporation, to establish a member benefits
business in the United States. To commence operations Countdown America
recruited two personnel and secured office accommodation located in Flanders,
New Jersey on a month to month basis. The Company and TME's strategic plan
called for Countdown America to initially develop a benefits program, based on
the Countdown model, suitable for the United States marketplace. As a result a
benefits program incorporating healthcare, travel, shopping and entertainment
has been developed. The healthcare products and services are the cornerstone of
the Countdown America benefits program. Such products and services include mail
order and retail pharmacy, eye care and hearing products, medical supplies and
equipment. In addition, members have 24 hour a day access to a telephone based
medical library extending to over 2,200 topics. Benefits also include a Nurse
Triage program which provides members with a toll free number allowing them to
speak to a registered nurse concerning medical and healthcare concerns. In
September 1998 Countdown America agreed to acquire the membership base and
certain assets of the National Association of Mature Americans ("NAMA"). The
acquisition, which was completed on November 17, 1998, provided Countdown
America with an established membership base as well as a defined set of benefit


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packages. Additionally, the acquisition included a series of contracts pursuant
to which NAMA provides customized benefit packages, on a wholesale basis, to
other membership based organizations and corporations throughout the United
States.

Acquisitions

Countdown

On April 3, 1997, the Company purchased from Mr. C.E.C. Radbone 50% of the
outstanding capital stock of Countdown Holdings Limited, a privately owned
United Kingdom company based in London, England. Countdown, through its
wholly-owned subsidiary, Countdown plc, is an international provider of
membership based discount shopping services. The remaining 50% interest in
Countdown was simultaneously purchased by TME. The transaction (the
"Acquisition") was consummated pursuant to an Acquisition Agreement dated April
3, 1997 (the "Acquisition Agreement") between the Company, TME and Mr.
Radbone.

The consideration paid by the Company for its 50% interest in Countdown totalled
$2,682,487. The purchase consideration payable to Mr. Radbone was satisfied by
the issuance of 1,330,524 shares (the "Radbone Shares") of the Common Stock and
a cash payment of 500,000 UK pounds sterling (approximately $800,000 as of April
3, 1997). In addition, Mr. Radbone was granted an option to purchase 277,193
shares of Common Stock at $0.90 per share. The Company granted Mr. Radbone
piggyback and demand registration rights with respect to the Radbone Shares. The
balance of the outstanding capital stock of Countdown was simultaneously
purchased by TME on similar terms.

The cash portion of the purchase price was funded by a $1,000,000 loan from Mr.
J. Vittoria, a director and shareholder of the Company. The loan, which bears
interest rate of 12% per annum, was originally scheduled to mature on September
27, 1997. By agreement between the Company and Mr. Vittoria, the loan maturity
date has been extended indefinitely, subject to being repayable on 60 days
notice. Interest continues to accrue at 12% per annum. The loan is
collateralised by a pledge of the Company's entire interest in Countdown. In
consideration for the loan, the Company granted to the lender 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.

Contemporaneously with the Acquisition, Countdown entered into an employment
agreement with Mr. Radbone pursuant to which Mr. Radbone was employed as
Managing Director of Countdown. Upon consummation of the Acquisition, Mr Radbone
was elected as a director of the Company and Edward J. Guinan and Paul Harrison
were elected to the board of directors of Countdown and Countdown Plc. On
January 16, 1998, Mr. Radbone resigned from the Board of Directors. At the same
time his employment agreement was terminated without penalty and replaced by a
one year consultancy agreement.

As described earlier, Mr. Radbone is beneficial owner of 1,330,524 shares of
Common Stock and an option to purchase a further 277,193 shares at an exercise
price of $0.90 per share. Mr. Radbone has granted Edward J. Guinan III, the
Chairman of the Board of Directors, an option to purchase his shares and share
option at a purchase price of $1 per share. Pursuant to the agreement between
Messrs. Radbone and Guinan, Mr. Guinan paid a portion of the purchase price by
delivering such number of shares of the Common Stock owned by him, as equate to
a market value of $250,000. In addition, he delivered a similar number of shares
of the common stock of TME owned by him. Such shares will be forfeited to Mr.
Radbone if the option is not exercised and paid by January 15, 1999.

In connection with the Acquisition, the Company and TME each agreed to pay
$125,000 in cash to TMNI. In addition, the Company and TME jointly issued to
TMNI a promissory note 


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in the principal amount of $500,000, payable on April 2, 1998 and bearing
interest at the rate of 10% per annum. The promissory note is convertible at the
holder's option into $250,000 in value of Common Stock of each issuer at the
rate of $1.20 per share. The Company agreed to pay such amounts in order to
obtain the consent of TMNI to the Countdown Acquisition, which consent was
required pursuant to the terms of the License Agreement under which the Company
operates its restaurant charge card business.

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.
Nationwide was established in 1989 and is an Australian based provider of
"member benefit" programs. The operations of Transmedia Australia are controlled
by the Company and accordingly Transmedia Australia's accounts are consolidated
into those of the Company. 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.

The Aus$6,000,000 required to complete the acquisition of 51% of NHS was to be
advanced to Transmedia Australia by the Company and TME as follows:

                             Company         TME       Total   
                                                               
      Deposit                200,000     200,000     400,000   
      1st Installment      1,400,000   1,400,000   2,800,000   
      2nd Installment      1,400,000   1,400,000   2,800,000   
                                                               
      Total                3,000,000   3,000,000   6,000,000   
                           
The deposit was paid to the sellers in June, 1997. The first installment of
Aus$2,800,000 was paid in December 1997, 50% in cash and the balance by the
issuance of 500,000 of the common stock of each of the Company and TME (valued
at (pound)1.00 per share). The second installment was payable on January 31,
1998. However, pursuant to the terms of the Acquisition Agreement, such payment
date was extended to May 1, 1998. As a result of the extension of the payment
date, Transmedia Australia became liable to pay interest at the rate of 5% per
annum during such extension period. The second installment was paid on May 1,
1998, together with accrued interest in the sum of Aus$34,781.

In connection with the Acquisition, NHS entered into employment contracts with
Mr. Kevin Bostridge ("Bostridge") and Mr. Robert Swinbourn ("Swinbourn"),
shareholders and former executive directors of Nationwide. Each of the contracts
were for a fixed term of three years and provided for the payment of an annual
salary of Aus$200,000 to Bostridge and Aus$150,000 to Swinbourn. As an
inducement to Bostridge and Swinbourn to enter into such employment contracts,
the Company and TME agreed to jointly pay sign-on fees of Aus$4,000,000
(approximately $2,860,000) in aggregate to Bostridge and Swinbourn. Such


                                       11
<PAGE>

sign-on fees were apportioned as Aus$2,914,286 pertaining to Bostridge and
Aus$1,085,714 pertaining to Swinbourn and were payable in installments as
follows:

                                    Company         TME       Total

      1st Installment             1,000,000   1,000,000   2,000,000
      2nd Installment             1,000,000   1,000,000   2,000,000

      Total                       2,000,000   2,000,000   4,000,000

The first installment was payable on January 31, 1998 of which an aggregate of
Aus$1,250,000 could be deferred until May 1, 1998. On January 31, 1998, in lieu
of the required minimum payment of Aus$750,000, Aus$203,571 was paid in cash and
the balance was settled by a promissory note in the sum of Aus$546,429 payable
on June 30, 1998. The promissory note was guaranteed by Mr. Edward Guinan,
Chairman of the Company. The promissory note has been paid in full. The
Aus$1,250,000 due on May 1, 1998 was paid on that date together with accrued
interest thereon at 5% per annum, approximately Aus$15,240. 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 accrues at the rate of 10% per annum and is payable quarterly in
arrears. The Promissory Note is secured by a charge over Transmedia Australia
and is 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.


                                       12
<PAGE>

Logan Leisure

On May 14, 1998 the Company and TME purchased from Compass Trustees Limited the
entire outstanding capital stock of Porkpine. The Company and TME each acquired
50% of the outstanding capital stock of Porkpine.

Porkpine and its wholly owned subsidiaries Letville Holdings Limited
("Letville") and Floracourt Marketing Limited ("Floracourt") operate two
businesses trading as Logan Leisure and Logan Leisure & Entertainment. Porkpine
trades as Logan Leisure ("LL"). LL was established in 1989 and is based in
Belfast, Northern Ireland. Letville is an intermediary holding company which
owns Floracourt. Floracourt trades as Logan Leisure & Entertainment ("LLE"). LLE
is based in Dublin in the Republic of Ireland and commenced operations in 1992.
Both LL and LLE produce and sell discount and savings directories.

The transaction was consummated pursuant to an acquisition agreement (the
"Agreement") dated May 14, 1998 between Compass Trustees Limited, the Company,
TME and Gavin and Joanne Logan. The consideration paid totaled 1,060,000 pounds
sterling ($1,749,000 approximately) subject to increase or decrease by an amount
equal to the net current assets of Porkpine and subsidiaries as of the date of
completion. The Agreement provided for the net current assets as of the date of
acquisition to be determined by reference to consolidated financial statements
(the "Acquisition Accounts") to be prepared as soon as practicable after the
date of acquisition.

The consideration paid on completion was made up as follows:

                                    Company             TME              Total
      Pounds Sterling

      Cash                          330,000           330,000           660,000
      Shares of common stock:
      Company -225,000 shares       200,000                             200,000
      TME - 225,000 shares                            200,000           200,000
                                    -------           -------          ---------
      Total                         530,000           530,000          1,060,000
                                    =======           =======          =========

The net current assets as of May 14, 1998 per the Acquisition Accounts totaled
$33,627.

Breakaway

On May 22, 1998 Transmedia Holdings acquired from Gisborne the entire issued
share capital of Breakaway.

Breakaway, which is based in Sydney, Australia, commenced operations in 1995.
Breakaway is a licensed travel agent specializing in discount package holidays
for individuals employed in the travel industry in Australia. Such individuals
are entitled to become members of Breakaway. Members of Breakaway pay an annual
membership fee of Aus$20 (approximately $12). Breakaway has negotiated
agreements with travel providers pursuant to which it can secure reduced rate
fares from such travel providers. Travel providers include 


                                       13
<PAGE>

airlines, hotels and tour operators. These reduced rate fares are marketed to
members by Breakaway.

The transaction was consummated pursuant to a Share Sale Agreement dated March
26, 1998 between Gisborne, Transmedia Travel, Peter Guy Gisborne and Terence
John Gill. The total consideration payable was Aus$375,000 (approximately
$230,000). The consideration was paid in cash.

Competition

The "membership based" benefits business is highly competitive. The Company
competes with a number of other operators, both internationally and in
Australia. 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 such as
"air miles".

In its Restaurant Card business the Company competes against other discount
programs. Competitors include programs offered by major credit card companies
such as American Express, Visa, Mastercard and Diners Club. Additionally, other
companies offer different kinds of discount programs. For example, Hilton
International, an international hotel owner and hotel management company,
provides two-for-one dining offers in its restaurants. The Company is not aware
of any restaurant discount charge card business, similar to that of the Company,
in the Licensed Territories at this time. The unique nature of the restaurant
discount charge card is the principal method used to secure business. However,
there can be no assurance given that no new entrants will enter the market in
the future.

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 Company's travel businesses compete with travel agents and other operators
in the hotel and travel industries, including retail travel agents, airlines and
hotel groups. The Teletravel business competes on price and convenience when
compared with retail travel agents where the consumer usually is required to
visit the travel agents premises. Breakaway competes primarily on price as well
as offering its services only to employees of the travel industry.

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 100,000 participating merchants
in 39 countries, is broader based than the programs offered by its competitors.
Management believes that the size of its merchant base, as well as the
international spread of such merchants, gives Countdown an advantage over its
competitors. Such 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 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.


                                       14
<PAGE>

Intellectual Property

The Company operates its restaurant card business pursuant to the rights
acquired through the License Agreement with TMNI. While the License Agreement
grants the Company the right to use certain proprietary software and systems,
the Company found it necessary to develop its own systems and practices for
sales tax and other considerations. Accordingly, the Company is not reliant on
the License Agreement for the conduct its day to day operations. However,
TRANSMEDIA is a registered trademark and therefore the Company relies on the
rights it acquired under the License Agreement to use such trademark and such
other trademarks and service marks as Network may apply for in the Licensed
Territories.

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 recognition attaching to the Countdown name.

Employees

As of September 30, 1998, the Company employed 74 full-time employees (including
those employed by NHS). None of the Company's employees are represented by a
labor union, and the Company considers that its employee relations to be good.

Need for Additional Financing

The Company requires additional funding to provide working capital and to
implement its business plans. Management estimates that an amount of
approximately $1.5 million will be required to meet loan repayment obligations.

The loan made by Mr. Vittoria, a director and shareholder of the Company, of
$1,000,000 in connection with the Countdown acquisition has been renewed for an
indefinite period. However the lender has the right to demand repayment upon
giving of 60 days notice. The Company may need additional funds to finance such
repayment.

No assurance can be given that the Company will be successful in obtaining
additional financing. Failure to obtain necessary financing in a timely manner
may have a significant adverse effect on the Company and operating performance.

ITEM 2. PROPERTIES.

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

The lease in respect of the former office accommodation of NHS expired on
October 31, 1998.

Breakaway Travel occupied approximately 3,275 square feet of office
accommodation in Sydney at an annual rental of Aus$105,230 (approximately
$62,400). The lease expires on May 31, 1999. Breakaway has relocated to the Pitt
Street office and by agreement with its former landlord will be relieved of its
prior lease obligations effective mid February 1999.


                                       15
<PAGE>

Teletravel leases approximately 1,800 square feet of office accommodation in
Sydney at an annual rental of Aus$34,400 (approximately $20,400). The lease
expires on August 31, 1999. Teletravel has relocated to the Pitt Street office.

The Company and TME share office accommodation of approximately 4,000 square
feet at 11 St James's Square, London, England. The office is leased by TME. The
lease expires in February, 2004. During the year ended September 30, 1998 the
Company reimbursed TME in the amount of $56,742 for its share of the rental
cost.

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.

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, 1998.


                                       16
<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, 1998.

      Quarter ended                High                 Low

      December 31, 1996            1 1/2                 1
      March 31, 1997               1 3/8                1/2
      June 30, 1997                1 1/4                1/2
      September 30, 1997           1 3/8                1/2

      December 31, 1997            1 5/8              1 5/16
      March 31, 1998               2 1/4              1 1/16
      June 30, 1998                3 9/16             1 3/4
      September 30, 1998           3 1/16               3/4

(b) Holders. As of January 4, 1999 there were approximately 230 holders of
record of the Common Stock. The Company believes that a significant number of
beneficial owners of its Common Stock are held in "street name".

(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 three year warrant to purchase one
share of the Common Stock at an exercise price of $1.25 per share. The warrants
are exercisable at any time after the date of grant 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 (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 


                                       17
<PAGE>

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.

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 843,333 shares of common stock at $0.75
per share resulting in net proceeds to the Company of $632,500.

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 acquired a 51% interest in NHS. The results of NHS have been
consolidated by the Company from the date of acquisition using the purchase
method of accounting.

Income Statement Data

<TABLE>
<CAPTION>
                                                                                         Inception
                                                         Year Ended     Year Ended          to
                         Year Ended      Year Ended       September      September       September
                        September 30,   September 30,        30,            30,           30, 1994
                            1998            1997            1996           1995           (6 mths)
                            ----            ----            ----           ----           --------
<S>                    <C>             <C>             <C>             <C>             <C>         
Revenues               $  4,667,556    $  2,129,362    $  1,890,476    $  1,103,081    $          0

Gross profit              3,593,453         871,593         791,810         400,358               0

S,G & A                  (7,080,173)     (3,649,441)     (2,816,758)     (2,476,105)              0

Operating loss           (3,486,720)     (2,777,848)     (2,024,946)     (2,075,747)       (377,498)

Share of losses of
affiliated companies       (949,467)       (209,715)              0               0               0

Net loss               $ (4,739,811)   $ (3,030,445)   $ (2,006,258)   $ (1,990,288)   $   (349,650)

Net loss per share     $      (0.27)   $      (0.22)   $      (0.16)   $      (0.17)   $      (0.03)

Balance Sheet Data

                                                        As of Sept. 30
<CAPTION>
                               1998            1997            1996            1995            1994
                               ----            ----            ----            ----            ----
<S>                    <C>             <C>             <C>             <C>             <C>         
Current Assets         $  2,764,972    $    648,799    $  2,065,308    $  2,301,830    $  2,201,303

Total Assets             10,958,762       4,798,380       3,954,947       4,312,460       4,164,997

Working Capital
(Deficiency)             (5,067,882)     (1,399,428)      1,288,958       1,674,014       2,049,383

Stockholders Equity       2,496,124       2,750,153       3,178,597       3,684,644       4,013,077
</TABLE>


                                       18
<PAGE>

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

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. Such factors include,
among others, those described below and those presented elsewhere by management
from time to time. 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," "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.

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.

General

The business of the Company is the design and supply of a range of member
benefit programs to corporations, affinity groups and individuals on an
international scale. In 1996 the Company and TME decided to work closely to
implement a strategy to create a broader based international member benefits
business. As a result the Company currently has established business operations
in Australia and New Zealand and through its affiliates, Countdown and Logan
Leisure, has an interest in business operations in Europe and elsewhere. In
addition, the Company and TME have recently established business operations in
the United States and in November 1998 Countdown launched its transactional web
site business, Countdown Arcade.

The future success of the Company is primarily dependent upon its ability to
develop and expand its current business operations by increasing their
membership base and broadening the range of member benefit programs offered. As
of the date hereof, management is actively recruiting senior executives to
strengthen the management team to facilitate such development and expansion.

The Company will continue to look for new opportunities within the member
benefits industry and may expand its operations through further acquisitions.
Management believes that while the industry has shown good growth, which is
expected to continue, this has been primarily in the United States. Outside the
United States, the international market is significantly less developed
providing an opportunity for the Company to expand its operations from its
established base in Europe and Australasia and the Countdown network of
sub-licensees and franchisees in a number of other countries.

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 America, NHS, Logan Leisure and Breakaway Travel,
management of the Company and TME have been assessing the rationale of
maintaining two separate corporate entities. Management has concluded that
keeping the two companies distinct and separate is no longer appropriate or
advantageous to shareholders and therefore announced its intention to merge the
two 


                                       19
<PAGE>

companies. In concluding that a merger is in the best interests of both the
Company and TME, management considered several factors including the confusion
of having two separate stock quotes for essentially the same business (operating
in different geographical regions), the opportunity to reduce corporate overhead
and to increase operating efficiency. The proposed merger is subject to the
approval of the respective Boards of Directors, fairness opinions by independent
investment advisers and the approval of shareholders of both companies.

The Company recorded significant losses in its fiscal year ended September 30,
1998 as well as in prior years. Such losses and the Company's acquisition and
expansion program to date have been funded by the sale of equity securities and
debt financing. The Company's ability to continue as a going concern depends on
its ability to obtain outside financing sufficient to support its operations and
business development plans. Based upon the Company's history of obtaining
necessary financing, management remains confident that sufficient funds will be
available to the Company to enable it to operate for the foreseeable future.
However, there can be no assurance given that the Company will obtain such
short-term or long-term outside financing.

Results of Operations

Fiscal 1998 compared to Fiscal 1997

The Company generated revenues of $4,667,556 (1997: $2,129,362) in the year
ended September 30, 1998, an increase of $2,538,194 or 119% over the
corresponding period in 1997, reflecting the impact of the NHS and Breakaway
acquisitions. NHS and Breakaway generated revenues of $2,959,970 and $362,147
respectively while the pre-existing business recorded a decline in revenues of
$783,921 to $1,345,440 due to lower card usage by cardholders as a result of
rationalization of the participating restaurant base.

Cost of sales totaled $1,074,103 (1997: $1,257,769) for the year ended September
30, 1998, generating a gross profit percentage of 77.0% (1997: 40.9%). The
increase in gross profit percentage reflects the impact of the higher margin NHS
and Breakaway Travel businesses. The gross profit percentages achieved by NHS
and Breakaway respectively were 89.5% and 100% in fiscal 1998 as compared to
43.4% by pre-existing operations.

Selling, general and administrative expenses totaled $7,080,173 (1997:
$3,649,441) for the year ended September 30, 1998, an increase of $3,430,732 or
94.0% over fiscal 1997. NHS and Breakaway accounted for $2,742,323 and $340,928
of such increase respectively. Selling, general and administrative expenses of
pre-existing operations and head office were $3,996,922 in fiscal 1998, an
increase of $347,481 or 9.5% as compared to fiscal 1997. Selling, general and
administrative expenses in fiscal 1998 included sign-on fees in relation to the
NHS acquisition ($925,000 approximately) and a write-off of approximately
$463,000 relating to an aborted acquisition. These expenses were partially
offset by cost reductions realized in pre-existing operations of approximately
$787,000. Such cost reductions were primarily in payroll, selling and
communication expenses. In addition, in fiscal 1997 the Company recorded
significant non-recurring costs and other charges (see Fiscal 1997 compared to
Fiscal 1996).

The Company's share of losses of its affiliates Countdown and Logan Leisure were
$949,467 for the year ended September 30, 1998, including amortization of
underlying goodwill in the Company's investment in such affiliates of $237,267.
(1997: $ 202,905 (Countdown only)). The Company did not amortize underlying
goodwill in its investment in Countdown in fiscal 1997.

The minority interests in the Company comprise TME's 50% interest in Transmedia
Australia and Transmedia Holdings and the 49% third party interest in NHS.


                                       20
<PAGE>

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, 1998.

Fiscal 1997 compared to Fiscal 1996

The Company generated revenues of $1,924,908 excluding membership fees (1996:
$1,659,515) for the year ended September 30, 1997, an increase of 16% over the
previous year. The Company increased the number of Company Cardholders from
18,000 at September 30, 1996 to 36,800 at September 30, 1997. The increase was
largely the result of a promotion launched in September 1996 with Westpac
Banking Corp. and a new marketing initiative in December 1996 with an Australian
company, FAI Insurance. The arrangement with FAI Insurance provided for the
Company to issue Restaurant Cards free of charge to FAI Insurance customers.
Such customers would not receive an immediate cash benefit in respect of their
25% discount on food and beverage purchased at Participating Restaurants.
Instead their discount was accumulated in a trust account which could be used in
part payment of their subsequent years insurance premium payable to FAI
Insurance. The agreement gave the Company the right to cancel Restaurant Cards
issued to FAI Insurance customers in the event that they did not maintain
minimum spend levels using their Restaurant Card. The only obligation of the
Company was to issue Restaurant Cards free of charge to FAI Insurance customers
subject to their achieving the minimum spend levels referred to above. The
number of Company Participating Restaurants decreased from 430 at September 30,
1996 to 274 at September 30, 1997. This decrease resulted from of the Company
removing under-performing restaurants from the program.

Membership fees totaled $204,454 (1996: $230,961) for the year ended September
30, 1997 a decrease of 11% compared to the prior year. This decrease is a result
of an accounting adjustment of $15,584 to deferred membership fees in the first
quarter and the effect of the free membership card. The accounting adjustment in
the first quarter reduced revenues by $15,584. The adjustment was necessary to
correct an accounting error in the calculation of deferred membership fees as of
December 31, 1996. It is the Company's policy to account for membership fee
revenue over the period of membership, usually one year. An error in the
calculation of deferred membership fee income was discovered subsequent to the
finalization of the unaudited financial statements for the quarter ended
December 31, 1996. The error was corrected in the quarter ended March 31, 1997.
Previous periods were not adjusted because the amount involved was not
considered material.

Cost of sales totaled $1,257,769 (1996: $1,098,666) for the year ended September
30, 1997, an increase of 15% over the prior year, in line with the 16% increase
in revenues. Cost of sales are approximately 50% of the gross food and beverage
value consumed by Cardholders and represents recovery of advances made by the
Company to Participating Restaurants.

Selling, general, and administrative expenses, consisting primarily of salaries,
rents, commissions, and other general overheads totaled $3,649,441 (1996:
$2,816,756) for the year ended September 30, 1997, an increase of 30% over the
previous year. The increase is primarily due to professional fees of $118,642
for work on the proposed merger with TME, a write down of the License by
$276,472 to fair value and costs of $112,875 relating to the termination
agreement with Mr. C.E.C. Radbone, a former director of the Company. In
addition, the Company incurred unrealised foreign exchange losses of $242,012
arising out of the translation of the inter-company balance between the Company
and Transmedia Australia as of September 30, 1997 and a $150,000 write off of
the Hawaii option. Excluding these additional expenses, the Company recorded a
small decrease in selling, general and administrative expenses in fiscal 1997.


                                       21
<PAGE>

The Company's share of losses relating to Countdown's operations for the period
from April 3, 1997 to September 30, 1997 was $202,905. The Company earned
interest of $24,197 (1996: $21,005) in fiscal 1997 from the temporary investment
of surplus cash and interest on loans to certain stockholders.

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:

                                                Twelve Months Ended
                                                -------------------

                                 September 30, 1998           September 30, 1997
Cash used in
Operating Activities                 $(2,523,744)                 $(2,126,864)

Cash used in
Investing activities                 $(2,437,248)                 $(1,205,610)

Cash provided by financing
Activities                            $5,549,595                  $ 2,057,449

The Company incurred a net loss of $4,739,811 for the year ended September 30,
1998. Such loss, adjusted for non-cash items, namely depreciation and
amortization charges totaling $441,885, the Company's share of losses incurred
by its affiliates of $949,467, accrued interest charges of $250,412 and a
provision against a non-trade receivable of $452,427 resulted in funds used in
operating activities totaling $2,523,744, net of working capital movements.

The fiscal 1998 net cash used in investing activities of $2,437,248 comprised
the cash elements of the Company's investments in its subsidiaries NHS
($1,702,559) and Breakaway ($126,748). In addition, the Company invested
$570,623 in its affiliate Logan Leisure and $37,318 in fixed assets. In fiscal
1997 net cash used in investing activities comprised the cash element
($1,209,655) of the Company's investment in Countdown, net of the proceeds of
sale of fixed assets of $4,045.

To meet its cash requirements during fiscal 1998, the Company sold in aggregate
3,447,095 shares of its common stock in equity private placements, resulting in
net proceeds to the Company of $3,934,595. In addition, in April 1998 the
Company raised approximately $1,615,000 through the issuance of four 8%
promissory notes. Such promissory notes fell due for payment on November 1,
1998. As of the date hereof, $125,000 has been repaid together with accrued
interest to November 1, 1998.

The Company's independent auditor's report on the Company's consolidated
financial statements included in Item 8 states that "......the Company has
experienced losses from operations in during the year ended September 30, 1998
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 Company's ability to continue to
effect such sales of equity and issue of debt".

During fiscal 1998 the Company relied on net revenues and the net proceeds of
equity placements and short-term debt financing to fund its operating needs and
investments. 


                                       22
<PAGE>

Management has taken steps to reduce the amount of cash used by operations,
including reducing staffing levels, however the Company's operations may not
provide sufficient internally generated cash flows to meet its projected
requirements in the short-term. Accordingly, the Company will require further
capital infusions in order to meet its loan repayment commitments and the
ongoing funding requirements of its operations. Based upon the Company's history
of obtaining necessary financing, management remains confident that sufficient
funds will be available for the Company to operate in the foreseeable future and
meet its loan repayment obligations. However there can be no assurance given
that the Company will be able to obtain such funding.

Historically, the Company's ability to grow and generate cash from operations
has been restricted by the single product offered, the Transmedia dining card.
However, in recent years the Company and TME have worked closely to implement a
strategy to create a broader based international member benefits business. As a
result the Company currently has established business operations in Australia
and New Zealand and through its affiliates, Countdown and Logan Leisure, has an
interest in business operations in Europe and elsewhere. In addition, the
Company and TME have recently established business operations in the United
States and in November 1998 Countdown launched its transactional web site
business, Countdown Arcade. 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

The Company does not believe that its operations have been materially influenced
by inflation in the fiscal year ended September 30, 1998, a situation which is
expected to continue for foreseeable future. Some of the Company's individual
businesses such as Teletravel and Breakaway are seasonal, as is the Company's
restaurant card business albeit to a lesser extent. However, the Company has no
basis at this time on which to project the seasonal effects, if any, on its
business as a whole.

Effect of Year 2000

The Company has developed a plan to address the possible exposure related to the
impact of the Year 2000 on its computer systems. Key operating, financial and
management information systems have been assessed and plans have been developed
to address required systems modifications by December 31, 1999. The financial
impact of making the required system changes is not expected to be material to
the Company's consolidated financial position, results of operations or cash
flow. Management currently estimates the likely cost of system modifications to
be approximately $100,000.

In fiscal 1998 the Company established a Year 2000 group to evaluate the
potential exposure of the Company's computer systems and computer reliant
systems to Year 2000 issues. The working group completed its evaluation and has
developed a plan to ensure that all of the Company's systems will be fully
compliant by December 31, 1999.

The core business system used in the Company's restaurant card business is not
Year 2000 compliant and could fail to operate into the next millennium without
corrective action. The system was scheduled to be re-written in any event, with
completion planned for the fourth quarter of 1999. Interim systems have been
fully tested and will be implemented during the first quarter of 1999 as a
precautionary measure. In other areas of the Company's operations systems are
Year 2000 compliant. Breakaway is fully compliant, as are the telephone systems
used by NHS. Non core business applications such as word processing and
management 


                                       23
<PAGE>

information reporting systems require some minor modification. Computer hardware
has been substantially upgraded to appropriate processors. The systems of the
Company's affiliate, Countdown, have also been evaluated. Countdown systems
require some modification and upgrading which is scheduled for completion in the
first quarter of 1999

The Company is in communication with others with whom it does business,
including but not limited to, financial institutions and key customers, to
determine their Year 2000 compliance readiness and the extent to which the
Company is vulnerable to any third party Year 2000 issues. In particular the
Company has not yet received confirmations from a number of banking
institutions. There can be no assurance that the systems of third parties, on
which the Company's systems rely, will be converted on a timely basis, or that a
failure to convert or a conversion that is incompatible with the Company's
systems would not have a material adverse effect on the Company.

New U.S. Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
on Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income," effective for fiscal years beginning after December 15, 1997. This
statement establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
as including all changes in equity except those resulting from investments by
owners and distributions to owners. The Company will be required to adopt SFAS
No. 130 in the first quarter of fiscal 1999.

In June 1997, FASB issued SFAS No. 131, "Disclosure About Segments of an
Enterprise and Related Information," effective for fiscal years beginning after
December 15, 1997. This statement establishes standards for the way that public
companies report information about operating segments in financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. The Company will be
required to adopt SFAS No. 131 in fiscal 1999.

Both of the above standards require comparative information to be restated.
Results of operations and financial position will be unaffected by
implementation of these new standards.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about
Pensions and Other Post-retirement Benefits" (SFAS No. 132), which revises
employers' disclosures about pension and other post-retirement benefit plans.
SFAS 132 is effective for financial statements for periods beginning after
December 15, 1997 and requires comparative information for earlier years to be
restated. This standard does not currently apply to the Company.

ITEM 7 A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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


                                       24
<PAGE>

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

Effective September 26, 1997 KPMG resigned as the Company's independent
auditors. On the same date the Company appointed BDO Stoy Hayward as the
Company's independent auditors. This action was recommended by the Audit
Committee and approved by the Board of Directors.

In connection with their audit of the Company's consolidated financial
statements for the fiscal year ended September 30, 1996, and in the subsequent
interim period, there were no disagreements between KPMG and the Company on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope and procedures which, if not resolved to the satisfaction of
KPMG, would have caused KPMG to make reference to such matters in their report.

Notwithstanding the foregoing, by letter dated February 13, 1998, KPMG informed
the Company that it would not agree to file a consent to the inclusion of its
prior audit reports in the Company's Annual Report on Form 10-K for the year
ended September 30, 1997. The Company believes that there was no basis for this
action by KPMG.

The position of KPMG was set out in a letter dated February 13, 1998, which
stated that:

"Based on an evaluation of circumstances and recent events we have decided that
we are not willing to accept an assignment to consider whether we would re-sign
our audit report as of September 30, 1996 and for the year then ended for
inclusion in the Form 10-K filing of Transmedia Asia Pacific, Inc. for the year
ended September 30, 1997".

The financial statements for the fiscal year ended September 30, 1996 have been
re-audited by BDO Stoy Hayward and their report is included in this Annual
Report.

See the Company's Current Report on Form 8-K, as amended, filed with the
Commission on or about October 27, 1997 for a description of the resignation of
KPMG.


                                       25
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Name                       Age      Position
----                       ---      --------

Edward J. Guinan III       51       Chairman and Chief Executive Officer
Paul L. Harrison           37       President, Secretary and Principal Financial
                                    Officer and Director
Carl Freyer (1)            59       Director
Joseph V. Vittoria (1)     64       Director

-------------------------------
(1) Member of the Audit Committee.

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.

Edward J. Guinan III
Chairman and Chief Executive Officer

Edward J. Guinan III has been the Chairman of the Board of Directors, Chief
Executive Officer and a director of the Company since its inception in March
1994. Since February 1993, Mr. Guinan has also served as Chairman and Chief
Executive Officer of the Company's affiliate, TME. In addition, commencing May
1995, Mr. Guinan has served as President, Chief Executive Officer, Chief
Financial Officer and as the sole director of International Advance, Inc. Mr.
Guinan devotes substantially all of his time to the affairs of the Company and
TME. Prior to February 1993, Mr. Guinan headed his own broker-dealer firm Guinan
and Company which he established in 1984.

Paul L. Harrison
President, Secretary and
Principal Financial and Accounting Officer

Paul Harrison has been a director of the Company since June 1997. He was a
director and President of Transmedia Australia from May 1994 until June 1997.
Mr. Harrison is also President, Principal Financial and Accounting Officer and
Secretary of TME. In 1993, Mr. Harrison acted as a consultant to TME in
connection with the initial funding of TME and commencement of its business
operations. Prior to 1993, Mr. Harrison was Vice-President responsible for
European Equities at Salomon Brothers, London, where his responsibilities
included coordinating and marketing the sale of various derivatives and other
equity securities to European based institutional clients.

Joseph V. Vittoria
Director

Mr. Vittoria has been a director of the Company since inception. Mr. Vittoria is
Chairman and Chief Executive Officer Travel Services International, Inc. a
position he has held since that company's inception in 1997. From September 1987
to January 1997, Mr. Vittoria was


                                       26
<PAGE>

Chairman and Chief Executive Officer of Avis Inc., having been a senior
executive at Avis from 1982. Mr. Vittoria is a director of TME.

Carl H. Freyer
Director

Carl Freyer has been a director of the Company since 1996. Mr. Freyer is also
President of Freyer Corporation, a financial consulting firm. He was a director
of G-Tech Corporation from 1983 to 1997. Mr. Freyer is a director of TME.

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

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and 10% shareholders to file with the Securities
and Exchange Commission ("SEC") certain reports regarding such persons'
ownership of the Company's securities. Edward J. Guinan was late in filing Form
4 in respect of Common Stock owned by Mr. Guinan pledged to secure a
contemplated acquisition and Common Stock pledged to secure a Promissory Note
executed by TME. Mr. Guinan is working on bringing his filings up-to-date.

The Company is not aware of any other late filings of reports under Section 16.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the aggregate compensation paid during the three
years ended September 30, 1998 to the Company's Chief Executive Officer and any
other executive officer of the Company earning in excess of $100,000 for
services rendered during fiscal 1998.


                                       27
<PAGE>

                       Summary Compensation Table

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

Name and Principal                                                            All Other 
Position                   Year      Notes         Salary  Options/SAR's   Compensation
<S>                        <C>   <C>              <C>          <C>               <C>   
Edward J. Guinan III
Chief Executive Officer    1998     (1)(2)        165,330      2,500,000         80,359
                           1997     (3)(2)        162,100              0         38,472
                           1996     (4)(2)        153,625              0         22,925
Paul L. Harrison
President                  1998  (1)(2)(5)        165,330        750,000          8,668
                           1997     (3)(5)        154,000              0              0
                           1996     (4)(5)        122,900              0              0
</TABLE>

(1)   Based upon an exchange rate of 1 pound sterling = $1.6533
(2)   Represents reimbursement of travel and entertainment expenses
(3)   Based upon an exchange rate of 1 pound sterling = $1.6210
(4)   Based upon an exchange rate of 1 pound sterling = $1.5362
(5)   50% of Mr. Harrison's salary is recharged to TME

Option/SAR Grants in Last Fiscal Year

The following table sets forth information regarding stock option grants made
during the fiscal year ended September 30, 1998 to each of the named executive
officers and their potential realizable values.

                      Option/SAR Grants in Last Fiscal Year

                                Individual Grants

<TABLE>
<CAPTION>                                                   
                        Number of                                              Potential Realizable
                        Shares of    % of Total                             Value at Assumed Annual
                     Common Stock      Options/                                Rates of Stock Price
                       Underlying          SARs     Exercise                Appreciation for Option
                         Options/    Granted to      or Base                                   Term
                     SARs granted   Emloyees in        Price   Expiration                       ($)
Name                          (#)   Fiscal Year    ($/Share)         Date           5%          10%
                                                                                    
<S>                     <C>               <C>          <C>         <C>       <C>          <C>      
Edward J. Guinan 
CEO                     3,250,000         67.0%        $1.00       3/1/03    1,159,234    2,313,909

Paul Harrison
President                 750,000         15.5%        $1.00       3/1/03      267,515      533,979
</TABLE>


                                       28
<PAGE>

In March 1998 the Board of Directors granted, subject to stockholder approval,
options to senior management to purchase 2,250,000 shares, in aggregate, of the
Common Stock of the Company at an exercise price of $1.00 per share.

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

The following table sets forth information as of September 30, 1998, concerning
exercisable and non exercisable options held by the Company's Chief Executive
Officer and any other executive officer of the Company earning in excess of
$100,000 for services rendered during fiscal 1998. The table also includes the
value of "in-the-money" options which represents the spread between the exercise
price of the existing stock options and the year end price of the Common Stock
which was $1.375.

<TABLE>
<CAPTION>
Name                          Shares          Value        Number of Securities   Value of Unexercised
                         Acquired on       Realized      Underlying Unexercised   In-the-Money Options
                            Exercise            ($)           Options at Fiscal  at fiscal Year-End($)
                                 (#)                                Year-End(#)           Exercisable/
                                                                   Exercisable/          Unexercisable
                                                                  Unexercisable
<S>                                <C>            <C>           <C>                                <C>
Edward Guinan                      0              0                 0/3,250,000                    0/0

Paul Harrison                      0              0             800,000/750,000                    0/0
</TABLE>

Employment Agreements

On May 26, 1994 Mr. Guinan and the Company entered into an Employment Agreement
for a term ending on May 25, 1997 with annual extensions thereafter unless
terminated by either party. On March 2, 1998 Mr. Guinan and the Company agreed
to replace the Employment Agreement in its entirety except with respect to
accrued benefits as of March 2, 1998. The New Employment Agreement is for a term
ending on March 1, 2001 and provides for an annual salary of 100,000 pounds
sterling and participation in executive benefit programs if and when put into
effect by the Company. In addition, in recognition of certain guarantees and
pledges made by Mr. Guinan for the benefit of the Company and to provide
inducement for Mr. Guinan to make further guarantees and pledges as required and
to further the best interests of the Company, the New Employment Agreement also
provides that Mr. Guinan be entitled to receive, subject to shareholder
approval, fully vested stock options having a term of 5 years and covering
2,500,000 shares of the Company's Common Stock at an exercise price of $1.00 per
share. The New Employment Agreement includes confidentiality and non-compete
restrictions during the term of the New Employment Agreement and for a period of
two years thereafter. Mr. Guinan may be discharged for cause including failure
or refusal to perform his duties, dishonesty, conviction of a felony or fraud,
engagement in acts detrimental to the Company, material breach of any provision
of the New Employment Agreement, disability or death. Mr. Guinan is required to
devote substantial business efforts to the Company. Mr. Guinan is also employed
by TME and International Advance, Inc. and the 


                                       29
<PAGE>

New Employment Agreement provides that Mr. Guinan's other business activities
shall not conflict with the terms of the New Employment Agreement.

On May 26, 1994 Mr. Harrison and the Company entered into an Employment
Agreement for a term ending on May 25, 1997 with annual extensions thereafter
unless terminated by either party. Under the Employment Agreement Mr. Harrison
receives a salary of 100,000 pounds sterling per year and is entitled to
participate in executive benefit programs if and when put into effect by the
Company. Mr. Harrison was also granted non-transferable options to purchase
800,000 shares of the Common Stock of the Company at an exercise price of $1.00
per share. Of such options 400,000 became exercisable on May 9, 1995 and the
balance on May 9, 1996. The Employment Agreement includes confidentiality and
non-compete restrictions during the term and for a period of two years
thereafter. Mr. Harrison may be discharged for cause including failure or
refusal to perform his duties, dishonesty, conviction of a felony or fraud,
engagement in acts detrimental to the Company, material breach of the Employment
Agreement, disability or death. On March 2, 1998 the Board of Directors granted
Mr. Harrison, subject to shareholder approval, fully vested non-transferable 5
year share options to purchase 750,000 shares of the common stock of the Company
at an exercise price of $1.00 per share.

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 calibre and to offer an incentive for officers and employees to promote
the business of the Company. The 1994 Plan authorizes the granting of incentive
stock options or non-qualified stock options to purchase the 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 other
independent contractors who perform services for the Company or any of its
subsidiaries are eligible to receive incentive stock options. The 1994 Plan is
administered by the Board of Directors (or a committee appointed by it), which
determines the persons to whom awards will be granted, 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 which is 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, commencing January
1, 1996, for the automatic granting to each non-employee director of the Company
a stock option to purchase 10,000 shares of common stock of the Company on
January 1 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.


                                       30
<PAGE>

As of January 4, 1999, 60,000 options have been granted under the Outside
Directors Plan.

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 4, 1999, by (i) each beneficial owner of
more than five percent of the outstanding Common Stock, (ii) each current 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. Additionally, 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>
Name and Address                      Notes    # of Shares Owned    Percentage Owned
<S>                             <C>                   <C>                      <C>  
FAI Overseas Investment Pty
77 Pacific Highway
Sydney, Australia 2059                  (2)            4,058,799               13.5%

C.E.C. Radbone
19 Calonne Road
Wimbledon, London, UK                   (3)            1,607,717               5.35%

Edward J. Guinan III            (4) to (10)            8,683,882               28.9%

Paul L. Harrison                       (11)            1,737,500                5.8%

Joseph V. Vittoria                 (12)(13)            1,756,969                5.8%

Carl Freyer                        (14)(15)              220,000                0.7%

All directors and officers
As a group (four persons)       (2) to (15)           12,398,351               41.2%
</TABLE>

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

(1)   Based on 20,364,316 shares of Common Stock outstanding on January 4, 1999.
(2)   Includes 1,633,342 shares of Common Stock issuable upon exercise of
      warrants granted November 1998.
(3)   Includes 277,193 shares of Common Stock issuable upon exercise of options
      granted April 19, 1997 as part of the Countdown acquisition.


                                       31
<PAGE>

(4)   Includes 450,000 shares of Common Stock owned by Conestoga Partners II,
      Inc. ("Conestoga") which Mr. Guinan may be deemed to beneficially own. Mr.
      Guinan Chief Executive Officer, President and Director of Conestoga and is
      beneficial owner 75% of the outstanding capital stock of Conestoga.
(5)   Includes 800,000 shares of Common Stock placed in trusts set up for Mr.
      Guinan's children and certain other shares for which Mr Guinan disclaims
      beneficial ownership. Does not include 93,750 shares of Common Stock owned
      by Edward J Guinan Jr., Mr. Guinan's father, which Mr. Guinan disclaims
      beneficial ownership of.
(6)   Includes 133,332 shares of Common Stock issuable upon exercise of warrants
      granted as part of the February 1998 Private Placement.
(7)   Includes 3,050 shares of Common Stock owned by International Advance, Inc.
      ("IA") which Mr. Guinan may be deemed to beneficially own. Mr. Guinan is a
      director, President, Chief Executive Officer and the controlling
      stockholder of IA.
(8)   Includes 200,000 shares of Common Stock issuable upon exercise of warrants
      granted in May 1996 in relation to a Private Placement of shares in IA.
(9)   Includes 2,500,000 shares of Common Stock issuable upon exercise of
      options granted in March 1998, subject to shareholder approval.
(10)  Includes 750,000 shares of Common Stock issuable upon exercise of options
      granted to Mrs. Susan E Guinan, Mr. Guinan's wife, in March 1998, subject
      to shareholder approval.
(11)  Includes 800,000 shares of Common Stock issuable on exercise of options
      granted in 1994 and 750,000 shares of Common Stock issuable on exercise of
      options granted, subject to shareholder approval, March 1998. Does not
      include 450,000 shares of Common Stock owned by Conestoga, of Mr. Harrison
      is a director and minority shareholder of which he disclaims beneficial
      ownership.
(12)  Includes 60,000 shares of Common Stock issuable upon exercise of warrants
      granted under the 1995 Directors Stock Option Plan.
(13)  Includes 138,596 shares of Common Stock issuable upon exercise of warrants
      granted in April 1997 in relation to the acquisition of Countdown, 167,873
      shares of Common Stock issuable upon exercise of warrants granted as part
      of the August 1997 Private Placement and 250,000 shares of Common Stock
      issuable upon exercise of warrants granted in March 1998, subject to
      shareholder approval.
(14)  Includes 20,000 shares of Common Stock issuable upon exercise of warrants
      granted under the 1995 Directors Stock Option Plan.
(15)  Includes 200,000 shares of Common Stock issuable upon exercise of warrants
      granted to Caribbean Basin Capital Consultants, Inc ("CBCC"), which Mr.
      Freyer may be deemed to beneficially own. Mr. Freyer is a director,
      President, Chief Executive Officer and the controlling shareholder of
      CBCC.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In fiscal 1998 the Company was charged a management fee of $1,060,526 (1997:
$679,786) 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, 1998 the Company owed $2,454,716 to Transmedia Europe, Inc.
Such payable is non-interest bearing and is repayable on demand.

Messrs. Guinan, Harrison, Freyer and Vittoria are also directors of Transmedia
Europe, Inc. See "Directors and Executive Officers of Registrant".

During fiscal 1997, the Company entered into an agreement with Mr. Joseph
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 Holdings Limited ("Countdown"). The loan, which bears
interest at 12% per annum and is collateralized by a pledge of all the shares of
Countdown purchased by the Company, was originally scheduled 


                                       32
<PAGE>

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.


                                       33
<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:

        I     Schedule of Valuation and Qualifying Accounts

        II.   Consolidated Financial Statements for significant associate
              Countdown Holdings Limited

(a)(3)  Exhibits:

        (i)   Lease Agreement dated September 23, 1998 between Cambooya 
              Properties Pty Limited and Transmedia Australia

        (ii)  Employment Agreement dated March 2, 1998 between Transmedia Asia
              Pacific, Inc. and Edward Guinan.

(b)     Reports on Form 8-K

        None.


                                       34
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            Page

         Report of BDO Stoy Hayward, Independent Auditors                     F1

         Consolidated Balance Sheets                                     F2 - F3
         September 30, 1998 and 1997

         Consolidated Statements of Operations                                F4
         for the years ended September 30, 1998, 1997 and 1996

         Consolidated Statements of Stockholders Equity                       F5
         for the years ended September 30, 1998, 1997 and 1996

         Consolidated Statements of Cash Flows                                F6
         for the years ended September 30, 1998, 1997 and 1996

         Notes to the Consolidated Financial Statements                 F7 - F22

         Schedule II - Valuation and Qualifying Accounts                     F23
         And Reserves

<PAGE>

                Report of BDO Stoy Hayward, Independent Auditors

The 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, 1998 and 1997 and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the three years in the period ended September 30, 1998. We have also
audited the financial statement schedule listed in the accompanying index. These
consolidated financial statements and schedule are the responsibility of the
Company's management. 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. These standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements and
schedule are free of 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, 1998 and
1997, and the results of their operations and their cash flows for each of the
three years ended September 30, 1998 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 and schedule 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 from operations during the years ended September 30, 1998, 1997 and 1996
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 Company's ability to continue to
effect such sales of equity and issue of debt. Management's plans in regard to
these matters are also described in Note 3. The consolidated financial
statements and schedule do not include any adjustments which might result from
this uncertainty.

January 20, 1999

BDO Stoy Hayward
London, England


                                      F-1
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

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

<TABLE>
<CAPTION>
                                                         September 30,   September 30,
                                                              1998            1997
                                                         -------------   -------------
<S>                                                        <C>                <C>   
ASSETS

Current assets

Cash and cash equivalents                                  1,504,921          13,104

Trade accounts receivable                                    446,193          56,563

Restaurant credits, (net of allowance for irrecoverable
credits of $ 48,033 at September 30, 1998 and of
$ 114,610 at September 30, 1997)                             195,548         301,815

Amounts due from related parties (Note 4)                    591,916         258,533

Prepaid expenses and other current assets                     26,394          18,784
                                                          ----------      ----------

Total current assets                                       2,764,972         648,799
                                                          ----------      ----------
Non current assets

Investment in affiliated companies (Note 5)                2,877,728       2,715,442

Office furniture and equipment, (net of accumulated
depreciation of $509,874 at September 30, 1998 and
$ 106,620 at September 30, 1997)                             240,269          94,250

Goodwill, (net of accumulated
Amortization of $204,897 at September 30, 1998 and
$ Nil at September 30, 1997) (Note 7)                      3,759,284              --

Other intangible assets, (net of accumulated
Amortization of $768,277 at September 30, 1998 and
$644,631 at September 30, 1997) (Note 6)                   1,073,297       1,196,943

Restricted cash and cash equivalents                         139,209              --

Other assets                                                 104,003         142,946

                                                          ----------      ----------
Total non current assets                                   8,193,790       4,149,581

                                                          ----------      ----------
TOTAL ASSETS                                              10,958,762       4,798,380
                                                          ----------      ----------
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements


                                      F-2
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

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

<TABLE>
<CAPTION>
                                                         September 30,   September 30,
                                                              1998            1997
                                                         -------------   -------------
<S>                                                      <C>             <C>   
LIABILITIES

Current liabilities

Trade accounts payable                                     538,708            267,232

Deferred membership fee income                             467,588            104,375

Accrued liabilities                                        990,672            330,908

Liability for  sign on fees (Note 7(a))                    296,500                 -- 

Amount due to related parties (Note 4)                   3,924,386          1,345,712

Notes payable (Note 8)                                   1,615,000                 -- 
                                                       -----------        -----------
Total current liabilities                                7,832,854          2,048,227
                                                       -----------        -----------

Minority interest                                          629,784                 -- 

STOCKHOLDERS' EQUITY

Preferred stock, $0.1 par  value per share
Authorized 5,000,000 shares; issued and outstanding:            --                 -- 

Common stock, $0.00001 par value per share
Authorized 95,000,000 shares, (19,521,316 issued
and outstanding at September 30, 1998
15,249,221 at September 30, 1997)                              196                153

Additional paid-in capital                              14,823,648          9,962,922

Cumulative foreign currency translation                   (211,268)           163,719
adjustment

Accumulated deficit                                    (12,116,452)        (7,376,641)
                                                       -----------        -----------
Total Stockholders' equity                               2,496,124          2,750,153
                                                       -----------        -----------

                                                       -----------        -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              10,958,762          4,798,380
                                                       -----------        -----------
</TABLE>

See accompanying summary of accounting policies and notes to 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,
                                                               1998            1997             1996

<S>                                                        <C>             <C>             <C>         
Sales revenues                                             $  4,418,237    $  1,924,908    $  1,659,515
Membership fees                                                 241,506         204,454         230,961
Other                                                             7,813              --              --
                                                           ------------    ------------    ------------

Total revenues                                                4,667,556       2,129,362       1,890,476

Cost of revenues                                             (1,074,103)     (1,257,769)     (1,098,666)
                                                           ------------    ------------    ------------

Gross profit                                                  3,593,453         871,593         791,810

Selling, general and administrative expenses (Note 7(d))     (7,080,173)     (3,649,441)     (2,816,756)
                                                           ------------    ------------    ------------

Loss from operations                                         (3,486,720)     (2,777,848)     (2,024,946)

Share of losses of affiliated companies (Note 5)               (949,467)       (202,905)             --

Interest expense                                               (277,751)        (73,889)         (2,317)

Interest income                                                  19,249          24,197          21,005
                                                           ------------    ------------    ------------

Loss before income tax and minority interest                 (4,694,689)     (3,030,445)     (2,006,258)

Income taxes (Note 10)                                         (188,198)             --              --

Minority interest                                               143,076              --              --

                                                           ------------    ------------    ------------
Net loss                                                     (4,739,811)     (3,030,445)     (2,006,258)
                                                           ------------    ------------    ------------

Net loss per common and common equivalent share:
Basic                                                             (0.27)          (0.22)          (0.16)
Diluted                                                           (0.27)          (0.22)          (0.16)

Weighted average number of
Common shares outstanding, basic and diluted                 17,691,690      13,802,812      12,618,400
</TABLE>

See accompanying summary of accounting policies and notes to financial
statements


                                      F-4
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

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

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                        Number of            Common       Additional         Cumulative 
                                                      Common shares           stock     paid-in capital       currency  
                                                                                                             translation
                                                                                                             adjustment
<S>                                                    <C>                    <C>         <C>                <C>   
Balance, October 1, 1995                               12,469,590             $125        $6,235,758              $949  

Issuance of common stock for cash                         892,857                9         1,249,991                    
Issue costs                                                                                  (15,000)                   
Net loss                                                                                                                
Effect of foreign currency
translation                                                                                                     52,961  
Compensation expense                                                                                                    

                                                      ----------------------------------------------------------------
Balance, September  30, 1996                           13,362,447             $134        $7,470,749           $53,910  

Issuance of common stock for cash                         556,250                6         1,112,494                    
Issue costs                                                                                  (15,000)                   
Issuance of common stock relating
to acquisition of Countdown                             1,330,524               13         1,222,819                    
Net loss                                                                                                                
Effect of foreign currency
translation                                                                                                    109,809  
Option re Countdown                                                                          171,860                    

                                                      ----------------------------------------------------------------
Balance, September 30, 1997                            15,249,221             $153        $9,962,922          $163,719  

Issuance of common stock for cash                       3,447,095               35         3,934,560                    
Issuance of common stock relating
to acquisition of NHS                                     500,000                5           499,995                    
Issuance of common stock relating
to acquisition of Porkpine                                225,000                2           326,172                    
Issuance of common stock relating to failed               100,000                1            99,999                    
acquisition (Note 7(d))
Net loss                                                                                                                
Effect of foreign currency
translation                                                                                                   (374,987) 

                                                      ----------------------------------------------------------------
Balance, September 30, 1998                            19,521,316             $196       $14,823,648         $(211,268) 
                                                      ----------------------------------------------------------------

<CAPTION>
-----------------------------------------------------------------------------------------------------
                                                       Accumulated         Unearned          Total
                                                         deficit         compensation
<S>                                                    <C>                 <C>             <C>       
Balance, October 1, 1995                              $ (2,339,938)        $(212,250)   $   3,684,644

Issuance of common stock for cash                                                           1,250,000
Issue costs                                                                                   (15,000)
Net loss                                                (2,006,258)                        (2,006,258)
Effect of foreign currency
translation                                                                                    52,961
Compensation expense                                                         212,250          212,250

                                                      -----------------------------------------------
Balance, September  30, 1996                          $ (4,346,196)               --    $   3,178,597

Issuance of common stock for cash                                                           1,112,500
Issue costs                                                                                   (15,000)
Issuance of common stock relating
to acquisition of Countdown                                                                 1,222,832
Net loss                                                (3,030,445)                        (3,030,445)
Effect of foreign currency
translation                                                                                   109,809
Option re Countdown                                                                           171,860

                                                      -----------------------------------------------
Balance, September 30, 1997                           $ (7,376,641)               --    $   2,750,153

Issuance of common stock for cash                                                           3,934,595
Issuance of common stock relating
to acquisition of NHS                                                                         500,000
Issuance of common stock relating
to acquisition of Porkpine                                                                    326,174
Issuance of common stock relating to failed                                                   100,000
acquisition (Note 7(d))
Net loss                                                (4,739,811)                        (4,739,811)
Effect of foreign currency
translation                                                                                  (374,987)

                                                      -----------------------------------------------
Balance, September 30, 1998                           $(12,116,452)               --    $   2,496,124
                                                      -----------------------------------------------
</TABLE>


                                      F-5
<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,
                                                               1998            1997             1996

<S>                                                        <C>             <C>             <C>         
Cash flows from operating activities:
Net loss                                                   $ (4,739,811)   $ (3,030,445)   $ (2,006,258)

Adjustment to reconcile net loss
to net cash used in operating activities:
Depreciation                                                    113,342          38,195          35,539
Amortization of license and goodwill                            328,543         122,720         122,720
Write down of license to fair value                                  --         276,472              --
Provision for irrevocable restaurant credits                         --          (5,152)         79,344
Amortization of deferred compensation                                --              --         212,250
Write off of Hawaii option                                           --         150,000              --
Share of loss of affiliates                                     949,467         202,905              --
Accrued interest expense                                        250,412              --              --
Accrued sign-on fees                                            296,500              --              --
Reserve against non-trade receivable                            452,427              --              --
Minority interest                                               143,076              --              --
Changes in assets and liabilities:
Trade accounts payable                                         (288,932)         13,800         131,837
Accrued liabilities                                             (36,268)         80,556          (5,021)
Accounts receivable                                              36,324              --              --
Restaurant credits                                              106,267         340,145         (98,997)
Prepaid expenses and other current assets                      (153,876)         (9,956)        (60,299)
Deferred membership fees                                        160,291         (34,840)          5,066
Restricted cash and cash equivalents                           (139,209)             --              --
Due from /(to) related parties                                   (2,297)       (271,264)        663,930
                                                           ------------    ------------    ------------
Net cash used in operating activities                        (2,523,744)     (2,126,864)       (919,889)

Cash flows from investing activities:

Interest acquired in affiliates                                (570,623)     (1,209,655)             --
Net cash paid to acquire NHS                                 (1,702,559)             --              --
Net cash paid to acquire Breakaway                             (126,748)             --              --
Proceeds on disposal/(acquisition) of fixed assets              (37,318)          4,045         (29,861)
                                                           ------------    ------------    ------------
Net cash used in investing activities                        (2,437,248)     (1,205,610)        (29,861)

Cash flows from financing activities:
Net proceeds received from issuance
  of common stock                                             3,934,595       1,097,500       1,235,000
Loans from related parties re Countdown acquisition                  --       1.000,000              --
Bank credit line                                                     --         (40,051)        (86,097)
Proceeds from notes payable                                   1,615,000              --              --
                                                           ------------    ------------    ------------
Net cash provided by financing activities                     5,549,595       2,057,449       1,148,903

Effects of exchange rate changes on cash                       (112,197)        116,824          31,054

                                                           ------------    ------------    ------------
Net increase/(decrease) in cash and cash equivalents            476,407      (1,158,201)        230,207

Cash and cash equivalents at beginning of period                 13,104       1,171,305         941,098
Cash acquired as part of acquisitions                         1,015,410              --              --
Cash and cash equivalents at end of period                    1,504,921          13,104       1,171,305
                                                           ------------    ------------    ------------
</TABLE>


                                      F-6
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Supplemental disclosures of cash flow information:

Cash paid during the year for:

Interest                                                              $73,494
        
Taxes paid                                                               $395

No amounts of cash were paid for interest or income taxes in 1997 or 1996

Supplemental Disclosures of Non-cash Investing and Financing Activities

(1) In April, 1997 the Company issued 1,330,524 shares of its common stock as
part payment for its investment in Countdown Holdings Limited ("Countdown"). The
Company paid a total of $2,682,487 for its investment in Countdown made up as
follows:

Cash payment                                                        1,209,655   
Issuance of 1,330,524 shares of Common Stock                        1,222,832  
Loan Note in favor of TMNI International, Inc.                        250,000  
                                                                   ---------- 
                                                                    2,682,487  
                                                                   ---------- 

(2) 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. As at September 30, 1998 total
acquisition costs were $ 2,202,559 made up as follows:

Cash payment                                                        1,702,559   
Issuance of 500,000 shares of Common Stock                            500,000  
                                                                   ---------- 
                                                                    2,202,559  
                                                                   ---------- 
                                                                  
(3) In May, 1998 the Company issued 225,000 shares of its common stock as part
payment for its investment in Porkpine Limited ("Porkpine"). The Company paid a
total consideration of $869,797 for its investment in Porkpine made up as
follows:

Cash payment                                                          570,623
Issuance of 225,000 shares of Common Stock                            326,174
                                                                   ---------- 
                                                                      896,797
                                                                   ---------- 


                                      F-7
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1 - The Company

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

On December 2, 1997, Transmedia Australia 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
(Refer Note 7 "Acquisitions" for further details).

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

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

As of September 30, 1998, the Company had the following holdings in its direct
subsidiaries and affiliates:

<TABLE>
<CAPTION>
Name                                                  Country of Incorporation       %  Owned
<S>                                                   <C>                                <C>
Transmedia Australia Pty Limited                      Australia                          100
Transmedia Australasia  Limited                       New Zealand                        100
Transmedia Australia Holdings Pty Limited             Australia                           50
Countdown Holdings Limited                            UK                                  50
Porkpine Limited                                      Channel Islands                     50
Transmedia Australia Travel Holdings Pty Limited      Australia                           50
</TABLE>

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


                                      F-8
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 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.

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 may depend on its ability to obtain outside financing sufficient
to support its operations and business development plans (Refer 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 credits are
recouped by the Company as a result of Company cardholders utilizing their cards
at participating restaurants. The amount by which such credits are recouped
amounts to approximately 50% of the retail value of food and beverages consumed
by cardholders. The Company reviews recoverability of credits and establishes an
allowance for credits to restaurants that have ceased operations or whose
credits may not be utilized by cardholders.

The amount of funds advanced to participating restaurants are generally
unsecured and are recoverable as cardholders utilize their restaurant charge
card at the respective restaurant. In certain cases, the Company may request a
personal guarantee from the owner of a restaurant with respect to the
recoverability of the advance if the restaurant ceases operations or ceases to
be a participating restaurant. Generally, no other forms of collateral or
security are obtained from the restaurant owners.

(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. No impairment write-down was necessary for fiscal
1998 (fiscal 1997 - $276,472; fiscal 1996 - $nil.).

(d) Other intangible assets

Other intangible assets consist primarily of the cost of the Transmedia License
paid to TMNI International, Inc. (TMNI) in cash plus the fair value of Company
shares 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 is being amortized on a straight-line basis over its estimated
useful life of 15 years from the commencement of operations in November 1994.

(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
useful lives which are between 3 - 5 years.


                                      F-9
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 2. Significant accounting policies (continued)

(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 fifteen years.

(g) Income taxes

The Company recognizes 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 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 recognized 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 be realized.

(h) Revenue recognition

Revenues comprise:

(i)   the retail value of food and beverage purchased from participating
      restaurants by the Company's Transmedia cardholders (less the cardholders'
      20% or 25% discount) and the cardholders' membership fees,

(ii)  NHS membership fees paid by sponsoring corporations, and

(iii) Travel agency commissions earned by the Teletravel division of NHS and
      Breakaway.

Transmedia card membership fees are recognized as revenue in equal monthly
installments over the membership period. All other components of revenue,
including NHS membership fees paid by sponsoring corporations for the provision
of "helpline" services, are non-refundable and recognized as revenue when the
related services have been performed.

(i) Unearned compensation

The Company recorded unearned compensation in fiscal 1996 for shares of
restricted common stock issued in exchange for certain consultancy and financial
advisory services. The restricted shares and the unearned compensation were
recorded at the fair value of the shares at the date at which they were issued.
Compensation expense was recorded on a periodic basis as the restriction on such
shares expired.

(j) Cardholder bonuses

In fiscal 1995 and 1996 the Company operated a Restaurant Cardholder promotion
to increase usage of the Restaurant Card and to recruit new cardholders. The
promotion involved the granting of bonus food and beverage credits. The bonus
food and beverage credits were utilized as the Cardholder used the Restaurant
Card and were processed as an additional saving to the standard 20% or 25%
discount obtained by using the Restaurant Card. The bonus was accrued by the
Company when the bonus was granted to the Cardholder.


                                      F-10
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 2. Significant accounting policies (continued)

(k) Foreign currencies

The reporting currency of the Company is the United States dollar. The Company's
functional currencies are the Australian dollar, the UK pound sterling and the
Irish punt. The Australian dollar is the functional currency of the Company's
restaurant card business because it is the primary currency of the environment
in which the business operates as an autonomous unit. All cash generated and
expended by the restaurant card business is 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.

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 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 to September
30, 1998 the Company recorded an exchange loss of $80,017 (1997 loss of $
176,575, 1996 loss of $221,038).

The average exchange rates during the years ended September 30, 1998, 1997 and
1996 and the exchange rates in effect at September 30, 1998 and 1997 were as
follows:

                                     UK Pound         Australian         Irish
                                 Sterling (pound)       Dollar            Punt
Average exchange rates

Year ended September 30, 1998          1.6533           0.6470           1.4215
Year ended September 30, 1997          1.6200           0.7302              N/A
Year ended September 30, 1996          1.5600           0.7900              N/A

Closing exchange rate

September 30, 1998                     1.7000           0.5930           1.4995
September 30, 1997                     1.6125           0.7251           1.4545

(l) 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.

(m) Advertising costs

The Company expenses advertising costs as incurred. Advertising costs for the
years ended September 30, 1998, 1997 and 1996 were $nil, $nil and $13,370
respectively. The Company has used direct response advertising in the past and
may use such advertising in the future. However, the Company did not have costs
related to direct response advertising campaigns during the years ended
September 30, 1998, 1997 and 1996.


                                      F-11
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 2. Significant accounting policies (continued)

(n) 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.

(o) Financial instruments

Financial instruments held by the Company which include cash and cash
equivalents, restricted cash, notes payable, restaurant credits and amounts due
from/to related parties approximated fair value as of September 30, 1998 and
1997 due to either short maturity or terms similar to those available to similar
companies in the open market.

(p) Recent accounting pronouncements not yet implemented

In June 1997, the Financial Accounting Standards Board ("FASB") issued two new
disclosure standards, Statement on Financial Accounting Standard ("SFAS") No.
130, "Reporting Comprehensive Income" and SFAS No. 131, "Disclosure about
Segments of an Enterprise and Related Information".

SFAS No. 130 establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments by
owners and distributions to owners. This standard is effective for the Company's
financial statements for the fiscal year ending September 30, 1999.

SFAS No. 131 supersedes SFAS No. 14, "Financial Reporting for Segments of a
Business Enterprise," and establishes standards for the way that public
enterprises report information about operating segments in financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. This standard is
effective for the Company's financial statements for the fiscal year ending
September 30, 1999.

Both of these standards require comparative information to be restated. Results
of operations and financial position will be unaffected by implementation of
these new standards. Management does not expect the implementation of these new
Standards to have a significant impact upon the financial statements.

In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about
Pensions and Other Post-retirement Benefits", which revises employers'
disclosures about pension and other post-retirement benefit plans. SFAS 132 is
effective for financial statements for the periods beginning after December 15,
1997, and requires comparative information for earlier years to be restated.
This standard currently does not apply to the Company.


                                      F-12
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 3. Going Concern

The financial statements record a loss for the year ended September 30,1998 of $
4,739,811, which, when taken with the previous years' results, result in an
accumulated deficit of $ 12,116,452 at September 30, 1998.

The Company has been able to fund this deficit and complete its acquisitions
through the sale of equity securities and issuance of debt (Refer Note 8 "Notes
Payable" and Note 9 "Stockholders Equity" for further details). Management has
taken steps to reduce the amount of cash used by operations, including reducing
staffing levels, however the Company's operations may not provide sufficient
internally generated cash flows to meet its projected requirements in the
short-term. Accordingly, the Company is likely to require further capital
infusions in order to meet its loan repayment commitments and the ongoing
funding requirements of its operations. Based upon the Company's history of
obtaining necessary financing, management remains confident that sufficient
funds will be available to the Company to operate in the foreseeable future and
meet its loan repayment obligations. However there can be no assurance given
that the Company will be able to obtain such funding.

Note 4. Related party transactions

Amounts due from/(to) related parties consist of the following:

                                          September 30,    September 30,
                                               1998             1997
Amounts due from

Transmedia Europe, Inc.                     $       --       $  190,124
Transmedia UK                                  383,507               --
International Advance                          140,000               --
Conestoga Partners Inc.                         26,260           26,260
Paul Harrison                                   42,149           42,149
                                            ----------       ----------
                                            $  591,916       $  258,533
                                            ----------       ----------
Amounts due to

J.V. Vittoria                               $1,182,137       $1,061,479
TMNI                                           287,533          284,233
Transmedia Europe, Inc.                      2,454,716               --
                                            ----------       ----------
                                            $3,924,386       $1,345,712
                                            ----------       ----------

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 collateralized 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.

The Company and TME issued a joint promissory note together in the principal
amount of $500,000 to TMNI for which the liability has been split between the
two companies equally. The promissory note was payable on April 2, 1998, bears
interest at the rate of 10% per annum, and is convertible at the holder's option
into common stock of each issuer at the rate of $1.20 per share. To date this
promissory note has not been repaid or converted.


                                      F-13
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 4. Related party transactions (continued)

During the year ended September 30, 1998, the Company was charged a corporate
management fee of $1,060,526 (1997: $679,786, 1996: $362,793) from TME in
respect of the Company's share of the head office expenses, comprising salaries,
rent, travel and other associated office and professional costs.

Note 5. Investment in Affiliated Companies

Investments in affiliated companies comprise the Company's interests in
Countdown and Porkpine, which are made up as follows:

                                              September 30,  September 30,
                                                   1998           1997
Countdown

Cost of investment                              $ 2,682,487    $ 2,682,487
Cost of option                                      171,860        171,860
Share of profits/(losses)
- Year ended September 30, 1997                    (202,905)      (202,905)
- Year ended September 30, 1998                    (651,311)            --
Amortization of goodwill on investment             (215,204)            --
Amounts due from/(to) Countdown                     278,956         64,000
                                                -----------    -----------

                                                $ 2,063,883    $ 2,715,442
                                                ===========    ===========
Porkpine

Cost of investment                              $   896,797    $        --
Amortization of goodwill on investment              (22,063)            --
Share of profits/(losses)
- From acquisition date to September 30, 1998       (60,889)            --
                                                -----------    -----------

                                                $   813,845    $        --
                                                ===========    ===========

Countdown Summary Financial Information

                                              September 30,  September 30,
                                                   1998           1997

Current Assets                                  $   962,458    $   903,210

Non Current Assets
Office furniture and equipment                      169,833        502,097
Intangible Assets                                   155,360        458,172
                                                --------------------------
                                                    325,193        960,269

Current Liabilities                               2,184,672      2,770,455

Non Current Liabilities                           1,446,530         45,442
                                                --------------------------

Net assets                                       (2,343,551)      (952,418)
                                                --------------------------


                                      F-14
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 5. Investment in Affiliated Companies (continued)

Stockholders Equity
Common Stock                                        800,000        800,000
Accumulated losses                               (3,143,551)    (1,752,418)
                                                --------------------------
                                                 (2,343,551)      (952,418)
                                                ==========================

Sales                                             7,186,569      7,670,478
                                                -----------    -----------

Operating loss                                    1,269,809        976,386
                                                -----------    -----------

Net loss                                          1,302,126      1,049,001
                                                -----------    -----------

Note 6. Intangible assets

                                              September 30,  September 30,
                                                   1998           1997

Formation expenses                              $       784    $       784
Transmedia License                                1,840,790      1,840,790
                                                --------------------------
                                                  1,841,574      1,841,574
Less: Accumulated amortization                     (768,277)      (644,631)
                                                --------------------------
                                                $ 1,073,297    $ 1,196,943
                                                ==========================

Note 7. Acquisitions

(a) NHS Acquisition

On December 2, 1997, Transmedia Australia, a company owned equally by the
Company and TME but controlled by the Company, purchased 51% of the common stock
of NHS, a newly incorporated company. NHS purchased the net assets and business
of Nationwide Helpline Services Pty Limited ("Nationwide"). Nationwide was an
Australian provider of telephone helpline services and other member benefit
programs. The total consideration paid by Transmedia Australia for its 51%
interest in the equity of NHS was Aus$6,000,000 (approximately $4,290,000 as of
December 2, 1997). Transmedia Australia also exercised their right to purchase
the balance of the equity of NHS for Aus$2,500,000 payable on June 30, 1998 with
the right to extend such obligation ("Balance Obligation") until September 30,
1998 by paying interest at 5% per annum. 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. On October 21,
1998 the Company and TME reached agreement to reduce these sign-on fees by
Aus$1,000,000.

On November 17, 1998 the Company acquired the remaining 49% and settled the
Balance Obligation. The Company and TME also paid the reduced sign-on fees on
that date.

The total revised sign-on fees of Aus$3,000,000 (approximately $1,940,000) have
been charged as compensation expense equally in the statements of operations of
the Company and TME for the year ended September 30, 1998.

The acquisition was accounted for as a purchase and the excess purchase price
attributable to goodwill was $3,905,384.


                                      F-15
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 7. Acquisitions (continued)

The following unaudited pro forma information combines the consolidated results
of the Company and NHS as if the acquisition had occurred at October 1, 1997 and
October 1, 1996, after giving effect to certain adjustments including the
amortization of excess cost over the net assets acquired and to eliminate the
effect of intercompany transactions.

                                 Year ended        Year ended
                                Sept 30,1998      Sept 30,1997

Revenues                         $ 5,170,740      $ 5,001,467

Costs and Expenses                (9,961,635)      (8,165,628)
 
Net Loss                          (4,790,895)      (3,164,161)

Basic Earnings per share               (0.27)           (0.23)

Diluted Earnings per share             (0.27)           (0.23)

(b) Breakaway acquisition

On May 22, 1998, the Company acquired 100% of the issued share capital of
Breakaway Travel Club Pty Limited ("Breakaway"). The total consideration paid
was Aus$375,000 (approximately $230,000) plus acquisition costs of $16,000. Such
consideration was paid equally by the Company and TME in cash.

Goodwill arising on acquisition amounted to $58,797.

(c) Porkpine acquisition

On May 14, 1998 the Company and TME purchased 100% of the outstanding common
stock of Porkpine Limited ("Porkpine"). The consideration paid totaled 1,060,000
pounds sterling ($1,749,000 approximately) subject to an adjustment such that
the purchase price equals net assets as at May 14, 1998. No goodwill therefore
arose on acquisition.

(d) Acquisitions - other

The Company incurred costs of $362,000 and issued 100,000 shares of common stock
with a market price of $1.00 at the date of issue in connection with a failed
acquisition. These costs have been included in selling, general and
administrative expenses in the statement of operations.


                                      F-16
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 8. Notes payable

On April 29, 1998 the Company engaged in a private placement of debt securities
(the "April Loan Notes"). 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 (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 of the Company at an
exercise price of $2.00 per share and the holder of the 200,000 pounds sterling
promissory notes received a warrant to purchase 33,328 shares on the same terms.
The warrants are exercisable at any time after issuance through November 1, 2001
and are not considered to have any value.

See also Note 16 "Subsequent Events"

Note 9. Stockholders' equity

On August 7, 1997 the Company commenced 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. The
Placement closed on December 31, 1997 upon the sale of 1,497,095 shares of
common stock at $1.00 per share resulting in gross proceeds to the company of
$1,497,095. For every three shares purchased each purchaser received a three
year warrant to purchase one share of the common stock of the Company at an
exercise price of $1.00 per share for no additional consideration. The warrants
are exercisable at any time after the date of grant for a period of three years.
In addition, in consideration of their agreement to purchase, on a standby
basis, a number of shares in the Placement, certain holders of preferred stock
of the Company were granted three-year warrants to purchase an aggregate of 327,
656 shares of Common Stock of the Company at an exercise price of $1.00 per
share.

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 sold each subscriber received a three year warrant to purchase one share
of the common stock of the Company at an exercise price of $1.25 per share for
no additional consideration. The warrants are exercisable at any time after the
date of grant for a period of three years.

See also Note 16 "Subsequent Events"


                                      F-17
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 10. Income taxes

Income taxes reflected in the accompanying consolidated statements of operations
differed from the amounts computed by applying the average foreign federal tax
rate of 36 % to loss before taxes as a result of the following:

<TABLE>
<CAPTION>
                                                             Year ended      Year ended      Year ended
                                                          September 30,   September 30,   September 30,
                                                                   1998            1997            1996
<S>                                                        <C>             <C>             <C>         

Computed 'expected' foreign tax benefit                    $ (1,121,895)   $   (707,000)   $   (682,000)
State taxes                                                          --              --           8,000
Change in valuation allowance  against
deferred tax assets                                           1,036,272         683,000         646,000
Disallowable expenses                                           212,821
Other                                                            61,000          24,000          28,000
                                                           ------------    ------------    ------------
Income tax expense                                         $    188,198    $         --    $         --
                                                           ============    ============    ============

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

Deferred tax assets:
Net operating loss carry forwards                          $  3,062,272    $  1,999,000    $  1,306,000
Pre operating costs capitalized for
 tax purposes                                                        --          27,000          37,000
                                                           ------------    ------------    ------------

Total                                                         3,062,272       2,026,000       1,343,000
Less valuation allowance                                     (3,062,272)     (2,026,000)     (1,343,000)
                                                           ------------    ------------    ------------

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


                                      F-18
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 11. Loss per common share

The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
128, "Earnings per Share" issued in February 1997. The new pronouncement is
effective for periods ending after December 15, 1997, and requires restatement
of prior periods. Assumed exercise of warrants are not included in the
calculation of diluted loss per share since the effect would be anti-dilutive.
Accordingly, basic and diluted loss per share does not differ for any period
presented.

The following table summarizes securities that were outstanding at September 30,
1998, 1997 and 1996, but not included in the calculation of diluted loss per
share because such shares are anti-dilutive.

                                   Sept 30, 1998   Sept 30, 1997   Sept 30, 1996

Stock options and warrants             3,952,145       2,038,825       1,437,619

Note 12. Leases

The Company leases certain office space under lease agreements.

Future minimum lease payments under non-cancelable operating leases as of
September 30, 1998, are as follows:

Year ending September 30, 1999                        $180,299
Year ending September 30, 2000                         210,122
Year ending September 30, 2001                         276,017
Year ending September 30, 2002                         276,017
Year ending September 30, 2003                         276,017
Thereafter                                             260,955

The amount charged to the consolidated statement of operations for rent expense
in the year ended September 30,1998 was $ 218,264 (1997: $42,465, 1996: $44,641)


                                      F-19
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 13. 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 1997) and 10,000 in 1997 under the Company's 1996 Stock
Option Plan for Outside Directors. The 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.

Mr Paul Harrison, President of the Company, has been granted options to purchase
800,000 common shares at $1 per share. These options are outside the Company's
1994 stock option and rights plan.

 In prior years the Company has also issued warrants to purchase 497,619 shares
of common stock at an exercise price ranging from $1.40 to $1.50 per share. The
warrants have a three to five year term ending through July 2000.

In April 1997, the Company granted an option 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 warrants to purchase 138,596 shares of Common Stock at an
exercise price of $1.13 per share, with an expiration of April 2002.

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

                                               Weighted                 Weighted
                                     Options    Average     Warrants    Average 
                                    Number of  Exercise    Number of    Exercise
                                      Shares    Price        Shares      Price  
                                                                                
Balance at September 30, 1995         800,000    $1.00       200,000     $1.50  
Granted                                40,000     1.78       297,619      1.40  
Exercised                                  --       --       100,000      2.50  
                                    ---------              ---------  
                                                                                
Balance at September 30, 1996         840,000     1.04       597,619      1.62  
Granted                               287,193     0.90       324,013      1.57  
Cancelled                             (10,000)   (1.78)           --        --  
                                    ---------              ---------  
                                                                                
Balance at September 30, 1997       1,117,193     1.00       921,632      1.62  
Granted                               120,000     1.00     1,793,320      1.20  
                                    ---------              ---------  
Balance at September 30, 1998       1,237,193     1.00     2,714,952      1.35  


                                      F-20
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 13. Stock Options and Warrants (continued)

The range of exercise prices for the options is $0.90 to $1.78. The range of
exercise prices for the warrants is $1.00 to $2.00. All the options and warrants
shown as at September 30, 1998 and 1997 were exercisable at that date.

The Company applies APB Opinion No.25 in accounting for its stock options and
warrants and, accordingly, 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 and warrants under SFAS No.123, the Company's net losses would
have been increased to the pro forma amounts indicated below:

                                        1998             1997             1996

Net Loss - As reported         $  (4,739,811)   $  (3,030,445)   $  (2,006,258)
          - Pro forma          $  (5,064,663)   $  (3,044,470)   $  (2,018,298)

Loss per share - As reported
Basic                          $       (0.27)   $       (0.22)   $       (0.16)
Diluted                        $       (0.27)   $       (0.22)   $       (0.16)

Loss per share - Pro forma
Basic                          $       (0.27)   $       (0.22)   $       (0.16)
Diluted                        $       (0.27)   $       (0.22)   $       (0.16)

In arriving at such pro-forma 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 1998,
1997, and 1996 respectively: no dividends paid for all years; expected
volatility of 40%; a risk free interest rate of 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 1998, 1997 and 1996 were $ 1.05, $0.74 and $0.33
respectively.

Note 14. Business and credit concentrations

The Company's customers are primarily located in Australia and New Zealand. One
corporate customer accounted for 17 % of sales revenue for the year ended
September 30, 1998.

No single restaurant credit receivable was greater than 10% of the Company's
total restaurant credit receivable balance at September 30, 1998.

One corporate client of the Company's affiliate, Countdown, accounted for
approximately 20% of revenues for the year ended September 30, 1998.


                                      F-21
<PAGE>

                 TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
             NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Note 15. Commitments and Contingencies

Legal proceedings

In the opinion of management there are no claims or lawsuits pending against the
Company.

Note 16. Subsequent Events

(a) Acquisition of the remaining 49% interest in NHS

On November 17, 1998 the Company acquired the remaining 49% of NHS (Refer Note 7
"Acquisitions" for further details).

(b) November Loan Note

On November 17, 1998 the Company entered into a "1 Year Secured Promissory Note"
in the principal sum of $3.4 million executed with FAI General Insurance, a
shareholder of the Company and TME. Interest on the Promissory Note accrues at
the rate of 10% per annum and is payable quarterly in arrears. The Promissory
Note is secured by a charge over Transmedia Australia and is guaranteed by TME.
The promissory note is repayable on 16 November 1999. In addition the promissory
note holders received a three year warrant to purchase 1,000,000 shares in the
Company as $1.00 and the Company agreed to exchange warrants to purchase 633,342
shares, exercisable at prices between $1.00 and $1.40, for a warrant to purchase
633,342 shares at $1.00. The fair value of these warrants, using the Black
Scholes valuation method, will be charged as interest expense over the life of
the notes.

(c) April Loan Notes

As referred to in Note 15, certain of the April Loan Notes have not been repaid
on their due date and legal proceedings have been undertaken against the Company
to recover both the principal and accrued interest due.

(d) Equity Private Placement

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 843,333 shares of common stock at $0.75
per share resulting in net proceeds to the company of $632,500.


                                      F-22
<PAGE>

Transmedia Asia Pacific, Inc.
Schedule II
Valuation and Qualifying Accounts
For the Years ended September 30, 1998, 1997 and 1996

<TABLE>
<CAPTION>
Column A                                   Column B                    Column C                   Column D         Column E
                                                                       Additions                 Deductions       Balance at
Description                               Balance at         Charged to         Acquisition      (describe)         End of
                                         Beginning of    Costs and Expenses   of Subsidiaries                       Period
                                            Period
<S>                               <C>    <C>             <C>                  <C>                <C>              <C>
Allowance for Irrecoverable
Restaurant Credits

                                  1996      40,418            79,344                                                119,762
                                  1997     119,762                                                 (5,152)(1)       114,610
                                  1998     114,610                                                (66,577)(2)       48,033
</TABLE>

(1) Release of provision no longer required.

(2) The deduction of $66,577 relates to the write-off of certain irrecoverable
    credits totaling $63,334 and an adjustment of $3,244 to adjust the provision
    to the requirements as of September 30, 1998.


                                      F-23
<PAGE>

                                                                     Schedule II

COUNTDOWN HOLDINGS LIMITED

Report of the auditors

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

To the shareholders of Countdown Holdings Limited

      We have audited the accompanying consolidated balance sheets of Countdown
      Holdings Limited and subsidiaries as of 30 September 1998 and 30 September
      1997 and consolidated profit and loss account for the two years ended 30
      September 1998.

      Respective responsibilities of directors and auditors

      The company's directors are responsible for the preparation of the
      financial statements. It is our responsibility to form an independent
      opinion, based on our audit, on those statements and to report our opinion
      to you.

      Basis of opinion

      We conducted our audit in accordance with generally accepted auditing
      standards in the United Kingdom which do not differ in any material
      respect from auditing standards generally accepted in the United States of
      America. An audit includes examination, on a test basis, of evidence
      relevant to the amounts and disclosures in the financial statements. It
      also includes an assessment of the significant estimates and judgements
      made by the directors in the preparation of the financial statements, and
      of whether the accounting policies are appropriate to the company's
      circumstances, consistently applied and adequately disclosed.

      We planned and performed our audit so as to obtain all the information and
      explanations which we considered necessary in order to provide us with
      sufficient evidence to give reasonable assurance that the financial
      statements are free from material misstatement, whether caused by fraud or
      other irregularity or error. In forming our opinion we also evaluated the
      overall adequacy of the presentation of information in the financial
      statements.

      Fundamental uncertainty

      In forming our opinion, we have considered the adequacy of the disclosures
      made in note 1 to the financial statements concerning the substantial
      doubt about the ability of the major shareholders Transmedia Europe Inc
      and Transmedia Asia Pacific Inc to continue to provide financial support.
      Our opinion is not qualified in this respect.

      Opinion

      In our opinion the financial statements give a true and fair view of the
      state of affairs of the company and its subsidiaries as at 30 September
      1998 and 30 September 1997 and of its result for the two years ended 30
      September 1998 in conformity with generally accepted accounting
      principles.

      BDO STOY HAYWARD
      Chartered Accountants
        and Registered Auditors
      London

      January 20, 1999


                                       1
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Consolidated profit and loss account for the year ended 30 September 1998

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

                                               Note      1998           1997
                                                        (pound)        (pound)

Turnover                                               4,346,437      4,734,863

Cost of sales                                          2,325,444      2,960,839
                                                      ----------     ----------

Gross profit                                           2,020,993      1,774,024

Net operating expenses                                 2,789,404      2,376,732
                                                      ----------     ----------

Operating loss                                          (768,411)      (602,708)

Interest receivable                                        2,259             --
Interest payable and similar charges                      21,806         53,232
                                                      ----------     ----------

Loss on ordinary activities before taxation      2      (787,958)      (655,940)

Tax on loss on ordinary activities               3            --          8,408
                                                      ----------     ----------

Loss for the year                               14      (787,958)      (647,532)
                                                      ----------     ----------

All amounts relate to continuing activities.

All recognised gains and losses are included in the profit and loss account.

The loss for the year represents the movement in shareholders' funds.

The notes on pages 5 to 13 form part of these financial statements.


                                       2
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Consolidated balance sheet at 30 September 1998

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

<TABLE>
<CAPTION>
                                                   Note                 1998                             1997
                                                              (pound)          (pound)          (pound)         (pound)
<S>                                                 <C>     <C>              <C>              <C>              <C>
Fixed assets
  Intangible assets                                 4                            91,383                         284,138
  Tangible assets                                   5                            99,896                         311,378
                                                                             ----------                        --------
                                                                                191,279                         595,516
Current assets
  Stocks                                            6           90,399                          129,950
  Debtors                                           7          441,225                          403,518
  Cash at bank and in hand                                      34,494                           26,663
                                                            ----------                        ----------
                                                               566,118                           560,131
Creditors: amounts falling due
 within one year                                    8        1,283,654                         1,719,602
                                                            ----------                        ----------
Net current liabilities                                                        (717,536)                     (1,159,471)
                                                                             ----------                        --------

Total assets less current liabilities                                          (526,257)                       (563,955)

Creditors: amounts falling due
 after more than one year                           9                          (852,347)                        (26,691)
                                                                             ----------                        --------

                                                                             (1,378,604)                       (590,646)
                                                                             ==========                        ======== 
Capital and reserves
  Called up share capital                          13                           500,000                         500,000
  Profit and loss account                                                    (1,878,604)                     (1,090,646)
                                                                             ----------                        --------

Shareholders' funds - equity                       14                        (1,378,604)                       (590,646)
                                                                             ==========                        ======== 
</TABLE>

The financial statements were approved by the Board on

P Harrison
Director

The notes on pages 5 to 13 form part of these financial statements.


                                       3
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Statements of cash flows

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

                                                             1998         1997
                                                           (pound)      (pound)
Cash flows from operating activities
  Net loss                                                (787,958)    (647,532)

Adjustments to reconcile net loss to net cash
  provided by operating activities:
    Depreciation and amortisation charges                  228,555      290,494
    Income taxes receivable                                     --       28,763
    Profit on sale of plant and equipment                   21,020      (11,447)

Net changes in operating assets and liabilities
    Increase in payables                                  (239,572)     215,004
    Decrease in receivables                                (37,707)     106,115
    Decrease in inventories                                 39,551        8,225
    Other, net                                                  --           --
                                                          --------     --------

Net cash used in operating activities                     (776,111)     (10,378)
                                                          --------     --------
Cash flows from investing activities
    Additions to plant and equipment                       (24,849)     (59,954)
    Proceeds from disposition of plant and equipment       179,511       15,096
                                                          --------     --------

Net cash provided by/(used in) investing activities        154,662      (44,858)
                                                          --------     --------
Cash flows from financing activities
    Loans from parent companies and group company          822,719           --
    Finance lease repayments                               (31,453)     (19,703)
                                                          --------     --------

Net cash provided by/(used in) financing activities        791,266      (19,703)
                                                          --------     --------

Net increase/(decrease) in cash and cash equivalents       169,817      (74,939)

Cash and cash equivalents at beginning of year            (412,920)    (337,981)
                                                          --------     --------

Cash and cash equivalents at end of year                  (243,103)    (412,920)
                                                          ========     ========

Supplemented disclosure of cash flow information
    Interest paid during the year                           21,806       48,091
    Interest received during year                           (2,259)          --
    Income taxes received during the year                       --      (37,171)
                                                          ========     ========

The notes on pages 5 to 13 form part of these financial statements.


                                       4
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998

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

1     Accounting policies

      The financial statements have been prepared under the historical cost
      convention and are in accordance with applicable accounting standards
      which do not differ significantly from accounting principles used in the
      United States of America. The following principal accounting policies have
      been applied:

      Basis of accounting - going concern

            The group sustained a net loss for the year as well as for the two
            preceding years, and as a consequence, net assets have been
            depleted. Furthermore, the group had net current liabilities at the
            balance sheet date.

            The financial statements have been prepared on the going concern
            basis which assumes that the company will continue in operational
            existence for the foreseeable future.

            The validity of this assumption depends upon the financial support
            of Transmedia Europe, Inc. and Transmedia Asia Pacific, Inc. Both
            companies in turn have recorded losses for the year and their
            ability to remain as a going concern is dependant upon their ability
            to obtain additional external financing. The directors remain
            confident, based upon the history of Transmedia Europe, Inc. and
            Transmedia Asia Pacific, Inc. in obtaining additional finance either
            by issue of shares or raising of external debt, that sufficient
            funds will be made available to the company. However, inherently,
            there can be no certainty in relation to the raising of future
            finance.

            On the basis of the cash flow information and the assurances
            received from the directors of the company's parent company, the
            directors consider that the company and group will be provided with
            sufficient funds available to it to enable it to operate for the
            foreseeable future.

            The financial statements do not include any adjustments that would
            result if the parent company is unable to raise additional funds.

      Turnover

            Turnover represents the invoiced value of goods and services
            supplied, and membership fees.

            Membership fees are recognised as revenue in equal monthly
            instalments over the membership year.

      Long-lived assets

            Long-lived assets, such as property, plant and equipment and
            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. No impairment
            write-down was recorded for the year ended 30 September 1998 (year
            ended 30 September 1997 - (pound)206,220).


                                       5
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

1     Accounting policies (Continued)

      Depreciation

            Depreciation is provided to write off the cost, less estimated
            residual values, of all fixed assets, except freehold land and some
            freehold buildings, evenly over their expected useful lives. It is
            calculated at the following rates:

                  Freehold property    -  2% on cost
                  Plant and equipment  -  25% on written down value
                  Leasehold property   -  over the life of the lease

      Stocks

            Stocks are valued at the lower of cost and net realisable value.

      Deferred taxation

            Provision is made for timing differences between the treatment of
            certain items for taxation and accounting purposes, to the extent
            that it is probable that a liability or asset will crystallise.

      Leased assets

            Where assets are financed by leasing agreements that give rights
            approximating to ownership ('finance leases'), the assets are
            treated as if they had been purchased outright. The amount
            capitalised is the present value of the minimum lease payments
            payable during the lease term. The corresponding leasing commitments
            are shown as amounts payable to the lessor. Depreciation on the
            relevant assets is charged to the profit and loss account.

            Lease payments are analysed between capital and interest components
            so that the interest element of the payment is charged to the profit
            and loss account over the year of the lease and represents a
            constant proportion of the balance of capital repayments
            outstanding. The capital part reduces the amounts payable to the
            lessor. All other leases are treated as operating leases. Their
            annual rentals are charged to the profit and loss account on a
            straight-line basis over the term of the lease.

      Pension costs

            Contributions to the company's defined contribution pension scheme
            are charged to the profit and loss account in the year in which they
            become payable.

      Goodwill

            Goodwill arising on consolidation is shown in the balance sheet
            under intangible assets and is amortised on a straight line basis
            over its expected economic life of 20 years.


                                       6
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

1     Accounting policies (Continued)

      Investments

            Fixed asset investments are stated at cost less provision for any
            permanent diminution in value.

      Basis of consolidation

            The group financial statements consolidate the financial statements
            of the company and all its subsidiaries made up to 30 September 1998
            using the acquisition method of accounting.

      Foreign currencies

            Assets and liabilities expressed in foreign currencies are
            translated into sterling at the rate of exchange ruling at the
            balance sheet date. Transactions in foreign currencies are
            translated into sterling at the rate of exchange ruling at the date
            of the transaction. Exchange differences are taken into account in
            arriving at the operating profit.

2     Loss before taxation

                                                              1998        1997
                                                            (pound)     (pound)

      The operating loss is stated after charging/(crediting):

        Amortisation of goodwill                            192,755      14,970
        Depreciation of tangible assets: Owned               25,526     266,044
                                         Leased              10,274       9,480
        Auditors' remuneration: Audit fee                    42,988      21,630
                                Non-audit fee                12,000       5,144
        Loss/(profit) on disposal of fixed assets            21,020     (11,447)
                                                            =======    ========

3     Taxation

      The tax credit/(charge) on loss on ordinary
      activities for the year was as follows:

        Corporation tax at 31% (1997 - 33%)                      --       2,087
        Overseas taxation                                        --       6,321
                                                            -------    --------

                                                                 --       8,408
                                                            =======    ========

      Tax losses carried forward at 30 September 1998 amounted to (pound)687,000
      (1997 - (pound)477,658). A full valuation provision has been made against
      these due to uncertainties.


                                       7
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

4     Intangible fixed assets

                                                                 Goodwill on
                                                                consolidation
                                                                   (pound)
      Group

        Cost

          At 1 September 1997
           and at 30 September 1998                                324,350
                                                                   -------

        Amortisation

          At 1 September 1997                                       40,212
          Charge for year                                          192,755
                                                                   -------

          At 30 September 1998                                     232,967
                                                                   -------

        Net book value

          At 30 September 1998                                      91,383
                                                                   =======

          At 31 August 1997                                        284,138
                                                                   =======


                                       8
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

5     Tangible fixed assets

<TABLE>
<CAPTION>
                                                                   Short
                                                Freehold         leasehold         Plant and
                                               buildings          property         equipment            Total
                                                (pound)           (pound)           (pound)            (pound)
      <S>                                       <C>               <C>               <C>               <C>
      Group

        Cost

          At 1 September 1997                    257,612            46,406           987,421           1,291,439
          Additions                                   --                --            24,849              24,849
          Disposals                             (257,612)          (46,406)         (186,373)           (490,391)
                                                --------          --------          --------          ----------

          At 30 September 1998                        --                --           825,897             825,897
                                                --------          --------          --------          ----------

        Depreciation

          At 1 September 1997                    107,612            46,406           826,043             980,061
          On disposals                                --                --            35,800              35,800
          Charge for the year                   (107,612)          (46,406)         (135,842)           (289,860)
                                                --------          --------          --------          ----------

          At 30 September 1998                        --                --                --             726,001
                                                --------          --------          --------          ----------

        Net book value

          At 30 September 1998 - Owned                --                --            79,359              79,359
                               - Leased               --                --            20,537              20,537
                                                --------          --------          --------          ----------

                                                      --                --            99,896              99,896
                                                ========          ========          ========          ==========

          At 30 September 1997 - Owned           150,000                --           125,843             275,843
                               - Leased               --                --            35,535              35,535
                                                --------          --------          --------          ----------

                                                 150,000                --           161,378             311,378
                                                ========          ========          ========          ==========
</TABLE>


                                       9
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

6     Stocks

                                                          1998            1997
                                                        (pound)         (pound)
      Group

        Cards and books                                  76,342          77,563
        Store discount vouchers                          14,057          52,387
                                                      ---------       ---------

                                                         90,399         129,950
                                                      =========       =========

7   Debtors

      Trade debtors                                     383,987         284,174
      Other debtors                                      37,205          40,867
      Prepayments and accrued income                     20,033          78,477
                                                      ---------       ---------

                                                        441,225         403,518
                                                      =========       =========

      The amounts above fall due for payment in less than one year.

8     Creditors: amounts falling due within one year

      Bank loan and overdrafts (note 10)                277,597         439,583
      Trade creditors                                   541,427         707,752
      Amounts owed to associated companies                   --          28,181
      Obligations under finance leases and
        hire purchase agreements (note 11)               16,552          22,761
      Social security and PAYE                           58,784          34,116
      Other creditors and accruals                      389,294         487,209
                                                      ---------       ---------

                                                      1,283,654       1,719,602
                                                      =========       =========


                                       10
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

9     Creditors: amounts falling due after more than one year

                                                          1998            1997
                                                        (pound)         (pound)

      Obligations under finance leases
        and hire purchase agreements (note 11)            1,447          26,691
      Amounts owed to parent companies                  486,209              --
      Amount owed to associated company                 364,691              --
                                                      ---------       ---------

                                                        852,347          26,691
                                                      =========       =========

10    Bank loans and overdrafts

      The aggregate amount of bank loans and 
        overdrafts is as follows:

      Falling due within one year:
        Bank overdraft                                  277,597         340,265
        Bank loan                                            --          99,318
                                                      ---------       ---------

                                                        277,597         439,583
                                                      =========       =========

      The bank loan is secured by a fixed charge over the freehold property. The
      bank overdraft is secured by a fixed charge over the book debts and a
      floating charge on the other assets of the group.

11    Obligations under finance leases

                                                          1998            1997
                                                        (pound)         (pound)

      The finance lease payments are as follows:

        Under one year                                   18,166          27,570
        In the second to fifth year inclusive             1,447          28,982
                                                      ---------       ---------

                                                         19,613          56,552
        Less: Amount representing future
          finance charges                                (1,614)         (7,100)
                                                      ---------       ---------

                                                         17,999          49,452
                                                      =========       =========


                                       11
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

12    Leases

      The group leases contain office space under lease agreements.

      Future minimum lease payments under non-cancellable operating leases as of
      30 September 1998 were:

                                                                        (pound)

        Year ending 30 September 1999                                   100,000
                                 2000                                   100,000
                                 2001                                   100,000
                                 2002                                   100,000
                                 2003                                   100,000
        Thereafter                                                      100,000
                                                                        =======

      The amount charged in the profit and loss account for the year was (pound)
      100,000.

13    Called up share capital

                                                               1998       1997
                                                             (pound)    (pound)

        Authorised, issued, called up and fully paid
          500,000 Ordinary shares of(pound)1 each            500,000    500,000
                                                             =======    =======

14    Reconciliation of shareholders' funds                             (pound)

        Shareholders funds
          At 1 October 1997                                            (590,646)
          Loss for the year                                            (787,958)
                                                                      ---------

          At 30 September 1998                                        1,378,604
                                                                      =========

15    Related party transactions

      A subsidiary company has acquired a twenty year lease in respect of a
      property from The Countdown plc Self-administered Scheme. The director, Mr
      C E C Radbone, is the only member of this pension scheme. The current rent
      is (pound)100,000 per annum.


                                       12
<PAGE>

COUNTDOWN HOLDINGS LIMITED

Notes forming part of the financial statements for the year ended 30 September
1998 (Continued)

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

16    Pension commitments

      The group operates a defined contribution pension scheme. The assets of
      the scheme are held separately from those of the company. The cost of the
      contributions to the scheme are charged to the profit and loss account in
      the year in which they fall due. There were no amounts due at the balance
      sheet date (1997 - Nil).

17    Ultimate holding company

      On 3 April 1997, the entire share capital of Countdown Holdings Limited
      was acquired in an equal share by Transmedia Europe, Inc. and Transmedia
      Asia Pacific, Inc., companies incorporated in the USA.

      Due to the control exerted over Countdown Holdings Limited, by Transmedia
      Europe, Inc. Countdown Holdings Limited is treated as a subsidiary of that
      company. Therefore Transmedia Europe, Inc. is the parent of the largest
      and the smallest groups of which the company is a member.

      A copy of each of the holding companies accounts is available from the
      Companies' registered office.


                                       13
<PAGE>

                                                 Countdown Holdings Limited

                                                 Report and Financial Statements

                                                 Year ended

                                                 30 September 1998

                                                 ABC
                                                 BDO Stoy Hayward

<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 20, 1999       /s/ Edward J. Guinan III
                             --------------------------------------------
                             Edward J. Guinan III
                             Chairman, Chief Executive Officer and
                             Director

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 20, 1999       /s/ Edward J. Guinan III
                             ---------------------------------------------
                             Edward J. Guinan III
                             Chairman, Chief Executive Officer and Director
                             Principal Executive Officer

Date: January 20, 1999       /s/ Paul L. Harrison
                             ---------------------------------------------
                             Paul L. Harrison
                             President, Secretary and Director
                             Principal Accounting Officer

Date: January 20, 1999       /s/ Carl Freyer
                             ---------------------------------------------
                             Carl Freyer
                             Director

Date: January 20, 1999       /s/ Joseph Vittoria
                             ---------------------------------------------
                             Joseph Vittoria
                             Director