SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                                   (Mark One)

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

                  For the fiscal year ended SEPTEMBER 30, 1999

                                       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 1-13806

                             TRANSMEDIA NETWORK INC.
                             -----------------------
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                             84-6028875
--------------------------------------------------------------------------------
(State or other jurisdiction of                               (I.R.S Employer
 incorporation or organization)                              Identification No.)

                 11900 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33181
                 ----------------------------------------------
               (Address of principal executive offices) (zip code)

                                  305-892-3300
                                  ------------
                         Registrant's telephone number,
                              including area code)

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

TITLE OF EACH CLASS                                        NAME OF EACH EXCHANGE
-------------------                                         ON WHICH REGISTERED
                                                           ---------------------
      None                                                           None

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

                     COMMON STOCK, PAR VALUE $.02 PER SHARE
                     --------------------------------------
                                (Title of Class)

                    PREFERRED STOCK, PAR VALUE $.10 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 and (2) has been subject to such filing requirements for the
past 90 days.
                                                               Yes  X     No  _


<PAGE>

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.

Aggregate market value of voting stock held by non-affiliates of the Registrant
as of December 6, 1999: $23,190,778

Number of shares outstanding of Registrant's Common Stock, as of December 6,
1999: 13,352,709.

DOCUMENTS INCORPORATED BY REFERENCE:

           None.

                                       2
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

         Transmedia Network Inc. and its subsidiaries (the "Company") own and
         market a charge card ("the Transmedia Card") offering savings to the
         Company's card members on dining as well as lodging, travel, retail
         catalogues and long distance telephone calls. The Company's primary
         business activity is to acquire, principally through cash advances and
         purchases, rights to receive food and beverage credits at full retail
         value from restaurants ("rights to receive"), which are then sold for
         cash to holders of the Transmedia Card. These rights to receive are
         primarily purchased by the Company for cash but may also be acquired in
         exchange for services.

         On June 30, 1999, the Company acquired from SignatureCard, Inc.
         ("SignatureCard"), a subsidiary of Montgomery Ward & Co., Incorporated,
         assets related to a membership discount program that SignatureCard
         operated under the Dining a la Card ("DALC") trade name and service
         mark. The assets acquired included various intellectual property rights
         and computer software, membership and merchant data, rights-to-receive,
         and most significantly, a registered card platform (the "Registered
         Card Program"), among other things. The Company simultaneously entered
         into a collaboration agreement with SignatureCard pursuant to which the
         Company obtains access to their sponsor relationships with the world's
         leading airlines. SignatureCard will receive a portion of the profits
         derived from members initially acquired from SignatureCard or
         subsequently generated through their efforts.

         The Registered Card Program complements the Company's existing
         proprietary Transmedia Card. In contrast to the Transmedia Card, which
         is a private label charge card linked electronically to a member's bank
         credit card of choice, registered card members can make discounted
         purchases with one of their existing major credit cards so that the
         discount is "blind" to both merchant and guests. This allows members to
         accumulate savings by using conventional charge cards, such as
         MasterCard, Visa, AMEX and Discover. The Company believes that the
         registered card concept has broader consumer and restaurant appeal due
         to its discrete nature and presently contemplates shifting the majority
         of its marketing efforts to this platform.

         Prior to the acquisition of DALC, the Company's areas of operation
         included Central and South Florida, the New York, Chicago and Los
         Angeles metropolitan areas, Boston and surrounding New England,
         Philadelphia, San Francisco, Detroit, Indianapolis, Milwaukee, Denver,
         Phoenix, North and South Carolina, Georgia, parts of Tennessee,
         Dallas/Ft Worth and Houston. Franchised areas include most of New
         Jersey, Washington, D.C., Maryland, Virginia, and parts of Texas. With
         the acquisition of Dining a la Card, the Company now has a presence in
         new areas such as St. Louis, Kansas City, San Diego, Memphis,
         Minneapolis, Seattle and other parts of Washington, and to a lesser
         degree, Cincinnati, Pittsburgh, Las Vegas, New Orleans, Portland, Salt
         Lake City, Tulsa, and Hawaii. Licensing arrangements for the Transmedia
         Card tradename and servicemark exist for the United Kingdom, Canada,
         and Europe, as well as the Asia-Pacific region and are presently being
         terminated.

         The Company, in the past, derived income from franchising and licensing
         the Transmedia Card tradename and servicemark and related proprietary
         rights and know-how, including rights to solicit restaurants, hotels,
         resorts and motels and acquire food, beverage and lodging credits,
         within and outside the United States. The Company also received revenue

                                       3
<PAGE>

         from licensing the Transmedia Card. The Company no longer grants new
         franchises and has reacquired most of the formerly franchised
         territories.

         CORPORATE STRUCTURE

         The Company commenced operations in 1984 and was reincorporated as a
         Delaware corporation in 1987. Currently, it has the following principal
         operating subsidiaries:

         Transmedia Restaurant Company Inc., which is responsible for obtaining
         and servicing restaurants and other service establishments such as
         hotels, resort destinations and retailers where the Transmedia Card and
         the Registered Card Program may be used.

         Transmedia Service Company Inc., which is responsible for (i)
         soliciting and servicing all members in the United States, (ii)
         providing support services to Transmedia Restaurant Company, and (iii)
         all domestic franchising of the Transmedia Card and related proprietary
         rights and know- how.

         TMNI International Incorporated, which licensed the Transmedia Card,
         service marks, proprietary software and know-how outside the United
         States.

         TNI Funding I, Inc., which was established as a special purpose
         corporation for purposes of the securitization of cash advances to
         merchants referred to as rights-to-receive.

         DESCRIPTION OF RIGHTS TO RECEIVE, PRIVATE LABEL CARD AND REGISTERED
         CARD PROGRAMS

         The Company's primary business is the acquisition of rights to receive
         from participating establishments which are then sold for cash to
         holders of the Transmedia Card (the "Private Label Program") or members
         of the Registered Card Program. "Rights to Receive" are rights to
         receive goods and services, principally food and beverages, which are
         acquired and purchased from participating restaurants, for an amount
         typically equal to approximately fifty percent (50%) of the food and
         beverage credits. Alternatively, the Company may acquire such Rights to
         Receive either by financing the merchant's purchase of other goods and
         services or providing advertising and media placement services to the
         participating establishments. Approximately ninety-five percent (95%)
         of Rights to Receive are purchased for cash. The Company typically
         purchases food and beverage credits that are anticipated to be utilized
         in a period of no more than six to nine months; however, it is not
         always possible for the Company to predict with accuracy the amount of
         time in which such credits will be consumed, due to seasonality or the
         opening of new market areas.

         The Transmedia Card, the Company's proprietary private label charge
         card, is selectively issued to applicants who are determined to be
         creditworthy by virtue of their having a current, valid MasterCard,
         Visa, Discover or American Express credit card. The Transmedia
         cardmembers have a choice of programs, including (i) a card which
         offers a 25% savings at participating establishments for which there is
         a $49 annual fee, (ii) a Turn Meals into Miles(R) program which offers
         mileage credits with participating airlines of 10 miles for each dollar
         spent on food and beverage at participating establishments for an
         annual fee of $9.95, and (iii) a no-fee Transmedia Card which affords
         them 20% savings at participating establishments. Each account may have
         more than one user and, accordingly, more than one cardmember. The
         Company's cardmember solicitation efforts over the last fiscal year
         have been, by design, focused on the fee paying cardmembers who, while
         more expensive to acquire, tend to use the card more frequently and
         spend more per dine. The Company also previously offered a silver and
         gold fee-based Transmedia Card program designed to supplement the
         existing dining only fee program and entitled the cardmember access to
         additional benefits and savings at either no-cost or a reduced fee
         depending upon the cardmembers' election. Renewal fees are $29.95 under
         the silver program and $49.95 under the gold program.

                                       4
<PAGE>

         When cardmembers present the Transmedia Card, they sign for the goods
         or services rendered, as well as for the taxes and tips, as they would
         with any other charge card. The Company, upon obtaining the receipt
         (directly or via electronic point of sale transmission) from the
         appropriate establishment, gives the establishment credit against
         Rights to Receive which are owned by the Company. The Company then (i)
         processes the receipt through the cardmember's electronically linked
         MasterCard, Visa, Discover or American Express card account, which
         remits to the Company the full amount of the bill, and (ii) either
         credits the cardmember's MasterCard, Visa, Discover or American Express
         account the appropriate discount or the cardmember's airline account
         the appropriate mileage. Taxes and tips are remitted back to the
         various establishments.

         At the present time, the Registered Card Program is primarily marketed
         through airline reward programs. Members enrolled in the program simply
         register a valid major credit card with Transmedia and then present
         their registered credit card while dining at a participating
         restaurant. On a daily basis, a complete detail of all registered
         credit card numbers is transmitted electronically to a central
         processor and aggregator of transactions. The aggregator also receives
         a complete detail of all merchants who are currently members of the
         Registered Card Program. Based on the Company's agreements with various
         processors throughout the country, the aggregator receives data for all
         the credit card transactions from participating merchants. These
         transactions are then matched to the current registered card file.
         These matched transactions are transmitted electronically back to the
         Company and qualified as to whether they are eligible for rebate.
         Qualified transactions are then used to provide member savings, as well
         as to invoice and collect from merchants.

         Savings are delivered to the members in the form of a direct credit on
         their statement, cash rebate or mileage credit program. The credit or
         cash rebate provides members with either a monthly check or credit
         equivalent to 20% of their total spend with participating merchants.
         Alternatively, members can elect to receive rebates in the form of
         frequent flyer miles with major airlines, such as United, American,
         TWA, US Airways, Continental, British Airways, Northwest and Delta
         Airlines.

DOMESTIC FRANCHISING

From 1990 to 1994, the Company franchised the Transmedia Card (then known as The
Restaurant Card) and related proprietary rights and know-how, including rights
to solicit restaurants and acquire Rights to Receive, in the United States, as
part of an expansion strategy to develop a national presence. In recent years,
however, the Company has adopted a strategy of systematically reacquiring the
franchise territories. At September 30, 1999, the Company's remaining franchises
were in the following territories: a large part of New Jersey, the Washington,
D.C./Baltimore, Maryland region, southern Virginia, and parts of Texas. The
Company has also granted an option to acquire a franchise for the State of
Hawaii.

From January 1997 through December 1999, the Company reacquired the former
franchise territories of California, Nevada, Oregon and Washington, Carolinas,
Georgia and eastern Tennessee and Dallas/Forth Worth, Houston, San Antonio and
Austin. The Company now conducts the operations in all of these reacquired
territories directly. The remaining franchises operate under a ten year
franchise agreement that is renewable for an additional ten-year term for all
locations. Each agreement provides that the Company will assist the franchisee
with marketing, advertising, training and other administrative support and
licenses the franchisee to use the Company's trademarks in connection with the
solicitation of new cardmembers (which is not restricted to the franchisee's
territory) and the purchase of Rights to Receive from restaurants in the
territory granted to the franchisee. The franchisee is responsible for, among
other things, soliciting cardmembers and participating establishments,
purchasing Rights to Receive from participating establishments in its territory,
and maintaining adequate insurance. In addition to the initial consideration for
the grant of the franchise, the franchisee pays to the Company the

                                       5
<PAGE>

following continuing fees during the term of the franchise agreement: (i) 7 1/2%
of the total meal credits used within the franchisee's territory; (ii) 2 1/2% of
the total meal credits sold within the franchisee's territory into the Company's
advertising and development fund; (iii) a processing fee of $.20 per sales
transaction from the franchisee's territory; and (iv) a monthly service charge
of $1.00 per participating establishment in the franchisee's territory.

After completing the DALC acquisition, the Company established separate
representation agreements with the remaining franchises for those restaurants
participating in the Registered Card Program in the respective franchise
territory.

LICENSING

In November 1995, the Company entered into a license arrangement under which a
licensee was authorized to solicit Rights to Receive from various types of
resorts, hotels and other entities. The territory covered by the license
agreement was the continental United States, excluding the State of Minnesota.
The term of this arrangement was ten years, with a potential renewal period of
ten years and under this arrangement, the Company compensated the licensee
through a commission. In December 1996, the Company terminated the license
agreement. (See Item 3).

In 1993, the Company, through its subsidiary, TMNI International Incorporated,
granted an exclusive, perpetual license to Transmedia Europe, Inc. to establish
the Company's business in Europe, Turkey and the countries that formerly
comprised the Union of Soviet Socialist Republics. In 1994, the Company granted
an exclusive perpetual license to Transmedia Asia Pacific Inc. to establish the
Company's business in Australia, New Zealand and the Asia-Pacific region (such
region covering approximately 16 major countries and areas including, among
others, Japan, Hong Kong, Taiwan, Korea, the Philippines and India). The
licensee also took an option to purchase a franchise for the State of Hawaii.

Both licenses are governed by a Master License Agreement which provides that,
among other things, (i) the licensees have the right to sublicense the rights
granted under the Master License Agreement to others within the territory,
provided that each such sublicense is approved by the Company, (ii) the Company
will assist the licensees with training relating to sales, administration,
technical and operations of the business, and (iii) the licensees are solely
responsible for developing its own market, paying its own expenses for
advertising and soliciting cardmembers and participating establishments in its
territory. In consideration for the licenses, the Company was paid initial fees
aggregating $2,375,000, received an equity interest in the licensee and the
right to receive royalties on gross dining volumes. In December 1996, Transmedia
Europe Inc. amended the sublicense it had granted for France and expanded the
sublicensee's territory to include Belgium and Luxembourg, Italy, Spain and
Switzerland (other than the German speaking area).

In December 1996, the Company entered into an agreement with Transmedia Europe,
Inc. and Transmedia Asia Pacific Inc. amending both of the licenses, among other
things, to permit the companies to be reorganized under one entity and to allow
them to acquire and operate worldwide the business of Countdown plc., which
conducts a discount savings program in Europe and, to a lesser extent, in the
United States. Upon closing of the Countdown acquisition, the Company received
$250,000 in cash and a $500,000 note bearing interest at 10%, which was payable
on April 1, 1998. At September 30, 1999, the licensee had not yet made payments
on the note. Given the uncertainty regarding resolution of this matter, the
Company has provided a reserve for the face value of the note and related
accrued interest. The Company is in negotiations with its licensee to reacquire
the licenses for Transmedia Europe and Asia-Pacific, Inc.

With the acquisition of DALC, the Company established a reciprocity relationship
with CardPlus Japan.

                                       6
<PAGE>

AREAS OF OPERATION

The Company's areas of operation include Central and South Florida, New York,
Chicago and Los Angeles metropolitan areas, Boston and surrounding New England,
Philadelphia, San Francisco, Detroit, Indianapolis, Milwaukee, Denver, Phoenix,
North and South Carolina, Georgia, parts of Tennessee, Dallas/Forth Worth and
Houston. Franchised areas include most of New Jersey, Washington, D.C.,
Maryland, Virginia and parts of Texas. With the acquisition of Dining a la Card,
the Company now has a presence in new areas such as St. Louis, Kansas City, San
Diego, Memphis, Minneapolis, Seattle and other parts of Washington, and to a
lesser degree, Cincinnati, Pittsburgh, Las Vegas, New Orleans, Portland, Salt
Lake City, Tulsa, and Hawaii.

Licensing arrangements continue to exist for the United Kingdom, Canada, and
Europe, as well as the Asia-Pacific region.

PARTICIPATING MERCHANTS AND MEMBERS

As of September 30, 1999, the most recent quarterly directories published by the
Company, listed 6,400 merchants available to Transmedia cardmembers. As of that
date, the Transmedia Card was held by approximately 1,000,000 members, comprised
of 690,000 accounts with an average of 1.45 members per account. Separate
quarterly directories distributed to members of the Registered Card Program
listed 4,180 merchants available to 1,700,000 members of this program. Of these
members, 663,000 were non-airline members. The Company has a combined merchant
base of 9,500 separate restaurants after eliminating duplicate program
participants. The following table sets forth (i) the number of restaurants
listed in directories published by the Company and (ii) the number of members,
as of the fiscal years ended September 30, 1995 through 1999:

<TABLE>
<CAPTION>
                                  1999           1998            1997            1996            1995
                             -------------------------------------------------------------------------------
<S>                            <C>               <C>              <C>          <C>             <C>
Restaurants:
------------------------------------------------------------------------------------------------------------
  Private label                     6,400           7,300            7,100        7,000           5,300
------------------------------------------------------------------------------------------------------------
  Registered card                   4,180              --               --           --              --
------------------------------------------------------------------------------------------------------------
        Total, net                  9,500           7,300            7,100        7,000           5,300
------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------
Members:
------------------------------------------------------------------------------------------------------------
   Private label                1,000,000       1,200,000        1,300,000       900,000        600,000
------------------------------------------------------------------------------------------------------------
  Registered Card               1,700,000              --               --            --             --
</TABLE>

The majority of all restaurants listed in the directories published by the
Company renew their contracts with the Company after the initial amount of
Rights to Receive is expended. At the second renewal, the Company retains
approximately eighty (80%) of those restaurants continuing in business. After
the second renewal, however, attrition tends to increase because the
restaurants, with the Company's help, have either become successful and no
longer require the Company's financial and marketing resources, the Company
chooses not to renew the restaurant, or the restaurant has gone out of business.
Offsetting this decrease are new restaurants that choose to participate as old
ones go out of business, and restaurants that were formerly on the program that
often re-sign as they further expand and/or desire the program's benefits again.
This provides the Company with a continuous flow of new restaurant prospects.
The Company believes that in no area where the Company operates is it close to
restaurant or member saturation. The increase in membership is mainly due to the
addition of 1,700,000 members with the acquisition of DALC. This increase is
offset by a reduction of 200,000 members participating in the Transmedia program
from 1,200,000 at September 30, 1998 to 1,000,000 at September 30, 1999. The
reduction in the Transmedia Card members is a result of the Company's strategy
of forcing attrition in the inactive no-fee members and focusing on

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<PAGE>

marketing only the fee-based membership. For fiscal 1999, fee-paying members
have a net increase of 50,000 members while the no-fee members have a net
decrease of 250,000 members. New fee paying members acquired in 1999 amounted to
95,000, while new no-fee members added were approximately 90,000.

MARKETING

The Company markets the Transmedia Card through the use of advertising, direct
mail and through promotion with co-marketing partners such as banks and affinity
groups. Additionally, the Company periodically develops promotions such as
frequent dining rewards or additional seasonal discounts to help stimulate
utilization by existing cardmembers.

Towards the latter part of fiscal 1998, the Company shifted its cardmember
acquisition strategy to focus predominantly on the solicitation of fee paying
consumers, offering a 25% discount, private label charge card program. The
no-fee, lower discount offer is now used only in large volume campaigns that
have demonstrated good spending patterns in the past. The Company continues to
implement its strategy of marketing primarily fee-based memberships with large
marketing partners, principally financial institutions. While recently adopted
consumer credit regulations have caused us to alter certain solicitation
techniques that produced favorable response rates, the Company is currently
testing a series of offers and rollouts and other alternatives such as "earn
your fee" through rebates. The various solicitation methods are determined to be
successful when the incremental cost of solicitation and promotion is
substantially offset by the initial fee income and where future renewal income
may have a positive contribution towards profitability. The Company has sent
solicitation mailings with marketing partners of approximately 6.5 million
pieces during the year ended September 30, 1999.

The registered card member base acquired in the DALC transaction is heavily
skewed towards airline programs, which enjoy higher renewal rates because the
product is both free and in a desirable currency, i.e. frequent flier miles. The
increased use of airline programs as a primary source for registered card
members has resulted from the dining program's attractiveness to the airlines
because of the enhanced value of the frequent flyer membership and the
opportunity to sell miles in advance. From the Company's perspective, the
business and vacation traveler is an excellent demographic segment and the cost
of acquisition is low.

There are formal guidelines for the enrollment of registered card members. For
the airline members, SignatureCard had established marketing alliances with
United Airlines, American Airlines, British Airways, Northwest Airlines, Delta
Airlines, Continental Airlines, Trans World Airlines, and US Airways. Under the
terms of the DALC acquisition and Service Collaboration Agreement, SignatureCard
consented to delegate their duties with respect to dining under the various
airline agreements. It is through SignatureCard's sponsor relationship with the
airlines that the Company is able to enroll airline members through a variety of
methods that often depend on whether the frequent flyer has a relationship with
the airlines affinity partners, particularly card issuers such as Citibank,
First Card, American Express and Bank of America. The earn miles by dining
program is considered advantageous to both the airline carriers and the Company.
The airlines benefit because the dining program enhances loyalty among their
frequent flyer members and also allows them to sell miles, in advance, similar
to a prepaid ticket. The arrangement is attractive to the Company because (1)
mileage is purchased on an as needed basis which improves cash flow, (2) by
offering airline members 10 miles for each dollar spent at participating
merchants, the cost of the 20% rebate discount is effectively reduced if airline
miles are elected, and (3) there is no charge by the airline for adding new
members. SignatureCard benefits through a profit sharing agreement provided for
in the Service Collaboration Agreement with the Company based on revenue
generated from members acquired either in the acquisition or subsequently
through SignatureCard's efforts. There were no amounts payable under this
agreement at September 30, 1999.

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<PAGE>

EMPLOYEES

As of September 30, 1999, the Company employed 211 persons, including 26 former
SignatureCard employees. The Company had initially employed forty-eight of the
former employees for a planned period of transition estimated through March
2000. With the completion of the integration of the registered card operation in
November 1999, five of those employees remained in the Chicago offices of whom
only one will be permanent. Additionally, the Company has added twelve new
employees in its corporate headquarters for information technology, contract
administration and the call center. The Company believes that its relationships
with its employees are good.

COMPETITION

The discount dining business remains competitive and the Company competes for
both members and participating merchants, such as restaurants, hotels and other
applicable service establishments. The Company also anticipates growing
competition from various e-commerce ventures. Competitors include discount
programs offered by major credit card companies, other companies that offer
different kinds of discount marketing programs and numerous small companies
which offer services which may compete with the services offered or to be
offered by the Company. Certain of the Company's competitors may have
substantially greater financial resources and expend considerably larger sums
than does the Company for new product development and marketing. Further, the
Company must compete with many larger and better-established companies for the
hiring and retaining of qualified marketing personnel. The Company believes that
the unique features of its programs: the Private Label Card can be used by
members at participating establishments with very few restrictions; the programs
provide substantial savings without the need for a member to present discount
coupons when paying for a meal; and participating establishments are provided
with cash in advance of customer charges -- contribute to the Company's
competitiveness and allow the Company to offer better value and service to its
members and merchants. The Company has also initiated the development of a
broader e-commerce strategy, focused on the "dining space" in which it already
maintains a dominant position, that it plans to roll out in fiscal year 2000.

ITEM 2.  PROPERTIES

The Company's present executive office consists of 14,546 square feet, located
in Miami, Florida, which the Company occupies pursuant to two lease agreements
expiring on February 28, 2002. Both leases provide for a total annual base
rental of $294,750. The lease for the executive offices is currently being
renegotiated to allow for expansion of an additional 4,944 square feet. The
lease cost is expected to be approximately $357,345 per annum with a term of two
years and two, two-year renewal periods. The Company's Miami office also houses
both the Company's member and merchant service center. The Company leases 5,710
square feet of office space in New York City. The lease, which expires on June
30, 2001, provides for minimum annual rentals of $199,850. In addition, the
Company has a five-year office lease in Philadelphia, Pennsylvania for
approximately 1,641 square feet, which commenced October 1, 1998. The lease
provides for a base annual rent of $27,897 in the first three years and $29,128
for the following two years. In Boston, Massachusetts, the Company has a
sixty-four month lease with an option for a three-year renewal, for
approximately 1,500 square feet, which commenced May 1, 1995. The lease provides
for base annual rentals of $31,418. In Chicago, the Company has a six-year
office lease for approximately 1,876 square feet, which commenced August 1,
1998. The lease provides for an initial annual lease rental of $45,024,
increasing by approximately 2% each year thereafter. In North Carolina, the
Company has a two-year lease, with an option for an additional year, for
approximately 3,000 square feet for an annual rental of $36,000, which commenced
March 1, 1999. In Detroit, the Company leases an executive office for a
twelve-month period that began on April 1, 1999 for a total rental of $15,000.
In Tampa, the Company leases an executive office for a twelve-month period that
began on July 1, 1999 for a total rental of $9,681. In Phoenix, the Company
leases an executive office for a twelve-month period that

                                       9
<PAGE>

began on February 1, 1999 for a total rental of $6,336. In Denver, the Company
leases an executive office on a month to month basis that began on June 1, 1999
for a monthly rental of $1,400. In Atlanta, the Company leases an executive
office for a six-month period that began on July 1, 1999 for a total rental of
$6,990. In Dallas, the Company leases an executive office for a five-year period
that commenced November 1, 1998. The lease provides for base annual rentals of
$25,745. In San Francisco, the Company has a five-year lease that commenced on
May 15, 1998 for an initial annual lease rental of $40,128 increasing by
approximately 5% each year thereafter. In Los Angeles, the Company has a
thirty-seven month lease that commenced on February 1, 1998 for a base annual
rental of $46,953.

ITEM 3.  LEGAL PROCEEDINGS

In December 1996, the Company terminated its license agreement with Sports &
Leisure Inc. ("S&L"). In February 1997, S&L commenced an action against the
Company in the 11th Judicial Circuit, Dade County, Florida, alleging that the
Company improperly terminated the S&L license agreement and seeking money
damages. In the quarter ended December 31, 1998, a reserve of $1,000,000 was
established and recorded in selling, general and administrative expenses to
cover management's best estimate at the time of the potential cost and expenses
of this litigation and other legal matters.

The Company, in order to avoid prolonged litigation, settled the outstanding
lawsuit with its former licensee in November of 1999. Under the terms of the
settlement S&L. will receive $2,100,000 in cash and 280,000 shares of common
stock for a total of $2,835,000. Based on the fair value of the common stock
included in the settlement and net of reserve amounts previously provided by the
Company, a charge of $1,835,000 has been recognized in the fourth quarter ended
September 30, 1999.

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

During the quarter ended September 30, 1999, no matters were submitted to a vote
of the security holders.

EXECUTIVE OFFICERS OF THE REGISTRANT

NAME                     POSITION                                        AGE
----                     --------                                        ---

Gene M. Henderson        Director, President and Chief Executive         52
                         Officer
Stephen E. Lerch         Executive Vice President and                    45
                         Chief Financial Officer
James M. Callaghan       Vice President; President of Transmedia         60
                         Restaurant Company Inc.
Christine Donohoo        Vice President, President of                    49
                         Transmedia Service Company Inc.
Paul A. Ficalora         Executive Vice President                        48
                         of Transmedia Restaurant
                         Company Inc.
Gregory Borges           Treasurer                                       63
Kathryn Ferara           Secretary and Vice President of Operations      43

Mr. Henderson was appointed as President and Chief Executive Officer of the
Company in October 1998. Previously, Mr. Henderson was President and Chief
Executive Officer of DIMAC

                                       10
<PAGE>

Marketing, a full service direct marketing company based in St. Louis. Prior to
that, Mr. Henderson was Chief Operating Officer of Epsilon, an operating unit of
American Express.

Mr. Callaghan was elected Vice President of the Company and President of
Transmedia Restaurant Company Inc., a subsidiary, in 1994. He was also a
director of the Company from 1991 to 1998. Mr. Callaghan joined the Company in
1989 and served as its Executive Vice President, Vice President, Sales and
Marketing and Treasurer.

Christine Donohoo joined the Company in January 1999, as Vice President and
President of Transmedia Service Company Inc. Mrs. Donohoo was formerly Senior
Vice President of Credit Card Marketing for Nationsbank (now Bank of America).

Mr. Lerch was elected Executive Vice President and Chief Financial Officer of
the Company, as well as Vice President of TMNI International Incorporated,
Transmedia Restaurant Company Inc. and Transmedia Service Company Inc,
subsidiaries, in 1997. Previously, Mr. Lerch was a Partner at Coopers and
Lybrand LLP (now PriceWaterhouse Coopers), where he worked from 1978 to 1997.

Mr. Ficalora was elected Executive Vice President of the Restaurant Company in
1994, having served as Vice President, Operations of the Company from 1992 until
1994, and Director of Franchise Sales from 1991 to 1992.

Mr. Borges was elected Treasurer of the Company in 1992. He joined the Company
in 1985 as Controller.

Mrs. Ferara was elected Secretary of the Company in 1992. She joined the Company
in 1989 as Office Manager and Assistant Secretary.

PART II

ITEM 5.  MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is traded on the New York Stock Exchange under the
symbol "TMN". The following table sets forth the high and low sale prices for
the common stock for each fiscal quarter ended from December 31, 1997 as
reported on the New York Stock Exchange, as well as the dividends paid during
each such fiscal quarter.

The payment of dividends, if any, in the future, will depend upon, among other
things, the Company's earnings and financial requirements, as well as general
business conditions.

 QUARTER ENDED               LOW               HIGH           DIVIDEND PAID
 -------------               ---               ----           -------------
December 31, 1997           $3.813            $ 6.313             $0.02
March 31, 1998               5.000              6.686                --
June 30, 1998                5.438              8.313                --
September 30, 1998           3.188              6.188                --
December 31, 1998            1.938              4.625                --
March 31, 1999               2.375              5.125                --
June 30, 1999                3.000              4.188                --
September 30, 1999           2.688              4.375                --

The aggregate number of holders of record of the Company's Common Stock on
December 6, 1999 was approximately 406.

                                       11
<PAGE>

On August 5, 1999, the New York Stock Exchange notified the Company of the
pending adoption of amendments to its continued listing criteria and of the
Company's noncompliance with the new standards. In accordance with the
requirements of the notification, the Company submitted to the Exchange its plan
to come into compliance with the new criteria. On September 16, 1999, the
Company was advised by the Exchange that its plan had been accepted and that it
will continue to be listed on the Exchange. The Company's performance relative
to the plan of compliance is subject to monitoring by the Exchange over the next
six fiscal quarters. The rights offering that closed on November 9, 1999 and
resulted in the issuance of $10 million in Series A preferred stock was
intended, in part, to position the Company to come into compliance with these
standards. The Company commenced trading of its Series A preferred stock on the
Exchange on that date under the symbol TMN PrA.

                                       12
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                      YEAR ENDED SEPTEMBER 30,
                                                                      ------------------------
                                                                  (THOUSANDS EXCEPT PER SHARE DATA)
                                                                  ---------------------------------
                                           1999            1998            1997            1996           1995
                                           ----            ----            ----            ----           ----
<S>                                     <C>             <C>             <C>             <C>            <C>
STATEMENTS OF OPERATIONS DATA:
Registered card sales                   $  25,942              --              --              --             --
Private label sales                        94,530       $  95,549       $ 101,301       $  90,076      $  78,632

Total dining sales                        120,472          95,549         101,301          90,076         78,632

Net revenues from rights-to-receive        23,882          19,659          21,232          19,504         15,769

Membership and renewal fee income           8,281           7,321           7,251           6,646          4,081
Franchise fee income                        1,073           1,249           1,438           1,839          1,881
Other income                                1,552           1,912           1,023             497            423

Total operating revenues                   34,788          30,141          30,944          28,486         22,154

Total operating expenses                   40,782          37,606          30,246          23,729         15,809

Operating income (loss)                    (5,994)         (7,465)            698           4,757          6,345

Income (loss) before taxes                 (8,398)        (10,436)           (684)          4,107          6,879

Net income (loss)                       $ (10,398)      $  (7,836)      $    (424)      $   2,546      $   4,196
                                        =========       =========       =========       =========      =========

Operating income (loss) per share
          Basic and diluted                  (.46)           (.63)            .07             .46            .64

Net income (loss) per share
          Basic                              (.80)           (.67)           (.04)            .25            .42
          Diluted                            (.79)           (.66)           (.04)            .25            .42

Weighted average number of common
and common equivalent shares
outstanding:
          Basic                            13,043          11,773          10,166              --             --
          Diluted                          13,157          11,825          10,180              --             --
          Primary                              --              --              --          10,299         10,112
          Fully diluted                        --              --              --          10,299         10,112

BALANCE SHEET DATA:
Total assets                              119,710          74,425          72,685          54,514         38,383

Long-term debt:
          Recourse                             --              --              --          15,000          2,000
          Non-recourse                     43,000          33,000          33,000              --             --

Stockholders' equity                       18,113          27,734          25,304          25,753         24,191
Debt to total assets                           36%             44%             45%             28%             5%
Earnings to fixed charges                    -109%           -245%             73%            582%         1,774%
Cash dividends per common share              0.00            0.02            0.02            0.04           0.04
</TABLE>

                                       13
<PAGE>

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

                             (DOLLARS IN THOUSANDS)

RESULTS OF OPERATIONS (1999 VERSUS 1998)

Gross dining sales for the fiscal year ended September 30, 1999 increased 26.1%
to $120,472 as compared to $95,549 for the year ended September 30, 1998,
primarily reflecting the registered card dining sales associated with the
acquisition of Dining a la Card (DALC). Sales for the registered card program
from June 30, 1999, the date of acquisition, through September 30, 1999 were
$25,942. Actual sales for the Transmedia private label program decreased 1.1% to
$94,530 compared to $95,549 for the year ended September 30, 1998. The Company
continues to experience a decline in private label sales in its largest and most
established market of New York. Sales for New York decreased 8.6% to $38,211 as
compared to $41,788 for the year ended September 30, 1998. Other noticeable
declines occurred in Boston and Philadelphia that decreased 16% and 9%,
respectively. During 1999, Transmedia's private label program experienced a
higher average monthly spend per cardmember and a higher overall utilization by
the cardmember base. However, part of this increased utilization is a function
of a forced reduction in inactive cardmembers and a corresponding lower member
base in the denominator. The overall private label cardmember base has been
reduced when compared to the prior year, and the average number of monthly
active accounts decreased from 112 thousand in 1998 to 107 thousand in 1999.
Offsetting the sales territories showing decreases were continued higher sales
volumes in Chicago, Indiana, Wisconsin, Denver, and Phoenix. Additionally, sales
for the reacquired franchise territories of Carolinas, Georgia and Dallas/Ft.
Worth (which were reacquired in 1998), and the more recently reacquired Houston
territory amounted to approximately $4,610 for the year ended September 30,
1999, compared to $1,474 in 1998.

Private-label cardmember accounts decreased 16.9% to 690,000 for the year and
total cardmembers at September 30, 1999 were approximately 1,000,000 or 1.45
cardmembers per account. The net decrease in accounts in fiscal 1999 is
primarily due to the Company's continued policy of proactively eliminating
inactive no-fee accounts while marketing extensively the fee-paying membership
that tends to have higher activity.

Registered card membership at September 30, 1999 was approximately 1,700,000. Of
these members, 663,000 were non-airline members. Airline members, which
accounted for approximately 61% of total membership and approximately 68% of
sales, do not pay membership fees and typically receive rebates in the form of
frequent flyer mileage.

The total merchants available to members of the private label and registered
card programs were 6,400 and 4,180 at September 30, 1999, respectively. Of the
6,400 merchants available to the members of the private label program, 5,800 are
merchants in Company-owned sales territories. There are no franchise territories
associated with the registered card program. Due to duplication of merchants in
both programs, the total Company-owned merchants listed in both directories at
September 30, 1999, were approximately 9,500.

At September 30, 1999, the average Rights to Receive balance per participating
Company merchant in the private label program was $6.9 versus $7.7 at September
30, 1998. With the inclusion of the registered card program, the combined
average Rights to Receive balance per participating Company merchant was $8.0 at
September 30, 1999. Rights-to-Receive turnover for the private label program for
fiscal 1999 was 1.2, or 10.0 months on hand, compared to 1.2, or 9.9 months on
hand, in the prior year. With the inclusion of the DALC portfolio, the Rights to
Receive turnover for the combined portfolio is 1.2 or 9.8 months on hand. The
Company is presently negotiating a single financing facility intended to
securitize the rights to receive in both programs. By having both a private
label and a registered card program to offer restaurants, and consolidating the
programs into a single securitized debt facility, the Company believes that it

                                       14
<PAGE>

can optimize its asset allocation efficiency, more effectively manage credit
risk and bring the overall months of Rights to Receive on hand, presently at
just between nine and ten months, down to a more acceptable level of six to
seven months.

Cost of sales increased to 58.2% of gross dining sales from 57.0% a year
earlier. The increase in cost of sales is directly related to the addition of
the DALC registered card portfolio which was traditionally offered to merchants
at an advance rate less than the customary Transmedia private label rate of 2:1
and therefore results in a somewhat higher cost of sales than the private label
portfolio. Since the acquisition, however, all new restaurants signed on under
the registered card program, as well as the majority of those renewed, have been
converted to the 2:1 proposition. While this initially results in a somewhat
slower inventory turn, the individual dining transactions are more profitable
due to the corresponding reduction in the cost of the Rights to Receive
consumed. The provision for Rights-to-Receive losses on the private label
program, which are included in cost of sales, decreased to $3,308 or 3.5% of
gross sales in 1999, compared to $3,822 or 4.0% in the prior year period. The
provision for losses recorded for the registered card program amounted to $780
or 3% of gross sales in 1999. Processing fees based on transactions processed
remained constant as a percentage of private label gross dining sales at 3.2%
for 1999 and 1998.

Member discounts as a percentage of sales decreased slightly from 22.4% in 1998
to 22.0% in 1999. While the effective rate of discount on private label sales
increased from 22.4% to 22.9%, reflecting more usage by fee-paying, 25% discount
members, the overall decrease is a result of the inclusion of the registered
card portfolio during the last quarter of 1999. The majority of the registered
card members are enrolled in the airline program and earn 10 miles for each
dollar spent at participating merchants. The Company purchases airline mileage
from the airlines on an as needed basis at a contractual rate that allows the
Company to effectively reduce the cost of the member rebate in the airline
program to less than that of the 20% cash rebates.

Membership and renewal fee income increased to $8,281, of which $3,387 was
initial fee income in 1999, compared to $7,321, of which $701 was initial fee
income in 1998. The increased initial fee income is reflective of the Company's
continued marketing of the 25% savings fee card with the private label program.
Renewal fee income relating to the registered card program was $53. The
Company's strategy is to continue to enroll members of the airline mileage
programs for which there is very little acquisition cost and the rebate
percentage tends to be lower and also to commence marketing a fee-based
registered card. Marketing of the private label fee program will continue on a
lesser scale and focus on key partner affinity programs. Fee income is
recognized over a twelve-month period beginning in the month the fee is
received. Cardholder membership fees are cancelable and refunded to members, if
requested, on a prorata basis based on the remaining portion of the membership.

Continuing franchise fee and royalty income decreased to $1,073 from $1,249.
This decrease resulted primarily from the purchase of the Houston franchise
territories in 1999.

Processing income relates to the Company's full service electronic processing
services that commenced during fiscal 1997 and comprises the sale or lease of
point-of-sale terminals to merchants, principally restaurants, as well as fees
received for serving as the merchants' processor for all of their credit card
transactions.

Overall selling, general and administrative expenses increased $3,068 or 16.4%
over the prior year, mainly as a result of additional costs associated with
maintaining separate infrastructures to support both programs during the period
of transition. Many of these additional costs will be eliminated when the
integration is completed and both dining programs are processed and supported on
one platform. The integration of the registered card program was completed in
November 1999. At that time substantially all operations in Chicago ceased and
the transition agreement with Signature Card was terminated.

                                       15
<PAGE>

As a percentage of gross dining sales, selling general and administrative
expenses were 18.0% in 1999 compared to 19.5% in 1998. However, this expense
increased overall by $3,068 from $18,607 to $21,675. The principal components of
the increase include sales commission and related expenses ($3,245 in 1999
versus $2,818 in 1998), depreciation and amortization, principally on the
software development costs ($3,462 in 1999 versus $3,194 in 1998), professional
fees, mainly legal fees ($2,460 in 1999 versus $2,253 in 1998), rent and other
office expenses ($1,819 in 1999 versus $1,530 in 1998), telephone ($1,504 in
1999 versus $1,063 in 1998) and software development and maintenance, inclusive
of Y2K charges ($1,800 in 1999 versus $653 in 1998).

Salaries and benefits increased $1,636 or 20.0% over the prior year. With the
acquisition of DALC, the Company employed forty-eight of the former
SignatureCard employees for the expected transition period. In addition, the
Company contracted with SignatureCard for customer service, information
technology and facilities services. At September 30, 1999, there were 26 former
SignatureCard employees still on the payroll. With the completion of the
integration of SignatureCard in November 1999, five of those employees remained
of which only one will be permanent and all services under the transition
agreement were terminated. The Company has added twelve new employees in the
corporate headquarters to information technology, contract administration and
the call center.

In 1999, member acquisition expenses were $6,447 versus $5,097 in 1998. Included
in member acquisition expenses is the amortization of deferred acquisitions
costs, which amounted to $3,335 in 1999 and $701 in 1998. Costs capitalized in
1999 and 1998 were $4,184 and $1,184, respectively. The Company used various
techniques at different levels of cost to solicit new members. Consumer privacy
regulations adopted in 1999 required the Company to change certain methods of
solicitations that had resulted in favorable response rates. Prospective
cardmembers continue to be solicited through direct mail and the use of affinity
and loyalty programs with major credit card issuers and corporations. Third
party and strategic marketing partners are compensated through a commission on
fees received and to a lesser degree, on an activation basis or through
wholesaling of the fee based savings card. The mix of solicitation programs used
has a direct correlation to the overall acquisition cost per member and the
spending profile of members acquired. The Company seeks to employ the most
cost-effective means of acquiring active and frequent users of the card and
typically uses solicitation methods whereby the fees earned substantially offset
the cost of acquisition.

The Company, in order to avoid prolonged litigation, settled the outstanding
lawsuit with its former licensee, Sports & Leisure, Inc., in November of 1999.
Under the terms of the settlement, Sports & Leisure, Inc. will receive $2,100 in
cash and 280,000 shares of common stock for a total of $2,835. Based on the fair
value of the common stock included in the settlement and net of reserve amounts
previously provided by the Company in the first quarter of 1999, a charge of
$1,835 has been recognized in the fourth fiscal quarter of 1999.

The amended employment agreement and termination of the consulting agreement of
the Chief Executive Officer resulted in a one-time charge of $3,081 1998.
Components included in the charge were a lump-sum cash payment of $2,750,
cancellation of indebtedness of $135, and health insurance for the remainder of
his life. The after tax impact of the charge was approximately $1,900. Also, the
Company recorded a charge of $463 in fiscal 1998 relating to the remaining
outstanding obligation under consulting agreements with former employees that
the Company has determined it no longer requires nor intends to utilize.

The Company recognized an asset impairment loss of $2,169 ($.18 per share) in
1998. The continued lag in dining sales in California, reacquired from a former
franchise in January 1997, indicated that the projected undiscounted cash flows
from this former franchise were less than the carrying value of the excess of
cost over net assets acquired. Additional investments in both merchants and new
card members as well as expansion into new markets in reacquired franchise
territory were required to generate sales sufficient to realize the value of the
intangible asset.

                                       16
<PAGE>

Operating loss in 1999 was $5,994 compared to $7,465 in 1998.

Other income, net of expense in 1999 was a net expense amounting to $2,404
versus $2,971 in 1998, a decrease of $567. The principal reasons for the change
included $1,149 of realized gain on sale of securities available for sale which
is offset by additional interest expense and financing costs in 1999, as a
result of the additional $39 million of term loans, in part, used to purchase
the DALC Rights to Receive.

Earnings before taxes amounted to a loss of $8,398 in 1999 compared with loss of
$10,436 in 1998. Due to the Company's continued losses, an additional valuation
reserve of $2,000 has been applied to the net deferred tax asset for fiscal
1999. At September 30, 1999, the net deferred tax asset, principally related to
net operating loss carryforward amount to $2,000 has been fully reserved. The
effective tax rate for fiscal 1999 was 24% and reflects the valuation reserve of
$2,000 applied to the net deferred tax asset.

Net loss was $10,398 or $.80 per share in 1999, versus net loss of $7,836 or
$.67 per share in 1998.

RESULTS OF OPERATIONS (1998 VERSUS 1997)

Gross dining sales for the fiscal year ended September 30, 1998 decreased 5.7%
to $95,549 as compared to $101,301 for the year ended September 30, 1997. Lower
sales volume in the Company's larger, more established markets were only
partially offset by increased sales in new regions and reacquired franchises.
Sales volume in the New York metropolitan area and South Florida, two of the
Company's largest and most competitive markets, declined 17% and 19%,
respectively, compared to the prior year. Noticeable declines also occurred in
Philadelphia and Detroit. Factors driving the decline in dining sales were lower
spend per cardmember and lower overall utilization by the cardmember base.
Offsetting these decreases were higher sales volumes in other markets such as
Chicago, Denver, Phoenix, Wisconsin and Indiana. Gross dining sales associated
with the Carolinas, Georgia and Dallas/Fort Worth reacquired franchise
territories amounted to approximately $1,474 since their acquisition in 1998.

Cardmember accounts decreased 7.3% to 838,118 for the year and total cardmembers
at September 30, 1998 were 1,203,080 or 1.44 cardmembers per account. The net
decrease in accounts is primarily due to the Company's new policy in fiscal 1998
of proactively eliminating inactive no-fee accounts.

The total restaurants available to cardmembers remained fairly consistent
between years. At September 30, 1998, the Company had 7,274 restaurants listed
in its directories (7,087 at September 30, 1997), of which 5,495 were in
Company-owned sales territories and 757 were overseas. The increase in
Company-owned restaurants from 4,922 a year ago relates primarily to the
acquisition of the Carolinas, Georgia and Dallas/Fort Worth franchise
territories.

At September 30, 1998, the average Rights to Receive balance per participating
Company restaurant was $7,706 versus $8,198 at September 30, 1997.
Rights-to-Receive turnover for fiscal 1998 was 1.2, or 9.9 months on hand,
compared to 1.3, or 9.2 months on hand, in the prior year. The lower turnover is
attributable to the decreased sales volumes in New York and South Florida and an
increased investment in the California marketplace.

Cost of sales increased to 57.0% of gross dining sales from 56.3% a year
earlier. Provision for Rights-to-Receive losses, which are included in cost of
sales, amounted to 3,822 in 1998, compared to $3,209 in the prior year.
Processing fees based on transactions processed remained constant as a
percentage of gross dining sales at 3.2% for 1998 and 1997. Cardmember discounts
as a percentage of sales remained stable.

                                       17
<PAGE>

Membership and renewal fee income slightly increased to $7,321, of which $701
was initial fee income in 1998, compared to $7,251, of which $670 was initial
fee income in 1997. Initial fee income remains lower, on a relative basis, due
to the continued marketing of the no-fee product in 1998 and does not yet
reflect the Company's new focus on marketing the 25% savings fee card. Fee
income is recognized over a twelve-month period beginning in the month the fee
is received. Cardholder membership fees are cancelable and refunded to
cardmembers, if requested, on a prorata basis based on the remaining portion of
the membership.

Continuing franchise fee and royalty income decreased to $1,249 from $1,438.
This decrease resulted primarily from the purchase of the Carolinas, Georgia and
Dallas/Fort Worth franchise territories in 1998.

Processing income relates to the Company's full service electronic processing
services that commenced during fiscal 1997 and comprises the sale or lease of
point-of-sale terminals to merchants, principally restaurants, as well as fees
received for serving as the merchants' processor for all of their credit card
transactions.

Overall selling, general and administrative expenses increased $1,200 or 4.7%
over the prior year. As a percentage of gross dining usage, selling general and
administrative expenses were 28% in 1998 compared to 25.3% in 1997. The
principal components of the increase include salaries and related expenses
($8,189 in 1998 versus $7,923 in 1997), depreciation and amortization,
principally on the software development costs ($3,194 in 1998 versus $2,232 in
1997), office related expenses ($2,882 in 1998 versus $2,688 in 1997), and legal
($1,418 in 1998 versus $983 in 1997). Additionally, the acquisition of the
Carolina and Georgia franchise in December 1997, and the Dallas/Fort Worth
territory in July 1998, resulted in additional costs associated with
establishing these sales territories.

In 1998, cardmember acquisition expenses were $5,097 versus $4,650 in 1997.
Included in cardmember acquisition expenses is the amortization of deferred
acquisitions costs, which amounted to $701 in 1998 and $670 in 1997. Costs
capitalized in 1998 and 1997 were $1,184 and $446, respectively.

The amended employment agreement and termination of the consulting agreement of
the Chief Executive Officer resulted in a one-time charge of $3,081 in the first
quarter of 1998. Components included in the charge were a lump-sum cash payment
of $2,750, cancellation of indebtedness of $135, and health insurance for the
remainder of his life. The after tax impact of the charge was approximately
$1,900. Also, the Company recorded a charge of $463 relating to the remaining
outstanding obligation under consulting agreements with former employees that
the Company has determined it no longer requires nor intends to utilize.

The continued lag in dining sales in California, reacquired from a former
franchise in January 1997, indicated that presently the undiscounted cash flows
from this former franchise are less than the carrying value of the excess of
cost over net assets acquired. Additional investments in both merchants and new
card members as well as expansion into new markets in reacquired franchise
territory will be required to generate sales sufficient to realize the value of
the intangible asset. Accordingly, the Company recognized an asset impairment
loss of $2,169 ($.18 per share).

Operating loss in 1998 was $7,465, a $8,163 decrease from 1997.

Other income, net of expense in 1998 was a net expense amounting to $2,971
versus $1,382 in 1997, an increased expense of $1,589. The principal reasons for
the change included $449 additional interest expense and financing costs in
1998, as a result of the $33 million securitization and the write-down of $710
relating to the Company's international licensees. Offsetting these expenses was
a realized gain of $200 on securities available-for-sale

                                       18
<PAGE>

Earnings before taxes amounted to a loss of $10,436 in 1998 compared with loss
of $684 in 1997. The effective tax rate in 1998 and 1997 was 25% and 38.0%,
respectively. The change in the effective tax rate for fiscal 1998 reflects the
valuation reserve of $972 applied to the net deferred tax asset.

Net loss was $7,836 or $.67 per share in 1998, versus net income of $424 or $.04
per share in 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital decreased to $49,398 at September 30, 1999 from
$45,995 at September 30, 1998.

EQUITY GROUP INVESTMENT

On March 4, 1998, the Company issued and sold 2.5 million common shares and
non-transferable warrants to purchase an additional 1.2 million common shares
for a total of $10,625 to affiliates of Equity Group Investments, Inc., a
privately held investment company. Net proceeds amounted to $9,825 after
transaction costs. The non-transferable warrants have a term of five years; one
third of the warrants are exercisable at $6.00 per share, another third are
exercisable at $7.00 per share and the third are exercisable at $8.00 per share.
As part of this strategic investment, Equity Group nominated and the
shareholders elected two candidates for the Board of Directors who joined three
of the Company's existing directors and two new independent directors.

FINANCING OF DINING A LA CARD ACQUISITION

In connection with the acquisition of Dining A La Card on June 30, 1999, the
Company obtained a senior secured revolving bridge loan from the Chase Manhattan
Bank (note 4). The loan permitted the Company to borrow an amount equal to the
lesser of (i) $35 million and (ii) the amount available under a borrowing base
formula based on the amount of registered card rights-to-receive which meet
certain eligibility criteria. At September 30, 1999, the borrowing base capacity
was $31.5 million and the amount drawn down by the Company was $29 million. The
facility expired on December 30, 1999 and was paid off with the proceeds of the
$80 million securitization described further in this section.

RIGHTS OFFERING

On November 9, 1999, the Company completed its Rights Offering to existing
shareholders resulting in the issuance of 4,149,378 convertible, redeemable
preferred shares. The preferred shares have a dividend rate of 12%, of which 6%
is payable in cash, quarterly in arrears, and the remaining 6% accrues unless
otherwise paid currently at the Company's discretion, until conversion by the
holder. Each preferred share may be converted into common stock at the option of
the holder at any time. The initial rate of conversion is one to one. Subsequent
conversion rates could be higher to the extent of accrued but unpaid dividends.
If not previously converted, the Company may commence redemption of the
preferred shares on the fifth anniversary of the rights offering.

The proceeds from the stock issuance of $10,000 were used to retire the $10,000
bridge loan obtained from GAMI Investment. Pursuant to its subscription
privileges and as a Standby Purchaser for any unsubscribed shares, EGI acquired
2.84 million of the preferred shares. The additional investment provides EGI
with the right to designate an additional member to the Board of Directors. The
size of the Board will increase by one if EGI chooses to exercise that right.

                                       19
<PAGE>

The terms of this loan also required the Company to pay GAMI, at closing, a cash
fee of $500, which was reimbursable to the Company upon the consummation of the
rights offering and the issuance to Samstock L.L.C. of warrants to purchase 1
million shares of the Company's common stock in consideration of providing the
loan and if it acted as a standby purchaser in connection with the rights
offering.

SECURITIZATION OF RIGHTS TO RECEIVE

On December 24, 1996, the Company made an initial transfer of $33 million of
rights-to-receive to a special purpose corporation ("SPC"), an indirect wholly
owned subsidiary, as part of a revolving securitization. The Rights-to-Receive,
which were sold to the SPC without recourse, were in turn transferred to a
limited liability corporation ("Issuer"), which issued $33 million of five-year
term fixed rate securities, bearing interest at 7.4%, in a private placement to
various third party investors.

In exchange for the rights-to-receive, which have a retail value of
approximately $66 million before cardmember discounts, the Company received
approximately $32 million, after transaction costs, and a 1% equity interest in
the Issuer. Excess cash flows generated from the securitized assets as the
rights-to-receive are exchanged for meals by Company cardholders, are remitted
to the Company on a monthly basis as a return on capital from the Issuer. Excess
cash flows are determined after payments of interest to noteholders and
investors, as well as trustee and servicing fees. During the five-year revolving
period, the Issuer is responsible for the ongoing purchase of rights-to-receive
from the Company to ensure that the initial pool of $33 million is continually
replenished as the rights-to-receive are utilized by cardholders.
Rights-to-receive currently held by the Issuer, as well as cash and certain
deposits restricted under the securitization agreement, have been separately
depicted in the consolidated balance sheet.

The Company has engaged Chase Securities Inc. to arrange an $80 million
securitization facilty, using the assets of its recently acquired registered
card rights-to-receive portfolio combined with the existing securitized
portfolio. The permanent financing vehicle will be established with an asset
backed commercial paper conduit administered by the Chase Manhattan Bank. This
loan will permit the Company to borrow an amount equal to the lesser of (i) $80
million and (ii) the amount available under a borrowing base formula based on
the amount of aggregate rights-to-receive which meet certain eligibility
criteria. The interest rate applicable to the facility will be either (1) the
Eurodollar which is a rate 1.25% in excess of a rate per annum equal to the
LIBOR Rate and will be limited to interest periods of up to three months and (2)
the Alternate Base Rate which is the higher of (i) Chase's Prime rate and (ii)
the Federal Funds Effective Rate plus 1.5%. The new facility was closed on
December 30, 1999 and $65 million was drawn down. Simultaneously, the 1996
securitization was terminated and the outstanding principal plus a termination
penalty was paid off in the aggregate of $33.9 million. Additionally, the
outstanding balance of the Chase bridge loan of $27.1 million was paid off.
Financing fees of $1.1 million were also paid. In addition to this $80 million
securitization facility, the Company is negotiating a warehouse line of credit
with Chase Securities to fund the growth in new markets and the purchase of the
corresponding new Rights to Receive.

The Company's inventory of Rights to Receive increased by $34,107 to a total of
$76,454 at September 30, 1999. The reason for this increase is the acquisition
of DALC which represents $36,434 of the Rights to Receive balance at September
30, 1999. In many instances the Rights to Receive purchased by the Company are
secured by the furniture, fixtures and kitchen equipment of the related
restaurants as filed pursuant to the Uniform Commercial Code. The Company also
attempts to obtain personal guarantees from the restaurant owners.

                                       20
<PAGE>

                          Analysis of Rights to Receive

<TABLE>
<CAPTION>
                                                                   1999                1998               1997
                                                                   ----                ----               ----
----------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                <C>                 <C>
Rights to Receive, beginning of year                             $ 42,347           $ 40,355            $ 37,526
----------------------------------------------------------------------------------------------------------------------
Acquisition of Registered Card
 Rights-to-receive in DALC transaction, net                        40,782                 --                  --
----------------------------------------------------------------------------------------------------------------------
Purchase of Rights to Receive                                      60,053             53,625              56,244
----------------------------------------------------------------------------------------------------------------------
Write-offs of Rights to Receive                                    (3,871)            (3,550)             (2,764)
                                                                 --------           --------            --------
                                                                  139,311             90,430              91,006
----------------------------------------------------------------------------------------------------------------------
Cost of Rights to Receive, included in cost of sales
                                                                   62,857             48,083              50,651
                                                                 --------           --------            --------
----------------------------------------------------------------------------------------------------------------------
Rights to Receive, end of year                                   $ 76,454           $ 42,347            $ 40,355
                                                                  =======           ========            ========
</TABLE>

Management of the Company believes that continued increase in the number of
restaurants that participate in the private label and registered card dining
programs is essential to attract and retain members. The Company strives to
constantly manage the dynamics of each market by balancing the rights-to-receive
acquired to the cardmember demand. This balance is critical to achieving the
participating restaurants objectives of incremental business and yield
management and the cardmembers desire for an adequate amount of desirable dining
establishments. Management believes that the purchase of Rights to Receive can
be funded generally from cash generated from operations, and from funds made
available through the securitization.

GENERAL

The Company expects to continue to make significant marketing expenditures over
the next fiscal year, with a primary focus on fee paying registered card
members. The Company believes that member acquisition cost can either be
substantially funded by the initial fee income or minimized through the ongoing
relationship with SignatureCard and their airline agreements. Furthermore, the
Company believes that the rights to receive inventory levels in the existing
markets, currently averaging approximately ten months on hand on an aggregate
basis, are sufficient to absorb much of the new member demand over the next
fiscal year, particularly when targeting new members in existing markets. The
Company believes that there will be sufficient capacity available under the new
securitization and the warehouse line currently being negotiated to fund the
entry into new territories and the expansion of existing markets.

Capital expenditures by the Company over the past three fiscal years
(approximately $7.7 million) have been due almost exclusively to the Company's
development and acquisition of computer hardware and software supporting the
credit card processing technology necessary to the operation of the dining
programs, the Cardmember Service Center and the integration of the registered
card platform.

The Company believes that cash on hand at September 30, 1999, together with cash
generated from operations and available under the securitization facility will
satisfy the Company's operating capital needs during the 2000 fiscal year.

SFAS No. 109 requires that deferred tax assets be reduced by a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax asset will not be realized. A valuation allowance was recorded for the
remaining amount of the net deferred tax assets as of September 30, 1999, due to
the Company's recurring losses. The valuation allowance at September 30, 1999
and 1998 was $6,005 and $972, respectively. The net deferred tax asset relates
primarily to net operating loss carryforwards which are available through 2019
and amount to $12,044 at September 30, 1999.

Operating activities during fiscal 1999 resulted in net cash provided of $3,361.
However, further expansion into new markets and planned increases in existing
markets could reverse this trend

                                       21
<PAGE>

depending on the rate of growth management deems appropriate. As described in
the above paragraph, funds generated from operations, as well as capacity under
the securitization, should be sufficient to fund such growth over the next
twelve months. Additionally, the Company's continued focus on acquiring
fee-paying cardmembers is expected to generate net positive cash flows in fiscal
2000.

Cash used in investing activities was $38,148 in the fiscal year ended September
30, 1999, compared with $3,624 used in 1998 and $11,887 used in 1997. Cash
utilized in investing activities were due primarily to the acquisition of DALC,
and the development and acquisition of computer hardware and software necessary
for the operation of the Company's Cardmember Service Center and the integration
of the registered card platform into the Company's exisiting systems. Management
believes that cash to be used in investing activities associated with capital
expenditures in the fiscal year ended September 30, 2000 will approximate $2.5
million.

Cash flows provided by financing activities were $39,098 for the fiscal year
ended September 30, 1999, compared with cash flows provided by financing
activities of $8,353 in 1998 and $14,499 in 1997. In 1999, the principal source
of cash flow was proceeds from short term borrowing of $29,000 from Chase
Manhattan Bank and $10,000 from GAMI Investments, Inc used to finance the
purchase of DALC. In 1998, the principal source of cash flow was from the
issuance of common stock in connection with the investment by the Equity Group
Investment, Inc. In 1997, the principal source of cash flow was proceeds from
the issuance of secured non-recourse notes relating to the securitization.

On August 5, 1999, the New York Stock Exchange notified the Company of the
pending adoption of amendments to its continued listing criteria and of the
Company's noncompliance with the new standards. In accordance with the
requirements of the notification, the Company submitted to the Exchange its plan
to come into compliance with the new criteria. On September 16, 1999, the
Company was advised by the Exchange that its plan had been accepted and that it
will continue to be listed on the Exchange. The Company's performance relative
to the plan of compliance is subject to monitoring by the Exchange over the next
six fiscal quarters. The rights offering that closed on November 9, 1999, and
resulted in the issuance of $10 million in Series A preferred stock was
intended, in part, to position the Company to come into compliance with these
standards. The Company commenced trading of its Series A preferred stock on the
Exchange on that date under the symbol TMN PFA.

YEAR 2000

In 1998, the Company initiated a plan ("Plan") to identify, assess, and
remediate "Year 2000" issues within each of its computer programs and certain
equipment which contain micro-processors. The Plan addressed the issue of
computer programs and embedded computer chips being unable to distinguish
between the year 1900 and 2000, if a program or chip uses only two digits rather
than four to define the applicable year. The Company divided the Plan into six
major phases: assessment, planning, validation, conversion, implementation and
testing. After completing the assessment and planning phase in late 1998, the
Company hired an independent consulting firm to validate the Plan. All software
development and installation effected during 1999 is currently in compliance.
The Company worked with an outside vendor on the conversion, implementation and
testing phases. Systems that were determined not to be Year 2000 compliant have
been either replaced or reprogrammed, and thereafter tested for Year 2000
compliance. The Company believes that at September 30, 1999 the conversion,
implementation and testing phases had been materially completed. The original
budget for the total cost of remediation (including replacement software and
hardware) and testing, as set forth in the Plan, was $500. The Company's
aggregate spending on the Year 2000 remediation at September 30, 1999, which has
been expensed, was $641.

                                       22
<PAGE>

The Company has identified and contacted critical suppliers and customers whose
computerized systems interface with the Company's systems, regarding their plans
and progress in addressing their Year 2000 issues. The Company has received
varying information from such third parties on the state of compliance or
expected compliance. Contingency plans are being developed in the event that any
critical supplier or customer is not compliant.

The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
operations, liquidity and financial condition. Due to the general uncertainty
inherent in the Year 2000 problem, resulting in part from the uncertainty of the
Year 2000 readiness of third-party suppliers and customers, the Company is
unable to determine at this time whether the consequences of Year 2000 failures
will have a material impact on the Company's operations, liquidity or financial
conditions.

FORWARD-LOOKING STATEMENTS

The Company has made, and continues to make, various forward-looking statements
with respect to its financial position, business strategy, projected costs,
projected savings and plans and objectives of management. Such forward-looking
statements are identified by the use of forward-looking words or phrases such as
"anticipates," "intends," "expects," "plans," "believes," "estimates," or words
or phrases of similar import. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge, investors and prospective investors are cautioned that such
statements are only projections and that actual events or results may differ
materially from those expressed in any such forwarding looking statements. The
Company's actual consolidated quarterly or annual operating results have been
affected in the past, or could be affected in the future, by factors, including,
without limitation, general economic, business and market conditions;
relationships with credit card issuers and other marketing partners; regulations
affecting the use of credit card files, extreme weather conditions;
participating restaurants' continued acceptance of discount dining programs and
the availability of other alternative sources of capital to them.

                                       23
<PAGE>

ITEM 8. FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report                                           F - 1

Financial Statements:
    Consolidated Balance Sheets,                                       F - 2
      September 30, 1999 and 1998

    Consolidated Statements of Income                                  F - 3,4
      and Comprehensive Income/(Loss)
      for each of the years in the three-year
      period ended September 30, 1999

    Consolidated Statements of Shareholders'                           F - 5
      Equity for each of the years in the three-year
       period ended September 30, 1999

    Consolidated Statements of Cash Flows                              F - 6,7,8
      for each of the years in the three-year
      period ended September 30, 1999

    Notes to Consolidated Financial Statements                         F - 9

    Schedule II - Valuation and Qualifying Accounts                    F - 30

                                       24
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and
   Shareholders
Transmedia Network Inc. and subsidiaries:

We have audited the accompanying consolidated balance sheets of Transmedia
Network Inc. and subsidiaries (the "Company") as of September 30, 1999 and 1998,
and the related consolidated statements of operations, and comprehensive loss,
shareholders' equity and cash flows for each of the years in the three-year
period ended September 30, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Transmedia Network Inc. and subsidiaries as of September 30, 1999 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended September 30, 1999, in conformity with generally
accepted accounting principles.

December 3, 1999, except as to notes (4)
  and (21), which are
  as of December 30, 1999

                                      F-1

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                           September 30, 1999 and 1998

                                 (in thousands)

<TABLE>
<CAPTION>
                                    ASSETS                                       1999           1998
                                    ------                                    ---------      ---------
<S>                                                                           <C>            <C>
Current assets:
     Cash and cash equivalents                                                $   8,943      $   4,632
     Restricted cash                                                              3,726          3,518
     Accounts receivable, net                                                     8,107          2,061
     Rights-to-receive, net
        Unrestricted                                                             41,833          7,909
        Securitized and owned by Trust                                           34,621         34,438
     Prepaid expenses and other current assets                                    5,259          5,067
                                                                              ---------      ---------
                   Total current assets                                         102,489         57,625

Securities available for sale, at fair value                                        631          1,267
Equipment held for sale or lease, net                                               702            988
Property and equipment, net                                                       6,413          6,832
Other assets                                                                      2,583          1,142
Restricted deposits and investments                                               2,070          1,980
Excess of cost over net assets acquired and other intangible assets               4,822          4,591
                                                                              ---------      ---------
                   Total assets                                               $ 119,710      $  74,425
                                                                              =========      =========
                  LIABILITIES AND SHAREHOLDERS' EQUITY
                  ------------------------------------
Current liabilities:
     Short term borrowing -  bank                                             $  29,000      $      --
     Accounts payable - rights-to-receive                                         6,691          4,181
     Accounts payable - trade                                                     8,376          3,348
     Accrued expenses and other                                                   5,174          1,507
     Deferred membership fee income                                               3,850          2,594
                                                                              ---------      ---------
                   Total current liabilities                                     53,091         11,630

Secured non-recourse notes payable                                               33,000         33,000
Term loan - affiliate                                                            10,000             --
Other long-term liabilities                                                       3,170          2,061
                                                                              ---------      ---------
                   Total liabilities                                             99,261         46,691
                                                                              ---------      ---------
Guaranteed value of puts                                                          2,336             --

Shareholders' equity :
     Preferred stock, par value $0.10 per share (1,000 shares authorized;
        none issued and outstanding )                                                --             --
     Common stock, par value $0.02 per share (20,000 shares authorized;
        13,376 and 12,876 shares issued and outstanding in 1999 and 1998,
        respectively)                                                               264            258
     Additional paid-in capital                                                  22,661         21,496
     Cumulative other comprehensive income                                          218            612
     Retained (deficit) earnings                                                 (5,030)         5,368
                                                                              ---------      ---------
                   Total shareholders' equity                                    18,113         27,734
                                                                              ---------      ---------
                   Total liabilities and shareholders' equity                 $ 119,710      $  74,425
                                                                              =========      =========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-2

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

     For each of the years in the three-year period ended September 30, 1999
                     (in thousands, except income per share)

<TABLE>
<CAPTION>
                                                               1999           1998           1997
                                                               ----           ----           ----
<S>                                                         <C>            <C>            <C>
Operating revenue:
     Sales of rights-to-receive:
        Owned by Company                                    $  34,919          5,566         23,189
        Owned by Trust                                         85,553         89,983         78,112
                                                            ---------      ---------      ---------
           Gross dining sales                                 120,472         95,549        101,301

        Cost of sales                                          70,110         54,446         57,065
        Member discounts                                       26,480         21,444         23,004
                                                            ---------      ---------      ---------
     Net revenue from rights-to-receive                        23,882         19,659         21,232

     Membership and renewal fee income                          8,281          7,321          7,251
     Franchise fee income                                       1,073          1,249          1,438
     Commission income                                            150            369            403
     Processing income                                          1,402          1,543            620
                                                            ---------      ---------      ---------
           Total operating revenues                            34,788         30,141         30,944
                                                            ---------      ---------      ---------
Operating expenses:
     Selling, general and administrative expenses              21,675         18,607         17,673
     Salaries and benefits                                      9,825          8,189          7,923
     Acquisition and promotion expenses                         6,447          5,097          4,650
     Settlement of licensee litigation                          2,835             --             --
     Amended compensation agreements                               --          3,544             --
     Asset impairment loss                                         --          2,169             --
                                                            ---------      ---------      ---------
           Total operating expenses                            40,782         37,606         30,246
                                                            ---------      ---------      ---------
                   Operating (loss) income                     (5,994)        (7,465)           698

Other income (expense):
     Realized gains on sale of securities available for
        sale                                                    1,149            200             --
     Interest and other income                                    468            560            450
     Initial franchise fee and license fee income, net             --           (710)           740
     Interest expense and financing cost                       (4,021)        (3,021)        (2,572)
                                                            ---------      ---------      ---------
                   Loss before income taxes                    (8,398)       (10,436)          (684)

Income tax provision (benefit)                                  2,000         (2,600)          (260)
                                                            ---------      ---------      ---------
                   Net loss                                 $ (10,398)        (7,836)          (424)
                                                            =========      =========      =========
</TABLE>

                                                                     (Continued)

                                      F-3

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS, CONTINUED

     For each of the years in the three-year period ended September 30, 1999

<TABLE>
<CAPTION>
                                                                                  1999          1998          1997
                                                                                --------      --------      --------
<S>                                                                             <C>           <C>           <C>
                   Net loss                                                     $(10,398)       (7,836)         (424)
                                                                                ========      ========      ========
Other comprehensive income
         Unrealized holding gain (loss) on securities
             available-for-sale                                                       78          (607)          119
         Beginning unrealized loss for all securities sold                          (562)         (114)           --
         Tax effect of unrealized gain (loss)                                         90           274           (45)
                                                                                --------      --------      --------
                   Comprehensive loss                                           $(10,792)       (8,283)         (350)
                                                                                --------      --------      --------
Operating income (loss) per common and common equivalent share:
          Basic and Diluted                                                     $   (.46)         (.63)          .07
                                                                                ========      ========      ========
Net loss per common and common equivalent share:
          Basic                                                                 $   (.80)         (.67)         (.04)
                                                                                ========      ========      ========
          Diluted                                                               $   (.79)         (.66)         (.04)
                                                                                ========      ========      ========
Weighted average number of common and common equivalent shares outstanding:
          Basic                                                                   13,043        11,773        10,166
          Effect of dilutive securities:
              Warrants                                                                 0             0            14
              Options                                                                114            52             0
                                                                                --------      --------      --------
          Diluted                                                                 13,157        11,825        10,180
                                                                                ========      ========      ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-4

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
     For each of the years in the three-year period ended September 30, 1999

                                 (in thousands)

<TABLE>
<CAPTION>
                                                             COMMON STOCK                     CUMULATIVE
                                                         -------------------     ADDITIONAL     OTHER       RETAINED
                                                          NUMBER                  PAID-IN   COMPREHENSIVE  (DEFICIT)
                                                         OF SHARES    AMOUNT      CAPITAL       INCOME      EARNINGS      TOTAL
                                                         ---------    ------     ---------- -------------  ---------     -------
<S>                                                      <C>          <C>         <C>          <C>          <C>          <C>
Balance, September 30, 1996                               10,127         202       10,547          985       14,019       25,753

     Net loss                                                 --          --           --           --         (424)        (424)

     Exercise of stock options                                63           2           64           --           --           66

     Income tax benefit related to stock option plan          --          --           24           --           --           24

     Dividend                                                 --          --           --           --         (189)        (189)

     Cumulative other comprehensive income, net               --          --           --           74           --           74
                                                         -------     -------      -------      -------      -------      -------
Balance, September 30, 1997                               10,190         204       10,635        1,059       13,406       25,304

     Net loss                                                 --          --           --           --       (7,836)      (7,836)

     Issuance of common stock                              2,674          53       10,797           --           --       10,850

     Exercise of stock options                                12           1           54           --           --           55

     Income tax benefit related to stock option plan          --          --           10           --           --           10

     Dividend                                                 --          --           --           --         (202)        (202)

     Cumulative other comprehensive loss, net                 --          --           --         (447)          --         (447)
                                                         -------     -------      -------      -------      -------      -------
Balance, September 30, 1998                               12,876     $   258       21,496          612        5,368       27,734

     Net loss                                                 --          --           --           --      (10,398)     (10,398)

     Issuance of common stock                                500          10        2,025           --           --        2,035

     Accretion of guaranteed value of puts                    --          (4)        (860)          --           --         (864)

     Cumulative other comprehensive loss, net                 --          --           --         (394)          --         (394)
                                                         -------     -------      -------      -------      -------      -------
Balance, September 30, 1999                               13,376         264       22,661          218       (5,030)      18,113
                                                         =======     =======      =======      =======      =======      =======
</TABLE>

See accompanying notes to consolidated financial statements.

                                      F-5

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

     For each of the years in the three-year period ended September 30, 1999
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                           1999          1998          1997
                                                                         --------      --------      --------
<S>                                                                      <C>           <C>           <C>
Cash flows from operating activities:
     Net loss                                                            $(10,398)       (7,836)         (424)

     Adjustments to reconcile net loss to net cash used in operating
        activities:
           Depreciation and amortization                                    3,444         5,346         2,232
           Amortization of deferred financing cost                            354           278           158
           Provision for losses on rights-to-receive                        4,606         3,822         3,209
           Gain on sale of investments                                     (1,149)         (200)           --
           Deferred income taxes                                            2,000        (1,980)         (256)

           Changes in assets and liabilities:
               Accounts receivable                                         (5,545)          199           357
               Rights-to-receive                                            4,706        (5,882)       (3,396)
               Prepaid expenses and other current assets                   (3,766)         (457)          886
               Other assets                                                (1,411)         (373)         (327)
               Accounts payable                                             5,022           554           242
               Income taxes receivable (payable)                            1,259          (378)         (791)
               Accrued expenses and other                                   2,982           249        (35))2
               Deferred membership fee income                               1,257          (662)         (847)
                                                                         --------      --------      --------
                     Net cash provided (used) in operating
                          activities                                        3,361        (7,320)       (1,008)
                                                                         --------      --------      --------
Cash flow from investing activities:
     Acquisition of Dining a la Card                                      (36,453)           --            --
     Additions to property and equipment                                   (2,106)       (2,066)       (3,443)
     Acquisition of franchises                                               (648)       (1,758)       (7,454)
     Proceeds from sale of securities available for sale                    1,149           200            --
     Increase in restricted deposits and investments                          (90)           --          (990)
                                                                         --------      --------      --------
                     Net cash used in investing activities                (38,148)       (3,624)      (11,887)
                                                                         --------      --------      --------
Cash flows from financing activities:
     Proceeds from issuance of secured
           non-recourse notes                                                  --            --        31,978
     Proceeds from short term borrowings - bank                            29,000            --            --
     Proceeds from term loan - affiliate                                   10,000            --            --
     Net borrowings (repayments) on revolving line of credit                   --            --       (15,000)
     Net proceeds from issuance of common stock                               306         9,854            --
     Increase in restricted cash                                             (208)       (1,364)       (2,166)
     Conversion of warrants and options for common stock, net of
        tax benefits                                                           --            65            90
     Dividends paid                                                            --          (202)         (403)
                                                                         --------      --------      --------
                     Net cash provided by financing activities             39,098         8,353        14,499
                                                                         --------      --------      --------
</TABLE>

                                                                     (Continued)

                                      F-6

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

<TABLE>
<CAPTION>
                                                          1999         1998         1997
                                                         -------      -------      -------
<S>                                                      <C>          <C>          <C>
                     Net (decrease) increase in cash     $(4,311)      (2,591)       3,620

Cash and cash equivalents:
     Beginning of year                                     4,632        7,223        3,603
                                                         -------      -------      -------
     End of year                                         $ 8,943        4,632        7,223
                                                         =======      =======      =======
Supplemental disclosures of cash flow information:

     Cash paid (received) during the year for:
        Interest                                         $ 2,873        2,454        2,219
                                                         =======      =======      =======
        Income taxes                                     $(1,259)          23          764
                                                         =======      =======      =======
</TABLE>

Supplemental schedule of noncash investing and financing activities: Noncash
     investing and financing activities:

        At September 30, 1999, 1998 and 1997, the Company adjusted its available
           for sale investment portfolio to fair value resulting in a net
           (decrease) increase to Shareholders' equity of ($394), ($447) and
           $74, net of deferred income taxes.

        There is no dividend payable outstanding as of September 30, 1999, 1998
           and 1997.

        The acquisition of Dining a la Card for $35,000, 400,000 shares of
           common stock, with a put value of $8 per share, and options to
           purchase 400,000 shares of common stock, was recorded at the end of
           the third quarter of fiscal 1999 as follows (Note 2):

           Fair value of assets acquired:
                  Rights-to-receive                                  $ 40,782
                  Other assets                                            231
                  Accrued expenses                                       (663)
                  Stock options outstanding                              (697)
                  Guaranteed value of puts                             (1,471)
                  Common stock issued                                  (1,729)
                                                                     --------
                           Cash paid                                 $ 36,453
                                                                     ========

        The acquisition of the Houston franchisee was recorded during the second
           quarter of fiscal year 1999 as follows (see Note 13):

           Fair value of assets acquired:
                  Rights-to-receive                                  $    127
                  Other assets                                             13
                  Excess of cost over net assets acquired                 536
                                                                     --------
                                                                          676
           Less:  Cash paid                                               648
                                                                     --------
                           Liabilities assumed                       $     28
                                                                     ========

                                      F-7

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

        The acquisition of the Dallas/Ft. Worth franchisee was recorded during
           the fourth quarter of fiscal year 1998 as follows (see Note 13):

           Fair value of assets acquired:
                  Rights-to-receive                                  $    266
                  Other assets                                              8
                  Excess of cost over net assets acquired               1,541
                                                                     --------
                                                                        1,815
           Less:  Cash paid                                             1,758
                                                                     --------
                           Liabilities assumed                       $     57
                                                                     ========

        The acquisition of the rights-to-receive and cancellation of the
           franchise of East American Trading Company, for 170,000 shares of
           common stock, was recorded during the first quarter of fiscal year
           1998 as follows (see Note 13):

           Fair value of assets acquired:
                  Rights-to-receive                                  $    267
                  Excess of cost over net assets acquired                 740
                                                                     --------
                           Net assets acquired                       $  1,007
                                                                     ========

        The acquisition of the West Coast franchisee in fiscal year 1997 (see
           Note 13) was recorded as follows:

           Fair value of assets acquired:
                  Rights-to-receive                                  $  2,659
                  Other assets                                             45
                  Excess of cost over net assets acquired               5,017
                                                                     --------
                                                                        7,721
           Less:  Cash paid                                             7,454
                                                                     --------
                           Liabilities assumed                       $    267
                                                                     ========

See accompanying notes to consolidated financial statements.

                                      F-8

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

(1)      DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A)    DESCRIPTION OF BUSINESS

                Transmedia Network Inc. and subsidiaries' (the "Company") owns
                and markets a charge card ("the Transmedia Card") offering
                savings to the Company's card members on dining as well as
                lodging, travel, retail catalogues and long distance telephone
                calls. The Company's primary business activity is to acquire,
                principally through cash advances, the rights-to-receive food
                and beverage credits at full retail value from restaurants
                ("Rights-to-receive"), which are then sold for cash to its
                members. These Rights-to-receive are primarily purchased by the
                Company for cash but may also be acquired in exchange for
                services.

                The Company's areas of operation included Central and South
                Florida, the New York, Chicago and Los Angeles metropolitan
                areas, Boston and surrounding New England, Philadelphia, San
                Francisco, Detroit, Indianapolis, Milwaukee, Denver, Phoenix,
                North and South Carolina, Georgia, parts of Tennessee and
                Dallas/Ft Worth. Franchised areas include most of New Jersey,
                Washington, D.C., Maryland, Virginia, and parts of Texas.
                Licensing arrangements exist for the United Kingdom, Canada, and
                Europe, as well as the Asia-Pacific region.

                On June 30, 1999, the Company acquired from SignatureCard, Inc.
                ("SignatureCard"), a subsidiary of Montgomery Ward & Co.,
                Incorporated, assets related to a membership discount program
                SignatureCard operated under the trade name and service mark
                "Dining A La Card". The assets acquired included various
                intellectual property rights and computer software, membership
                and merchant data, rights-to-receive, and most significantly, a
                registered card platform, among other things. The registered
                card program is primarily marketed through airline reward
                programs where savings are passed on to members in the form of
                frequent flyer miles. With the acquisition of Dining a la Card,
                the Company now has a presence in new areas such as St. Louis,
                Kansas City, San Diego, Memphis, Minneapolis, Seattle and other
                parts of Washington, and to a lesser degree, Cincinnati,
                Pittsburgh, Las Vegas, New Orleans, Portland, Salt Lake City,
                Tulsa, and Hawaii. The Statement of Income includes the results
                of the acquired registered card operation commencing June 30,
                1999.

                Transmedia Network Inc.'s corporate structure consists of three
                wholly owned subsidiaries: Transmedia Restaurant Company Inc.,
                functions as the sales organization and is responsible for
                merchant acquisition and relationship management; TMNI
                International Incorporated is responsible for all foreign
                licensing; and Transmedia Service Company Inc., is responsible
                for all card member-related facets of the business, including
                the card member service center, domestic franchising, and
                support services to Transmedia Restaurant Company. In 1997, TNI
                Funding I, Inc. was established as a special purpose corporation
                as part of the securitization discussed in Note 5. TNI Funding
                I, Inc. is a wholly owned subsidiary of Transmedia Service
                Company, Inc. All intercompany accounts and transactions have
                been eliminated in consolidation.

         (B)    CASH AND CASH EQUIVALENTS

                Cash and cash equivalents are instruments with original
                maturities at the date of purchase of three months or less.

         (C)    RIGHTS-TO-RECEIVE

                Rights-to-receive ("Rights") are composed primarily of food and
                beverage credits acquired from restaurants. Rights are stated at
                the gross amount of the commitment to the establishment.
                Accounts payable-rights-to-receive represent the unfunded
                portion of the total commitments.

                                      F - 9
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                Cost is determined by the first-in, first-out method. The
                Company reviews the realizability of the Rights on a periodic
                basis and provides for anticipated losses on Rights-to-receive
                from restaurants that have ceased operations or whose credits
                are not utilized by cardholders. These losses are offset by
                recoveries from restaurants previously written off.

         (D)    SECURITIES AVAILABLE FOR SALE

                All of the Company's investments are available to be sold in
                response to the Company's liquidity needs and asset-liability
                management strategies, among other reasons. Investments
                available-for-sale on the balance sheet are stated at fair
                value. Unrealized gains and losses are excluded from earnings
                and are reported in a separate component of shareholders' equity
                (cumulative other comprehensive income), net of related deferred
                income taxes.

                A decline in the fair value of an available-for-sale security
                below cost that is deemed other than temporary results in a
                charge to income, resulting in the establishment of a new cost
                basis for the security. All declines in fair values of the
                Company's investment securities in 1999 and 1998 were deemed to
                be temporary.

                Dividends are recognized when earned. Realized gains and losses
                are included in earnings and are derived using the
                specific-identification method for determining the cost of
                securities sold.

         (E)    PROPERTY AND EQUIPMENT

                Property and equipment are stated at cost. Depreciation on
                property and equipment used in the business is calculated on the
                straight-line method over an estimated useful life of five
                years. Amortization of leasehold improvements is calculated over
                the shorter of the lease term or estimated useful life of the
                asset.

                Equipment held for sale or lease consists primarily of
                electronic terminals used for credit card processing and is
                stated at cost. Depreciation is calculated on a straight-line
                basis over a three-year life.

         (F)    EXCESS OF COST OVER NET ASSETS ACQUIRED

                Excess of cost over net assets acquired has resulted primarily
                from the acquisition of franchise territories (see note 13) and
                is amortized on a straight line basis over the expected periods
                to be benefited, generally 20 years. The Company's accounting
                policy regarding the assessment of the recoverability of
                intangibles is to review the carrying value of goodwill and
                other intangibles if the facts and circumstances suggest that
                they may be impaired. The Company assesses the recoverability of
                intangible assets by determining whether the amortization of the
                goodwill balance over its remaining life can be recovered
                through undiscounted future operating cash flows of the acquired
                operation. The amount of goodwill impairment, if any, is
                measured based on projected discounted future operating cash
                flows using a discount rate reflecting the Company's average
                cost of funds. The assessment of the recoverability of goodwill
                will be impacted if estimated future operating cash flows are
                not achieved.

         (G)    DEFERRED MEMBERSHIP AND RENEWAL FEE INCOME

                Initial membership and renewal fees are billed in advance and
                amortized on a straight-line basis over twelve months, which
                represents the standard membership period. Membership fees are
                cancelable and are refunded to members, if requested, on a
                prorata basis based on the remaining portion of the membership
                period.
                                     F - 10
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                Certain costs of acquiring members are deferred and amortized,
                on a straight-line basis over 12 months. The acquisition costs
                capitalized as assets by the Company represent initial
                fee-paying member acquisition costs resulting from
                direct-response campaign costs that are recorded as incurred.
                Campaign costs include incremental direct costs of
                direct-response advertising, such as printing of brochures,
                campaign applications and mailing. Such costs are deferred only
                to the extent of initial membership fees generated by the
                campaign.

                Acquisition expenses represent the cost of acquiring members and
                consist primarily of direct-response advertising costs incurred
                in excess of fees received and amortization of previously
                deferred costs and costs associated with soliciting no-fee
                members.

         (H)    REVENUE RECOGNITION

                Gross dining sales represent the retail value of the
                rights-to-receive that are recognized when members use either of
                the two programs at a dining establishment.

                Continuing franchise fee revenue represents royalties calculated
                as a percentage of the franchisees' sales and is recognized when
                earned. Initial franchise fees and license fees are recognized
                when material services or conditions relating to the sale of the
                franchise have been substantially performed.

                Commission income represents income earned on discounted
                products and services provided by third parties to the Company's
                members. Such services consist of retail catalogues, phone cards
                and travel services.

                Processing income represent the net fees charged to restaurants
                when the Company serves as merchant of record for processing of
                all other non-Transmedia point of sale transactions.

                Processing income is recognized when collected.

         (I)    COST OF SALES AND MEMBER DISCOUNTS

                Cost of sales is composed of the cost of rights-to-receive sold,
                related processing fees and provision for rights-to-receive
                losses.

                Member discount represents the cost of the specific discount
                earned by members whenever one of the two programs is used.

         (J)    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. Under this
                method, deferred tax liabilities and assets are determined based
                on the difference between the financial statement and tax basis
                of assets and liabilities using enacted tax 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.

         (K)    STOCK BASED COMPENSATION

                In fiscal 1997, the Company adopted the disclosure only
                provision of Statement of Financial Accounting Standards
                ("SFAS") No.123, "Accounting for Stock-Based Compensation." The

                                     F - 11
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                Company continues to account for its stock compensation
                arrangements using the intrinsic value method in accordance with
                Accounting Principles Board ("APB") Opinion No.25, "Accounting
                for Stock Issued to Employees."

         (L)    LOSS PER COMMON AND COMMON EQUIVALENT SHARE

                Basic loss per share is based on the weighted average number of
                common shares outstanding during the period presented.

                Diluted loss per share is computed using the weighted average
                number of common and dilutive common equivalent shares
                outstanding in the periods, assuming exercise of options and
                warrants calculated under the treasury stock method, based on
                average stock market prices at the end of the periods.

         (M)    COMPREHENSIVE INCOME AND LOSS

                Comprehensive income and loss presents a measure of all changes
                in shareholders' equity except for changes in equity resulting
                from transactions with shareholders in their capacity as
                shareholders. The Company's other comprehensive loss presently
                consists of net unrealized holding (losses) gains on investments
                available for sale. Total comprehensive losses were ($10,098),
                ($8,283), and ($350) for the years ended September 30, 1999,
                1998 and 1997, respectively.

          (N)   RECLASSIFICATION

                Certain prior year amounts have been reclassified to conform to
                the 1999 presentation.

         (O)    USE OF ESTIMATES

                Management of the Company has made a number of estimates and
                assumptions relating to the reporting of assets and liabilities
                and the disclosure of contingent assets and liabilities to
                prepare these financial statements in conformity with generally
                accepted accounting principles. Actual results could differ from
                those estimates. The principal estimates used by the Company
                relate to the provision for rights to receive losses and the
                valuation allowance for net deferred tax assets.

(2)      ACQUISITION OF DINING A LA CARD

         On June 30, 1999, the Company concluded the acquisition from
         SignatureCard, Inc. ("SignatureCard"), a subsidiary of Montgomery Ward
         & Co., Incorporated, of assets related to a membership discount dining
         program SignatureCard operated under the Dining A La Card trade name
         and service mark. The assets acquired included various intellectual
         property rights and computer software, membership and merchant data,
         rights-to-receive, and, most significantly, a registered card platform,
         among other things.

         The acquisition was accounted for under the purchase method, and
         accordingly, the results of operations of the acquired company have
         been included in the consolidated results of Transmedia Network Inc.,
         since the effective date of acquisition. The purchase price of $40,783
         has been allocated, in its entirety, to the rights to receive. As
         consideration for the assets, the Company (1) paid SignatureCard
         $35,000 in cash at closing, (2) issued to SignatureCard 400,000 shares
         of the Company's common stock and (3) issued to SignatureCard a
         three-year option to purchase an additional 400,000 shares of the
         Company's common stock at a price of $4.00 per share. The options,
         which are included in the cost of the acquired assets, were valued
         using the Black-Scholes model and assigned a value of $697. The shares
         issued were valued at $4.32 per share using an average price over the
         measurement period. Commencing

                                     F - 12
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         December 31, 1999, SignatureCard, at any time prior to June 30, 2002,
         may require the Company to repurchase all or part of the 400,000 shares
         issued at the closing at a price of $8.00 per share. The guaranteed
         value of the puts recorded at September 30, 1999, is $2,336. In
         addition, during the two-year period following the closing, the Company
         has agreed to share with SignatureCard certain amounts recovered from
         rights to receive acquired, but not funded, at closing.

         In connection with the acquisition of Dining A La Card, the Company
         entered into a Services Collaboration Agreement with SignatureCard.
         Under this agreement, SignatureCard will continue to provide dining
         members from its airline frequent flyer partner programs and other
         marketing programs. It will also share, for 12.5 years, certain profits
         the Company derives from SignatureCard-generated members as well as a
         portion of the membership fee revenues generated from fee paying
         members acquired in this transaction or subsequently through
         SignatureCard's efforts.

         To finance the acquisition, the Company obtained a $35,000 senior
         secured revolving bridge loan facility from The Chase Manhattan Bank
         (from which $29,000 was drawn down at closing) and a $10,000 term loan
         from GAMI Investments, Inc., an affiliate of EGI (which was drawn down
         in full) See Note 4.

         In connection with this acquisition, the Company paid a fee for
         transaction advisory services to Equity Group Investments LLC, an
         affiliate of the Company's largest stockholder ("EGI"), which is
         included in the cost of the acquired assets, of $386.

(3)      INVESTMENT BY EQUITY GROUP INVESTMENTS, INC.

         On March 4, 1998, the Company sold 2.5 million new-issued common shares
         and non-transferable warrants to purchase an additional 1.2 million
         common shares for a total of $10,625 to affiliates of Equity Group
         Investments, Inc., ("EGI") a privately held investment company. Net
         proceeds amounted to $9,825 after transaction costs. The
         non-transferable warrants have a term of five years; one third of the
         warrants are exercisable at $6.00 per share, another third are
         exercisable at $7.00 per share and the final third are exercisable at
         $8.00 per share. As part of this strategic investment, EGI nominated
         and the stockholders elected two candidates to the Board of Directors
         who joined three of the Company's existing directors and two new
         independent directors.

         As more fully described in Note 21, EGI invested an additional $6,846
         in November, 1999, as a result of a Standby Purchase Agreement that
         they provided to support the Company's $10 million rights offering and
         eventual issuance of convertible preferred stock. As consideration for
         the standby note agreement, EGI received one million warrants,
         exercisable over a five-year period, at a price of $2.48.

(4)      FINANCING ACTIVITIES

         The facility obtained for the acquisition of Dining a la Card through
         Chase Manhattan Bank permits the Company to borrow up to an aggregate
         principal amount equal to the lesser of (i) $35,000 and (ii) the amount
         available under a borrowing base formula based on the amount of
         registered card program rights to receive receivables which meet
         certain eligibility criteria (which was $36,600 at the closing). The
         facility is secured by liens on substantially all of the Company's
         assets (including those purchased pursuant to the acquisition), other
         than those subject to an existing securitization facility, as well as
         the stock of the three principal subsidiaries: Transmedia Restaurant
         Company Inc., Transmedia Service Company Inc., and TMNI International
         Incorporated. The remaining proceeds of the facility are available in
         connection with the ongoing registered card business.

         Amounts drawn down under the facility accrue interest, at the Company's
         election, at either (i) 0.25% plus the greater of (a) the prime rate
         publicly announced by Chase in effect in New York, New York

                                     F - 13
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         and (b) the federal funds effective rate from time to time plus 1.5% or
         (ii) one month LIBOR plus 1.25%, and mature on December 30, 1999, or
         upon the earlier effectiveness of a permanent securitization facility
         of the registered card program rights-to-receive. The effective rate of
         interest at September 30, 1999 was 7.4%. Interest is payable monthly in
         arrears. Any amounts overdue under the facility accrues interest at the
         applicable rate plus 2%. The agreement contains customary events of
         default, as well a cross default to all other material indebtedness,
         including the Company's existing securitization facility and the GAMI
         loan. In connection with this facility, the Company paid a $500 fee to
         Chase upon the closing and was required to pay a monthly unused line
         fee equal to 0.375% of the average unused amount. The facility was paid
         off on December 30, 1999 with the proceeds of the $80 million
         securitization described below. Financing fees of $1.1 million were
         also paid.

         On December 30, 1999, the Company entered into the $80 million
         securitization of the combined rights to receive of both the private
         label and the registered card dining program. The proceeds drawn down
         at closing, approximately $65 million based on a similar borrowing base
         formula used in the bridge loan, were utilized to terminate and payoff
         $33 million non recourse notes from the 1996 securitization and the $27
         million outstanding under the bridge loan. Additionally, the Company
         was required to pay a termination payment of approximately $900 to the
         investors of the 1996 securitization. The interest rate applicable to
         the facility will be either (1) the Eurodollar which is a rate 1.25% in
         excess of a rate per annum equal to the LIBOR Rate and will be limited
         to interest periods of up to three months and (2) the Alternate Base
         Rate which is the higher of (i) Chase's Prime rate and (ii) the Federal
         Funds Effective Rate plus 1.5%.

         The GAMI facility is a term loan made through an affiliate of EGI in
         the amount of $10,000 and was unsecured and subordinated to the Chase
         facility. Interest accrued on the principal amount outstanding was at
         the prime rate (as announced from time to time by Chase) plus 4%,
         payable monthly in arrears. The effective rate of interest at September
         30, 1999 was 12.25%.

         The GAMI agreement required the Company to conduct a rights offering of
         rights to purchase a new series of preferred stock to be offered to
         each existing stockholder of record on a pro rata basis. The proceeds
         of the rights offering were earmarked to repay all outstanding amounts
         under this loan.

         In connection with the rights offering, EGI, through its affiliate and
         the Company's largest stockholder, Samstock L.L.C., agreed to act as a
         standby purchaser whereby, after exercising its initial rights and any
         additional subscription privileges, would purchase any shares not
         otherwise subscribed for by other stockholders. The rights offering
         closed on November 9, 1999, and $10 million of convertible preferred
         stock was issued (see Note 21). The proceeds were used to retire the
         GAMI obligation.

         The terms of this loan also required the Company to pay GAMI, at
         closing a cash fee of $500, which was reimbursable to the Company upon
         the consummation of the rights offering and the issuance to Samstock
         L.L.C. of warrants to purchase 1 million shares of the Company's common
         stock in consideration of providing the loan and if it acted as a
         standby purchaser in connection with the rights offering.

(5)      SALE OF RIGHTS-TO-RECEIVE

         On December 24, 1996, the Company made an initial transfer of $33
         million of rights-to-receive to a special purpose corporation ("SPC"),
         an indirect wholly owned subsidiary, as part of a revolving
         securitization. The rights-to-receive, which were sold to the SPC
         without recourse, were in turn transferred to a limited liability
         corporation ("Issuer"), which issued $33 million of fixed rate
         securities in a private placement to various third party investors.

                                     F - 14
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         In exchange for the rights-to-receive, which have a retail value of
         approximately $66 million before member discounts, the Company received
         approximately $32 million, after transaction costs, and a 1% equity
         interest in the Issuer. Future excess cash flows, expected to be
         generated from the securitized assets as the rights-to-receive are
         exchanged for meals by Company cardholders, are remitted to the Company
         on a monthly basis as a return on capital from the Issuer. Excess cash
         flows are determined after payments of interest to noteholders and
         investors, as well as trustee and servicing fees. Rights-to-receive
         currently held by the Issuer, as well as cash and certain deposits
         restricted under the securitization agreement, have been separately
         depicted in the consolidated balance sheet.

         The private placement certificates have a five-year term before
         amortization of principal and have an interest rate of 7.4%. During
         this revolving period, the Issuer is responsible for the ongoing
         purchase of rights-to-receive from the Company to ensure that the
         initial pool of $33 million is continually replenished as the
         rights-to-receive are utilized by cardholders. It is anticipated that
         replenishment of rights-to-receive will provide for a continuous stream
         of additional net revenue throughout the period.

         As more fully discussed in Note 4, on December 30, 1999, the Company
         entered into a new securitization agreement and simultaneously
         terminated the 1996 facility and paid off the non-recourse notes.

(6)      AMENDED COMPENSATION AGREEMENTS

         On December 29, 1997, the Company and Melvin Chasen, former Chairman of
         the Board, Chief Executive Officer and President, agreed to amend his
         employment agreement and to terminate his consulting agreement. As part
         of the agreement, Mr. Chasen agreed to a five-year non-compete and
         confidentiality agreement with the Company and relinquished his right
         to receive $1 million in the event of the sale of a control block of
         stock, as described in Note 2 above. Pursuant to this agreement, the
         Company made cash payment of $2.75 million to Mr. Chasen and recognized
         a one-time pre-tax charge of $3.1 million in the quarter ending
         December 31, 1997.

         During 1998, the Company entered into consulting agreements with
         certain former senior management personnel. These agreements required
         these personnel to perform services at the Company's request for a
         period not to exceed more than one year. The Company determined that it
         no longer requires, nor intended to utilize the service of these
         individuals, and recorded a charge of $463 relating to the remaining
         outstanding obligation under the consulting agreements for the year
         ended September 30, 1998

(7)      SECURITIES AVAILABLE FOR SALE

         Securities available for sale consist of marketable equitable
         securities that are recorded at fair value and have an aggregate cost
         basis of $280 as of September 30, 1999, 1998 and 1997. Gross unrealized
         gains were $545, $1,030, and $1,774 and gross unrealized losses were
         $194, $43, and $66 as of September 30, 1999, 1998 and 1997,
         respectively. Realized gains were $1,149 and $200 for the years ended
         September 30, 1999 and 1998, respectively. There were no realized gains
         in 1997. Deferred income taxes associated with the net unrealized gains
         were $134, $375, and $649 at September 30, 1999, 1998 and 1997,
         respectively.
                                     F - 15
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


(8)      EQUIPMENT HELD FOR SALE OR LEASE

         Equipment held for sale and lease consists primarily of electronic
         terminals used for credit card processing. The cost of the terminals on
         hand is determined on a first in, first out basis. The amount presented
         on the balance sheet represents the net book value of terminals after
         reduction for terminals sold and accumulated depreciation of $972 and
         $490 on terminals under lease at September 30, 1999 and 1998.

(9)      PROPERTY AND EQUIPMENT

         Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                                         September 30,
                                                                 --------------------------------
                                                                          1999            1998
                                                                        -------         ------
<S>                                                          <C>                         <C>
                 Furniture and fixtures                      $              674             651
                 Office equipment                                        12,136          11,993
                 Leased equipment                                           174
                 Leasehold improvements                                     129             135
                                                                      ---------       ---------
                                                                         13,113          12,779
                 Less accumulated depreciation and
                      amortization                                       (6,700)         (5,947)
                                                                      ---------       ---------

                                                             $            6,413           6,832
                                                                      =========       =========
</TABLE>

         Depreciation and amortization expense for the years ended September 30,
         1999, 1998 and 1997 was $2,859, $2,711, and $1,812, respectively.

(10)     FAIR VALUES OF FINANCIAL INSTRUMENTS

         The fair value of a financial instrument is the amount at which the
         instrument could be exchanged in a current transaction between willing
         parties. The fair value of cash and cash equivalents, restricted cash,
         accounts receivable, rights-to-receive, accounts payable, accrued
         expenses and notes payable is based on the short maturity of these
         instruments which approximate the carrying amounts at September 30,
         1999 and 1998. The fair value of the rights-to-receive approximates the
         carry value due to their short-term nature. The fair value of the
         securities available for sale is based upon quoted market prices for
         these or similar instruments.

(11)     STOCK OPTION PLANS

         In March 1996, the 1996 Long-Term Incentive Plan (the "1996 Plan") was
         approved for adoption by the Company's stockholders as a successor plan
         to the 1987 Stock Option and Rights Plan (the "1987 Plan"). The 1996
         Plan was amended August 5, 1998 to allow for non-employee directors to
         choose to take directors fees in either cash or a current or deferred
         stock award. In addition, the amount of shares available for grant
         under the 1996 Plan was increased to 1,505,966. Under the 1996 Plan,
         the Company may grant awards, which may include stock options, stock
         appreciation rights, restricted stock, deferred stock, stock granted as
         a bonus or in lieu of other awards, dividend equivalents and other
         stock based awards to directors, officers and other key employees and
         consultants of the Company. Stock options granted under the 1996 Plan
         may not include more than 505,966 incentive stock options for federal
         income tax purposes. The exercise price under an incentive stock option
         to a person owning stock representing more than 10 percent of the
         common stock must equal at least 110 percent of the fair market value
         at the date of grant. Options are exercisable beginning not less than
         one year after date of
                                     F - 16
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         grant. All options expire either five or ten years from the date of
         grant and each becomes exercisable in installments of 25 percent of the
         underlying shares for each year the option is outstanding, commencing
         on the first anniversary of the date of grant.

         At September 30, 1999, there were 443,716 shares available for grant
         under the 1996 Stock Plan. The per share weighted average fair value of
         stock options granted during 1999 and 1998 was approximately $2.70 and
         $4.95 on the date of grant using the Black-Scholes option-pricing model
         with the following assumption: 1999-expected no dividend yield
         risk-free interest rate or 6.25%, and expected lives ranging from five
         to ten years; 1998-expected no dividend yield, risk-free interest rate
         or 5.25%, and expected lives ranging from five to ten years.

         The Company has continued to comply with APB No.25 to account for stock
         options and accordingly, no compensation expense has been recognized in
         the financial statements. Had the Company determined compensation
         expense based on the fair value at the grant date for its stock options
         under SFAS No. 123, the Company's net income would have been reduced to
         the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                             1999                1998                1997
                                                             ----                ----                ----
<S>                                                       <C>                 <C>                   <C>
         Net Income
            As reported                                   $(10,398)           $  (7,836)            $(424)
            Pro forma                                      (12,581)              (8,919)             (719)

         Net Income per Common and
         Common Equivalent Share
            As reported                                       (.80)                (.67)             (.04)
            Pro forma                                         (.96)                (.76)             (.06)
</TABLE>

         The full impact of the calculation of compensation expense for stock
         options under SFAS No. 123 is not reflected in the pro forma net income
         amounts presented above because compensation expense is reflected over
         the option's vesting period which could be up to five years.

         Stock option activity during the periods indicated is as follows:

<TABLE>
<CAPTION>
                                                    Incentive Stock Options           Nonqualified Options
                                                   ---------------------------    -----------------------------
                                                                   Weighted                        Weighted
                                                                   Average                          Average
                                                                   Exercise                        Exercise
                                                      Shares        Price            Shares          Price
<S>                                                     <C>              <C>            <C>               <C>
         Balance at September 30, 1997                  709,968          8.54           247,500           6.02
                  Granted                               364,500          5.16                 -              -
                  Exercised                            (23,250)          4.38                 -              -
                  Cancellations                       (279,550)          9.72         (112,500)           7.44
                                                      ---------         -----         ---------           ----
         Balance at September 30, 1998                  771,668       $  6.57           135,000       $   4.83
                                                      ---------         -----         ---------           ----
                  Granted                               570,000          2.49                 -              -
                  Exercised                                   -             -                 -              -
                  Cancellations                        (80,575)         12.52         (135,000)           4.83
                                                      ---------         -----         ---------           ----
         Balance at September 30, 1999                1,261,093          4.34                 -              -
                                                      =========         =====         =========           ====
</TABLE>

         At September 30, 1999, the range of weighted average exercise prices
         and remaining contractual life of outstanding options was $2.0 to
         $15.00 and 2.75 to 10 years, respectively.

         At September 30, 1999 and 1998, the number of options exercisable were
         901,593 and 630,918 and the

                                     F - 17
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         weighted-average exercise price of those options was $5.30 and $6.99,
         respectively.

(12)     INCOME TAXES

         The tax effects of the temporary differences that give rise to
         significant portions of the deferred tax assets and liabilities at
         September 30, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                                                        1999             1998
                                                                                        ----             ----
<S>                                                                                <C>                 <C>
         Deferred tax assets:
              Reserve for rights-to-receive losses                                 $           694     $        394
              Lawsuit settlement                                                             1,077                -
              Travel programs and reserve for frequent flyer miles
                 obligation                                                                     37               78
              Charitable contributions                                                          58               65
              Net operating loss carryforward                                                4,577            1,610
              Consulting charges                                                                 -              234
              Intangible assets                                                                758              864
              Other                                                                            156              557
                                                                                               ---              ---

                    Gross deferred tax assets                                                7,357            3,802
                          Less valuation allowance                                          (6,005)            (972)
                                                                                            ------           ------

                    Deferred tax assets                                                      1,352            2,830
                                                                                            ------           ------

         Deferred tax liabilities:
              Unrealized gain on securities available for sale                                 134              375
              Deferred acquisition costs                                                       551              229
              Property and equipment                                                           667              467
                                                                                            ------           ------

                    Deferred tax liabilities                                                 1,352            1,071
                                                                                            ------           ------

                             Net deferred tax asset                                              -            1,759
                                                                                            ======           ======
</TABLE>

         SFAS No. 109 requires that deferred tax assets be reduced by a
         valuation allowance if it is more likely than not that some portion or
         all of the deferred tax asset will not be realized. A valuation
         allowance was recorded for the full amount of the net deferred tax
         assets as of September 30, 1999, due to the Company's recurring losses.
         The valuation allowance at September 30, 1999 and 1998 was $6,005 and
         $972, respectively. The decrease in deferred tax liability related to
         securities available for sale was ($241), and ($274) during 1999 and
         1998, respectively.

         A net operating loss carryforward of $12,044 was available at the year
         ended September 30, 1999. The loss will expire in 2019.

                                     F - 18
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         Income tax provision (benefit) for the years ended September 30, 1999,
1998 and 1997 is as follows:

<TABLE>
<CAPTION>
                                                                Current          Deferred            Total
                                                                -------          --------            -----
<S>                                                       <C>                        <C>                <C>
                1999:
                     U.S. federal                         $              -           1,240              1,240
                     State and local                                     -             760                760
                                                                     -----          ------            -------

                                                          $              -           2,000              2,000
                                                                     =====          ======            =======

                1998:
                     U.S. federal                         $           (587)         (1,774)            (2,361)
                     State and local                                   (33)           (206)              (239)
                                                                     ------         -------           --------

                                                          $           (620)         (1,980)            (2,600)
                                                                     ======         =======           ========

                1997:
                     U.S. federal                         $             (4)           (206)              (210)
                     State and local                                     -             (50)               (50)
                                                                     -----          -------           --------

                                                          $             (4)           (256)              (260)
                                                                     ======         =======           ========
</TABLE>

         Reconciliation of the statutory federal income tax rate and the
         Company's effective rate for the years ended September 30, 1999, 1998
         and 1997, is as follows:

<TABLE>
<CAPTION>
                                               1999                         1998                        1997
                                     ---------------------------  --------------------------  ---------------------------
                                                      $ of                        % of                         % of
                                                     pretax                      pretax                       pretax
                                        Amount      earnings         Amount     earnings          Amount     earnings
                                        ------      --------         ------     --------          ------     --------
<S>                               <C>                 <C>        <C>               <C>        <C>               <C>
        Federal tax rate          $       (2,855)     34.0       $     (3,548)     34.0       $       (232)     34.0
        State and local taxes,
             net of federal
             income tax benefit             (336)      4.0               (417)      4.0                (33)      4.8
        Valuation allowance
             change                        5,033     (59.9)               972      (9.3)                 -       -
        Other                                158      (1.9)               393      (3.8)                 5      (0.8)
                                         -------      -----            ------      -----             -----      -----

                                  $        2,000     (23.8)%     $     (2,600)     24.9%      $       (260)     38.0%
                                         =======     =======           =======     =====              =====     =====
</TABLE>

 (13)    FRANCHISE AGREEMENTS

         The Company, as franchiser, had previously entered into various
         ten-year franchising agreements to assist in its national expansion
         through the years 1990 to 1995. In accordance with these agreements,
         franchisees were granted a territory with a defined minimum of
         full-service restaurants that accept certain major credit cards. The
         Company provides marketing, advertising, training and other
         administrative support.The franchisees are responsible for soliciting
         restaurants and cardholders, advancing consideration to the restaurants
         to obtain rights-to-receive food and beverage credits, and maintaining
         adequate insurance.
                                     F - 19
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         In consideration for granting the franchises, the franchisees paid the
         Company initial franchise fees and an initial fee to the Company's
         advertising and development fund. Continuing fees paid by the
         franchisees are as follows:

               o  7.5 percent of the total food and beverage credits used within
                  the franchisee's territory.

               o  2.5 percent of the total credits used within the franchisee's
                  territory to be deposited into the advertising and
                  development fund.

               o  A processing fee of twenty cents per sale transaction.

               o  A weekly service charge of twenty-three cents per
                  participating restaurant in the franchisee's territory.

         The Company ceased francising in 1995, and in 1997, the Board
         authorized a systematic reacquisition of the franchise territories. In
         1997, the Company reacquired for cash the right to operate its business
         in California, Oregon, Washington and a portion of Nevada, Western's
         rights-to-receive and its furniture, fixtures and equipment, as well as
         the assumption of certain obligations. The transaction closed on
         January 2, 1997. The purchase price was approximately $7,454 of which
         $5,017 represented the cost of the franchise, which has been recorded
         as the excess of cost over net assets acquired. The Company had
         previously received 60,000 shares of publicly traded common stock in
         connection with the initial sale of this franchise, representing 2.3
         percent of the franchisee's common stock. The shares are included in
         securities available for sale. In addition, a director of the Company
         owns 6.5 percent of the franchisee's common stock.

         In fiscal 1998, the Company determined that lagging performance in the
         reacquired West Coast sales territories indicated that the undiscounted
         cash flows from this former franchise would be less than the carrying
         value of the long-lived assets related to the franchise. Accordingly,
         the Company recognized an asset impairment loss of $2,169 ($.18 per
         share) for the difference between the carrying value of the related
         excess of cost over net assets acquired and the fair value of the asset
         based on discounted estimated future cash flows.

         On December 4, 1997, the Company acquired all the rights-to-receive of
         East America Trading Company, its franchisee in the Carolinas and
         Georgia, and terminated and canceled the franchise agreement in
         exchange for 170,000 shares of Transmedia Network stock. On July 15,
         1998, and February 10, 1999, respectively the Company acquired all the
         rights-to-receive, and the right to conduct business, in the
         Dallas/Fort Worth and Houston sales territories from its franchisee,
         the Texas Restaurant Card, Inc (TRC). The aggregate purchase price was
         approximately $2,406 of which $1,653 represented the cost of the
         franchise, which has been recorded as the excess of cost over net
         assets acquired. The Company assumed operational control of these
         reacquired territories. (See Note 21)

(14)     LICENSE AGREEMENTS

         The Company has an agreement for exclusive perpetual licenses of its
         software and trademark in the Asia-Pacific region and the continent of
         Europe. In accordance with the agreements, the Company agreed to assist
         the licensees with training relating to sales, administration,
         technology and operations of the business. All material services or
         conditions relating to the license sales have been substantially
         performed or satisfied by the Company. The licensee may grant
         sublicenses in the territories and is responsible for the operations of
         the business in the respective regions, including procuring member
         restaurants and providing related services and activities throughout
         the territory.
                                     F - 20
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         In consideration for granting the exclusive licenses, the licensee paid
         the Company license fees aggregating $2,375 for the master license
         agreements and has granted to the Company a five percent equity
         interest in the new entities which will operate in the United Kingdom,
         Australia and New Zealand. The shares comprising the equity interests
         are included in securities available for sale. The principal continuing
         fees to be paid by the licensee are royalties of two percent of gross
         sales of the Australia and New Zealand sublicensee and the United
         Kingdom sublicensee, and 25 percent of any other amounts that the
         licensee receives from the sublicensee.

         In December 1996, the Company amended its agreements with its
         international licensees, Transmedia Europe, Inc. and Transmedia
         Asia-Pacific, Inc. permitting them to acquire, on a worldwide basis,
         the business of Countdown, plc Holding Corp. ("Countdown"). Upon
         closing of the Countdown acquisition, the Company received $250 in cash
         and a $500 note bearing interest at 10%, which was payable on April 1,
         1998.

         The Company continues to negotiate with its licensee to reacquire the
         licenses for Transmedia Europe and Asia-Pacific, Inc. To date, the
         Company has not received payment on either the aforementioned note
         receivable or certain outstanding royalty obligations. Both the note
         and accrued interest has been reserved. In fiscal 1999, the Company
         realized gains of $1,149 in connection with the sale of the licensee
         securities.

(15)     LEASES

         The Company leases certain equipment and office space under long-term
         lease agreements.

         Future minimum lease payments under noncancelable operating leases as
         of September 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                            Year ending
                                           September 30,                                    Amount
                                           -------------                                    ------
                                                <S>                                     <C>
                                                2000                                    $          831
                                                2001                                               633
                                                2002                                               201
                                                2003                                               113
                                                2004                                                29
                                             Thereafter                                              -
                                                                                                 -----
                                    Total minimum lease payments                       $         1,807
                                                                                                 =====
</TABLE>

         Rent expense charged to operations was $794, $710, and $625 for the
         years ended September 30, 1999, 1998 and 1997, respectively.

(16)     RELATED PARTY TRANSACTIONS

         On June 30, 1999, the Company entered into a short term loan with GAMI,
         an affiliate of Samstock, its largest stockholder, to provide interim
         debt financing in a total aggregate amount of $10,000 (See Note 4).
         During the year ended September 30, 1999, the Company paid interest
         relating to the GAMI loan of $310.

                                     F - 21
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         The Company has a management agreement with EGI, an affiliate of
         Samstock, its largest stockholder, in which EGI provides investment
         advisory and other managerial services to the Company. During the year
         ended September 30, 1999, the Company paid approximately $250 to EGI
         for these services.

(17)     COMMITMENTS

         On July 14, 1995, the Company entered into an unconditional guaranty
         agreement with a financial institution, to extend credit in the amount
         of $450 to a franchisee, which agreement is still outstanding at
         September 30, 1999.

         The Company has amended its employment agreement with the president of
         its wholly-owned subsidiary, Transmedia Restaurant Company. The
         agreement provides for salary at an annual rate of $335 through
         September 30, 2001, plus eligibility for a bonus up to 50% of his
         salary.

         The Company has an ongoing Service Collaboration Agreement with
         SignatureCard as a result of the DALC acquisition. In exchange for
         providing the Company with members, either through their own marketing
         efforts or their agreement with the airlines, SignatureCard is entitled
         to receive a profit participation, if applicable, based on dining sales
         generated by those members, as well as a percentage of the fees
         received from those members. For the three-month period, from
         acquisition to September 30, 1999, SignatureCard received approximately
         $106 in fees. There was no profit participation due at that date.

(18)     YEAR 2000 COMPUTER COMPLIANCE

         In 1998, the Company initiated a plan ("Plan") to identify, assess, and
         remediate "Year 2000" issues within each of its computer programs and
         certain equipment which contain micro-processors. The Plan addressed
         the issue of computer programs and embedded computer chips being unable
         to distinguish between the year 1900 and 2000, if a program or chip
         uses only two digits rather than four to define the applicable year.
         The Company divided the Plan into six major phases: assessment,
         planning, validation, conversion, implementation and testing. After
         completing the assessment and planning phase in late last 1998, the
         Company hired an independent consulting firm to validate the Plan. All
         software development and installation is currently believed to be in
         compliance. The Company worked with an outside vendor on the
         conversion, implementation and testing phases. Systems that were
         determined not to be Year 2000 compliant have been either replaced or
         reprogrammed, and thereafter tested for Year 2000 compliance. The
         Company believes that at September 30, 1999 the conversion,
         implementation and testing phases have been materially completed. The
         original budget for the total cost of remediation (including
         replacement software and hardware) and testing, as set forth in the
         Plan, was $500. The Company's aggregate spending on the Year 2000
         remediation at September 30, 1999, which has been expensed, was $641.

         The Company has identified and contacted critical suppliers and
         customers whose computerized systems interface with the Company's
         systems, regarding their plans and progress in addressing their Year
         2000 issues. The Company has received varying information from such
         third parties on the state of compliance or expected compliance.
         Contingency plans are being developed in the event that any critical
         supplier or customer is not compliant.

         The failure to correct a material Year 2000 problem could result in an
         interruption in, or a failure of, certain normal business activities or
         operations. Such failures could materially and adversely affect the
         Company's operations, liquidity and financial condition. Due to the
         general uncertainty inherent in the Year 2000 problem, resulting in
         part from the uncertainty of the Year 2000 readiness of third-party

                                     F - 22
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         suppliers and customers, the Company is unable to determine at this
         time whether the consequences of Year 2000 failures will have a
         material impact on the Company's operations, liquidity or financial
         conditions.

(19)     BUSINESS AND CREDIT CONCENTRATIONS

         Most of the Company's customers are located in the New York City,
         California, Massachusetts and Florida areas. No single customer
         accounted for more than 5 percent of the Company's sales in any fiscal
         year presented.

         No single restaurant's rights-to-receive balance was greater than 5
         percent of the total rights-to-receive balance at September 30, 1999 or
         1998.

         Airline membership represents approximately 61% of the total registered
         card members and approximately 38% of the Company's total membership.

 (20)    LITIGATION

         In December 1996, the Company terminated its license agreement with
         Sports & Leisure Inc. ("S&L"). In February 1997, S&L commenced an
         action against the Company in the 11th Judicial Circuit, Dade County,
         Florida, alleging that the Company improperly terminated the S&L
         license agreement and seeking money damages. In the quarter ended
         December 31, 1998, a reserve of $1,000 was established and recorded in
         selling, general and administrative expenses to cover management's
         estimate of the potential cost and expenses of this litigation and
         other legal matters.

         On November 19, 1999, the Company, in an effort to avoid prolonged
         litigation, settled the outstanding lawsuit with its former licensee.
         Under the terms of the settlement S & L, Inc. will receive $2.1 million
         in cash and 280,000 shares of common stock for a total of approximately
         $2,835 or 22 cents per share. The impact of the settlement based on the
         fair value of the common stock and net of the $1,000 reserve amount
         previously provided by the Company in the first quarter of fiscal 1999,
         is approximately $1.835 million and has been recognized in the fourth
         quarter ended September 30, 1999.

(21)     SUBSEQUENT EVENTS

         On November 9, 1999, the Company completed its Rights Offering to
         existing stockholders resulting in the issuance of 4,149,378
         convertible, redeemable preferred shares. The preferred shares have a
         dividend rate of 12%, of which 6% is payable in cash, quarterly in
         arrears, and the remaining 6% accrues unless otherwise paid currently
         at the Company's discretion, until conversion by the holder. Each
         preferred share may be converted into common stock at the option of the
         holder at any time. The initial rate of conversion is one to one.
         Subsequent conversion rates could be higher to the extent of accrued
         but unpaid dividends. If not previously converted, the Company may
         commence redemption of the preferred shares on the fifth anniversary of
         the rights offering.

         The proceeds from the stock issuance of $10,000 were used to retire the
         $10,000 bridge loan obtained from GAMI Investment. Pursuant to its
         subscription privileges and as a Standby Purchaser for any unsubscribed
         shares, EGI acquired 2.84 million of the preferred shares. The
         additional investment provides EGI with the right to designate an
         additional member to the Board of Directors. The size of the Board will
         increase by one if EGI chooses to exercise that right.

         On December 16, 1999, the Company acquired all the Rights-to-Receive,
         and the right to conduct business of the San Antonio and Austin sales
         territory from its franchisee, the Texas Restaurant Card,

                                     F - 23
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


         Inc. The purchase price was $950 of which $788 represents the cost of
         the franchise which has been recorded as the excess of cost over net
         assets acquired. With the acquisition of these sales territories, the
         Company has reacquired all of the sales territories of the Texas
         Restaurant Card, Inc., and the right to conduct business in Texas and
         has settled any and all obligations under the franchise agreement, as
         amended.

(22)     SELECTED QUARTERLY FINANCIAL DATA

(a)      Selected quarterly financial data is as follows:

<TABLE>
<CAPTION>
                                                   Three months ended                        Year ended
                                ---------------------------------------------------------  ---------------
                                September 30,    June 30,     March 31,    December 31,    September 30,
                                    1999           1999          1999          1998             1999
                                    ----           ----          ----          ----             ----
<S>                                    <C>            <C>           <C>           <C>             <C>
    Gross dining sales:                49,618         23,893        24,205        22,756          120,472

    Operating revenue:                 12,584          7,679         7,599         6,926           34,788

    Operating income (loss):           (1,498)        (1,410)       (1,307)       (1,779)          (5,994)

    Net income:                        (5,109)        (2,065)       (1,871)       (1,353)         (10,398)

    Basic earnings per share             (.39)          (.16)         (.14)         (.11)            (.80)
    Diluted earnings per                 (.38)          (.16)         (.14)         (.11)            (.79)
         share:
</TABLE>

<TABLE>
<CAPTION>
                                                  Three months ended
                                                                                             Year ended      Year ended
                                September 30,    June 30,      March 31,    December 31,   September 30,   September 30,
                                    1998           1998          1998           1997            1998            1997
                                    ----           ----          ----           ----            ----            ----
<S>                           <C>                     <C>           <C>            <C>             <C>            <C>
    Gross dining sales:       $        24,091         23,661        24,761         23,036          95,549         101,301

    Operating revenue:                  7,244          7,556         7,664          7,677          30,141          30,944

    Operating income:                  (4,263)          (245)         (165)        (2,792)         (7,465)            698

    Net Income:                        (4,739)          (502)         (490)        (2,105)         (7,836)           (424)

    Basic and diluted
         earnings per share:             (.37)          (.04)         (.04)          (.21)           (.67)           (.04)
</TABLE>
                                     F - 24
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


(B) UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS

On June 30, 1999 the Company acquired most of the assets and operations related
to a membership discount dining program SignatureCard operated under the Dining
A La Card trade name and service mark. Accordingly, the Company's Consolidated
Statements of Operations for the year ended September 30, 1998 reflects the
operations of Transmedia only. Unaudited Pro forma Consolidated Statements of
Operations have been provided herein to report the results of operations for the
years ended September 30, 1998 and for comparative purposes, the nine-month
period ending September 30, 1999 as though the companies had combined at the
beginning of the periods being reported. The pro forma consolidated results do
not purport to be indicative of results that would have occurred had the
acquisition been in effect for the periods presented, nor do they purport to be
indicative of the results that will be obtained in the future.

                                      F-25
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                    TRANSMEDIA NETWORK INC. AND SUBSIDIARIES
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
                     FOR THE YEAR ENDED SEPTEMBER 30, 1998
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                      HISTORICALS
                                                    ----------------       PRO FORMA      PRO FORMA
                                                    TMN      DALC(A)      ADJUSTMENTS      COMBINED
                                                    ---      -------      -----------      --------
<S>                                                <C>        <C>              <C>           <C>
Operating revenue:
   Gross dining sales                              95,549     120,512              -         216,061

   Cost of sales                                   54,446      98,964 (B)     (8,000)        145,410
   Cardmember discounts                            21,444      24,262                         45,706
                                                  -------     -------        -------         -------

   Net revenues from rights-to-receive             19,659      (2,714)         8,000  (I)     24,945

Other income                                       10,482      10,629         (7,100) (C)     14,001
                                                  -------     -------        -------         -------

      Total operating revenue                      30,141       7,915            890          38,946
                                                  -------     -------        -------         -------

Operating expenses:
   Selling, general & administrative expenses      26,796      22,281        (10,873) (H)     38,204
   Cardmember acquisition and promotion             5,097      32,927        (21,069) (D)     16,955
   Amended compensation agreements                  3,544           -                          3,544
   Assets impairment loss                           2,169           -                          2,169
                                                  -------     -------        -------         -------

      Total operating expenses                     37,606      55,208        (31,942)         60,872

         Operating income (loss)                   (7,465)    (47,293)        32,832         (21,926)

Other income (expenses)                            (2,971)          -         (3,617) (E)     (6,588)
                                                  -------     -------        -------         -------

         Income (loss) before taxes               (10,436)    (47,293)        29,215         (28,514)

Income tax provision (benefit)                     (2,600)     (7,806)                (F)    (10,835)
Income tax valuation allowance                                                        (F)     10,835

         Loss before equity loss and accounting
         change                                    (7,836)    (39,487)        29,215         (28,514)

   Equity in loss of Cardplus Japan                     -        (220)           220  (G)          -
   Cumulative effect of accounting change               -      (2,105)         2,105  (J)          -
                                                  -------     -------        -------         -------

         Net income (loss)                         (7,836)    (41,812)        31,540         (28,514)
                                                  =======     =======        =======         =======

Operating income (loss) per common and common
   equivalent share:
      Basic and Diluted                             (0.63)          -                          (1.80)
                                                  =======     =======        =======         =======

Net income (loss) per common and common
   equivalent share:
      Basic and Diluted                             (0.67)          -                          (2.33)
                                                  =======     =======        =======         =======

Weighted average number of common and common
   equivalent shares outstanding:
      Basic                                        11,773                        400          12,173
                                                  =======     =======        =======         =======

      Diluted                                      11,825                        400          12,225
                                                  =======     =======        =======         =======
</TABLE>

See notes to unaudited pro forma financial information

                                     F - 26

<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                    TRANSMEDIA NETWORK INC. AND SUBSIDIARIES
            UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
               FOR THE NINE MONTH PERIOD ENDING SEPTEMBER 30, 1999
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                      HISTORICALS
                                                    ----------------       PRO FORMA      PRO FORMA
                                                    TMN      DALC(K)      ADJUSTMENTS      COMBINED
                                                    ---      -------      -----------      --------
<S>                                                <C>        <C>              <C>           <C>
Operating revenue:
   Gross dining sales                              97,716      61,384              -         159,100

   Cost of sales                                   57,051      39,099 (L)                     96,150
   Cardmember discounts                            21,284      13,195                         34,479
                                                  -------     -------        -------         -------

   Net revenues from rights-to-receive             19,381       9,090              -          28,471

Other income                                        8,481       4,378         (2,933) (M)      9,926
                                                  -------     -------        -------         -------

      Total operating revenue                      27,862      13,468         (2,933)         38,397
                                                  -------     -------        -------         -------

Operating expenses:
   Selling, general & administrative expenses      26,811      10,008         (5,437) (R)     31,382
   Cardmember acquisition and promotion             5,266       8,890         (2,690) (N)     11,466
                                                  -------     -------        -------         -------

      Total operating expenses                     32,077      18,898         (8,127)         42,848

         Operating income (loss)                   (4,215)     (5,430)          5,193         (4,452)

Other income (expenses)                            (2,830)          -         (1,888) (O)     (4,718)
                                                  -------     -------        -------         -------

         Income (loss) before taxes                (7,045)     (5,430)         3,305          (9,170)

Income tax provision (benefit)                                                (3,484) (P)     (3,484)
Income tax valuation allowance                      2,000                      3,484  (P)       5,484

         Loss before equity loss and gain on sale
         of dining assets                          (9,045)     (5,430)          3,305        (11,169)

   Gain on sale of dining assets                                2,089         (2,089) (S)          -
   Equity in loss of Cardplus Japan                              (212)           212  (Q)          -
                                                  -------     -------        -------         -------

         Net income (loss)                         (9,045)     (3,553)         1,428         (11,169)
                                                  =======     =======        =======         =======

Operating loss per common and common
   equivalent share:
      Basic and Diluted                             (0.32)          -                          (0.34)
                                                  =======     =======        =======         =======

Net loss per common and common
   equivalent share:
      Basic and Diluted                             (0.69)          -                          (0.85)
                                                  =======     =======        =======         =======

Weighted average number of common and common
   equivalent shares outstanding:
      Basic                                        13,043                                     13,043
                                                  =======     =======        =======         =======

      Diluted                                      13,157                                     13,157
                                                  =======     =======        =======         =======
</TABLE>

See notes to unaudited pro forma financial information

                                     F - 27
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

1.       SIGNIFICANT ACCOUNTING POLICIES

There are currently no material differences in the significant accounting
policies of Transmedia Network, Inc. and Dining A La Card ("the Companies")
therefore, no consideration has been given to conforming the Companies'
significant accounting policies in this pro forma presentation. The Companies do
not expect to have material changes to current accounting policies in connection
with the transaction.

2.       RECLASSIFICATIONS

Certain reclassifications have been made to the historical statement of
operations of Dining A La Card to conform to the presentation used by Transmedia
Network Inc. These reclassification relates to the presentation of rights to
receive losses and cost of sales.

3.       UNAUDITED PRO FORMA STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE TWELVE
         MONTHS ENDING SEPTEMBER 30, 1998

(A)  Dining A La Card statement of operations is for the twelve-month period
     ending December 31, 1998 while Transmedia's statement of operations is for
     the twelve-month period ending September 30, 1998.

(B)  Dining A La Card rights-to-receive losses of $25,962 have been reclassified
     to cost of sales to conform with Transmedia's presentation.

(C)  In accordance with the Marketing Collaboration Agreement between Transmedia
     and Signature, SignatureCard will receive 67% of all membership dues
     collected from Dining A La Card members.

(D)  To remove marketing amortization, since under the Marketing Collaboration
     Agreement, SignatureCard will provide Dining A La Card members to
     Transmedia at no cost.

(E)  To record the amortization of deferred financing cost of $567 over the
     estimated six-month life of the GAMI loan, plus record interest expense on
     the outstanding debt.

(F)  To adjust the income tax benefit using Transmedia's statutory rate for 1998
     of 38%, and record an income tax valuation allowance required by SFAS No.
     109.

(G)  To eliminate Dining A La Card's equity loss in CardPlus Japan since
     Transmedia did not purchase those assets.

(H)  To remove Dining A La Card's internal interest expense included in general
     and administrative and a portion of the general and administrative expenses
     allocated from Signature, which was eliminated as part of the acquisition.

(I)  To remove one time write-down of Dining A La Card's RTR portfolio of
     approximately $8,000 and bring to fair value.

(J)      Remove cumulative effect of accounting change

4.       UNAUDITED PRO FORMA STATEMENT OF OPERATIONS ADJUSTMENTS FOR THE NINE
         MONTHS ENDING SEPTEMBER 30, 1999

(K)  Dining A La Card interim statement of operations is for the six-month
     period ending June 30, 1999. A statement of operations for the nine-month
     period ending June 30, 1999 for Dining A La Card is not available and
     therefore not presented. Dining A La Card operations from June 30, 1999 to
     September 30, 1999 are included in Transmedia's operations. For
     comparability purposes, Transmedia derived its statement of operations for
     the nine-month period ending September 30, 1999 by removing the operations
     for the three months ending December 31, 1998 from the operation for the
     twelve-months ending
                                     F - 28
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


     September 30, 1999. For the period excluded, Transmedia's reported gross
     dining sales of $22,756 and a net loss of $1,353, which were reported in
     the 10-Q for that period and are incorporated herein by reference.

(L)  Dining A La Card rights-to-receive losses of $2,749 have been reclassified
     to cost of sales to conform with Transmedia's presentation.

(M)  In accordance with the Marketing Collaboration Agreement between Transmedia
     and SignatureCard, SignatureCard will receive 67% of all membership dues
     collected from Dining A La Card members.

(N)  To remove marketing amortization, since under the Marketing Collaboration
     Agreement, SignatureCard will provide Dining A La Card members to
     Transmedia at no cost.

(O)  To record the amortization of deferred financing cost of $567 over the
     estimated six month life of the GAMI loan, plus record interest expense on
     the outstanding debt.

(P)  To adjust the income tax benefit using Transmedia's statutory rate for 1999
     of 38%, and record an income tax valuation allowance required by SFAS No.
     109.

(Q)  To eliminate Dining A La Card's equity loss in Cardplus Japan since
     Transmedia did not purchase those assets.

(R)  To remove Dining A La Card's internal interest expense included in general
     and administrative and a portion of the general and administrative expenses
     allocated from SignatureCard, which were eliminated as part of the
     acquisition.

(S) To remove gain on sale of dining assets which resulted from Transmedia's
    purchase of Dining A La Card.

                                      F-29
<PAGE>

                            TRANSMEDIA NETWORK, INC.

                  SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS

        For each of the years in the three-years ended September 30, 1999
                                 (in thousands)

<TABLE>
<CAPTION>
                                                     Balance,       Charged                                    Balance,
                                                    beginning          to                       Acquisition     end of
                                                     of year        expenses      Write-offs      Of DALC        year
                                                     -------        --------      ----------      -------        ----
<S>                                                      <C>               <C>             <C>          <C>           <C>
Accounts receivable:
     Year ended September 30, 1999:
        Allowance for doubtful
          accounts                                       $    15            514            (514)          -           15
                                                            ====            ===            =====  =========           ==

     Year ended September 30, 1998:
        Allowance for doubtful
          accounts                                       $    15            497            (497)          -           15
                                                            ====         ======          =======  =========         ====

     Year ended September 30, 1997:
        Allowance for doubtful
          accounts                                       $    15            501            (501)          -           15
                                                            ====         ======          =======  =========         ====

Rights to receive:
     Year ended September 30, 1999:
        Allowance for doubtful
          accounts                                      $  1,037          4,088          (2,772)     12,519       14,872
                                                           =====          =====          =======     ======       ======

     Year ended September 30, 1998:
        Allowance for doubtful
          accounts                                     $     765          3,822          (3,550)          -        1,037
                                                             ===          =====          ======  ==========      =======

     Year ended September 30, 1997:
        Allowance for doubtful
          accounts                                     $     320          3,209          (2,764)          -          765
                                                             ===          =====          ======  ==========     ========
</TABLE>

                                     F - 30
<PAGE>

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

         None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Information called for by Item 10 is set forth under the heading
         "Executive Officers of the Registrant" in Part I hereof and in
         "Election of Directors" in the Company's 1999 Proxy Statement, which is
         incorporated herein by this reference.

ITEM 11. EXECUTIVE COMPENSATION

         Information called for by Item 11 is set forth under the heading
         "Executive Compensation" in the Company's 1999 Proxy Statement, which
         is incorporated herein by this reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information called for by Item 12 is set forth under the heading
         "Security Ownership of Certain Beneficial Owners and Management" in the
         Company's 1999 Proxy Statement, which is incorporated herein by this
         reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information called for by Item 13 is set forth under the heading
         "Certain Relationships and Related Transactions" in the Company's 1999
         Proxy Statement, which is incorporated herein by this reference.

PART IV

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

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

         (a)(1)   Financial Statements:
                    Transmedia Network Inc.
                    See "Index to Financial Statements" contained in Part II,
                    Item 8.

         (a)(2)   Financial Statement Schedules

         Schedule II - Valuation and Qualifying Accounts

         (a)(3)   Exhibits

DESIGNATION                         DESCRIPTION
-----------                         -----------
1.1      Form of Standby Purchase Agreement between Transmedia Network Inc. and
           Samstock, L.L.C. (k)

3.1      Certificate of Incorporation of Transmedia Network Inc., as amended.
           (b)

                                       25

<PAGE>

3.2      Certificate of Amendment to the Certificate of Incorporation of
           Transmedia Network Inc. (e)

3.3      Certificate of Amendment to the Certificate of Incorporation of
           Transmedia Network Inc., as filed with the Delaware Secretary of
           State on March 22,1994.(a)

3.4      Form of Amendment to the Certificate of Incorporation of Transmedia
           Network Inc. (k)

3.5      Form of Certificate of Designations, Preferences and Rights of Series A
           Senior Convertible Redeemable Preferred Stock. (k)

3.6      By-Laws of Transmedia Network Inc. (c)

4.1      Form of Series A Preferred Stock certificate (k)

4.2      Form of Rights Agreement between Transmedia Network Inc. and American
           Stock Transfer & Trust Company, as subscription agent. (k)

4.3      Second Amended and Restated Investment Agreement dated as of June 30,
           1999 among Transmedia Network Inc., Samstock, L.L.C., EGI-Transmedia
           Investors, L.L.C., and, with respect to Section 5 of the Agreement
           only, Robert M. Steiner, as trustee under declaration of trust dated
           March 9, 1983, as amended, establishing the Robert M. Steiner
           Revocable Trust.(k)

10.1     Asset Purchase Agreement, dated as ofMarch 17, 1999, between
           Transmedia Network Inc. and SignatureCard, Inc., as amended by
           Amendment No. 1 thereto dated as of April 15, 1999 and Amendment No.
           2 thereto dated as of May 31, 1999.(j)

10.2     Option Agreement, dated as of June 30, 1999, between Transmedia Network
           Inc. and SignatureCard, Inc. (j)

10.3     Services Collaboration Agreement, dated as of June 30, 1999, between
           Transmedia Network Inc. and SignatureCard, Inc.(j)

10.4     Credit Agreement, dated as of June 30, 1999, between Transmedia Network
           Inc. and The Chase Manhattan Bank.(j)

10.5     Security Agreement, dated as of June 30, 1999, between Transmedia
           Network Inc. and The Chase Manhattan Bank. (j)

10.6     Pledge Agreement, dated as of June 30, 1999, between Transmedia Network
           Inc. and The Chase Manhattan Bank. (j)

10.7     Credit Agreement, dated as of June 30, 1999, between GAMI Investments,
           Inc., Transmedia Network Inc., Transmedia Restaurant Company Inc.,
           Transmedia Service Company Inc. and TMNI International Incorporated.
              (j)

                                       26
<PAGE>

10.8     1987 Stock Option and Rights Plan, as amended. (a)

10.9     Form of Stock Option Agreement (as modified) between Transmedia Network
           Inc. and certain Directors.(g)

10.10    Amended and Restated Employment Agreement dated as of November 15, 1996
           between Transmedia Network Inc. and Melvin Chasen.(f)

10.11    Amended and Restated Consulting Agreement dated as of November 15, 1996
           between Transmedia Network Inc. and Melvin Chasen.(f)

10.12    Second Restated and Amended Employment Agreement dated as of October 1,
           1998 between Transmedia Network Inc. and James Callaghan. (k)

10.13    Master License Agreement dated December 14, 1992 between Transmedia
           Network Inc. and Conestoga Partners, Inc.(d)

10.14    First Amendment to Master License Agreement dated April 12, 1993,
           between Transmedia Network Inc. and Conestoga Partners, Inc. (e)

10.15    Second Amendment to Master License Agreement -- Assignment and
           Assumption Agreement dated August 11, 1993 among Transmedia Network
           Inc., TMNI International Incorporated and Transmedia Europe, Inc.(e)

10.16    Master License Agreement Amendment No. 3 dated November 22, 1993
           between TMNI International Incorporated and Transmedia Europe,
           Inc.(e)

10.17    Master License Agreement dated March 21, 1994 between TMNI
           International Incorporated and Conestoga Partners II, Inc. licensing
           rights in the Asia Pacific region. (a)

10.18    Agreement, dated as of December 6, 1996, among Transmedia Network Inc.,
           TMNI International Incorporated, Transmedia Europe Inc. and
           Transmedia Asia Pacific Inc.(f)

10.19    Stock Purchase and Sale Agreement, dated as of November 6, 1997, among
           Transmedia Network Inc., Samstock, L.L.C., and Transmedia Investors,
           L.L.C. (h)

10.20    Form of Warrant to purchase Common Stock.(i)

10.21    Amended and Restated Agreement Among Stockholders Agreement, dated as
           of March 3, 1998, among Transmedia Network Inc., Samstock, L.L.C.,
           EGI-Transmedia Investors, L.L.C., Melvin Chasen, Iris Chasen and
           Halmstock Limited Partnership. (i)

10.22    Stockholders Agreement, dated as of March 3, 1998, among Transmedia
           Network Inc., EGI-Transmedia Investors, L.L.C., Samstock, L.L.C. and
           Melvin Chasen and Halmstock Limited Partnership. (i)

                                       27
<PAGE>

10.23    Security Agreement dated as of December 1, 1996 among TNI Funding
           Company I, L.L.C. as Issuer, The Chase Manhattan Bank as Trustee and
           as Collateral Agent, TNI Funding I, Inc., as Seller and Transmedia
           Network Inc., as Servicer. (g)

10.24    Purchase Agreement dated as of December 1, 1996 among Transmedia
           Network Inc., Transmedia Restaurant Company Inc., Transmedia Service
           Company Inc. and TNI Funding I, Inc., as Purchaser.(g)

10.25    Purchase and Servicing Agreement dated as of December 1, 1996 among TNI
           Funding Company I, L.L.C., as Issuer, TNI Funding I, Inc. as Seller,
           Transmedia Network Inc., as Servicer, Frank Felix Associates, Ltd.,
           as Back-up Servicer and The Chase Manhattan Bank, as Trustee.(g)

10.26    Indenture dated as of December 1, 1996 between TNI Funding Company I,
           L.L.C., as Issuer and The Chase Manhattan Bank, as Trustee.(g)

10.27    Letter of Agreement dated January 29, 1997 between Transmedia Network
           Inc. and Stephen E. Lerch. (g)

10.28    Transmedia Network Inc. 1996 Long-Term Incentive Plan (including
           Amendments through August 5, 1998).(b)

10.29    Employment Agreement dated as of January 5, 1999 between Transmedia
           Network Inc. and Christine Donohoo.(k)

10.30    Employment Agreement dated as ofOctober 14, 1998 between Transmedia
           Network Inc. and Gene M. Henderson.(k)

12.1     Statement regarding calculation of earnings to fixed charges. (k)

21.1     Subsidiaries of Transmedia Network Inc.(a)

23.2     Consent of KPMG LLP. (l)

23.3     Consent of Arthur Andersen LLP. (l)

24.1     Power of Attorney (included in the signature page hereto). (l)

27.1     Financial datat schedule

Legend:

           (a)    Filed as an exhibit to Transmedia's Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1994 and incorporated
                  by reference.

           (b)    Filed as an exhibit to Transmedia's Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1998, and incorporated
                  by reference thereto.

           (c)    Filed as an exhibit to the Post Effective Amendment to the
                  Registration Statement on Form S-1 (Registration No. 33-5036),
                  and incorporated by reference thereto.

                                       28
<PAGE>

           (d)    Filed as an exhibit to Transmedia's Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1992, and incorporated
                  by reference thereto.

           (e)    Filed as an exhibit to Transmedia's Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1993, and incorporated
                  by reference thereto.

           (f)    Filed as an exhibit to Transmedia's Annual Report on Form 10-K
                  for the fiscal year ended September 30, 1996, and incorporated
                  by reference thereto.

           (g)    Filed as an exhibit to Transmedia's Annual Report on Form
                  10-K/A for the fiscal year ended September 30, 1997, and
                  incorporated by reference thereto.

           (h)    Filed as an exhibit to Transmedia's Current Report on Form 8-K
                  dated as of November 6, 1997, and incorporated by reference
                  thereto.

           (i)    Filed as an exhibit to Transmedia's Current Report on Form 8-K
                  filed on March 3, 1998.

           (j)    Filed as an exhibit to Transmedia's Current Report on Form 8-K
                  filed on July 14, 1999, and incorporated by reference thereto.

           (k)    Filed as an exhibit to Transmedia's Registration Statement in
                  Form S-2 (registration no. 333-84947), and incorporated by
                  reference thereto.

         (i)      The Company did not file any Form 8-K Current Reports during
                  the fourth quarter of the fiscal year ended September 30,
                  1999.

         (ii)     Exhibits:

                  See paragraph (a) (3) above for items filed as exhibits to
                  this Annual Report on Form 10-K as required by Item 601 of
                  Regulation S-K.

         (iii)    Financial Statement Schedules:

                  See paragraphs (a)(1) and (a)(2) above for financial statement
                  schedules and supplemental financial statements filed as part
                  of this Annual Report on Form 10-K.

                                       29
<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 Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 5th day of
January, 2000.

                                        TRANSMEDIA NETWORK INC.

                                        By: /s/STEPHEN E. LERCH
                                            ------------------------------------
                                            Name:  Stephen E. Lerch
                                            Title: Executive Vice President and
                                                   Chief Financial Officer

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

                                     CAPACITY IN
     SIGNATURE                       WHICH SIGNED                    DATE
     ---------                       ------------                    ----

/s/ F. Philip Handy         Chairman of the Board,             January 4, 2000
-------------------------
F. Philip Handy

/s/ Gene M. Henderson       Director                           January 4, 2000
-------------------------   President and
Gene M. Henderson           Chief Executive Officer

/s/ Rod Dammeyer            Director                           January 4, 2000
-------------------------
Rod Dammeyer

/s/ Lester Wunderman        Director                           December 30, 1999
-------------------------
Lester Wunderman

/s/ George Wiedemann        Director                           January 4, 2000
-------------------------
George Wiedemann

/s/ Jack Africk             Director                           January 4, 2000
-------------------------
Jack Africk

                            Director                           January __, 2000
-------------------------
Herbert Gardner

                                       30
<PAGE>

                                 EXHIBIT INDEX

EXHIBIT     DESCRIPTION
-------     -----------
  27.1      Financial data schedule