SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13
                OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                                   (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, 2000
                                            -------------------

                                       OR

 [ ]  Transition Report Pursuant to Section 13 or 15 (d) of the Securities
      Exchange Act of 1934

                For the transition period from________ to________

                         Commission file number 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, North Miami, Florida         33181
           ------------------------------------------------------------
               (Address of principal executive offices)      (Zip Code)

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

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

                                                   Name of each exchange
           Title of each class                      on which registered
           -------------------                     ---------------------

  Common Stock, par value $.02 per share          New York Stock Exchange
  --------------------------------------

  Preferred Stock, par value $.10 per share       New York Stock Exchange
  -----------------------------------------

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

                              Title of each class
                             ---------------------
                                      None


Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
<PAGE>
Based on the closing sale price of December 26, 2000, the aggregate market value
of voting stock held by non-affiliates of the Registrant was approximately
$31,300,000.

Number of shares outstanding of Registrant's Common Stock, as of December 26,
2000: 16,200,000.

DOCUMENTS INCORPORATED BY REFERENCE.

Parts of the Proxy Statement for Registrant's 2001 Annual Meeting of
Stockholders to be filed with the Securities and Exchange Commission not later
than 120 days after the end of the fiscal year ended September 30, 2000 are
incorporated by reference into Part III of this Form 10-K.

                                       2
<PAGE>
                                     PART I
                                     ------

We have made, and continue to make, various forward-looking statements with
respect to our 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 we believe that our expectations are
based on reasonable assumptions within the bounds of our 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. Our 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.

Item 1.  Business
-----------------

Corporate Structure
-------------------

Transmedia Network Inc., and its subsidiaries administer dining reward programs
which offer savings to our members on dining as well as lodging, travel, retail
and catalog merchandise and long distance telephone calls. We commenced
operations in 1984 and were reincorporated as a Delaware corporation in 1987,
and our principal office is located at 11900 Biscayne Boulevard, North Miami,
Florida 33181. Our principal telephone number (305) 892-3300. Currently, we have
the following principal operating subsidiaries:

IDine Restaurant Group Inc., formerly Transmedia Restaurant Company Inc., is
responsible for obtaining agreements with and servicing restaurants and other
service establishments such as hotels, resort destinations and retailers where
members may receive rewards.

Transmedia Service Company Inc., is responsible for (i) soliciting and servicing
all members in the United States, and (ii) providing support services to iDine
Restaurant Group Inc. RTR Funding LLC. A wholly-owned subsidiary of Transmedia
Service Company, Inc., was established as a special purpose corporation for
purposes of the securitization of cash advances to merchants referred to as
rights-to-receive. In previous years, these functions were performed by TNI
Funding I, Inc., but as of December 30, 1999, such functions have been assumed
by RTR Funding LLC.

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

iDine.com, Inc., was established in November 1999 and commenced operation in
April 2000 and is responsible for providing restaurant operators with the
capability of using the Internet to provide "real time" yield management tools
such as variable promotions, dining incentives and off peak pricing to fill
empty seats and generate incremental business.

Description of Rights to Receive and Registered Card
----------------------------------------------------

Our primary business is the administration of dining rewards programs. We
accomplish this through the acquisition of Rights to receive from participating
merchants which are then sold for cash to our members. Rights to receive are
rights to receive goods and services, principally food and beverage, which are
acquired and purchased from participating restaurants for an amount typically
equal to approximately 50% of the retail value of the food and beverage credits.
Alternatively, we may acquire such Rights to receive either by facilitating the
merchant's purchase of other goods and services or providing advertising and
media placement services to the participating establishments. Approximately 95%
of Rights to receive are purchased for cash. The typical discount to the menu
price of 50% has

                                       3
<PAGE>
merchant appeal due to the fact that the cost of food and beverages at most fine
dining establishments is 30-40% of the retail value. Thus, the restaurant makes
a wholesale profit in advance in exchange for up front cash and filling tables
in the future that may otherwise go empty. We typically purchase food and
beverage credits that are anticipated to be utilized by our members in a period
of no more than six to nine months from the date of purchase; however, it is not
always possible for us 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 Registered Card Program, obtained through the acquisition of Dining A La
Card (the "Registered Card Program") in June 1999, and subsequently enhanced by
us, has been adopted to replace the private label program. Members enrolled in
the program simply register a valid major credit card with us and then present
their registered credit card while dining at a participating restaurant. We
employ an independent third party aggregator to mitigate any issues around
privacy or confidentiality of data. Based on our agreements with various
processors throughout the country, the aggregator receives data for all the
credit card transactions at participating merchants. On a daily basis, a
complete detail of all registered credit card numbers is transmitted
electronically to the aggregator of these transactions. The transactions are
then matched to a file containing the members' registered card. These matched
transactions are transmitted electronically to us and qualified via business
rules as to whether they are eligible for a rebate. Qualified transactions are
then used to provide member savings or alternate currency benefits, as well as
to invoice and collect from merchants, principally via an electronic debit to
their bank account.

The savings are delivered to the members in the form of a direct credit on their
credit card statement, cash rebate or mileage credit program. The credit
ordinarily provides members the 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, Delta, Continental, British Airways, Northwest and America
West.

Recent Developments in our Business
-----------------------------------

In June 1999, we acquired from SignatureCard, Inc. ("SignatureCard"), a
subsidiary of Montgomery Ward & Co., Incorporated, assets related to a
membership discount dining program that SignatureCard operated under the Dining
A La Card ("DALC") trade name and service name.

DALC had competed directly with us since 1995. The assets acquired in the
acquisition included various intellectual property rights and computer software,
membership and merchant data, Rights to receive, and most significantly, a
registered card platform. We simultaneously entered into a service agreement
with SignatureCard pursuant to which we obtained access to their sponsor
relationships with the nation's leading airlines. SignatureCard receives a
portion of the fees and profits derived from members initially acquired from
SignatureCard or subsequently generated through their efforts. The operations of
DALC were consolidated with ours, and integration was completed in November of
1999.

On December 28, 2000, we reached an agreement with GE Financial Assurance
("GEFA"), the successor parent of SignatureCard, Inc., to extinguish all
remaining obligations associated with the DALC acquisition, to eliminate
SignatureCard, Inc's. exclusivity rights in dealing with the airline frequent
flyer member files and to execute a contract to fully resolve and terminate the
relationship. In consideration for the above, the Company will pay GEFA $3.8
million in cash and will honor their right to put 400,000 shares held by GEFA as
part of the acquisition consideration, at a value of $8 per share. Additionally,
the Company has agreed to assume SignatureCard, Inc's., minimum miles purchase
obligation with one of the major airline which will be determined as of March
31, 2001. If we are unable to renegotiate or defer the obligation at that date,
the Company estimates that it may have to acquire approximately $2 million of
frequent flyer miles to be held for future awards.

We estimate that our member base and network of participating restaurants has
changed to approximately 3,100,000 and 7,000, respectively, from our previous
base of 1,200,000 members and 7,300 restaurant merchants prior to the
acquisition. We operate in over 50 major market areas.

                                       4
<PAGE>
Following the acquisition, we converted our method of doing business from the
legacy private label Transmedia Card program to the Registered Card program.
This conversion was completed in August 2000. In order to capitalize on this
significant change in our business, we conducted numerous customer research
surveys and decided to re-brand the dining program under the name iDine. In
contrast to the Transmedia Card, which was a private label charge card linked
electronically to a member's bank credit card of choice, a registered card is a
major credit card that has been registered with iDine by the holder. Members can
make discounted purchases with one of their existing "registered" credit cards
so that the discount is "blind" to both merchant and guests. Thus, the iDine
program allows members to accumulate savings by using conventional charge cards,
such as MasterCard, Visa, American Express and Discover. We believe that the
registered card concept has broader consumer and restaurant appeal due to its
more discrete nature.

In connection with our conversion to the iDine registered card format, we have
launched an e-commerce initiative through our wholly owned subsidiary iDine.com.
The on-line revenue management product, accessed through the iDine website,
allows restaurants to create special time and date specific incentives and
promotions in order to drive incremental traffic through the restaurant during
slow periods. Consumers have their choice of receiving benefits in either points
or cash and may convert the points into complimentary dining or frequent flyer
miles. The website also allows for national restaurant listings and access to
reviews. Specifically, the web site contains Zagat restaurant listings and
review content provided under our agreement with Zagat. Another popular member
enhancement is the member's review feature. We accept restaurant reviews from
members and post the suitable ones. The real business driver on the web site,
however, is the revenue management program whereby restaurants have the ability
to establish dining deals online (e.g., 10% discount on Tuesday nights) which
may be accepted by a member.

To provide us with sufficient funds to launch our new revenue management
product, we raised $10 million in equity capital through a private placement.
The testing of the product is expected to be completed in December 2000, and
rollout will commence on a national basis shortly thereafter. The revenue
management product is intended to increase the number of participating
restaurants, provide a retention incentive for existing restaurants and increase
overall restaurant dining sales.

In the past, we have derived income from franchising and licensing the
Transmedia Card tradename and servicemark, and related proprietary rights and
know-how within and outside the United States. We have also received revenue
from licensing the Transmedia Card. In recent years, we started systematically
reacquiring the franchise sales territories to obtain greater control over our
national presence and growth plans. In June 2000, we completed the reacquisition
of the last of our previously franchised territories. In addition to reacquiring
all its previously franchised territories, in April 2000, we terminated, by
mutual consent, the license agreements with Transmedia Asia Pacific, Inc. and
Transmedia Europe. Following a brief transition period, Transmedia Asia Pacific,
Inc. and Transmedia Europe, Inc. have ceased using the Transmedia brand name for
their respective discount programs.

Member and Merchant Programs
----------------------------

Member Programs

Our members have a choice of programs, including (1) a program which offers a
20% savings at participating establishments on food, beverage, tax, and tip, for
which there is a $49 annual fee and (2) a program which offers mileage credits
with participating airlines of ten miles for each dollar spent on food and
beverage at participating establishments for no annual fee.

We recently introduced a no fee program where benefits and rewards are not
provided until the member reaches a certain level of qualified spending each
year. The typical usage requirements range from cumulative rewards of $40.00 to
$50.00, and the net effect is essentially that by the time the member receives a
benefit, we (by not providing a benefit for the first few dines) have
effectively received a fee.

                                       5
<PAGE>
Typically, iDine registered cardmembers can choose (or members through an
airline program) to earn ten miles for each dollar spent per dine. This type of
arrangement is advantageous for airlines as they view miles acquired for use as
rewards or rebates to be equivalent to prepaid ticket. We are able to purchase
mileage from the airlines on an as needed basis at favorable rates.
Additionally, the contracts with the airlines provide that additional members
can be added at virtually no cost. We have effectively reduced the cost of the
20% cash rebate discount to approximately 16-17% if airline miles are elected to
be received in lieu of cash.

Merchant Programs

Fixed Incentive Plans

o    Cash Advance Plan - Under this plan, the merchant receives cash in advance
     for food and beverage, credits typically in the ratio of 1:2. For the
     Registered Card Program, gross dining sales are recognized as the portion
     of the total ticket recovered from the merchant, typically 80%. The 20%
     left with the merchant is to provide the merchant with liquidity for items
     such as sales tax and tips.

o    Arrears Plan - Under this plan, the merchant receives no cash in advance;
     however, meals are discounted at a lower rate. The merchant is still listed
     in our directory of participating merchants similar to the standard plan.
     When a member visits the merchant, we may receive only 30% to 35% of the
     transaction from the merchant. The gross margin on these transactions is
     the residual amount after the member receives their 20% discount. While a
     lower margin than cash advance plans there is very little risk and we do
     not have a cost of receivables or capital for those merchants.

Variable Incentive Plans

o    The Revenue Management Plan - This plan provides the merchant with the
     ability to direct when they wish to offer incentive dining. The merchant
     posts a certain reward (i.e., percentage discount) tied to day of the week
     or time of day, or both. The reward is communicated to members via the
     iDine website, or as planned for future, through wireless devices such as
     palm pilots. The member either goes to the advertised restaurant or, for
     certain "exclusives", selects the reward and then makes a reservation to
     dine. We receive a portion of the transaction, the merchant gets direct
     incremental business when they want it, and the member receives a reward.

     Multi-Unit Plan - The multi-unit (or chain) restaurant plan specifically
     addresses peak versus off-peak demand issues. Accordingly, we have in place
     and are testing with certain merchants, a Sunday through Thursday plan
     designed to drive incremental traffic at times when the multi-unit
     restaurants' capacity is underutilized. We typically take a percentage of
     all such transactions and the member gets a similar reward.

Participating Members and Merchants

As of September 30, 2000, we had about 7,000 merchants available to our members.
As of that date the membership in various programs was about 3,150,000.
<TABLE>
<CAPTION>
    ---------------------------------------------------------------------------------------------------------
                                          2000           1999          1998           1997          1996
    ---------------------------------------------------------------------------------------------------------
    <S>                                <C>            <C>            <C>            <C>            <C>
    Restaurants
      Total                                 7,000         7,200*         7,300          7,100         7,000
    Cardmembers
      Total                             3,150,000     2,700,000      1,200,000      1,300,000      900,000
    ---------------------------------------------------------------------------------------------------------
</TABLE>

*    Actual unique restaurants are disclosed in table; total restaurants listed
     in the directories for both programs was 9,500, which includes dual
     participants of 2,300.

The majority of all restaurants listed in the quarterly directories published by
us typically renew their contracts after the initial Rights to receives are
used. At the second renewal, we retain approximately 70% to 80% of those
restaurants continuing in business. After the second renewal, however, attrition
tends to increase because the restaurants, with our help, have either become
successful and no longer

                                       6
<PAGE>
require our financial and marketing resources, or we choose not to renew them.
Offsetting this decrease are new restaurants that choose to participate as old
ones leave the program, and restaurants that were formerly on the program that
re-sign as they further expand and/or desire the program's benefits again. This
provides us with a continuous flow of restaurant prospects. Moreover, the
recently developed e-commerce enabled revenue management program is expected to
be helpful in restaurant retention efforts by inducing merchants to remain in
the program, and also to attract restaurants that previously had chosen not to
participate with a fixed incentive plan. We believe that in no area where we
operate are we close to restaurant or member saturation. The increase in
membership during fiscal 1999 was mainly due to the addition of 1,700,000
members with the acquisition of DALC. During fiscal 1999-2000, the integration
of DALC and subsequent conversion to the registered card platform had the effect
of slightly lowering the number of restaurants participating in our programs.
Limited resources were focused on converting valuable restaurants over to the
Registered Card Program instead of acquiring new restaurants. Some of the
restaurants were uncomfortable converting to a program in which the "discount
diner" is imperceptible from the rest of the population. More significantly,
there were restaurants in both portfolios that were not economically viable for
us, and the conversion process served to flush these restaurants out. With the
conversion process completed, our sales force was mandated to focus on enrolling
new restaurants. Further, we are aggressively pursuing the multi-units or chain
restaurants that, prior to the conversion and instituting the variable incentive
program, had previously been outside of our scope of potential merchants.

Marketing
---------

With the completion of the conversion, we are now aggressively pursuing our
large partner marketing strategy. The recently announced ValueVision ("VVTV")
home shopping network alliance is an example of distribution of the dining
program membership as a loyalty product through large traffic groups, in the
VVTV Television case, 34.2 million households. Another example are the airlines
relationships, which we recently expanded with the announcement of the America
West FlightFund Dining program to join American Advantage Dining, United Mileage
Plus Dining, Delta Skymiles Dining and the recently kicked off USAirways
Dividend Miles Dining. We operate nine airline dining reward programs that offer
an alternative currency, frequent flyer miles. Enrollment and fulfillment costs
are significantly reduced, the effective cost of the reward to members, when
compared to a cash rebate, is lowered and the demographic profile of the
members, principally business travelers and vacationers, is desirable. We are in
negotiations with a number of other large partners and most of the proposed
alliances follow a variation of the above partnerships (i.e., large enrollment
potential), enabled through the registered card format, at very low or no cost
of acquisition and servicing, often coupled with a cost effective alternative
currency that is used as the reward to the prospective members.

Another key marketing initiative that is now possible through the registered
card format is the corporate expense management program. Participating companies
enroll their corporate card accounts with us on a no fee basis where a benefit
is not provided until the member reaches a certain level of qualified spending.
After reaching such level, the participating company receives a monthly check
for the aggregate benefits earned by their employees when dining out for
business and travel. Communicating restaurant information to corporate card
employees is most commonly done through a regular content transmission to the
corporation's Intranet site.

As we expand both our demographic and geographic footprint, we have developed
alternative value propositions that appeal to the multi-unit restaurant
industry. The multi-unit casual dining market tends to be a lower margin, lower
average ticket business; however, there is still the need to fill empty seats
and drive traffic in off-peak time frames. We are presently in discussions with
a number of multi-unit operators to provide either the traditional cash advance,
unrestricted seven day a week offers, or Sunday to Thursday marketing only
offer.

With the conversion process and the launch of the on-line business now complete,
we are now focused on growth in revenue and taking advantage of the scale
inherent in our business. From the restaurant perspective, we continue to
develop alternative offers to meet off-peak or real time needs of the restaurant
operators, all of which are geared to retaining restaurants in the program. This
goal is accomplished by

                                       7
<PAGE>
providing a suite of marketing propositions that meet the needs of growing and
expanding restaurants as well as the mature, successful ones and include both
fine dining and casual dining. From a member growth standpoint, the registered
card appeals to large partners, and coupled with our technology competency and
dominant market position, sets the stage for significantly increasing the size
of the membership. Our challenge will continue to be the effective management of
the delicate balance between the restaurants and members in each market.

Dependence on marketing partners
--------------------------------

In connection with our acquisition of DALC, we entered into a Service
Collaboration Agreement with SignatureCard, under which SignatureCard will
generate members by relying on its long-standing marketing partner arrangements
with the airlines for the mutual benefit of SignatureCard (now GE Financial
Assurance Partners Marketing Group) and us. Furthermore, our relationship with
SignatureCard precludes us from directly forming marketing relationships with
airlines, but rather we must work through them for enrollment and stimulation
initiatives. Sales generated from airline members were approximately $71.5
million and $9 million for the years ended September 30, 2000 and 1999,
respectively.

Competition
-----------

The discount dining business remains competitive and we compete for both members
and participating merchants, such as restaurants, hotels and other applicable
service establishments. We also anticipate growing competition from various new
economy 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 us. Certain of
our competitors may have substantially greater financial resources and expend
considerably larger sums than we do for new product development and marketing.
Further, we must compete with many larger and better-established companies for
the hiring and retaining of qualified marketing personnel. We believe that the
unique features of our programs: (1) can be used by members at participating
establishments with very few restrictions; (2) the programs provide substantial
savings without the need for a member to present discount coupons or a separate
card when paying for a meal; and (3) participating establishments are provided
with cash in advance of customer charges contribute to our competitiveness and
allow us to offer better value and service to its members and merchants.

Employees
---------

As of September 30, 2000, we had 218 full-time employees, including 14 employees
specifically hired to initiate the iDine revenue management concept. We believe
that our relationships with our employees are good. None of our employees are
represented by a labor union.

EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Name                                     Position                                      Age
----                                     --------                                      ---
<S>                                      <C>                                          <C>
Gene M. Henderson                        Director, President and Chief Executive       53
                                         Officer
Stephen E. Lerch                         Executive Vice President and                  46
                                         Chief Financial Officer
James M. Callaghan                       Vice President; President of Transmedia       61
                                         Restaurant
                                         Company Inc.
Paul A. Ficalora                         Executive Vice President                      49
                                         of Transmedia Restaurant
                                         Company Inc.
</TABLE>

                                       8
<PAGE>

<TABLE>
<S>                                      <C>                                          <C>
Gregory Borges                           Treasurer                                     64
Kathryn Ferara                           Secretary and Vice President of Operations    44
</TABLE>

Gene M. Henderson, President and Chief Executive Officer - Mr. Henderson became
President and Chief Executive Officer in October, 1998. From March, 1997 to
June, 1998, Mr. Henderson was President and CEO of DIMAC Marketing in St. Louis.
From 1977 to 1997, Mr. Henderson was employed at Epsilon Data Management of
Burlington, Massachusetts, ultimately becoming its Chief Operating Officer. From
1990 to 1998, Epsilon was a wholly owned subsidiary of American Express Company.
Mr. Henderson has a MBA from the University of Chicago.

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. 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.

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.

Item 2.  Properties
--------------------

The principal leased properties of Transmedia and its subsidiaries are set forth
in the following table
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------

                   Location                     Monthly Rent             Terms of Lease          Square Footage
------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                <C>                          <C>
Miami - call center, processing, and               $ 33,865
executive office,                                                 Two leases expiring 02/28/02        18,040
------------------------------------------------------------------------------------------------------------------
New York - Sales                                   16,654              05/01/96 - 11/30/01            5,710
------------------------------------------------------------------------------------------------------------------
Chicago - Email Server and sales Office             6,431              04/15/00 - 01/21/01            2,756
------------------------------------------------------------------------------------------------------------------
Chicago - Sales                                     3,908              08/01/98 - 07/31/04            1,876
------------------------------------------------------------------------------------------------------------------
Boston - Sales                                      4,527              09/01/00 - 08/31/03            1,550
------------------------------------------------------------------------------------------------------------------
Los Angeles - Sales                                 3,913              02/01/98 - 02/28/01            1,665
------------------------------------------------------------------------------------------------------------------
San Francisco - Sales                               3,687              05/15/98 - 05/14/03            1,254
------------------------------------------------------------------------------------------------------------------
Philadelphia - Sales                                2,449              10/01/98 - 09/30/03            1,641
------------------------------------------------------------------------------------------------------------------
Dallas - Sales                                      2,158              11/01/98 - 10/31/03            1,355
------------------------------------------------------------------------------------------------------------------
Potomac, MD - Sales                                 3,646              02/01/99 - 12/31/00            1,923
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       9
<PAGE>
Item 3.  Legal Proceedings
---------------------------

We are involved in various legal proceedings. While it is not currently possible
to predict or determine the outcome of these proceedings, it is the opinion of
our management that the outcome will not have a material adverse effect on our
financial position or liquidity.

Item 4.  Submission of Matters to a Vote of Security Holders
--------------------------------------------------------------

A Special Meeting was held on August 17, 2000, so that the our stockholders
could consider and act upon certain matters that require their approval to
enable us to raise additional capital through a private placement sale of our
common stock and warrants to the purchasers. At the Special Meeting, our
stockholders were asked to approve the issuance and sale of 1,287,480 shares of
our common stock and five-year warrants to purchase 2,574,960 shares of our
common stock.

At the close of business on June 19, 2000, the record date for the determination
of the stockholders entitled to vote at the Special Meeting, there were
outstanding 18,686,370 shares of voting stock. At the Special Meeting, the
holders of 11,304,967 shares of voting stock were represented in person or
proxy. The vote was as follows:

                     For          Against           Abstain
                     ---          -------           -------

                  11,014,451      264,506           26,010

PART II
-------

Item 5.  Market for our Common Stock and Related Shareholder Matters
--------------------------------------------------------------------

Our Common Stock is traded on the New York Stock Exchange under the symbol
"TMN". The following table sets forth the high, low and closing bid prices of
our Common Stock for our two most recent fiscal years.
<TABLE>
<CAPTION>
          Quarter Ended                      Low                High              Close
          -------------                      ---                ----              -----
<S>                                          <C>               <C>               <C>
         December 31, 1998                   $ 1.938           $ 4.625           $2.125
         March 31, 1999                        2.375             5.125            3.875
         June 30, 1999                         3.000             4.188            3.938
         September 30, 1999                    2.688             4.375            3.000
         December 31, 1999                     2.125             2.938            2.500
         March 31, 2000                        4.563             5.313            5.000
         June 30, 2000                         2.938             5.000            4.250
         September 30, 2000                    3.313             4.375            3.750
</TABLE>

No dividends have been paid on our Common Stock for the last two most recent
fiscal years. The payment of dividends to holders of common stock, if any, in
the future, will depend upon, among other things, our earnings and financial
requirements, as well as general business conditions.

Our Series A preferred stock is traded on the New York Stock Exchange under the
symbol "TMN pfA". Holders of our Series A convertible preferred stock are
entitled to receive dividends at the rate of $0.29 per share per annum, at least
$0.145 of which is payable in quarterly installments in arrears on the first
business day of January, April, July and October. Annual dividends in the amount
of $0.145 per share are not payable currently but can be deferred, accrue and be
payable upon a conversion or redemption of the Series A preferred shares or
liquidation, dissolution or winding up of Transmedia. We, however, may choose to
pay any or all deferred dividends currently. Dividends will accrue from and
including the issue date to and including the date on which the preferred shares
are redeemed or converted or on which the liquidation preference is paid. To the
extent not paid, current dividends and deferred dividends will be

                                       10
<PAGE>
cumulative. The Series A preferred shares will be entitled to receive cash
dividends on an as-converted basis equal to the Common Stock, if dividends are
paid on Common Stock. At September 30, 2000, the conversion rate of the
preferred shares was one preferred share for 1.0539 common shares. Dividends on
our Series A preferred shares for the last two most recent fiscal years are as
follows:

                                             (in dollars)
          Quarter Ended              Cash                       Accrued
          -------------              ----                       -------
         December 31, 1998          $   --                   $     --
         March 31, 1999                 --                         --
         June 30, 1999                  --                         --
         September 30, 1999             --                         --
         December 31, 1999           0.021                      0.021
         March 31, 2000              0.036                      0.036
         June 30, 2000               0.036                      0.036
         September 30, 2000        $ 0.036                    $ 0.036

The aggregate number of holders of record of our common stock and Series A
preferred stock on December 26, 2000 was approximately 392and 24, respectively.

On August 5, 1999, the New York Stock Exchange notified us of the pending
adoption of amendments to its continued listing criteria and of our
noncompliance with the new standards. In accordance with the requirements of the
notification, we submitted to the Exchange our plan to come into compliance with
the new criteria. On September 16, 1999, we were advised by the Exchange that
our plan had been accepted and that it will continue to be listed on the
Exchange. Our performance relative to the plan of compliance is subject to
monitoring by the Exchange through September 30, 2001.

Recent Sales of Unregistered Securities

(1) On April 28, 2000, we issued 904,303 shares of common stock to investors,
for $4.56 per share and 1,808,606 warrants exercisable for common stock, half of
which were sold at $5.93 per share and half at $7.30 per share.

(2) On August 21, 2000, we issued 629,944 shares of common stock to investors,
for $4.56 per share and 1,259,888 warrants exercisable for common stock, half of
which were sold at $5.93 per share and half at $7.30 per share.

(3) On August 21, 2000, we issued 657,536 shares of common stock to certain
directors, executive officers and to an investor, for $4.56 per share, and
1,315,072 warrants exercisable for common stock, half of which were sold at
$5.93 per share and half at $7.30 per share.

(4) On June 29, 2000, we issued 352,423 shares of common stock to investors, for
$4.26 per share.

(5) On June 29, 2000, we issued two convertible notes in the principal amounts
of $1.0 million each, respectively, convertible into an aggregate of 469,897
shares of common stock at a conversion price of $4.26 per share.

The sale of these securities were deemed to be exempt from registration under
the Securities Act of 1933 in reliance on Section 4(2) of the Securities Act of
1933, as transactions by an issuer not involving a public offering.

                                       11
<PAGE>

Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                                                      Year Ended September 30,
                                                                      ------------------------
                                                                  (thousands except per share data)
                                                                  ---------------------------------
                                                  2000          1999           1998               1997         1996
                                                  ----          ----           ----               ----         ----
<S>                                       <C>               <C>              <C>              <C>             <C>
Statements of Operations Data:
Registered card sales (Page 4)             $ 103,950        $  25,942        $    --          $    --          $    --
Private label sales (Page 4)                  76,677           94,530           95,549          101,301           90,076
                                           ---------        ---------        ---------        ---------        ---------
Total dining sales                           180,627          120,472           95,549          101,301           90,076

Net revenues from rights-to-receive           36,356           23,882           19,659           21,232           19,504

Membership and renewal fee income              8,444            8,281            7,321            7,251            6,646

Franchise fee income                             568            1,073            1,249            1,438            1,839

Other income                                     990            1,552            1,912            1,023              497

Total operating revenues                      46,358           34,788           30,141           30,944           28,486

Total operating expenses                      46,831           40,782           37,606           30,246           23,729

Operating income (loss)                         (473)          (5,994)          (7,465)             698            4,757

Other expense                                 (5,682)          (2,404)          (2,971)          (1,382)            (650)

Income (loss) before taxes and
extraordinary item                            (6,155)          (8,398)         (10,436)            (684)           4,107

Extraordinary item, loss on early
extinquishment of debt, net of tax            (1,623)            --               --               --               --

Net income (loss)                          $  (7,778)       $ (10,398)       $  (7,836)       $    (424)       $   2,546
                                           =========        =========        =========        =========        =========

Income (loss) before taxes and
extraordinary items (per share)                 (.51)            (.80)            (.67)            (.04)             .25

Extraordinary item, loss on early
extinquishment of debt, (per share)             (.12)            --               --               --               --

Net income (loss)per share
          Basic and diluted                     (.63)            (.80)            (.67)            (.04)             .25

Weighted average number of common and
common equivalent shares outstanding:
          Basic and diluted                   14,149           13,043           11,773           10,166           10,299

Balance Sheet Data:
Total assets                               $ 121,581          119,710           74,425           72,685           54,514

Long-term debt:
          Recourse                              --             10,000             --               --             15,000
          Non-recourse                          --             33,000           33,000           33,000             --
Redeemable preferred shares                   10,000             --               --               --               --
Stockholders' equity                          20,806           18,113           27,734           25,304           25,753
Debt to total assets                            --                 36%              44%              45%              28%
Earnings to fixed charges                         17%            -109%            -245%              73%             582%
Cash dividends per common share            $    0.00             0.00             0.02             0.02             0.04

</TABLE>

                                       12
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations (Dollars in thousands)

Results of Operations (2000 versus 1999)
----------------------------------------

Gross dining sales for the fiscal year ended September 30, 2000 increased 49.9%
to $180,627 as compared to $120,472 for the year ended September 30, 1999,
primarily reflecting a full twelve months of registered card dining sales
associated with the acquisition of Dining A La Card ("DALC") which occurred on
June 30, 1999. Registered card sales for the fiscal year ended September 30,
2000 and 1999 associated with the acquisition were $85,174 and $25,942,
respectively. Fiscal 1999 results reflect three months of registered card sales
associated with the acquisition.

In March 2000, we initiated a plan to convert our private label membership and
restaurant base to the registered card platform. With the registered card
program, members enrolled in the program simply register a valid major credit
card with us, and then present their registered card while dining at a
participating restaurant. Based on our agreements with various processors
throughout the country, an aggregator receives data for all the credit card
transactions for participating merchants. On a daily basis, a complete detail of
all registered credit card numbers is transmitted electronically to the
aggregator of these transactions. These transactions are then matched to the
current registered card file. These matched transactions are transmitted
electronically to us and qualified via business rules as to whether they are
eligible for a rebate. Qualified transactions are then used to provide member
savings or alternate currency benefits, as well as to invoice and collect from
merchants, principally via an electronic debit to their bank account. This
conversion was completed in August 2000. Registered card sales associated with
converted private label members were $18,776 for the fiscal year ended September
30, 2000.

Actual sales for our private label program decreased 18.9% to $76,677 compared
to $94,530 for the year ended September 30, 1999. As more and more private label
members start using their registered credit card instead of the private label
card, private label sales should continue to decline, with a somewhat
corresponding increase in the registered card program.

Our member acquisition strategy has undergone certain revisions that are
reflected in a changing member profile. Leveraging a dominant national position
in the fine dining rewards space along with the recent conversion to universal
use of the registered card, we have focused on large partner marketing
opportunities. Expansion of the airline frequent flyer base of members, the
recent launch of the "expense management program" that involves registering
corporate credit cards and rebating discounts back to the participating company
and alliances with other reward programs, are examples of this strategy.
Characteristic of these partnerships is either a lower member acquisition cost,
an alternative currency to cash rewards that have a positive margin implication,
or a lower cost of servicing. We believe that this strategy provides excellent
opportunities with increased scale and is very focused on expansion of the
member base and the incremental sales volume that it should provide.

Registered card membership at September 30, 2000 and 1999 was approximately
3,150,000 and 1,700,000, respectively. Of these members, 1,100,000 were
non-airline members of which 370,000 were corporate card members and 280,000
from alliances with other rewards partners. Airline members, which accounted for
approximately 73% of total membership and approximately 69% of registered sales,
do not pay membership fees and typically receive rebates in the form of frequent
flyer miles.

At September 30, 2000, the combined average Rights to receive balance per
participating merchant were approximately $10 and $8 at September 30, 2000 and
1999, respectively. The Rights to receive turnover for the combined portfolio
for fiscal 2000 is 1.09 or 10.99 months on hand compared to1.16 or 10.36 months
on hand, in the prior year. The addition of restaurants for the revenue
management program will help to reduce the outstanding Rights to receive. With
the revenue management plan, the merchant posts a certain reward (i.e.,
percentage discount) tied to day of the week or time of day, or both. The reward
is communicated to members via the iDine website, or potentially through
wireless devices such as palm pilots. Via an overt act such as "clicking," the
member selects the reward and then makes a reservation to


                                       13
<PAGE>

dine. We receive a portion of the transaction, the merchant gets direct
incremental business, and the member receives a reward. There is no cash
advanced to restaurants participating in this program, and the sales generated
from these restaurants will help to reduce months on hand.

A combined directory of restaurants participating in the two dining programs
branded iDine is issued quarterly. The quarterly directory listed about 7,000
unique restaurants available to members.

Cost of sales increased to 58.3% of gross dining sales up slightly from 58.2% a
year earlier. The increase in cost of sales is directly related to the addition
of the acquired DALC registered card portfolio which was traditionally offered
to merchants at an advance rate less than our customary private label rate of
2:1, and therefore, results in a somewhat higher cost of sales than the private
label portfolio. The acquisition was completed in June 1999, and therefore the
results of fiscal 1999 reflect only three months with this portfolio versus the
full twelve months reflected in fiscal 2000. The increase would have been
greater, if not for the fact that the majority of those contracts renewed by us
were converted to the 2:1 rate during fiscal 2000. 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, which are included
in cost of sales, increased to $7,391 or 4.1% of gross sales in 2000, compared
to $4,088 or 3.4% in the prior year period due to the additional allowance
recorded for collection from registered card merchants. With the registered card
programs, we collect payment for qualified dines from the merchant, while with
the private label program, we collected directly from the members (i.e., we
processed the receipts through the members electronically linked credit card
accounts, and the full amount of the funds billed to the credit card is remitted
directly to us). Processing fees based on transactions processed, and included
in cost of sales, increased as a percentage of gross dining sales from 2.9% for
fiscal 1999 to 3.0% for fiscal 2000.

Member discounts as a percentage of sales decreased slightly from to 22.0% in
1999 to 21.6% in 2000. The majority of the registered card members are enrolled
in the airline program and earn ten miles for each dollar spent at participating
merchants. We purchase airline mileage from the airlines on an as needed basis
at a contractual rate that allows us to effectively reduce the cost of the
member rebate in the airline program to less than that of the conventional 20%
cash rebates. Fiscal 2000 reflects twelve months of registered card usage versus
only three months in fiscal 1999.

Membership and renewal fee income increased to $8,444, of which $1,654 was
initial fee income in 2000, compared to $8,281, of which $3,387 was initial fee
income in 1999. The increase in renewal fees is mainly as a result of a full
year's renewal fees on the members acquired through the purchase of DALC.
Renewal fees recognized for these members during the year ended September 30,
2000 were $1,088 versus $53 for the same period in the prior year. The decreased
initial fee income is reflective of the change in our marketing strategy in fall
of 1999. Marketing of the fee-based private label membership was reduced
significantly due to changes in the regulatory environment regarding direct
marketing solicitations. Our marketing strategy has shifted to focus mainly on
marketing to key partner affinity programs. One such program is our corporate
card program, where in lieu of a membership fee, the first of approximately two
hundred and fifty dollars of spend is not qualified for member discounts.
Participating companies enroll their corporate card accounts with us and after
the required spend the participating company receives a monthly check for the
aggregate benefits earned by their employees when dining out. Communicating
restaurant information to corporate card employees is most commonly done through
a regular content transmission to the corporation's Intranet site. With the
conversion now complete, we anticipate that a number of significant additional
corporate programs will come on-line next year. Our strategy is also 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. 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 pro
rata basis based on the remaining portion of the membership.

                                       14
<PAGE>

Continuing franchise fee and royalty income decreased for the year ended
September 30, 2000 to $568 from $1,073 in the prior year. In June 2000, we
completed the reacquisition of the last of our franchises. As such, any further
franchise royalty fees have ceased at that date.

Although overall selling, general and administrative expenses increased $5,631
or 26.0% over the prior year, as a percentage of gross sales, selling, general
and administrative expense decreased from 18.0% for fiscal 1999 to 15.1% for
fiscal 2000. There are two main factors contributing to the increased dollar
amount of expenses during fiscal 2000. First, we launched our e-commerce dining
venture, iDine.com in April 2000. Expenses recognized in fiscal 2000 associated
with iDine.com was approximately $3,501, and related to business plan
development, business concept definition and testing, deal support during
venture capital negotiations, project management, and support costs. Second,
other significant component increases for the year ended September 30, 2000
(exclusive of iDine.com) were sales commissions of $1,451 associated mainly with
special incentive commissions paid for the conversion of restaurants from the
private label program to the registered card platform, printing and postage of
$959 mostly related to the mailing of member correspondence related the
conversion from the private label program to the universal registered card
program, depreciation and amortization of $407, rent and other expenses of $246
associated with the increased corporate office space and other expenses through
the DALC integration transition period which was completed at the end of the
first quarter, and other expenses of $212 which mainly related to Private
Label/Registered Card conversion programming. Offsetting these increases during
the year ending September 30, 2000, was a decline in professional fees of $344
and telephone expense of $377 during the prior year.

Salaries and benefits increased $2,858 or 29.1% over the prior year. Of this
increase in salaries and benefits, $615 related to employees hired to support
iDine.com. Also, in the earlier part of the year, there were salaries and
benefits paid to the DALC employees during the integration. These amounts were
substantially cut back after January 1, 2000, and now reflect only a few
permanent employees required to support the addition of the registered card
programs, primarily relating to information technology, sales and customer
service.

In 2000, member acquisition expenses were $6,875 versus $6,447 in 1999, an
increase of $428. Included in member acquisition expenses is the amortization of
deferred acquisition costs, which amounted to $1,654 in 2000 and $3,335 in 1999.
We previously used various direct (one-on-one) marketing techniques at different
levels of cost to solicit new members. Consumer privacy regulations adopted in
1999 required us to change certain methods of solicitations that had resulted in
favorable response rates. Costs capitalized in 2000 and 1999 were $153 and
$4,184, respectively. Included in member acquisition expenses was approximately
$1,836 relating to the write down of our inventory of plastic cards as well as
fees for artwork used to make the Transmedia private label card. The conversion
to the registered card program rendered the inventory of plastic card obsolete.
The cost of the plastic cards was amortized over the estimated conversion period
of nine months which ended September 30, 2000. Prospective members continue to
be solicited through direct mail on a greatly reduced basis, and also through
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 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.

In order to avoid prolonged litigation, we settled the outstanding lawsuit with
our former licensee, Sports & Leisure, Inc., in November of 1999. Under the
terms of the settlement, Sports & Leisure, Inc. received $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 us in the first quarter of 1999, a charge of $1,835 was
recognized in the fourth fiscal quarter of 1999.

Other expense, net of income in 2000 amounted to $5,682 versus $2,404 in 1999,
an increase of $3,278. The principal reasons for the change was a decrease of
$1,109 of realized gain on sale of securities available for sale coupled with an
increase in interest expense and financing costs in 2000, as


                                       15
<PAGE>

a result of having one full year of additional borrowings, in part, used for the
purchase of the DALC Rights to receive.

Earnings before taxes amounted to a loss of $6,155 in 2000 compared with loss of
$8,398 in 1999. A net operating loss carryforward of $17,791 was available at
the year ended September 30, 2000. The net deferred tax asset, principally
related to the net operating loss carryforward remains fully reserved. The
effective tax rate for fiscal 2000 was 38%.

On December 30, 1999, we entered into an $80,000 revolving securitization of the
combined Rights to receive of both the private label and the registered-card
dining programs. The securitization was privately placed through an asset backed
commercial paper conduit. The proceeds drawn down at closing, approximately
$65,000 based on a similar borrowing base formula used in the bridge loan, were
utilized to terminate and payoff $33,000 non-recourse notes from the 1996
securitization and $27,000 outstanding under a bridge loan. The early
extinguishment of the 7.4% notes resulted in an extraordinary charge of $1,623
or 12 cents per share. At September 30, 2000, the balance outstanding under the
new revolving securitization was $59,625.

Net loss was $7,778 or $.63 per share in 2000, versus net loss of $10,398 or
$.80 per share in 1999.

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 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 our private label program decreased 1.1% to $94,530 compared to $95,549 for
the year ended September 30, 1998. We continue to experience a decline in
private label sales in our 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, our 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 our 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 registered card membership and
approximately 68% of registered card sales, do not pay membership fees and
typically receive rebates in the form of frequent flyer miles.

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.



                                       16
<PAGE>

At September 30, 1999, the average Rights to receive balance per participating
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 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 1.16 or 10.36 months on hand.

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 our customary 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 ten miles for each
dollar spent at participating merchants. We purchase airline mileage from the
airlines on an as needed basis at a contractual rate that allows us 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 our continued
marketing of the 25% savings fee card with the private label program. Renewal
fee income relating to the registered card program was $53. Our 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. 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
territory in 1999.

Processing income relates to our full service electronic processing services 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 SignatureCard was terminated.



                                       17
<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, we employed 48 of the former SignatureCard employees for
the expected transition period. In addition, we 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. We have 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. We used various techniques
at different levels of cost to solicit new members. Consumer privacy regulations
adopted in 1999 required us 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. We seek 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.

In order to avoid prolonged litigation, we settled the outstanding lawsuit with
our 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 us 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 former Chief Executive Officer resulted in a one-time charge of $3,081 in
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, we
recorded a charge of $463 in fiscal 1998 relating to the remaining outstanding
obligation under consulting agreements with former employees that we have
determined to no longer require nor intend to utilize.

We 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 franchisee
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.

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



                                       18
<PAGE>

securities available for sale which is offset by additional interest expense and
financing costs in 1999, as a result of the additional $39,000 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 our 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.

Liquidity and Capital Resources
-------------------------------

Our working capital decreased to $17,216 at September 30, 2000 from $49,398 at
September 30, 1999. This resulted principally from the classification of the new
securitization as a current liability, recognizing that the liquidity faacility
that accompanies the securitization is renewable annually.

Rights Offering
---------------

On November 9, 1999, we completed a Rights Offering to existing shareholders
resulting in the issuance of 4,149,378 convertible, redeemable preferred shares.
The preferred stock has 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 our 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, we 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 Inc., an affiliate of our largest
shareholder, Samstock, L.L.C. Pursuant to its subscription privileges and as a
standby purchaser for any unsubscribed shares, Equity Group Investments LLC
("EGI"), an affiliate of Samstock, L.L.C, 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 was increased
by one as EGI chose to exercise that right.

Securitization of Rights to Receive
-----------------------------------

On December 30, 1999, the Company entered into an $80,000 revolving
securitization of the combined Rights to receive of both the private label and
the registered card dining programs. The new securitization was privately placed
through an asset backed commercial paper conduit. The proceeds drawn down at
closing, approximately $65,000 based on a borrowing base formula, were utilized
to terminate and payoff $33,000 in non-recourse notes from a previous
securitization and $27,000 then outstanding under a bridge loan used in the
acquisition of Dining a La Card ("DALC") (see note 7 for additional
information). Additionally, the Company was required to pay a termination
payment of approximately $1,100 to the noteholders and non-recourse partners in
the prior securitization.

Borrowing capacity under the facility is recalculated weekly based on a formula
driven advance rate applied to the current balance of Rights to receive that are
eligible to be securitized. The advance rate is determined based on recent sales
trends and months on hand of Rights to receive. Capacity at September 30, 2000
was $60,663 and the outstanding borrowings at that date were $59,625. The
facility provides various restrictive covenants regarding collateral
eligibility, concentration limitations and also requires the Company to maintain
net worth of at least $24,000.

The interest rate applicable to the new facility is the rate equivalent to the
rate (or if more than one rate, the weighted average of the rates) at which
commercial paper ("CP") having a term equal to the related CP tranche period
that may be sold by any placement agent or commercial paper dealer selected by
the conduit on the first day of such CP tranche period, plus the amount of any
placement agent or commercial



                                       19
<PAGE>

paper dealer fees and commissions incurred or to be incurred in connection with
such sale. At September 30, 2000, the effective interest rate for the new
facility was 8.9% per annum.

The conduit requires that a liquidity facility be provided by an A1/P1 rated
financial institution in the amount equal to 102% of the securitization amount.
This liquidity facility must be renewed annually. Our primary bank, the Chase
Manhattan Bank, provided the liquidity facility in the initial year and has
indicated a desire to syndicate all or a portion of the liquidity facility, or
altenatively, bring in a co-purchaser conduit for a percentage of the
securitization. On December 27, 2000, the credit agreements were amended to
provide an extension of the initial term for 90 days to March 28, 2001 to
complete the syndication and to reduce the securitization amount to $60 million.
In the event that syndication is not completed by that date, another extension
may be granted, an alternative asset backed financing vehicle may be established
or the outstanding borrowings under the securitization may be converted to a
term loan.

We previously financed its Rights to receive under a revolving securitization
originated in 1996 (the 1996 facility). Under this facility, $33,000 of fixed
rate securities were issued in a previous private placement to various third
party investors. The private placement certificates had a five-year term before
amortization of principal and had an interest rate of 7.4%.

The early extinguishment of the 1996 facility and payoff of the related
non-recourse notes resulted in an extraordinary charge of $1,623 or $0.12 per
share consisting of the following:

Write-off of related unamortized financing costs        $   540
Termination payment to noteholder
     and non-recourse partners                            1,083
                                                        -------
Extraordinary charge before income tax benefit            1,623
Income tax benefit                                         (412)
Related increase in income tax valuation allowance          412
                                                        -------
Net extraordinary charge                                $ 1,623
                                                        =======

Compared to prior year, our inventory of Rights to receive, net of allowance,
decreased by $8,080 to a total of $68,374 at September 30, 2000. During
1999-2000, the integration of DALC and the subsequent conversion to the
registered card platform had the effect of lowering the restaurant count as
there were a number of overlapping restaurants, and some other restaurants which
did not participate under the Registered Card Program. In many instances the
Rights to receive purchased by us are secured by the furniture, fixtures and
kitchen equipment of the related restaurants as filed pursuant to the Uniform
Commercial Code as adopted by each state. We also attempt to obtain personal
guarantees from the restaurant owners.

                          Analysis of Rights to Receive
<TABLE>
<CAPTION>
                                                            2000            1999            1998
---------------------------------------------------------------------------------------------------
<S>                                                        <C>             <C>            <C>
Rights to receive, beginning of year                      $  76,454       $  42,347       $  40,355
---------------------------------------------------------------------------------------------------
Acquisition of Registered Card
 Rights -to receive in DALC transaction, net                   --            40,782            --
---------------------------------------------------------------------------------------------------
Purchase of Rights to receive                                95,564          60,053          53,625
---------------------------------------------------------------------------------------------------
Write-offs of Rights to receive                              (9,518)         (3,871)         (3,550)
                                                         ----------       ---------       ---------
                                                            162,500         139,311          90,430
---------------------------------------------------------------------------------------------------
Cost of Rights to receive, included in cost of sales
                                                             94,126          62,857          48,083
---------------------------------------------------------------------------------------------------
Rights to receive, end of year                            $  68,374       $  76,454       $  42,347
                                                          =========       =========       =========

</TABLE>

We believe that continued increase in the number of restaurants that participate
in the registered card dining programs is essential to attract and retain
members. We strive 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


                                       20
<PAGE>

management and the members 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. Also, new programs such as the revenue
management does not require any cash outlay.

Private Placement
-----------------

We launched our new Internet dining venture during the second half of the year.
Execution of the e-commerce initiative is through iDine.com, a newly formed
wholly owned subsidiary. The on-line product will allow restaurateurs to create
special incentives and promotions through the iDine website on specific days of
the week and/or times of the day in order to drive incremental traffic when they
need it most. Consumers will have their choice of savings benefits in points or
cash and may convert the points into either complimentary dining or frequent
flyer miles. The website may also allow for on-line reservations, features
national restaurant listings and access to reviews. The on-line initiative is
intended to broaden the amount and type of savings and rewards offered to
consumers as well as to expand the participating restaurant base by providing
restaurant operators with a full suite of yield management products.

Development of the e-commerce product is being financed by corporate capital and
through a $10,000 private placement. In the first tranche of the private
placement which closed on May 1, 2000, we issued 904,303 shares of our common
stock at $4.5625 and warrants to purchase an additional 1,808,606 shares of our
common stock, half of which have an exercise price of $5.93 and the other half
of $7.30. The warrants will expire on April 28, 2005. we received proceeds from
the share issuance in the amount of $4,126. The second tranche has the same
price per share of common stock and exercise prices for the warrants as the
first tranche. The second tranche which closed on August 21, 2000, consisted of
the sale of an aggregate of 1,287,480 common shares, accompanied by 2,574,960
warrants. We received proceeds from this share issuance in the amount of $5,874.
Funds obtained from the private placement has been earmarked by the Board
principally for development of the e-commerce venture. At September 30, 2000,
cash earmarked by the Board for the operating expenses of iDine.com was $6,617.

Operating results for the year ended September 30, 2000 were materially impacted
by the new on-line business which is presently in the start-up and development
phases. Included in operating expenses is $4,591 associated with the e-commerce
initiative. Additionally, $1,836 of website development costs have been
capitalized.

General
-------

Capital expenditures by us over the past three fiscal years was $9,208 of which
$5,036 related to fiscal 2000. The main reason for the increase in capital
expenditure during this fiscal year was the launching of the e-commerce
initiative and consisted mainly of website development, computer hardware and
software supporting the technology necessary to support the operation of the
dining programs, the Member Service Center and the integration of the registered
card platform.

We believe that cash on hand at September 30, 2000, together with cash generated
from operations and available under the securitization facility will satisfy our
normal operating capital needs during the 2001 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 previously provided
for the net deferred tax assets as of September 30, 2000, due to our recurring
losses. The valuation allowance at September 30, 2000 and 1999 was $8,859 and
$6,005, respectively. The net deferred tax asset relates primarily to net
operating loss carryforwards which are available through 2020 and amount to
$17,791 at September 30, 2000.

Operating activities during fiscal 2000 resulted in net cash provided of
$10,398. However, further expansion into new markets and planned increases in
existing markets could reverse this trend depending



                                       21
<PAGE>

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.

Cash used in investing activities was $8,980 in the fiscal year ended September
30, 2000, compared with $38,148 and $3,624 used in 1999 and 1998, respectively.
Cash utilized in investing activities were due primarily to the reacquisition of
former franchises as well as the development and acquisition of computer
hardware and software necessary for the e-commerce operation. Management
believes that cash to be used in investing activities associated with capital
expenditures in the fiscal year ended September 30, 2001 will be approximately
$3,500.

Cash flows provided by financing activities were $9,457 for the fiscal year
ended September 30, 2000, compared with cash flows provided by financing
activities of $39,098 in 1999 and $8,353 in 1998. In 2000, the principal source
of cash flow was $9,700 from the Rights offering, $9,865 from issuance of common
stock and warrants and $58,555 from the revolving securitization previously
mentioned. Cash flows used in financing activities during fiscal 2000 were to
pay off short term borrowings of $29,000 from The Chase Manhattan Bank and
$10,000 from GAMI Investments, Inc., used to finance the purchase of DALC, as
well as $33,000 used in the early extinguishment of the 1996 facility and payoff
of the related non-recourse notes. In 1999, the principal source of cash flow
was proceeds from short term borrowing of $29,000 from The 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 EGI.

On August 5, 1999, the New York Stock Exchange notified us of the pending
adoption of amendments to its continued listing criteria and of our
noncompliance with the new standards. In accordance with the requirements of the
notification, we submitted to the Exchange our plan to come into compliance with
the new criteria. On September 16, 1999, we were advised by the Exchange that
our plan had been accepted and that we will continue to be listed on the
Exchange. Our performance relative to the plan of compliance is subject to
monitoring by the Exchange through September 30, 2001. The private placement
that was completed in August 2000 for $10,000 and the rights offering that
closed on November 9, 1999, and resulted in the issuance of $10,000 in Series A
convertible preferred stock are intended, in part, to position us to come into
compliance with these standards. We commenced trading of its Series A
convertible preferred stock on the Exchange on that date under the symbol "TMN
pfA".

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various types of market risk, including changes in interest
rates. Market risk is the potential loss arising from adverse changes in the
market rates and prices, such as interest rates. Our exposure to market risk for
changes in interest rates is limited to the exposure related to our debt
instruments used to finance the purchase of Rights to receive which are tied to
market rates. On December 30, 1999, we entered into the $80,000 revolving
securitization of the combined Rights to receive of both the private label and
the registered card dining programs. The securitization was privately placed
through an asset backed commercial paper conduit. The interest rate applicable
to this facility will be the rate equivalent to the rate (or if more than one
rate, the weighted average of the rates) at which commercial paper ("CP") having
a term equal to the related CP tranche period that may be sold by any placement
agent or commercial paper dealer selected by the conduit on the first day of
such CP tranche period, plus the amount of any placement agent or commercial
paper dealer fees and commissions incurred or to be incurred in connection with
such sale. As of September 30, 2000, we had $59,625 outstanding under this
securitization. The commercial paper and the interest payment are subject to
interest rate risk. If market interest rates were to increase immediately and
uniformly by 100 basis points at September 30, 2000, the interest payments would
increase by approximately $596. We do not plan to use derivative financial
instruments in our investment portfolio. We plan to ensure the safety and
preservation of our invested principal funds by limiting default risks, market
risk and reinvestment risk. We plan to invest in high-credit quality securities.
Our total investments at September 30, 2000 and 1999 were $1,246 and $631,
respectively, and consisted of equity securities.



                                       22
<PAGE>

Item 8. Financial Statements

                          INDEX TO FINANCIAL STATEMENTS

Independent Auditors' Report                              F - 1

Financial Statements:
    Consolidated Balance Sheets,                          F - 2
      September 30, 2000 and 1999

    Consolidated Statements of Income                     F - 3, 4
      and Comprehensive Income/(Loss)
      for each of the years in the three-year
      period ended September 30, 2000

    Consolidated Statements of Shareholders'              F - 5
      Equity for each of the years in the three-year
       period ended September 30, 2000

    Consolidated Statements of Cash Flows                 F - 6, 7, 8
      for each of the years in the three-year
      period ended September 30, 2000

    Notes to Consolidated Financial Statements            F - 9 - 31

    Schedule II - Valuation and Qualifying Accounts       F - 32



                                       23
<PAGE>




                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                        Consolidated Financial Statements

                           September 30, 2000 and 1999

                   (With Independent Auditors' Report Thereon)



<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, 2000 and 1999,
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, 2000. 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
in the United States of America. 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, 2000 and 1999, and
the results of their operations and their cash flows for each of the years in
the three-year period ended September 30, 2000, in conformity with generally
accepted accounting principles in the United States of America.


/s/ KPMG LLP

November 20, 2000, except as to paragraph
4 of Note 5 and Note 21, which are
as of December 28, 2000


                                      F-1
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES
                           Consolidated Balance Sheets
                           September 30, 2000 and 1999
                      (in thousands, except per share data)
<TABLE>
<CAPTION>
                                    Assets                                            2000              1999
                                    ------                                            ----              ----
<S>                                                                                  <C>               <C>
Current assets:
     Cash and cash equivalents                                                      $  19,818       $   8,943
     Restricted cash                                                                      -             3,726
     Accounts receivable, net                                                           9,135           8,107
     Rights-to-receive, net
        Unrestricted                                                                   68,374          41,833
        Securitized and owned by Trust                                                    -            34,621
     Prepaid expenses and other current assets                                          2,883           5,259
                                                                                    ---------       ---------
                   Total current assets                                               100,210         102,489

Securities available for sale, at fair value                                            1,246             631
Equipment held for sale or lease, net                                                      94             702
Property and equipment, net                                                             8,484           6,413
Other assets                                                                            1,008           2,583
Restricted deposits and investments                                                        90           2,070
Excess of cost over net assets acquired and other intangible assets                    10,449           4,822
                                                                                    ---------       ---------
                   Total assets                                                     $ 121,581       $ 119,710
                                                                                    ---------       ---------
                     Liabilities and Shareholders' Equity
                     ------------------------------------
Current liabilities:
     Short term borrowing -  bank                                                   $     -         $  29,000
     Secured non-recourse revolving debt                                               59,625             -
     Accounts payable - rights-to-receive                                               7,443           6,691
     Accounts payable - trade                                                          10,317           8,376
     Accrued expenses and other                                                         2,601           5,174
     Deferred membership fee income                                                     3,008           3,850
                                                                                    ---------       ---------
                   Total current liabilities                                           82,994          53,091

Secured non-recourse notes payable                                                        -            33,000
Term loan - affiliate                                                                     -            10,000
Other long-term liabilities                                                             4,581           3,170
                                                                                    ---------       ---------
                   Total liabilities                                                   87,575          99,261
                                                                                    ---------       ---------

Guaranteed value of puts                                                                3,200           2,336
Shareholders' equity :
     Preferred stock - Series A, senior convertible redeemable, par value
        $0.10 per share (10,000 shares authorized; 4,149 and 0 shares issued              415             -
        and outstanding in 2000 and 1999, respectively)
     Common stock, par value $0.02 per share (70,000 shares authorized; 16,200
        and 13,376 shares issued and outstanding in 2000 and 1999,
        respectively)                                                                     316             264
     Additional paid-in capital                                                        43,129          22,661
     Cumulative other comprehensive income                                                833             218
     Retained deficit                                                                 (13,887)         (5,030)
                                                                                    ---------       ---------
                   Total shareholders' equity                                          30,806          18,113
                                                                                    ---------       ---------
                   Total liabilities and shareholders' equity                       $ 121,581       $ 119,710
                                                                                    ---------       ---------

</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, 2000
                     (in thousands, except income per share)
<TABLE>
<CAPTION>
                                                                  2000          1999           1998
                                                                  ----          ----           ----
<S>                                                           <C>            <C>            <C>
Operating revenue:
     Sales of rights-to-receive:
        Registered card sales                                $ 103,950       $  25,942      $      -
        Private label sales                                     76,677          94,530          95,549
                                                             ---------       ---------       ---------
           Gross dining sales                                  180,627         120,472          95,549

        Cost of sales                                          105,239          70,110          54,446
        Member discounts                                        39,032          26,480          21,444
                                                             ---------       ---------       ---------
     Net revenue from rights-to-receive                         36,356          23,882          19,659

     Membership and renewal fee income                           8,444           8,281           7,321
     Franchise fee income                                          568           1,073           1,249
     Commission income                                              75             150             369
     Processing income                                             915           1,402           1,543
                                                             ---------       ---------       ---------
           Total operating revenues                             46,358          34,788          30,141
                                                             ---------       ---------       ---------
Operating expenses:
     Selling, general and administrative expenses               27,273          21,675          18,607
     Salaries and benefits                                      12,683           9,825           8,189
     Member and merchant marketing expenses                      6,875           6,447           5,097
     Settlement of licensee litigation                             -             2,835             -
     Amended compensation agreements                               -               -             3,544
     Asset impairment loss                                         -               -             2,169
                                                             ---------       ---------       ---------
           Total operating expenses                             46,831          40,782          37,606
                                                             ---------       ---------       ---------
                   Operating loss                                 (473)         (5,994)         (7,465)

Other income (expense):
     Realized gains on sale of securities available for
        sale                                                        40           1,149             200
     Interest and other income                                     575             468             560
     Initial franchise fee and license fee income, net             -               -              (710)
     Interest expense and financing cost                        (6,297)         (4,021)         (3,021)
                                                             ---------       ---------       ---------
                   Loss before income taxes and
                        extraordinary item                      (6,155)         (8,398)        (10,436)

Income tax provision (benefit)                                     -             2,000          (2,600)
                                                             ---------       ---------       ---------
                   Loss before extraordinary item            $  (6,155)      $ (10,398)      $  (7,836)
                                                             ---------       ---------       ---------

</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, 2000
                    (in thousands, except income per share)

<TABLE>
<CAPTION>
                                                                                   2000            1999             1998
                                                                                   ----            ----             ----
<S>                                                                             <C>            <C>             <C>
           Loss before extraordinary item                                        $ (6,155)      $(10,398)      $ (7,836)
                                                                                 --------       --------       --------
Extraordinary item, loss on early extinguishment of debt,
     net of tax                                                                    (1,623)           -              -
                                                                                 --------       --------       --------
                   Net loss                                                        (7,778)       (10,398)        (7,836)
                                                                                 --------       --------       --------
Other comprehensive loss
         Unrealized holding gain (loss) on securities
             available -for-sale                                                      636             78           (607)
         Beginning unrealized loss for all securities sold                            (21)          (562)          (114)
         Tax effect of unrealized gain (loss)                                         -               90            274
                                                                                 --------       --------       --------
                   Comprehensive loss                                            $ (7,163)      $(10,792)      $ (8,283)
                                                                                 --------       --------       --------
Net loss per common and common equivalent share:
     Basic and diluted:
          Loss before extraordinary item                                             (.51)          (.80)          (.67)
          Extraordinary item loss on early extinguishment
             of debt,                                                                (.12)           -              -
          Net loss                                                               $   (.63)      $   (.80)      $   (.67)
                                                                                 --------       --------       --------
Weighted average number of common and common
     equivalent shares outstanding:
          Basic and diluted                                                        14,149         13,043         11,773

</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, 2000
                                 (in thousands)

<TABLE>
<CAPTION>
                                                 Preferred Stock     Common stock                  Cumulative
                                               -----------------  ------------------   Additional     other      Retained
                                                 Number             Number               paid-in  comprehensive (deficit)
                                               of shares  Amount  of shares    Amount    capital      income     earnings    Total
                                               ---------  ------  ---------    ------    -------      ------     --------    -----
<S>                                            <C>        <C>      <C>        <C>        <C>         <C>        <C>        <C>
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
     Net put options activity                      -         -        -            (4)       (860)       -           -         (864)
     Cumulative other comprehensive loss, net      -         -        -           -           -         (394)        -         (394)
                                                ----------------   ------------------     -----------------------------------------
Balance, September 30, 1999                        -         -     13,376         264      22,661        218      (5,030)    18,113
     Net loss                                      -         -        -           -           -          -        (7,778)    (7,778)
     Issuance of common stock                      -         -      2,824          56      12,044        -           -       12,100
     Issuance of preferred  stock                4,149       415      -           -         9,284        -           -        9,699
     Net put options activity                      -         -        -            (4)       (860)       -           -         (864)
     Preferred dividend                            -         -        -           -           -          -        (1,079)    (1,079)
     Cumulative other comprehensive income,
        net                                        -         -        -           -           -          615         -          615
                                                ----------------   ------------------     -----------------------------------------
Balance, September 30, 2000                      4,149  $    415   16,200    $    316    $ 43,129   $    833    $(13,887)  $ 30,806
                                                ================   ==================    ==========================================
</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, 2000
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                         2000           1999           1998
                                                                                         ----           ----           ----
<S>                                                                                   <C>             <C>            <C>
Cash flows from operating activities:
     Net loss                                                                         $ (7,778)      $(10,398)      $ (7,836)

     Adjustments to reconcile net loss to net cash used in operating activities:
           Depreciation and amortization                                                 4,067          3,444          5,346
           Amortization of deferred financing cost                                       1,113            354            278
           Provision for losses on rights-to-receive                                     7,391          4,606          3,822
           Gain on sale of investments                                                     (40)        (1,149)          (200)
           Loss on disposal of fixed assets                                                  8            -              -
           Deferred income taxes                                                           -            2,000         (1,980)

           Changes in assets and liabilities:
               Accounts receivable                                                      (1,029)        (5,545)           199
               Rights-to-receive                                                         3,849          4,706         (5,882)
               Prepaid expenses and other current assets                                 2,870         (3,766)          (457)
               Other assets                                                              1,490         (1,411)          (373)
               Accounts payable                                                          1,158          5,022            554
               Income taxes receivable(payable)                                            (37)         1,259           (378)
               Accrued expenses and other                                               (1,821)         2,982            249
               Deferred membership fee income                                             (843)         1,257           (662)
                                                                                        ------       --------         ------
                     Net cash provided by (used in) operating
                          activities                                                    10,398          3,361         (7,320)
                                                                                        ------       --------         ------
Cash flow from investing activities:
     Acquisition of Dining a la Card                                                       -          (36,453)           -
     Additions to property and equipment                                                (5,036)        (2,106)        (2,066)
     Acquisition of franchises                                                          (6,929)          (648)        (1,758)
     Proceeds from sale of fixed assets                                                     12            -              -
     Proceeds from sale of securities available for sale                                    40          1,149            200
     Decrease (increase) in restricted deposits and investments                          2,933            (90)           -
                                                                                        ------       --------         ------
                     Net cash used in investing activities                              (8,980)       (38,148)        (3,624)
                                                                                        ------       --------         ------
Cash flows from financing activities:
     Repayment of non-recourse notes                                                   (33,000)           -              -
     Proceeds from (repayment of) short term borrowings - bank                         (29,000)        29,000            -
     Proceeds from (repayment of) term loan - affiliate                                (10,000)        10,000            -
     Net proceeds from revolving securitization                                         58,555            -              -
     Net proceeds from rights offering                                                   9,700            -              -
     Net proceeds from issuance of common stock                                          9,865            306          9,854
     Decrease (increase) in restricted cash                                              3,726           (208)        (1,364)
     Conversion of warrants and options for common stock, net of
        tax benefits                                                                       -              -               65
     Dividends paid                                                                       (389)           -             (202)
                                                                                        ------       --------         ------
                     Net cash provided by financing activities                         $ 9,457       $ 39,098       $  8,353
                                                                                        ------        -------         ------
</TABLE>


                                      F-6
<PAGE>

                            TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Cash Flows, Continued

<TABLE>
<CAPTION>
                                                             2000         1999         1998
                                                             ----         ----         ----
<S>                                                        <C>         <C>          <C>
                     Net increase (decrease) in cash      $10,875      $(4,311)      $(2,591)

Cash and cash equivalents:
     Beginning of year                                      8,943        4,632         7,223
                                                          -------      -------       -------
     End of year                                          $19,818      $ 8,943       $ 4,632
                                                          -------      -------       -------
Supplemental disclosures of cash flow information:

     Cash paid (received) during the year for:
        Interest                                          $ 3,916      $ 2,873       $ 2,454
                                                          -------      -------       -------
        Income taxes                                      $    37      $(1,259)      $    23
                                                          -------      -------       -------
        Dividends                                         $   389     $   --         $   202
                                                          -------      -------       -------

</TABLE>

Supplemental schedule of noncash investing and financing activities:
     Noncash investing and financing activities:
        At September 30, 2000, 1999 and 1998, the Company adjusted its available
           for sale investment portfolio to fair value resulting in a net
           increase (decrease) to shareholders' equity of $615, ($394) and
           ($447), net of deferred income taxes.
        There was $690 dividend payable outstanding as of September 30, 2000.
           There was no dividend payable outstanding as of September 30, 1999
           and 1998.


     Theacquisition of the San Antonio/Austin franchisee was recorded during
        the first quarter of fiscal year 2000 as follows (see Note 4):

 Fair value of assets acquired:
          Rights-to-receive                            $200
          Other assets                                    5
          Excess of cost over net assets acquired       788
                                                        ---
                                                        993
 Less: Cash paid                                        950
                                                        ---
                            Liabilities assumed        $ 43
                                                        ===


     The acquisition of the New Jersey franchisee was recorded during the second
        quarter of fiscal year 2000 as follows (see Note 4):

 Fair value of assets acquired:
          Rights-to-receive                            $1,344
          Other assets                                     22
          Excess of cost over net assets acquired       2,002
                                                        -----
                                                        3,368
 Less:    Cash Paid                                     2,750
          Cash payments outstanding                       250
                                                        -----
                            Liabilities assumed        $  368
                                                        =====



                                      F-7
<PAGE>

                            TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Cash Flows, Continued

     The acquisition of the Washington, D.C. franchisee was recorded during the
        third quarter of fiscal year 2000 as follows (see Note 4):

        Fair value of assets acquired:
                  Rights-to-receive                                    $   1,661
                  Other assets                                                33
                  Excess of cost over net assets acquired                  3,725
                                                                       ---------
                                                                           5,419
        Less:     Cash Paid                                                1,426
                  Common shares issued                                     1,500
                  Note payable                                             2,000
                                                                       ---------
                                    Liabilities assumed                $     493
                                                                       =========


     The acquisition of the Virginia franchisee was recorded during the third
        quarter of fiscal year 2000 as follows (see Note 4):

         Fair value of assets acquired:

                  Excess of cost over net assets acquired     $   25
                                                              ------
        Less:     Cash payments outstanding                   $   25
                                                              ======



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")
                operates in one business segment and owns and markets discount
                dining rewards programs which offer savings to the Company's
                members on dining as well as lodging, travel, retail catalogues
                and long distance telephone calls. Our primary business is the
                administration of dining rewards programs. We accomplish this
                through the acquisition of Rights to receive from participating
                merchants which are then sold for cash to our 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 e-commerce services, launched in August 2000, uses the
                Internet to provide restaurant operators time and date specific
                revenue management tools to drive incremental traffic during off
                peak times and generate incremental business.

                We estimate that our member base and network of participating
                restaurants has changed to approximately 3,150,000 and 7,000,
                respectively, from our previous base of 1,200,000 members and
                7,300 restaurant merchants prior to the acquisition (see Note
                7). We operate in 50 major market areas.

                The Company's corporate structure consists of four wholly-owned
                subsidiaries: Transmedia Restaurant Company Inc., recently
                renamed iDine Restaurant Group Inc., functions as the sales
                organization and is responsible for merchant acquisition and
                relationship management; TMNI International Incorporated, which
                is responsible for all foreign licensing; Transmedia Service
                Company Inc., which is responsible for all card member-related
                facets of the business, including the card member service
                center, and support services to iDine Restaurant Group Inc.;
                iDine.com, Inc., incorporated in November 1999, which provides
                restaurant operators with the capability of using the Internet
                to provide revenue management tools such as variable promotions,
                dining incentives and off-peak pricing to fill empty seats and
                generate incremental business; and RTR Funding I, Inc., which
                was also established in 1999 as a special purpose corporation as
                part of the current securitization discussed in Note 5 is a
                wholly-owned subsidiary of Transmedia Service Company, Inc. In
                April 2000, the Company terminated, by mutual consent, the
                license agreements with Transmedia Asia Pacific, Inc. and
                Transmedia Europe, thereby reacquiring all rights to market the
                Transmedia brand name abroad. The accompanying consolidated
                financial statements include the accounts of the Company and its
                subsidiaries. All intercompany accounts and transactions have
                been eliminated in consolidation.

         (b)    Cash and Cash Equivalents

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

         (c)    Rights-to-Receive

                Rights to receive are composed primarily of food and beverage
                credits acquired from restaurants. Rights to receive 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. Cost is determined by the
                first-in, first-out method. The Company reviews the
                realizability of the Rights to receive 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 members. These losses are offset by recoveries from
                restaurants previously written off.


                                      F-9
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


         (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
                market 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 market 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 market values
                of the Company's investment securities in 2000 and 1999 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 less accumulated
                depreciation. Depreciation on property and equipment is
                calculated on the straight-line method over an estimated useful
                life of three to 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 lower of cost or fair value. Depreciation is
                calculated on a straight-line basis over a three-year life.

         (f)    Software Development Costs

                The Company developed and/or purchased certain website software
                applications and hardware that give rise to the Company's
                e-commerce services tailored to this targeted market. In
                accordance with Statement of Position 98-1 ("SOP 98-1"),
                "Accounting for the Costs of Computer Software Developed or
                Obtained for Internal Use." , the Company has capitalized
                certain internal use software and website development costs
                totaling $1,836 during the year ended September 30, 2000. The
                amortization of these costs is calculated on a straight-line
                basis over a three-year life. During the year ended September
                30, 2000, the amortization of these capitalized costs totaled
                $220. Certain software development costs are capitalized when
                incurred. Amortization starts when the product is available for
                general release to members. All other website construction and
                expansion expenditures are charged to expense in the period
                incurred.

         (g)    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 4) 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 estimated 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


                                      F-10
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


                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.

         (h)    Revenue Recognition

                Gross dining sales represent the cash received from a merchant
                when members dine at establishments in the program

                The Registered Card Program, obtained through the acquisition of
                Dining A La Card (the "Registered Card Program") in June 1999,
                and subsequently enhanced by us, has been adopted to replace the
                private label program. Members enrolled in the program simply
                register a valid major credit card with us and then present
                their registered credit card while dining at a participating
                restaurant. We employ an independent third party aggregator to
                mitigate any issues around privacy or confidentially of data.
                Based on our agreements with various processors throughout the
                country, the aggregator receives data for all the credit card
                transactions at participating merchants. On a daily basis, a
                complete detail of all registered credit card numbers is
                transmitted electronically to the aggregator of these
                transactions. The transactions are then matched to the current
                registered card file. These matched transactions are transmitted
                electronically to us and qualified via business rules as to
                whether they are eligible for a rebate. Once the transaction has
                been qualified, the portion of the transaction that the company
                will receive in cash is recognized as a sale. These qualified
                transactions are then used to provide member savings or
                alternate currency benefits, as well as to invoice and collect
                from merchants, principally via an electronic debit to their
                bank account.

                The Transmedia Card, the Company's proprietary private label
                charge card, was 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. 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,
                recognizes the sale and, gives the establishment credit against
                Rights to Receive which are owned by the Company. Simultaneously
                the Company (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.

                Initial membership and renewal fees are billed in advance and
                recognized on a straight-line basis over twelve months, which
                represents the 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.

                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 discounted products and services consist of retail
                catalogues, phone cards and travel services.

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

                                      F-11
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


         (i)    Deferred Acquisition Costs

                Certain costs of acquiring members are deferred and amortized,
                on a straight-line basis over the membership period, usually
                twelve 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
                restaurants 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.

         (j)    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 they use the program.

          (k)   Income Taxes

                Income taxes are accounted for using the asset and liability
                method. Deferred tax assets and liabilities are recognized for
                the estimated future tax consequences attributable to
                differences between the financial statement carrying amounts of
                existing assets and liabilities and their respective tax bases
                and operating loss and tax credit carryforwards. Deferred tax
                assets and liabilities are measured using enacted tax rates
                expected to apply in the year in which those temporary
                differences are expected to be recovered or rates settled. The
                effect on deferred tax assets and liabilities of a change in tax
                rates is recognized in income in the period that includes the
                enactment date. A valuation allowance is established when
                necessary to reduce deferred tax assets to the amounts expected
                to be realized.

         (l)    Stock Based Compensation

                Statement of Financial Accounting Standards (SFAS) No. 123,
                Accounting for Stock-Based Compensation, establishes a
                fair-value method of accounting for stock options and similar
                equity instruments. The fair-value method requires compensation
                costs to be measured at the grant date based on the value of the
                award and recognized over the service period. SFAS No. 123
                allows companies to either account for stock-based compensation
                to employees under the provisions of SFAS No. 123, or under the
                intrinsic-value based method of accounting prescribed by the
                Accounting Principles Board (APB) Opinion No 25 and its related
                interpretative releases. The Company has elected to account for
                the stock-based compensation to employees in accordance with the
                provisions of APB Opinion No. 25, and provide the pro forma
                disclosures required under SFAS No. 123.

         (m)    Impairment of Long-Lived Assets and Long-Lived Assets to be
                Disposed Of

                The Company reviews, as circumstances dictate, the carrying
                amount of our long-lived assets. The purpose of these reviews is
                to determine whether the carrying amounts are recoverable.

                                      F-12
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


                Recoverability of assets to be held and used is determined by
                comparing the projected undiscounted net cash flows of the
                long-lived assets against their respective carrying amounts. The
                amount of impairment, if any, is measured based on the excess of
                the carrying value over the fair value. Assets to be disposed of
                are reported at the lower of the stated amount or fair value
                less costs of disposal.

         (n)    Segment Information

                SFAS No. 131, Disclosures about Segments of an Enterprise and
                Related Information establishes standards for the manner in
                which public companies report information about operating
                segments in annual and interim financial statements. It also
                establishes standards for related disclosures about products and
                services, geographic areas, and major customers. The method for
                determining what information to report is based on the
                management organizes the operating segments within the Company
                for making operating decisions and assessing financial
                performance. The Company's chief operating decision-maker is
                considered to be the chief executive officer (CEO). The CEO
                reviews financial information presented on a consolidated basis
                for purposes of making operating decisions and assessing
                financial performance. The consolidated financial information is
                identical to the information presented in the accompanying
                consolidated statements of operations. Therefore, the Company
                has determined that it operated in a single operating segment,
                specifically, the providing of rewards to its members.

         (o)    Basic and Diluted Net Loss per Share

                Basic and diluted net loss per share was computed by dividing
                net loss applicable to common stockholders by the
                weighted-average number of shares of common stock outstanding
                for each period presented. Potentially dilutive securities were
                not considered for each of the years in the three year period
                ended September 30, 2000 since their effect would be
                antidilutive.

         (p)    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.

         (q)    Recent Accounting Pronouncements

                In June 1998, the FASB issued SFAS No. 133, "Accounting for
                Derivative Instruments and Hedging Activities" ("SFAS 133").
                SFAS 133 requires companies to recognize all derivative
                contracts as either assets or liabilities on the balance sheet
                and to measure them at fair market value. If certain conditions
                are met, a derivative may specifically be designated as a hedge,
                the objective of which is to match the timing of gain or loss
                recognition of: (i) the changes in the fair value of the hedged
                asset or liability that are attributable to the hedged risk; or
                (ii) the earnings effect of the hedged transaction. For a
                derivative not designated as a hedging instrument, the gain or
                loss is recognized as income in the period of change. SFAS 133,
                as amended by SFAS 137 and SFAS 138, is effective for all fiscal
                year quarters of fiscal years beginning after June 15, 2000. The
                Company does not expect SFAS 133 to have a material effect on
                its consolidated financial position or results of operations.

                In March 2000, the FASB issued FASB Interpretation (FIN) No. 44,
                Accounting for Certain Transactions Involving Stock
                Compensation. FIN No. 44 further defines the accounting
                consequence of various modifications to the terms of a
                previously fixed stock option or award


                                      F-13
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)



                under APB Opinion No. 25. FIN No. 44 becomes effective on July
                1, 2000, but certain conclusions in FIN No. 44 cover specific
                events that occur after December 15, 1998 or January 12, 2000.
                FIN No. 44 will not have a material effect on the Company's
                consolidated financial position or results of operations.

                In December 1999, the Securities and Exchange Commission (SEC)
                issued Staff Accounting Bulletin (SAB) No. 101, Revenue
                Recognition in Financial Statements, which provides guidance on
                the recognition, presentation, and disclosure of revenue in
                financial statements filed with the SEC. SAB No. 101 outlines
                the basic criteria that must be met to recognize revenue and
                provides guidance for disclosures related to revenue recognition
                policies. The impact of SAB No. 101 will not have a material
                effect on the Company's consolidated financial position or
                results of operations.

         (r)    Reclassification

                Certain prior year amounts have been reclassified to conform to
                the 2000 presentation.

         (s)    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)     Internet Dining Venture

         The Company launched its new Internet dining venture in April 2000.
         Execution of the e-commerce initiative is through iDine.com, a newly
         formed wholly-owned subsidiary. The on-line product will allow
         restaurateurs to create special variable incentives and promotions
         through the iDine website on specific days of the week and/or times of
         the day in order to drive incremental traffic when they need it most.
         Consumers will have their choice of savings rewards in points or cash
         and may convert the points into either complimentary dining or frequent
         flyer miles. The website also allows for on-line reservations, national
         restaurant listings and access to reviews and maps. The on-line
         initiative is intended to broaden the amount and type of savings and
         rewards offered to consumers as well as to expand the participating
         restaurant base by providing restaurant operators with a full suite of
         yield management products.

         Development of the e-commerce product is being financed by corporate
         capital and through a $10,000 private placement. In the first tranche
         of the private placement which closed on May 1, 2000, the Company
         issued 904,303 shares of its common stock at $4.5625 per share and
         warrants to purchase an additional 1,808,606 shares of its common
         stock, half of which have a per share exercise price of $5.93 and the
         other half of $7.30. The warrants will expire on April 28, 2005. The
         Company received proceeds from the share issuance in the amount of
         $4,126. The second tranche has the same price per share of common stock
         and exercise prices for the warrants as the first tranche. The second
         tranche, which closed on August 21, 2000, consisted of the sale of an
         aggregate of 1,287,480 common shares, accompanied by 2,574,960
         warrants. The Company received proceeds from this share issuance in the
         amount of $5,874. Funds obtained from the private placement have been
         earmarked by the Board for development of the e-commerce venture. At
         September 30, 2000 cash remaining from the private placement was
         $6,617.

                                      F-14
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)



         Operating results for the year ended September 30, 2000 were materially
         impacted by the new on-line product which is presently in the start-up
         and development phases. Included in operating expenses is approximately
         $4,591 associated with the e-commerce initiative. Additionally, $1,836
         of development expenditure has been capitalized.

(3)      Conversion to Registered Card and Rebranding

         Effective August 1, 2000, the Company completed its efforts to convert
         its entire restaurant portfolio and membership base to the registered
         card program. The registered card platform was acquired through the
         acquisition of Dining a La Card and subsequently enhanced by the
         Company, and allows members to register a valid credit card with the
         Company and then present the registered credit card when dining at
         participating restaurants in order to access their rewards and
         benefits. This is in contrast to the Company's traditional methodology
         whereby a separate private label charge card, the Transmedia Card, was
         selectively issued to members who then used it to obtain a discount at
         participating restaurants. The private label program is expected to be
         substantially phased out.

         In connection with the conversion and the launch of the on-line
         business, the Company has decided to universally brand its dining
         programs under the iDine name. iDine Prime will resemble the
         traditional fee-based, cash reward dining program that gives members
         unrestricted access to the entire restaurant portfolio. The iDine
         no-fee program will provide varying levels of benefits, services and
         rewards and uses alternative currencies for awarding benefits such as
         airline miles, dining points, etc. Included in both the iDine Prime and
         iDine programs will be the on-line offering of variable incentives and
         promotions at selected restaurants as discussed in Note 2 above.

 (4)     Franchise and License 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 provided marketing, advertising, training and other
         administrative support. The franchisees were responsible for soliciting
         restaurants and cardholders, advancing consideration to the restaurants
         to obtain rights-to-receive food and beverage credits, and maintaining
         adequate insurance. 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.

         The Company ceased franchising in 1995, and in 1997, the Board
         authorized a systematic reacquisition of the franchise territories. 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 is being amortized on a straight-line basis over twenty
         years

                                      F-15
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


         On December 16, 1999, the Company acquired all the Rights-to-receive,
         and the right to conduct business in the San Antonio and Austin sales
         territories from its franchisee, TRC. The purchase price was $950 of
         which $788 represents the cost of the franchises which has been
         recorded as the excess of cost over net assets acquired is being
         amortized on a straight-line basis over twenty years. With the
         acquisition of these sales territories, the Company completed the
         reacquisition of all of the sales territories of TRC, and the right to
         conduct business in Texas and settled any and all obligations under the
         franchise agreement, as amended.

         On March 31, 2000, the Company acquired all the outstanding shares of
         its New Jersey franchisee, 47K Corp, for $3,000 payable in three
         installments. The purchase method of accounting for business
         combinations was used. The operating results of the acquired company
         have been included in the consolidated results of the Company since the
         date of acquisition. The fair market value of the assets acquired was
         $3,368 and liabilities assumed totaled $368 The excess of cost over net
         assets acquired is being amortized on a straight-line basis over twenty
         years. Assets acquired included Rights to receive and other
         miscellaneous items. The first payment of $1,700 was made at closing on
         March 31, 2000; the second payment of $1,050 was paid on July 31, 2000;
         and the final payment is due March 31, 2001.

         On June 29, 2000, the Company acquired the net assets of its
         Washington, D.C. franchisee, Potomac Dining Ltd., for $4,926. The
         acquisition, accounted for under the purchase method of accounting for
         business combinations, was composed of a cash payment of $1,426, two
         subordinated convertible promissory notes totaling $2,000, and the
         issuance of 352,423 shares of the Company's common stock valued at
         $1,500. Accordingly, the operating results have been included in the
         Company's consolidated financial statements since the date of
         acquisition. The fair market value of the assets acquired, was $5,419
         and liabilities assumed totaled $493. The excess of cost over net
         assets acquired is being amortized on a straight-line basis over twenty
         years. Assets acquired included Rights to receive and other
         miscellaneous items. The terms of the two $1,000 convertible notes are
         as follows: (1) maturity date of June 30, 2002 and 2003, respectively;
         (2) interest accrues on unpaid principal amount of the notes at a rate
         equal to the prime rate plus 1%; and (3) notes may be converted to
         common shares by noteholder upon ten business days prior written notice
         to the Company (not less than $225 in principal per each election to
         convert).

         On June 30, 2000, the Company acquired all the assets of its Virginia
         franchisee, Stoney Creek Dining, Inc., for a termination cash payment
         of $25, which was paid on July 7, 2000.

         In addition to acquiring all former franchises, on April 11, 2000, the
         Company terminated, by mutual consent, the license agreements with
         Transmedia Asia Pacific, Inc. and Transmedia Europe, Inc. to operate
         the Transmedia dining card program in their respective territories. As
         a result of these negotiations, the Company forgave a $500 note and all
         accrued interest due from Transmedia Asia Pacific, Inc., and Transmedia
         Europe, Inc. Due to the uncertainty surrounding the resolution of this
         matter, the Company had previously provided a reserve for the face
         value of the note and related accrued interest. Following a brief
         transition period, Transmedia Asia Pacific, Inc. and Transmedia Europe,
         Inc. ceased using the Transmedia brand name for their discount
         programs.

(5)      Securitization of Rights to Receive

         On December 30, 1999, the Company entered into an $80,000 revolving
         securitization of the combined Rights to receive of both the private
         label and the registered card dining programs. The new securitization
         was privately placed through an asset backed commercial paper conduit.
         The proceeds drawn down at closing, approximately $65,000 based on a
         borrowing base formula, were utilized to terminate and payoff $33,000
         in non-recourse notes from a previous securitization and $27,000 then
         outstanding under a bridge loan used in the acquisition of Dining a La
         Card ("DALC") (see note 7 for


                                      F-16
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)

         additional information). Additionally, the Company was required to pay
         a termination payment of approximately $1,100 to the noteholders and
         non-recourse partners in the prior securitization.

         Borrowing capacity under the facility is recalculated weekly based on a
         formula driven advance rate applied to the current balance of Rights to
         receive that are eligible to be securitized. The advance rate is
         determined based on recent sales trends and months on hand of Rights to
         receive. Capacity at September 30, 2000 was $60,663 and the outstanding
         borrowings at that date were $59,625. The facility provides various
         restrictive covenants regarding collateral eligibility, concentration
         limitations and also requires the Company to maintain net worth of at
         least $24,000. At September 30, 2000 the Company was in compliance with
         the covenants.

         The interest rate applicable to the new facility is the rate equivalent
         to the rate (or if more than one rate, the weighted average of the
         rates) at which commercial paper ("CP") having a term equal to the
         related CP tranche period that may be sold by any placement agent or
         commercial paper dealer selected by the conduit on the first day of
         such CP tranche period, plus the amount of any placement agent or
         commercial paper dealer fees and commissions incurred or to be incurred
         in connection with such sale. At September 30, 2000, the effective
         interest rate for the new facility was 8.9% per annum.

         The conduit requires that a liquidity facility be provided by an A1/P1
         rated financial institution in the amount equal to 102% of the
         securitization amount. This liquidity facility must be renewed
         annually. The Company's primary bank, the Chase Manhattan Bank,
         provided the liquidity facility in the initial year and have indicated
         a desire to syndicate all or a portion of the liquidity facility, or
         alternatively, bring in a co-purchaser conduit for a percentage of the
         securitization. On December 27, 2000, the credit agreements were
         amended to provide an extension of the initial term for 90 days to
         March 28, 2001 to complete the syndication and reduced the amount of
         the securitization to $60 million. In the event that syndication is not
         completed by that date, another extension may be granted, an
         alternative asset backed financing vehicle may be established or the
         outstanding borrowings under the securitization may be converted to a
         term loan.

         The Company previously financed its Rights to receive under a revolving
         securitization originated in 1996 (the 1996 facility). Under this
         facility, $33,000 of fixed rate securities were issued in a previous
         private placement to various third party investors. The private
         placement certificates had a five-year term before amortization of
         principal and had an interest rate of 7.4%.

         The early extinguishment of the 1996 facility and payoff of the related
         non-recourse notes resulted in an extraordinary charge of $1,623 or
         $0.12 per share consisting of the following:

         Write-off of related unamortized financing costs        $   540
         Termination payment to noteholder
              and non-recourse partners                            1,083
                                                                 -------
         Extraordinary charge before income tax benefit            1,623
         Income tax benefit                                         (412)
         Related increase in income tax valuation allowance          412
                                                                 -------
         Net extraordinary charge                                $ 1,623
                                                                 =======

(6)      Rights Offering

         On November 9, 1999, the Company completed a 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. During
         fiscal year 2000, the Company declared dividends in the amount of $533.
         Each preferred share may be


                                      F-17
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


         converted into common stock at the option of the holder at any time.
         The initial rate of conversion was one to one. Subsequent conversion
         rates are higher to the extent of the deferred dividend accruing at 6%
         and any unpaid cash dividends. If not previously converted, the Company
         may commence redemption of the preferred shares on the third
         anniversary of the rights offering. At September 30, 2000, the
         conversion rate of the preferred shares was one preferred share for
         1.0539 common shares.

         The proceeds from the stock issuance of $10,000 were used to retire a
         $10,000 term loan obtained from an affiliate of the Company's largest
         investor, used primarily for the DALC acquisition. Pursuant to its
         subscription privileges and as a standby purchaser for any unsubscribed
         shares, Equity Group Investments, Inc. ("EGI"), an affiliate of the
         Company's largest investor, acquired 2.84 million of the preferred
         shares. The additional investment provided EGI with the right to
         designate an additional member to the Board of Directors.

(7)      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 that 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.

         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 the Company 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
         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, 2000, is $3,200. 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. (See Note 2)

         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. (See Note 2)

         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).

         The Chase facility was paid off on December 30, 1999 with the proceeds
         of the $80,000 securitization (Note 5). Financing fees of $1,100 were
         also paid.



                                      F-18
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)

         The GAMI facility was 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 agreement with GAMI 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 $10,000 of convertible preferred stock
         was issued (see Note 6). 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 one 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.

         In connection with this acquisition, the Company paid a fee for
         transaction advisory services to EGI, which is included in the cost of
         the acquired assets, of $386.

(8)      Investments by Equity Group Investments, Inc.

         On March 3, 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 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 Notes 6 and 7, EGI invested an additional
         $6,846 in November, 1999, as a result of a Standby Purchase Agreement
         which they provided to support the Company's $10,000 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.

         As more fully described in Note 2, EGI also invested an additional
         $1,850 in August 2000.

(9)      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 $1,000 in the event of the sale of a control block of stock,
         as described in Note 8 above. Pursuant to this agreement, the Company
         made cash payment of $2,750 to Mr. Chasen and recognized a one-time
         pre-tax charge of $3,081 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


                                      F-19
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


         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.

(10)     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, 2000, 1999 and 1998. Gross unrealized
         gains were $833, $545, and $1,030 and gross unrealized losses were $0,
         $194, and $43 as of September 30, 2000, 1999 and 1998, respectively.
         Realized gains were $40, $1,149 and $200 for the years ended September
         30, 2000, 1999 and 1998, respectively. Deferred income taxes associated
         with the net unrealized gains were $367, $134, and $375 at September
         30, 2000, 1999 and 1998, respectively.

(11)     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 of
         $1,648 and $972 on terminals under lease at September 30, 2000 and
         1999, respectively.

(12)     Property and Equipment

         Property and equipment consist of the following:
                                                              September 30,
                                                     --------------------------
                                                            2000         1999

                 Furniture and fixtures              $        612          674
                 Office equipment                          13,838       12,136
                 Website hardware and software              1,476           --
                      applications
                 Leased equipment                             174          174
                 Leasehold improvements                       227          129
                                                           ------       ------
                                                           16,327       13,113
                 Less accumulated depreciation and
                      amortization                         (7,843)      (6,700)
                                                           ------       ------
                                                     $      8,484        6,413
                                                           ======       ======

         Depreciation and amortization expense for the years ended September 30,
         2000, 1999 and 1998 was $3,445, $2,859, and $2,711, respectively.

 (13)    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 approximate the carrying amounts at
         September 30, 2000 and 1999 due to the short maturity of these
         instruments. The fair value of the Rights-to-receive approximates the
         carrying 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.


                                      F-20
<PAGE>
                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


(14)     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 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. On March 1, 2000 the Plan was amended again
         to increase the number of shares of common stock available for grant
         under the Plan to 2,505,966. 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
         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, 2000 and 1999, there were 614,616 and 443,716 shares
         available for grant under the 1996 Stock Plan, respectively. The per
         share weighted average fair value of stock options granted during 2000,
         1999 and 1998 was approximately $2.71, $2.70 and $4.95, respectively,
         on the date of grant using the Black-Scholes option-pricing model with
         the following assumption: 2000-expected no dividend yield, risk-free
         interest rate or 6.75%, volatility of 0.7553, and expected lives
         ranging from five to ten years; 1999-expected no dividend yield,
         risk-free interest rate or 6.25%, volatility of 1.0774 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 elected to continue 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:

                                                  2000        1999        1998
                                                  ----        ----        ----
         Net Income
            As reported                         $(7,778)    $(10,398) $  (7,836)
            Pro forma                            (8,761)     (12,581)    (8,919)

         Net Income per Common and Common
         Equivalent Share
            As reported                            (.63)        (.80)     (.67)
            Pro forma                              (.70)        (.96)     (.76)




                                      F-21
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)



         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                 -              -
                                                      ----------      -------          --------       --------
                  Granted                               971,600          3.89                 -              -
                  Exercised                                   -            -                  -              -
                  Cancellations                        (155,000)         4.01                 -              -
                                                      ----------      -------          --------       --------
         Balance at September 30, 2000                2,077,693       $  4.16          $      -              -
                                                      ==========      =======          ========       ========

</TABLE>


         At September 30, 2000, the range of weighted average exercise prices
         and remaining contractual life of outstanding options was $2.00 to
         $15.00 and 3.27 to 9.75 years, respectively. 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, 1998, the range of weighted average
         exercise prices and remaining contractual life of outstanding options
         was $4.38 to $15.00 and 1 to 10 years, respectively.

         At September 30, 2000, 1999 and 1998, the number of options exercisable
         were 1,105,343, 901,593 and 630,918, respectively, and the
         weighted-average exercise price of those options was $4.77, $5.30, and
         6.99, respectively.



                                      F-22
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)

(15)     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, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                  2000             1999
                                                                  ----             ----
<S>                                                            <C>             <C>
Deferred tax assets:
     Reserve for rights-to-receive losses                      $  2,890        $   694
     Lawsuit settlement                                            --            1,077
     Travel programs and reserve for frequent flyer miles
        obligation                                                   61             37
     Charitable contributions                                        59             58
     Net operating loss carryforward                              6,760          4,577
     Intangible assets                                              703            758
     Other                                                          195            156
                                                                 ------          -----
           Gross deferred tax assets                             10,668          7,357
                 Less valuation allowance                        (8,859)        (6,005)
                                                                 ------          -----
           Deferred tax assets                                    1,809          1,352
                                                                 ------          -----
Deferred tax liabilities:
     Unrealized gain on securities available for sale               367            134
     Deferred acquisition costs                                   1,082            551
     Property and equipment                                         360            667
                                                                 ------          -----
           Deferred tax liabilities                               1,809          1,352
                                                                 ------          -----
                    Net deferred tax asset                     $     -         $     -
                                                                 ======          =====
</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, 2000 and 1999, due to the Company's
         recurring losses. The valuation allowance at September 30, 2000 and
         1999 was $8,859 and $6,005, respectively. Of the net increase in the
         valuation allowance for the year ended September 30, 2000, a decrease
         of $233, which was attributed to unrealized gains, was allocated to
         shareholders equity. The change in deferred tax liability related to
         securities available for sale was an increase of $233, and a decrease
         of ($241) during 2000 and 1999, respectively.

         A net operating loss carryforward of $17,791 was available at the year
         ended September 30, 2000. The loss will expire through the year 2020.


                                      F-23
<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, 2000,
1999 and 1998 is as follows:

                                                2000      1999      1998
                                                ----      ----      ----
                Current
                     U.S. federal             $   -          -      (587)
                     State and local              -          -       (33)
                                              ------     ------   ------
                     Total Current            $   -          -      (620)
                                              ======     ======   ======
                Deferred
                     U.S. federal             $   -      1,240    (1,774)
                     State and local              -        760      (206)
                                              ------     ------   ------
                     Total Deferred           $   -      2,000     1,980
                                              ======     ======   ======

         Reconciliation of the statutory federal income tax rate and the
         Company's effective rate for the years ended September 30, 2000, 1999
         and 1998, is as follows:

<TABLE>
<CAPTION>
                                               2000                       1999                       1998
                                     -----------------------     -----------------------      ---------------------
                                               % of pretax                  % of pretax                  % of pretax
                                      Amount     earnings         Amount     earnings          Amount      earnings
                                      ------     --------         ------     --------          ------      --------
<S>                              <C>            <C>         <C>              <C>          <C>             <C>
        Federal tax rate          $  (2,643)     34.0       $     (2,855)     34.0        $     (3,548)     34.0
        State and local taxes,
             net of federal
             income tax benefit        (307)      4.0               (336)      4.0                (417)      4.0
        Valuation allowance
             change                   3,087     (39.8)             5,033     (59.9)                972      (9.3)
        Other                          (137)      1.8                158      (1.9)                393      (3.8)
                                  ---------      ----       ------------      ----        ------------      ----
        Total                     $      -          -       $      2,000      23.8%       $     (2,600)     24.9%
                                  =========      ====       ============      ====        ============      ====

</TABLE>

(16)     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, 2000 are as follows:
                                Year ending
                               September 30,                     Amount

                                    2001                      $     959
                                    2002                            475
                                    2003                            187
                                    2004                             44


                        Total minimum lease payments          $   1,665
                                                              =========

         Rent expense charged to operations was $1,028, $794, and $710 for the
         years ended September 30, 2000, 1999 and 1998, respectively.


                                      F-24
<PAGE>

                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)


(17)     Related Party Transactions

         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, 2000 and 1999, the Company paid approximately $256
         and $250 to EGI for these services. There was no such expense in fiscal
         1998.

(18)     Commitments

         In October 1998, the Company 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 agreements 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 year ending September 30,
         2000 and 1999, SignatureCard received approximately $2,817 and $106 in
         fees, respectively.

(19)     Business and Credit Concentrations

         At September 30, 2000 and 1999, members enrolled in the airline
         programs represent approximately 73% and 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.

         The Company is involved in various legal proceedings. While it is not
         currently possible to predict or determine the outcome of these
         proceedings, it is the opinion of management that the outcome will not
         have a material adverse effect on the Company's financial position or
         liquidity.

(21)     Subsequent Event

         On December 28, 2000, the Company reached an agreement with GE
         Financial Assurance ("GEFA"), the successor parent of SignatureCard,
         Inc., to extinguish all remaining obligations associated with the DALC
         acquisition, to eliminate SignatureCard, Inc's., exclusivity rights in
         dealing with the airline frequent flyer member files and to execute a
         contract to fully resolve and terminate the relationship. In




                                      F-25
<PAGE>


                             TRANSMEDIA NETWORK INC.
                                AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements
                 (in thousands, except share and per share data)

         consideration for the above, the Company will pay GEFA $3,800 in cash
         and will honor their right to put 400,000 shares held by GEFA as part
         of the acquisition consideration, at a value of $8 per share.
         Additionally, the Company has agreed to assume SignatureCard, Inc.,
         minimum miles purchase obligation with one of the major airline's which
         will be determined as of March 31, 2001. If unable to renegotiate or
         defer the obligation at that date, the Company estimates that it may
         have to acquire approximately $2,000 of frequent flyer miles to be held
         for future awards.

(22)     Selected Quarterly Financial Data (Unaudited)

(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,
                                  2000           2000          2000          1999             2000
                                  ----           ----          ----          ----             ----
<S>                          <C>               <C>           <C>           <C>             <C>
Gross dining sales:           $ 43,289         45,183         45,383        180,627         46,772

Operating revenue:              11,651         11,583         11,778         11,346         46,358

Operating income (loss):          (933)        (2,737)         1,851          1,346           (473)

Net income:                     (2,357)        (4,117)           437         (1,741)        (7,778)

Basic and Diluted
     earnings earnings           (0.17)         (0.31)         (0.01)         (0.14)         (0.63)
     per share
</TABLE>


<TABLE>
<CAPTION>
                                                 Three months ended
                               ----------------------------------------------------------
                                                                                         Year ended      Year ended
                            September 30,     June 30,       March 31,    December 31,  September 30,   September 30,
                                1999            1999           1999           1998          1999            1998
                                ----            ----           ----           ----          ----            ----
<S>                          <C>               <C>            <C>           <C>           <C>             <C>
Gross dining sales:           $ 23,893         24,205         22,756        120,472         95,549         49,618

Operating revenue:              12,584          7,679          7,599          6,926         34,788         30,141

Operating income:               (1,498)        (1,410)        (1,307)        (1,779)        (5,994)        (7,465)

Net Income:                     (5,109)        (2,065)        (1,871)        (1,353)       (10,398)        (7,836)

Basic and diluted
     earnings per share:          (.39)          (.16)          (.14)          (.11)          (.80)          (.67)

</TABLE>


                                      F-26
<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-27
<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)(I)       145,410
   Cardmember discounts                                   21,444         24,262                              45,706
                                                          ------         ------            ------            ------
   Net revenues from rights-to-receive                    19,659         (2,714)            8,000            24,945

Other income                                              10,482         10,629            (7,110)(C)        14,001
                                                          ------         ------            ------            ------

      Total operating revenues                            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              (7,836)       (39,487)           29,215           (28,514)
      change


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 consolidated financial information


                                      F-28
<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 (K)          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 revenues                      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           (9,045)           (5,430)            3,305           (11,169)
         on sale of dining assets

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 consolidated financial information




                                      F-29
<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-30
<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-31
<PAGE>

                             TRANSMEDIA NETWORK INC.

                  Schedule II-Valuation and Qualifying Accounts

        For each of the years in the three-years ended September 30, 2000
                                 (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, 2000:
        Allowance for doubtful accounts                 $     15            338            (338)           -           15
                                                        ========          =====          ======       ======       ======

     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
                                                        ========          =====          ======       ======       ======

Rights to receive:
     Year ended September 30, 2000
        Allowance for doubtful accounts                 $ 14,872          7,391          (9,518)           -       12,745
                                                        ========          =====          ======       ======       ======

     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
                                                        ========          =====          ======       ======       ======


</TABLE>


                                      F-32
<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 our 2001 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 our 2001 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 our
         2001 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 our 2001 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)   The following exhibits are filed as part of this report as
                  required by item 601 of Regulation S-K. The Exhibits
                  designated with an asterisk are management contracts and
                  compensatory plans and arrangements required to be filed as
                  Exhibits to this report.


<TABLE>
<CAPTION>
Designation                         Description
-----------                         -----------
<S>                         <C>
3.1      Certificate of Incorporation of Transmedia Network Inc., as amended. (b)

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


                                       24
<PAGE>

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      Certificate of Amendment to the Certificate of Incorporation of Transmedia Network Inc., -as filed with
           the Delaware Secretary of State on March 3, 1998.(i)

3.5      Certificate of Amendment of the Certificate of Incorporation  of Transmedia Network Inc., as filed with
           the Delaware Secretary of State on November 9, 1999.(k)

3.6       Cetificate of Designations relating to the Series A convertible redeemable Preferred Stock, as filed with
           the Delaware Secretary of State on November 9, 1999.(k)

3.7      By-Laws of Transmedia Network Inc., as amended and restated as of March 3, 1998.(i)

4.2      Form of Series A convertible redeemable Preferred Stock certificate.(k)

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

4.4      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)

4.5      Investment Agreement, dated as of April 28, 2000, by and among Transmedia Network Inc., Minotaur
         Partners II, L.P., Value Vision International Inc., Dominic Mangone and Raymond Bank.

4.6      Co-Sale and Voting Agreement, dated as of April 28, 2000, by and among Transmedia Network Inc.,
         Samstock, L.L.C., Minotaur Partners II, L.P., Value Vision International Inc., Dominic Mangone and
         Raymond Bank.

4.7      Investment Agreement, dated as of April 28, 2000, by and among Transmedia Network Inc., Gene M.
         Henderson, Herbert M. Gardner, James M. Callaghan, Gregory J. Robitaille, John A. Ward, George S.
         Weidemann, Christine M. Donohoo, Frank F. Schmeyer, Elliot Merberg, Gerald Fleischman, Samstock, L.L.C.
         and Thomas J. Litle.

4.8      Co-Sale and Voting Agreement, dated as of April 28, 2000, by and among Transmedia Network Inc., Gene M.
         Henderson, Herbert M. Gardner, James M. Callaghan, Gregory J. Robitaille, John A. Ward, George S.
         Weidemann, Christine M. Donohoo, Frank F. Schmeyer, Elliot Merberg, Gerald Fleischman, Samstock, L.L.C.
         and Thomas J. Litle.

10.1     Purchase Agreement, dated as of December 15, 1997, between Transmedia Network Inc. East American Trading
         Company.(l)

10.2     Purchase Agreement, dated as of June 29, 2000, by and among Transmedia Network Inc., Spectrum Partners,
         Inc., Potomac Dining Limited Partnership, Gustavo L. Bessalel, Thomas E. Gorman and Francis Rothgeb.(m)

10.3     Form of Subordinated Convertible Notes, dated June 30, 2000.(m)

10.4     Stock Purchase and Sale Agreement, dated as of April 28, 2000, by and among Minotaur Partners II, L.P.,
         Value Vision International Inc., Dominic Mangone and Raymond Bank.(m)


                                       25
<PAGE>

10.5     Form of Warrant to Purchase Shares of Common Stock of Transmedia Network Inc.(m)

10.6     Stock Purchase and Sale Agreement, dated as of April 28, 2000, by and among Gene M. Henderson, Herbert
         M. Gardner, James M. Callaghan, Gregory J. Robitaille, John A. Ward, George S. Weidemann, Christine M.
         Donohoo, Frank F. Schmeyer, Elliot Merberg, Gerald Fleischman, Samstock, L.L.C. and Thomas J. Litle.(m)

10.7     Form of Warrant to Purchase Shares of Common Stock of Transmedia Network Inc.(m)

10.8     Asset Purchase Agreement, dated as of March 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)

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

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

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

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

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

10.14    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)

10.15    1987 Stock Option and Rights Plan, as amended. (a)

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

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

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

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

10.20    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)

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


                                       26
<PAGE>

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

10.23    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)

10.24    Form of Warrant to purchase Common Stock of Transmedia Network Inc.(i)

10.25    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)

10.26    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)

10.27    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)

10.28    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)

10.29    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)

10.30    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)

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

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

10.33*   Employment Agreement, dated as of October 14, 1998, between Transmedia Network Inc. and Gene M.
           Henderson.(k)

10.34    Standby Purchase Agreement, dated as of June 30, 1999, between Transmedia Network Inc. and Samstock,
         L.L.C. including standby agreement warrant.(k)

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

12       Statement regarding calculation of earnings to fixed charges.

21       Subsidiaries of Transmedia Network Inc.



                                       27
<PAGE>

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

27       Financial Data Schedule

</TABLE>

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.

           (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 17, 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.

           (l)    Filed as an exhibit to the registration statement on Form S-3
                  (registration no. 333-53147), and incorporated by reference
                  thereto.

           (m)    Filed as an exhibit to the registration statement on Form S-3
                  (registration no. 333-49366), and incorporated by reference
                  thereto.

(b) We did not file any Form 8-K Current Reports during the fourth quarter of
    the fiscal year ended September 30, 1999.
(c) 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.
(d) 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.


                                       28
<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 29th day of
December, 2000.

                              TRANSMEDIA NETWORK INC.

                              By:    /s/Gene M. Henderson
                                     ----------------------------
                              Name:   Gene M. Henderson
                              Title:  President and Chief Executive Officer


                                Power Of Attorney
Each person whose signature appears below hereby authorizes and constitutes Gene
M. Henderson and Stephen E. Lerch, and each of them singly, his true and lawful
attorney-in-fact with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities to sign
and file any and all amendments to this report with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, and he or she as the case may be hereby ratifies and confirms all
that said attorney-in-fact or any of them, or their substitutes, may lawfully do
or cause to be done virtue hereof.

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.


<TABLE>
<CAPTION>
                                                Capacity In
             Signature                          Which Signed                       Date
             ---------                          ------------                       ----
<S>                                       <C>                                 <C>
        /s/ Sheli Z. Rosenberg             Chairperson of the Board             December 29, 2000
        ----------------------
           Sheli Z. Rosenberg


        /s/ Gene M. Henderson              Director,                            December 29, 2000
        ---------------------
           Gene M. Henderson               President and
                                           Chief Executive Officer
                                           (Principal Executive Officer)


        /s/ Stephen E. Lerch               Executive Vice President             December 29, 2000
        --------------------               and Chief Financial Officer
           Stephen E. Lerch                (Principal Financial and
                                           Accounting Officer)


        /s/ William A. Lederer             Director                             December 29, 2000
        --------------------------
           William A. Lederer


        /s/ Herbert M. Gardner             Director                             December 29, 2000
        ----------------------
           Herbert M. Gardner


        /s/ John A. Ward III               Director                             December 29, 2000
        --------------------
           John A. Ward III

</TABLE>

                                       29
<PAGE>

                                  EXHIBIT INDEX

DESIGNATION                         DESCRIPTION
-----------                         -----------

4.5      Investment Agreement, dated as of April 28, 2000, by and among
         Transmedia Network Inc., Minotaur Partners II, L.P., Value Vision
         International Inc., Dominic Mangone and Raymond Bank.(r)

4.6      Co-Sale and Voting Agreement, dated as of April 28, 2000, by and among
         Transmedia Network Inc., Samstock, L.L.C., Minotaur Partners II, L.P.,
         Value Vision International Inc., Dominic Mangone and Raymond Bank.

4.7      Investment Agreement, dated as of April 28, 2000, by and among
         Transmedia Network Inc., Gene M. Henderson, Herbert M. Gardner, James
         M. Callaghan, Gregory J. Robitaille, John A. Ward, George S. Weidemann,
         Christine M. Donohoo, Frank F. Schmeyer, Elliot Merberg, Gerald
         Fleischman, Samstock, L.L.C. and Thomas J. Litle.

4.8      Co-Sale and Voting Agreement, dated as of April 28, 2000, by and among
         Transmedia Network Inc., Gene M. Henderson, Herbert M. Gardner, James
         M. Callaghan, Gregory J. Robitaille, John A. Ward, George S. Weidemann,
         Christine M. Donohoo, Frank F. Schmeyer, Elliot Merberg, Gerald
         Fleischman, Samstock, L.L.C. and Thomas J. Litle.

12       Statement regarding calculation of earnings to fixed charges.

21       Subsidiaries of Transmedia Network Inc.

27       Financial Data Schedule