SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


     [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996.
                                       OR
     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 
          For the transition period from to

                         Commission file number 0-23026

                           PARAMARK ENTERPRISES, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                           22-3261564
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)

    135 Seaview Drive
   Secaucus, New Jersey                                 07094
  (Address of principal                               (Zip Code)
    executive offices)

Registrant's telephone number including area code:      (201) 422-0910

Securities registered pursuant to Section 12 (b) of the Act:   None

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

                                  Common Stock
                                (Title of Class)

                                Class A Warrants
                                (Title of Class)

                                Class B Warrants
                                (Title of Class)

<PAGE>

         Check whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes X No

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B in this Form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB. Yes X No

         The issuer's revenues for the fiscal year ended December 31, 1996 were
$1,489,900.

         As of December 31, 1996, there were 3,068,833 shares of Common Stock,
1,453,000 Class A Warrants, and 557,750 Class B Warrants outstanding. Based on
the average high and low bid prices of the Common Stock on February 28, 1997,
the approximate aggregate market value of Common Stock held by non-affiliates
was $4,432,200 (1).


                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Registrant's 1997 Definitive Proxy Statement, which
statement will be filed not later that 120 days after the end of the fiscal year
covered by this Report, are incorporated by reference in Part III hereof.

         Certain exhibits are incorporated by reference to the Registrant's
Registration Statement on Form SB-2 and the amendments thereto, and the
Registrant's Annual Reports on Form 10-KSB for the fiscal years ended December
31, 1994 and December 31, 1995 as listed in response to Item 13(a)(2).



         Transitional Small Business Disclosure Format (check one): Yes   No X


         (1) The aggregate dollar value of the voting stock set forth equals the
         number of shares of the Company's Common Stock outstanding, reduced by
         the amount of Common Stock held by officers, directors and shareholders
         owning in excess of 10% of the Company's Common Stock, multiplied by
         the average of the high and low bid prices for the Company's Common
         Stock on February 28, 1997. The information provided shall in no way be
         construed as an admission that any officer, director or 10% stockholder
         in the Company may or may not be deemed an affiliate of the Company, or
         that he/it is the beneficial owner of the shares reported as being held
         by him/it, and any such inference is hereby disclaimed. The information
         provided herein is included solely for recordkeeping purposes of the
         Securities and Exchange Commission.


<PAGE>

                                     PART I

ITEM 1. BUSINESS

General

         For a discussion of certain factors which should be considered in
evaluating the Company and its business, see "Investment Considerations".

         Paramark Enterprises, Inc., formerly T.J. Cinnamons, Inc. (the
"Company") was one of the first operators and franchisors of retail bakeries
specializing in gourmet cinnamon rolls and related products in the United
States. The Company owns and operates one wholesale production facility and one
retail bakery. The Company, a Delaware corporation formed in August 1993, is
successor by merger to Signature Acquisition Corp., a New Jersey corporation
formed in October 1991 and Signature Foods, Inc., a Missouri corporation formed
in December 1985.

         In June 1992, control of the Company was acquired by current management
with the intention of implementing a focused business plan designed to further
develop and capitalize on what management believed to be brand equity beyond the
scope of its current points of distribution. The Company's business plan has
centered on leveraging the T.J. Cinnamons brand equity to expand distribution by
implementing three interrelated strategies: (1) expand the Company's franchised
bakery system, (2) explore opportunities to offer the Company's products in
non-traditional retailing environments, and (3) expand opportunities to offer
the Company's cinnamon roll and related products in supermarkets and other
grocery outlets.

         With insufficient capital to fully implement the foregoing business
plan, in June 1995 the Company retained the Corporate Finance Group at Arthur
Andersen LLP to act as its financial advisor in connection with the exploration
of strategic alternatives available to the Company. As a result of this
engagement, in June, 1996 the Company executed a definitive agreement with
Triarc Restaurant Group (formerly known as Arby's, Inc.) for the sale of its
intellectual property and a simultaneous license of certain of the intellectual
property back to the Company for the purposes of continuing to distribute T.J.
Cinnamons products through retail grocery outlets, operate one existing retail
bakery, and continuing to act as franchisor under the existing franchise
agreements subject to a management agreement.

         The Triarc Restaurant Group Transaction. On August 29, 1996 the Company
sold certain of its operating assets, comprised of the "T.J. Cinnamons" and
other related trade names, trademarks, service marks, logos, signs, emblems,
distinctive recipes, secret formulas and technical information ( the
"Intellectual Property") , and assigned to TJ Holding Company, Inc. (a newly
formed wholly owned subsidiary of Triarc Restaurant Group) various manufacturer
and distributor agreements. Triarc Restaurant Group ("Triarc") operates and
franchises approximately 3,000 single and multi-branded restaurant concepts
under the names Arby's, ZuZu's, p.t. Noodles and Arby's Roast Town.

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         Under terms of the transaction, Triarc entered into a license agreement
with the Company for an initial term of 20 years, together with three 20 year
renewal options and one 19 year renewal option, granting the Company the rights
to use the Intellectual Property for the primary purpose of expanding its sales
of T.J. Cinnamons branded products through wholesale channels of distribution.
The Company also entered into a management agreement pursuant to which TJ
Holding Company, Inc. is acting as the Company's manager for the purposes of
fulfilling the Company's obligations under its existing franchise agreements.

         The aggregate base purchase price of the Intellectual Property was
$3,540,000, with $1,790,000 paid at the closing, $1,650,000 paid in the form of
a 15 month promissory note, and $100,000 paid in the form of a 24 month
promissory note. In addition, the transaction provides for additional
conditional payments of up to $5.5 million. Such additional payments commence on
August 29, 1998 based on 2% of gross sales of T.J. Cinnamons branded products in
Triarc retail outlets exceeding $26.3 million annually for a period of 48
months, and 1% of gross sales for a period of 36 months thereafter.

         Under the terms of the purchase agreement (the "Purchase Agreement"),
the Company agreed to the following covenants: (a) that it will not declare a
dividend on any class of stock prior to August 29, 1997, (b) that it will pay
all outstanding liabilities as of August 29, 1996 prior to November 29, 1997,
and (c) that it terminate its Trademark and Technology License Agreement with
Heinz Bakery Products. Pursuant to the terms of the purchase agreement, the
Company changed its name from T.J. Cinnamons, Inc. to Paramark Enterprises, Inc.

         With the completion of the Triarc agreement, the Company is no longer
pursuing the retail bakery and non-traditional bakery development strategies,
and is now poised to focus its energies on the wholesale manufacturing and
distribution of the T.J. Cinnamons branded products. The structure of the
transaction allows the Company to benefit from Triarc's extensive operational
and financial resources. As Triarc develops the T.J. Cinnamons brand in planned
Arby's/T.J. Cinnamons co-branded restaurant units, the Company will benefit from
a further consumer brand awareness which will complement its wholesale
distribution strategy.

         As of the date of this report, Triarc has developed thirteen
Arby's/T.J. Cinnamons test locations in various markets in the U.S. The sales of
T.J. Cinnamons products in these units are exceeding the Company's original
expectations. Triarc is currently completing the registrations of the franchise
offering materials and expects to roll-out the dual branded units to their
franchise system later this year.

         Subsequent to the closing of the Triarc transaction, the Company and
Orange Bakery, Inc. ("Orange") jointly developed a pre-proofed frozen cinnamon
roll utilizing the T.J. Cinnamons formulations. The pre-proofed frozen cinnamon
rolls are fully prepared, proofed and blast frozen cinnamon rolls. These
products are stored and shipped frozen, thawed at the retail stores, and baked
fresh daily. The advantages of the pre-proofed cinnamon rolls are (1) ease of
baking, (2) limited production space needed in retail outlets, (3) consistency
of quality, (4) reduced waste, and (5) improved efficiency and labor savings.
The Company introduced

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<PAGE>

Orange and the pre-proofed products to Triarc, and Orange was successful in
selling the pre-proofed products to Triarc where they are currently being used
in all test locations.

         The Company entered into an agreement with Orange whereby Orange will
provide the Company a fee equal to six and one-half percent (6.5%) of net sales
by Orange to Triarc or any of its affiliates in consideration for marketing,
brokerage and research and development services. The Company has also entered
into a brokerage agreement with a food broker on the west coast who introduced
the Company to Orange, providing a finders fee equal to one half percent (0.5%)
of net sales by Orange to Triarc of any of its affiliates.

         Wholesale Distribution. In June, 1992 the Company entered into an
exclusive 20 year manufacturing and licensing agreement with Heinz Bakery
Products ("Heinz"). Pursuant to this agreement, Heinz provided the Company with
$1,425,000 in advanced royalties, and began to market the Company's cinnamon
roll products initially as a "proof and bake" frozen dough and later as a "thaw
and serve" program. The Company did not achieve its expected results from its
relationship with Heinz, and on August 29, 1996, the Company entered into an
agreement with Heinz to terminate the manufacturing and licensing agreement and
satisfy the balance due under promissory note (approximately $795,000
representing the balance of unearned advanced royalties) based on the following
terms: (1) a payment of $600,000 on August 29, 1996, and (2) the assignment of
the $100,000 24 month promissory note receivable from Triarc.

         In December 1995 the Company began supplying two varieties of its fresh
baked cinnamon roll products delivered daily to an estimated 250 Ralphs
Supermarkets on the West Coast as a test. The Company utilized a West Coast
co-packer to manufacture and distribute these fresh-baked T.J. Cinnamons
products. These sales began in December, 1995, and the monthly sales averaged
$50,000, validating the Company's plan to directly engage in the manufacturing,
marketing and sales of T.J. Cinnamons branded products to retail grocery
outlets. With the termination of the Heinz agreement and the success of the
Ralphs Supermarket test, in October, 1996 the Company terminated its
relationship with its West Coast co-packer, and began to directly engage in the
manufacturing and sales of an expanded product line marketed to supermarket and
membership club stores.

         Manufacturing Facility. In October, 1996, the Company leased a 22,000
square foot baking production facility in Santa Ana, California. This facility
has been a health approved baking facility for the past eight years, and the
lease includes use of certain existing equipment. The term of the lease is 14
months, with a right to negotiate a new lease in the event the adjacent tenant
does not execute its option to lease the facility. In October 1996 the Company
formed Interbake Brands, Inc., a Delaware corporation, as a wholly owned
subsidiary to conduct all wholesale bakery operations. The Company invested
$270,000 in Interbake Brands, Inc. to fund various start-up costs including
working capital. The Company acquired mostly reconditioned equipment all of
which is removable in the event the Company is not able to structure a permanent
lease agreement, and is forced to relocate to a new facility.

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<PAGE>

         Sales and Marketing. To develop its wholesale sales, the Company will
initially focus its selling efforts in three geographic areas through alliances
with the following three key food brokerage groups: (a) Le Grand Marketing,
representing retail grocery stores California; (b) American Sales and Marketing,
representing membership club stores nationwide and retail grocery stores in the
mid-west, and (c) Douglas Sales, representing retail grocery stores in the New
York Tri-State area. The Company is targeting its product line to in-store
bakeries and in-store deli areas of supermarket chains, focusing on large
multi-unit accounts. The Company is supporting all initial sales with a
marketing budget for in-store sampling and demonstrations and store circular
promotions. The Company is currently developing various marketing materials
including a company brochure, product specification sheets and merchandising
materials, and will be presenting its products at the Retail Bakers Association
convention in Chicago in April, 1997 and the International Dairy, Deli and
Bakery Association convention in Orlando in June, 1997.

         The Company is focusing its initial marketing efforts on the following
core products: (a) T.J. Cinnamons Gourmet Cinnamon Rolls and Gourmet Sticky
Rolls; (b) T.J. Cinnamons CinnaChips; and (c) Gourmet Rugalach. The cinnamon
rolls are currently merchandised in 4-roll 16 ounce packages of both original
and sticky varieties, and 16-roll and 24-roll packages of one ounce mini
cinnamon rolls. The Company has developed a mass production process to produce
the CinnaChip products which are similar to bagel chips made from cinnamon rolls
utilizing a double bake process. The Cinnachips are currently sold in plastic
clam shell tub containers ranging in size from 8 ounces to 20 ounces. The
Company has also developed its own signature line of gourmet rugalach. These
rugalach are made utilizing the Company's own recipe in the following flavor
varieties: chocolate chip, cinnamon apple, raspberry walnut and apricot pecan.
The Company plans to market these rugalach under a new brand name sold in clear
plastic containers ranging from 7 ounces to 22 ounces.

         The cinnamon roll products are baked fresh and distributed daily
through independent distributors or the supermarket chains internal distribution
systems. The cinnamon roll products have a 5 to 7 day shelf life, the CinnaChips
have a 90 day shelf life, and the rugalach have a 45 day shelf life. All
cinnamon roll products currently sold in southern California are baked fresh and
distributed daily to the supermarkets and membership club stores through an
outside distributor or through the supermarket chains in-house distribution
system. The Company intends to freeze all cinnamon roll and rugalach products
for distribution outside of southern California. These products will be fully
baked and packaged, and will be shipped and distributed frozen to be thawed at
the supermarket and sold as a fresh product in the in-store bakery section of
the supermarkets. All CinnaChip products are distributed through dry
distribution due to their extended shelf life.

         The Company is currently selling products to the following accounts:
Ralphs Supermarkets, Price/Costco, Hughs Supermarkets, and FEDCO. In December,
1996, the Company sold nine full truck loads (64,800 units) of its 20 ounce
Cinnachip products to 71 Price/Costco warehouses in California. In addition, the
Company sold approximately 45,000 packages of its cinnamon roll products to
Price/Costco and Ralphs supermarkets. Recently the

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Company began selling its 10 ounce Cinnachips to the Ralphs Supermarkets, Hughs
Family Markets and FEDCO chains representing approximately 325 locations.

         The Santa Ana manufacturing facility has a capacity estimated to be
approximately $10 million. The Company intends to develop a manufacturing
facility in the New York area at a point when the Santa Ana facility is nearing
its capacity and east coast sales have been sufficiently developed to warrant
the investment.

         Quality Control. The Company's products are produced in accordance with
the Company's recipes, quality standards and proprietary formulations. In order
to maintain the high quality of its bakery products, the Company maintains
specifications for its ingredients. The Company is not dependent on any one
supplier for its ingredients and only those ingredients that meet specified
criteria are selected. Ingredients are carefully inspected by the Company before
they enter its plant. Product consistency is ensured by inspection at critical
flow points by quality assurance employees, although all workers are responsible
for monitoring the quality of the product and may stop the production process,
if necessary. Product sampling occurs on the production floor to ensure that
products are consistent with the Company's standards.

         Provisions and Supplies. The Company's dry mix products are produced by
Williams Foods, Inc. in accordance with the T.J. Cinnamons proprietary secret
formulas and quality standards. The proprietary cinnamon spice formulation is
produced by McCormick & Company, Inc., various other proprietary blends are
produced by Dawn Foods, Inc., and proprietary paper products are purchased from
a number of manufactures. Although the Company's relationship with its suppliers
is generally on an order-by-order basis, the Company believes alternate sources
of supply for all essential food and paper products are available, or on short
notice can be made available, at comparable prices. The Company negotiates
directly with its suppliers for all primary food and paper ingredients, and
beverage products sold at its bakery, to ensure adequate supply and to obtain
competitive prices.

         Government Regulations. The Company is subject to various federal,
state, and local laws affecting its business. The Company's bakeries are subject
to regulation by various governmental agencies, including state and local
licensing, zoning, land use, construction and environmental regulations and
various health, sanitation, safety and fire standards. The Company is also
subject to the Fair Labor Standards Act and various state laws governing such
matters as minimum wages, overtime and working conditions.

         The Company has not made nor does it anticipate making any material
capital expenditures in order to comply with environmental regulations. There
can be no assurance, however, that new environmental regulations may be adopted
which will require the Company to make material capital expenditures to comply
therewith.

         Employees. The Company has 7 full-time employees, approximately 5 of
whom are employed in general or administrative functions principally at or from
the Company's executive

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offices in Secaucus, New Jersey; and 2 of whom are employed in its retail bakery
in Poughkeepsie, New York. The Company also has 10 part time employees employed
in its retail bakery. Interbake Brands, Inc. has 4 full-time salaried employees
employed in general or administrative functions, and also has approximately 50
full time hourly employees employed in the Santa Ana manufacturing facility.
There are no collective bargaining agreements, and the Company considers its
labor relations to be satisfactory.

         Trademarks. The Company is licensed by Triarc to use the following
trademarks: "T.J. Cinnamons," "The Original Gourmet Cinnamon Roll,"
"Mini-Cinni," "Put A Little Spice In Your Life," "Cinnacone," "Cinnastruedel,"
"Cinnaloaf," "Home of the Original Gourmet Cinnamon Roll", "T.J. Cinnamon Bakery
Home of the Original Gourmet Cinnamon Roll," "CinnaChip," and the T.J. Cinnamons
name and logo together.

         Competition. The retail bakery industry and the restaurant industry,
particularly the quick-service segment, is highly competitive with respect to
price, service, food quality (including taste, freshness, healthfulness and
nutritional value) and location. There are numerous well-established competitors
possessing substantially greater financial, marketing, personnel and other
resources than the Company. These competitors include national and regional
bakeries, supermarkets with in-store bakeries and quick-service restaurants
chains, many of which specialize in or offer bakery products. Many quick-service
restaurant chains are expanding their menu to include products competitive with
the Company's cinnamon rolls. The Company can also be expected to face
competition from a broad range of other restaurants and food service
establishments.

         Many of the Company's competitors have achieved significant national,
regional and local brand name and product recognition and engage in extensive
advertising and promotional programs, both generally and in response to efforts
by additional competitors to enter new markets or introduce new products.

         The retail bakery industry and the quick-service restaurant industry
are characterized by the frequent introduction of new products, accomplished by
substantial promotional campaigns. In recent years, numerous companies in these
industries have introduced products positioned to capitalize on growing consumer
preference for food products that are or are perceived to be healthy,
nutritious, low in calories and low in fat content. It can be expected that the
Company will be subject to increasing competition from companies whose products
or marketing strategies address these consumer preferences. Furthermore, the
Company is aware of a significant competitor that offers cinnamon rolls directly
comparable to the Company's.

         A substantial portion of the Company's revenue is derived from sales of
products to grocery retail outlets. The wholesale food distribution business is
highly competitive. The principal competitive factor include price, service,
extent of product offered, strength of brand offered and store financing
support.

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         There can be no assurance that consumers will regard the products sold
under the Company's name by its bakeries and franchisees and by in-store
bakeries as sufficiently distinguishable from competitive products, that
substantially equivalent products will not be introduced by the Company's other
competitors or that the Company will be able to compete successfully.

Investment Considerations

In addition to the other information in this report, the following information
should be considered carefully by investors in evaluating the Company and its
business.

                  (a) History of Operating Losses; Operating Cash Flow Deficit;
Lack of Qualification to do Business as a Foreign Corporation. The Company has
had net operating losses since 1988. For the fiscal year ended December 31,
1996, the Company's net income was $219,864 which included a gain from the sale
of assets in the amount of $1,286,197. For the fiscal year ended December 31,
1995, the Company's net loss was $1,066,000.

                  The Company has been and is currently experiencing an
operating cash flow deficit primarily because its current expenses exceed its
current revenues. At December 31, 1996 the Company had a working capital balance
of approximately $836,000. There can be no assurance that the Company will
achieve profitable operations.

                  (b) Dietary Trends In recent years, numerous companies in the
retail bakery industry have introduced products positioned to capitalize on
growing consumer preference for bakery products that are, or are perceived to
be, healthful, nutritious, and low in calories, cholesterol and fat content. The
Company's primary products are relatively high in calories, cholesterol and fat
content. A decline in the sale of cinnamon rolls and related products, due to
industry trends, changing consumer preferences because of health related or
other dietary concerns or for other reasons, could have an adverse effect on the
Company.

                  (c) Competition The retail bakery industry is highly
competitive with respect to price and food quality including taste, freshness,
healthfulness and nutritional value. There are numerous well-established
competitors possessing substantially greater financial, marketing, personnel and
other resources than the Company. These competitors include national and
regional bakeries, supermarket with in-store bakeries and quick-service
restaurant chains, many of which specialize in or offer bakery products.

                  (d) Certain Factors Affecting the Wholesale and Retail Food
Industries. The Company will be required to respond to various factors affecting
the wholesale and retail food industries, including changes in consumer
preferences, tastes and eating habits; demographic trends; traffic patterns;
increases in food and labor costs; and national, regional and local economic
conditions.

                  (e) Dependence Upon Key and Other Personnel. The success of
the

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Company will be largely dependent on the efforts of certain key personnel of the
Company including Charles Loccisano, its Chairman and Chief Executive Officer,
and Alan Gottlich its President and Chief Financial Officer. The loss of the
service of any such persons would have a material adverse effect on the Company.

                  The Company will also be dependent upon its ability to retain
existing and hire additional qualified personnel. The competition for qualified
personnel in the food industry is intense and, accordingly, there can be no
assurance that the Company will be able to retain or hire other necessary
personnel.

                  (f) Government Regulations. The Company also is subject to
various other federal, state and local laws affecting its business. Both of the
Company's retail and wholesale bakeries are subject to regulation by various
governmental agencies, including state and local licensing, zoning, land use,
construction and environmental regulations and various health, sanitation,
safety and fire standard. In addition, suspension of certain licenses or
approvals, or failure to comply with applicable regulations or otherwise, could
interrupt the operations of the affected bakery or otherwise adversely affect
the bakery or the Company. The Company is also subject to federal and state laws
establishing minimum wages and regulating overtime and working conditions. Since
a substantial portion of bakery personnel are paid or expected to be paid at
rates based on the federal minimum wage, increases in such minimum wage will
increase the Company's labor costs.

                  (g) Trademarks and Service Marks. The Company believes that
the trademarks and services marks pursuant to the Triarc license agreement have
significant value and are important to the marketing of its products. There can
be no assurance, however, that these marks do not or will not violate the
proprietary rights of others, that the marks would be upheld if challenged or
that the Company would not be prevented from using these marks, any of which
could have an adverse effect on the Company.

                  (h) Insurance and Potential Liability. The Company maintains
insurance, including insurance relating to personal injury, in amounts that the
Company currently considers adequate. Nevertheless, a partially or completely
uninsured or underinsured claim against the Company, if successful and or
sufficient magnitude, could have a material adverse effect on the Company.

                  (i) No Assurance of Public Market; Volatility of Market Price
of Common Stock and Warrants. There can be no assurance that a regular trading
market for the Company's Common Stock and Warrants will be sustained. In the
absence of a trading market, an investor may be unable to liquidate its
investment. The market price for the Company's Common Stock and Warrants may
also be significantly affected by such factors as the introduction of new
products by the Company or its competitors, status of compliance with franchises
regulation and various factors affecting the quick-service restaurant industry
generally. Additionally, in recent years, the stock market has experienced a
high level of price and volume volatility, and market prices for many companies,
particularly small and emerging

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growth companies, the securities of which trade in the over-the-counter market,
have experienced wide price fluctuations not necessarily related to the
operating performance of such companies. The market price and liquidity of the
Company's Common Stock and Warrants may also be significantly affected by the
general business condition of the Company.

                  (j) No Dividends. To date, the Company has not paid any
dividends on its Common Stock and does not intend to declare any cash dividends
in the foreseeable future. Furthermore, under the terms of the Triarc agreement,
the Company is precluded from issuing a dividend until August 29, 1997. The
Company intends to retain earnings, if any, to finance the Company's growth.

                  (k) Control by Directors and Executive Officers. The
directors, executive officers and their affiliates own approximately 45% of the
Company's outstanding Common Stock and, therefore, are in a position to elect
all of the Company's directors who, in turn, elect all of the Company's
executive officers. Accordingly, such stockholders are able to, directly or
indirectly, control all of the affairs of the Company.

                  (l) Shares Eligible for Future Sale; Potential Costs to the
Company, Adverse Effects on Future Financing and Stock Price. The Shares of
Common Stock in the Company held by the Company's officers, directors, and
certain other stockholders, aggregating 1,846,084 shares of Common Stock, are
"restricted securities", as that term is defined under Rule 144 promulgated
under the Act. 938,084 of these shares of Common Stock became eligible for sale
under Rule 144 in May 1996, 158,000 of these shares of Common Stock will become
eligable for sale under Rule 144 commencing in 1998, with the balance of 750,000
shares of Common Stock subject to an escrow agreement which was established in
connection with the Initial Public Offering ("IPO") in May, 1994. These shares
will be released on the seventh anniversary following the IPO or earlier if the
Company's net income equals or exceeds specified amounts. No prediction can be
made as to the effect, if any, that sales of such shares of Common Stock or the
availability of such shares for sales will have on the market prices prevailing
from time to time. Nevertheless, the possibility that substantial amounts of
Common Stock may be sold in the public market may adversely affect prevailing
market prices for the Common Stock and could impair the Company's ability to
raise capital through the sale of its equity securities.

                  (m) Broker-Dealer Sales of Securities of the Company. The
Common Stock and Warrants of the Company are presently traded on The Nasdaq
Small Cap Market, which requires that, in order to continue to be included in
The Nasdaq SmallCap Market, a company must maintain $2 million in total assets,
a $200,000 market value of the public float and $1 million in total capital and
surplus. In addition, continued inclusion requires two market-mak- ers and a
minimum bid price of $1.00 per share; provided, however, that if a company falls
below such minimum bid price, it will remain eligible for continued inclusion if
the market value of the public float is at least $1 million and the company has
$2 million in capital and surplus. The Company currently meets these criteria
but the failure to meet these maintenance criteria in the future may result in
the discontinuance of the inclusion of the Securities in The

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Nasdaq SmallCap Market. In such event, trading, if any, in the Common Stock and
Warrants may then continue to be conducted in the non-Nasdaq over-the-counter
market in what is commonly referred to as the "bulletin board". As a result, the
Purchaser may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Common Stocks.

                  In the event that securities issued by the Company cease to be
listed on The Nasdaq SmallCap Market sales of such securities will be within the
scope of a Securities and Exchange Commission rule that imposes additional sales
practice requirements on broker-dealers who sell such securities to person other
that their established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouses). For transactions covered by that rule, the
broker-dealer must make a special suitability determination for the purchases
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealer to sell the
Company's securities and also may affect the ability of the Purchase to sell its
securities.

                  (n) Effect of Stock Options and Possible Impact on Future
Financing; Possible Dilution. The holders of options and/or warrants to purchase
Common Stock that may be outstanding or issued in the future have the
opportunity to profit from any rise in the value of the Common Stock, without
assuming the risk of ownership. The Company may find it more difficult to raise
additional equity capital if it should be needed for the business of the Company
while options and/or warrants are outstanding. At any time when the holders
thereof may be expected to exercise them, the Company probably would be able to
obtain additional equity capital on terms more favorable than those provided by
the options and/or warrants. To the extent that any of the options and/or
warrants granted by the Company are exercised, the ownership interest of the
Company's stockholders may be diluted. Additionally, if any of the Company's
outstanding warrants are exercised the Company may not be able to fulfill its
obligations thereunder to the extent that at such time the Company's
registration statement with the Securities and Exchange Commission may not be
deemed current under the Act.

                  (o) Potential Adverse Effect of Redemption of Warrants. The
Company's Warrants are redeemable in whole or in part at the Company's option at
a price of $.25 per Warrant upon not less than 30 days notice, provided that the
closing bid price per share of Common Stock equals or exceeds 130% of the
exercise price per share of the Warrants, for 10 consecutive trading days
immediately preceding the date of such notice. Holders rights to exercise the
Warrants will terminate on the redemption date thereof, depriving holders of any
value except the right to receive the redemption price of the Warrants. Notice
of the redemption of the Warrants could force the holders to exercise the
Warrants and to pay the exercise price at a time when it may be disadvantageous
to do so, to sell the Warrants at the current market price when they might
otherwise wish to hold the Warrants, or to accept the redemption price, which is
likely to be substantially less than the market value of the Warrants at the
time of the redemption.

                                       12
<PAGE>

                  (p) Possible Adverse Effect of Penny Stock Rules on Liquidity
for the Company's Securities. The Securities and Exchange Commission (the
Commission) regulations define a "penny stock" to be an equity security not
registered on a national securities exchange or for which quotation information
is disseminated on the Nasdaq SmallCap Market that has a market price (as
therein defined) of less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exemptions. For any transaction involving a
penny stock, unless exempt, the rules require delivery, prior to a transaction
in a penny stock, of a disclosure schedule prepared by the Commission relating
to the penny stock market. Disclosure is also required to be made about
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements are
required to be sent disclosing recent price information for the penny stock held
in the account and information on the limited market in penny stocks.

                  The foregoing required penny stock restrictions will not apply
to the Company's securities if such securities are listed on the Nasdaq SmallCap
Market, and have certain price and volume information provided on a current and
continuing basis or meet certain minimum net tangible assets or average return
criteria. In any event, even if the Company's securities were exempt from such
restrictions, it would remain subject to Section 15(b)(6) of the Securities
Exchange Act of 1934, which gives the Commission the authority to prohibit any
person that is engaged in unlawful conduct while participating in a distribution
of a penny stock from associating with a broker-dealer or participating in a
distribution of a penny stock, if the Commission finds that such a restriction
would be in the public interest. If the Company's securities were subject to the
rules on penny stocks, the market liquidity for the Company's securities could
be severely adversely effected.

                  (q) Authorization of Preferred Stock and Other Anti-Takeover
Devices. The Board of Directors is authorized to issue shares of preferred stock
and to fix the relative voting, dividend, liquidation, conversion, redemption
and other rights, preferences and limitations thereof without any further vote
or action of the stockholders. The issuance of preferred stock could adversely
affect the voting power or other rights of the holders of Common Stock. In the
event of the issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change of
control of the Company. Although the Company has no present intention to issue
any preferred stock, there can be no assurance that the Company will not do so
in the future. The Company has agreed not to issue preferred stock within five
years of the effective date being May 12, 1994, of its initial Registration
Statement without the consent of Paragon Capital Corporation. The Company's
restated certificate of incorporation and by-laws contain other provisions that
may discourage, delay or prevent a change of control on the Company that a
stockholder might consider to be in such stockholder's best interest, including
those attempts that might result in a premium over the market price for the
Company's securities.

                                       13
<PAGE>

ITEM 2. PROPERTIES

         The Company leases its executive offices at 135 Seaview Drive,
Secaucus, New Jersey. The offices occupy approximately 2,900 square feet. The
lease with respect to these premises commenced on December 31, 1994 and provides
for a three year term and base rent of approximately $29,000 per year, payable
monthly, and requires the Company to pay its proportionate share of real estate
taxes, common area maintenance fees and insurance premiums. The Company
currently sub leases 50% of its leased premises to an entity related to Charles
Loccisano, the Company's Chairman and Chief Executive Officer. This sub lease is
based on an oral month to month agreement, with 50% of the rental and related
charges being paid by the sub tenant.

         The Company leases its retail bakery located in the Poughkeepsie
Galleria Mall, in Poughkeepsie, New York, with the lease term expiring June 7,
2000. The lease has a minimum base occupancy charge of $35,000 per annum,
charges for a proportionate share of building operating expenses and real estate
taxes and contingent percentage rent based on sales above a stipulated sales
level. The bakery is in good operating condition.

         The Company leases its wholesale bakery production facility located in
Santa Ana, with the lease term expiring January 31, 1998. The lease has a
minimum base occupancy charge of $6,500 per month, plus charges for a
proportionate share of building operating expenses and real estate taxes. The
terms of the lease provide for the lessees right to terminate with a sixty (60)
day notice. An adjacent tenant has an option to lease the space which must be
exercised on or before August 31, 1997. In the event this option is not
exercised, the Company will have a first right to negotiate a permanent lease.
The bakery is in good operating condition.

                                       14
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

         In 1994, the Company terminated the franchise of Gary Hall for having
moved the location of his bakery without authorization, and for failing to
maintain a retail bakery operation in accordance with the requirements of his
franchise agreement. Mr. Hall's franchise agreement was for the operation of a
T.J. Cinnamons bakery at North Park Mall, Joplin, Missouri. Mr. Hall was given
an opportunity to cure said defaults prior to termination, but did not avail
himself of same.

         Subsequent to his termination, Mr. Hall commenced legal action against
the Company in the Federal District Court (the "Court") in Kansas City, Missouri
demanding (a) recovery of approximately $10,000 in monies delivered by Sams
Wholesale Club to the Company allegedly in payment for sales made by Mr. Hall to
Sam's Wholesale Club pursuant to his franchise agreement, (b) $50,000 in damages
for wrongful termination of his franchise agreement, and (c) $20,000 in damages
for breach by the Company of Mr. Hall's contractual territorial rights.

         The Company, because of its limited financial resources at that time,
chose not to retain Missouri counsel to respond to Mr. Hall's action, but
instead instructed its corporate counsel to make a written response, in lieu of
an appearance, to the Court hearing the matter. The Court chose not to consider
the Company's written response and entered a default judgment on May 31, 1996 on
behalf of Mr. Hall as to all of Mr. Hall's claims. The judgment was in the
amount of $80,120 plus interest on a portion of same.

         The Company believes that Mr. Hall's claims for damages for termination
of his franchise and loss of territorial rights, aggregating $70,000 are without
foundation, and the Company's written responses to the Court set forth
meritorious defenses to same. Therefore, the Company retained local Missouri
counsel to file an appeal to set aside the default judgment based on the
meritorious defenses that the Court failed to consider. The Company's Missouri
counsel has accordingly filed an appellate brief with the United States Court of
Appeals for the Eighth Circuit (the "Appellate Court") and the Company is
awaiting the decision of said Appellate Court.

         In addition, the Company from time to time has been involved in routine
litigation, including litigation with various vendors and creditors. None of
these litigations in which the Company has been involved is material to its
financial condition or results of operations.

                                       15

<PAGE>

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

         The Company did not submit any matters to vote of its stockholders,
through the solicitation of proxies or otherwise during the fourth quarter of
fiscal 1996.


                                       16

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS

         The Company's Common Stock, Class A Warrants and Class B Warrants are
traded on the Nasdaq Small Cap Market ("NASDAQ") under the symbols "TJCI",
"TJCIW", and "TJCIZ".

         The following table sets forth, for the periods indicated, the range of
high and low bid prices of the Common Stock as reported by NASDAQ for the fiscal
years ended December 31, 1995 and December 31, 1996. These prices reflect
interdealer prices and do not include retail mark-ups, mark-downs or
commissions, and do not necessarily represent actual transactions.

                                                High                 Low

Fiscal Year ended December 31, 1995

March 31, 1995........................         2  1/16             1  1/32
June 30, 1995 ........................         2  3/8              1
September 30, 1995 ...................         2  7/8              2
December 31, 1995 ....................         3  1/4              2  7/16

Fiscal Year ended December 31, 1996

March 31, 1996........................         4  3/8              1  3/4
June 30, 1996 ........................         2 15/16             1 11/16
September 30, 1996 ...................         2  3/4              2  3/16
December 31, 1996 ....................         2  7/16             1  5/16

         The following table sets forth, for the periods indicated, the range of
high and low bid prices of the Class A Warrants as reported by NASDAQ for the
fiscal years ended December 31, 1995 and December 31, 1996. These prices reflect
interdealer prices and do not include retail mark-ups, mark-downs or
commissions, and do not necessarily represent actual transactions.

                                                High                 Low

Fiscal Year ended December 31, 1995

March 31, 1995........................           15/16                7/16
June 30, 1995 ........................            3/4                 3/8
September 30, 1995 ...................            7/8                 1/2
December 31, 1995 ....................           13/16                1/2

                                       17

<PAGE>

Fiscal Year ended December 31, 1996

March 31, 1996........................           23/32               13/32
June 30, 1996 ........................           15/32                9/32
September 30, 1996 ...................           17/32                1/4
December 31, 1996 ....................            5/8                 3/16

         The following table sets forth, for the periods indicated, the range of
high and low bid prices of the Class B Warrants as reported by NASDAQ for the
fiscal years ended December 31, 1995 and December 31, 1996. These prices reflect
interdealer prices and do not include retail mark-ups, mark-downs or
commissions, and do not necessarily represent actual transactions.

                                                High                 Low

Fiscal Year ended December 31, 1995

March 31, 1995........................           11/16                9/32
June 30, 1995 ........................            3/4                 9/32
September 30, 1995 ...................            5/8                 3/8
December 31, 1995 ....................            5/8                11/32

Fiscal Year ended December 31, 1996

March 31, 1996........................            1/2                 5/32
June 30, 1996 ........................            9/32                5/32
September 30, 1996 ...................            7/32                5/32
December 31, 1996 ....................            7/32                5/32

         The approximate number of stockholders of the Common Stock on record at
December 31, 1996 was 700.

         The Company has not paid any dividends. The Company does not expect to
pay cash dividends on its Common Stock in the foreseeable future as any earnings
are expected to be retained to finance the Company's operations. Furthermore,
under the terms of the Triarc Purchase Agreement, the Company is precluded from
issuing a dividend until August 29, 1997. Declaration of dividends in the future
will remain within the discretion of the Company's Board of Directors.

                                       18

<PAGE>




Sales of Unregistered Securities

         The following sales of unregistered securities occurred during the
Company's fourth quarter of its fiscal year ended December 31, 1996:

1. In November 1996, the Company authorized the issuance of 5,000 shares of the
Company's Common Stock to Philip Friedman, a member of the Company's Board of
Directors. These shares were issued without an underwriter or placement agent in
consideration for consulting services rendered during the period June 1995
through September 1996. The exemption from registration for the grant was
claimed pursuant to Section 4(2) of the Securities Act of 1933, as amended, in
reliance upon the fact that such sale did not involve a public offering.

2. In November 1996, the Company authorized the issuance of 12,000 shares of the
Company's Common Stock to Harry Goldberg. These shares were issued without an
underwriter or placement agent in consideration for consulting services rendered
during the period June 1994 through September 1996. The exemption from
registration for the grant was claimed pursuant to Section 4(2) of the
Securities Act of 1933, as amended, in reliance upon the fact that such sale did
not involve a public offering.

3. In November 1996, the Company authorized the issuance of 1,000 shares of the
Company's Common Stock to Alan Weingarden. These shares were issued without an
underwriter or placement agent in consideration for consulting services rendered
during the period January 1996 through September 1996. The exemption from
registration for the grant was claimed pursuant to Section 4(2) of the
Securities Act of 1933, as amended, in reliance upon the fact that such sale did
not involve a public offering.

4. In November 1996, the Company authorized the issuance of 62,500 shares of the
Company's Common Stock to the Charles N. Loccisano Irrevocable Trust f/b/o
Michael Loccisano. These shares were issued without an underwriter or placement
agent in consideration for shares previously conveyed by the Trust, on behalf of
the Company, to Dan Feldman, a member of the Company's Board of Directors, in
exchange for his agreement to serve as a Director. The exemption from
registration for the grant was claimed pursuant to Section 4(2) of the
Securities Act of 1933, as amended, in reliance upon the fact that such sale did
not involve a public offering.

5. In November 1996, the Company authorized the issuance of 62,500 shares of the
Company's Common Stock to the Charles N. Loccisano Irrevocable Trust f/b/o
Marissa Loccisano. These shares were issued without an underwriter or placement
agent in consideration for shares previously conveyed by the Trust, on behalf of
the Company, to Dan Feldman, a member of the Company's Board of Directors, in
exchange for his agreement to serve as a Director. The exemption from
registration for the grant was claimed pursuant to Section 4(2) of the
Securities Act of 1933, as amended, in reliance upon the fact that such sale did
not involve a public offering.

                                       19
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report.

     RESULTS OF OPERATIONS (for the fiscal year ended December 31, 1996 compared
to the fiscal year ended December 31, 1995).

     The following tables set forth the components of the Company's revenue:

                                 Fiscal Year Ended December 31,
                                     1995            1996
Company-owned bakery sales         $381,700       $256,000
Wholesale sales                      52,400        861,900
Royalties and licensing fees        560,000        311,100
Initial franchise fees               25,500         17,500
Product rebates                           0         43,300
Other Income                         19,500              0
                                 ----------       --------
Total Revenue                    $1,039,100     $1,489,800

     Company-owned bakery sales decreased by 33% to $256,000 for the fiscal year
ended December 31, 1996 from $381,700 for the fiscal year ended December 31,
1995. This sales decrease resulted from the closing of two Company-owned
bakeries in February, 1995 and May, 1995 respectively, and a decline in mall
traffic due to a number of vacancies in the Poughkeepsie Galleria mall.

     Wholesale sales were $861,900 for the fiscal year ended December 31, 1996
as compared to $52,400 for the fiscal year ended December 31, 1995. In the
fourth quarter of 1995, the Company began supplying fresh baked 4-pack cinnamon
rolls delivered daily to approximately 250 Ralphs Supermarkets on the West
Coast. From inception through November 30, 1996, the Company utilized a West
Coast co-packer to manufacture and distribute these fresh-baked T.J. Cinnamons
products. In November, 1996, the Company began production in its own bakery
manufacturing facility in Santa Ana, California. For the months of November and
December, 1996, the Company produced and shipped sales of $381,700 out of the
Santa Ana facility. These sales included nine full truck loads representing
$256,400 of the 20 ounce CinnaChips sold to approximately 71 Price/Costco stores
in California, and $85,000 of the 24-pack MiniCinni Rolls sold to approximately
31 Price/Costco stores in Southern California. In addition, on December 1, 1996
the Company terminated its relationship with the West coast co-packer, and began
daily production and shipping of the 4-pack cinnamon rolls for distribution to
approximately 250 Ralphs supermarkets on the West Coast.

                                       20
<PAGE>

     To develop its wholesale sales, the Company is focusing its selling efforts
in three geographic areas through alliances with the following three key food
brokerage groups: (a) Le Grand Marketing, representing retail grocery stores
California; (b) American Sales and Marketing, representing the membership club
stores nationwide and retail grocery stores in the mid-west, and (c) Douglas
Sales, representing retail grocery stores in the New York Tri-State area. The
Company is currently selling products to the following accounts: Ralphs
Supermarkets, Price/Costco, Hughs Supermarkets, and FEDCO. Recently the Company
began selling its 10 ounce Cinnachips to the Ralphs Supermarkets, Hughs Family
Markets and FEDCO chains representing approximately 325 locations.

     Royalty and licensing fee revenue decreased by 44% to $311,100 for the
fiscal year ended December 31, 1996 from $560,000 for the fiscal year ended
December 31, 1995. This decrease in franchise royalties resulted primarily from
the closings of franchised bakeries and the terms of the Triarc Purchase
Agreement requiring the Company to provide franchisees an offer to forgive all
royalties for the period August, 1996 through January, 1997 in exchange for a
general release against the Company. Franchisees representing approximately 80%
of the franchised bakery units entered into these general release agreements.
There were 42 franchised bakeries operating on December 31, 1996 as compared
with 49 franchised bakeries operating on December 31, 1995. The decreases in
license fees are primarily from a decreases in the sales of "proof and bake"
cinnamon rolls utilized in various locations under licensing agreements. In
August, 1996, the Company terminated its trademark and technology license
agreement with Heinz Bakery Products which was a condition for the closing of
the Triarc Restaurant Group transaction.

     Initial franchise fee revenue decreased by 31% to $17,500 for the fiscal
year ended December 31, 1996 from $25,500 for the fiscal year ended December 31,
1995. This decrease reflects the Company discontinuing its marketing and sales
of new franchise agreements in early 1996 primarily as a result of the Triarc
transaction.

     Product rebates of $43,300 for the fiscal year ended December 31, 1996 are
from various supplier rebates and commitment fees.

     Other revenue of $19,500 for the fiscal year ending December 31, 1995 are
from reductions in account payable and accrued liabilities resulting from
discounted settlements and write-offs of accounts payable based on their being
no recent contact with the Company by the creditors being owed such amounts

     Cost of goods sold increased to $925,228 for the fiscal year ended December
31, 1996 from $301,552 for the fiscal year ended December 31, 1995. This
increase is primarily the result of the cost of the wholesale sales to
supermarkets and membership club chains.

     The cost of goods sold of the Company-owned retail bakery sales expressed
as a percentage of bakery sales were 63% during the fiscal year ended December
31, 1996 as compared to 65% for the same period last year. These decreases
resulted primarily from

                                       21
<PAGE>

management's focused efforts to manage costs at the Company-owned retail bakery
level.

     Selling, general and administrative expenses decreased by 2% to $1,696,830
for the fiscal year ended December 31, 1996 from $1,738,401 for the fiscal year
ended December 31, 1995. These decreases are primarily the result of decreases
in corporate payroll and related costs, and corporate office
costs.

     Net interest expense increased to $96,841 for the fiscal year ended
December 31, 1996 from $65,425 for the fiscal year ended December 31, 1995. This
increase in net interest expense resulted from an initial loan fees and interest
incurred on the two separate loans provided by Gelt Financial Corporation, and
loans from affiliates of two of the principal stockholders of the Company.

     Other income - gain on the sale of assets of $1,286,197 for the fiscal year
ended December 31, 1996 results from the sale of certain assets to Triarc
pursuant to the terms of a purchase agreement.

     Extraordinary item - forgiveness of debt in the amount of $162,729 for the
fiscal year ending December 31, 1996 is from reductions in account payable and
accrued liabilities resulting from discounted settlements and write-offs of
accounts payable based on their being no recent contact with the Company by the
creditors being owed such amounts. Included in this amount is a forgiveness of
indebtedness of $93,409 pursuant to the terms of the Heinz Bakery Products
termination agreement dated August 29, 1996.

     LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 1996, the Company had a working capital surplus of
approximately $838,700.

     The Company owed approximately $833,319 to various trade and other
creditors at December 31, 1996, of which approximately $214,500 was more than 90
days past due. The Company expects to negotiate discounts and payment plans with
a majority of the past due accounts. The Company is currently experiencing cash
flow deficits from its operating activities primarily because its current
expenses exceed its current revenues. These deficits are currently being funded
by the Triarc notes receivable payments. The Company will continue to incur cash
flow deficits from its operating activities until such time that the Company is
able to attain sales levels sufficient to support its operations.

     The Company used net cash in operating activities in the amount of
$1,027,064 for the fiscal year ended December 31, 1996 as compared to $579,122
for the fiscal year ended December 31, 1995. The Company generated net cash from
investing activities in the amount of $1,595,639 for the fiscal year ended
December 31, 1996 resulting from net proceeds from the sale of assets and cash
received from notes receivable, as compared to net cash used in investing
activities in the amount of $24,724 for the fiscal year ended December 31, 1995.
The Company used net cash in financing activities in the amount of

                                       22
<PAGE>

$570,585 for the fiscal year ended December 31, 1996 resulting from repayments
of notes payable, as compared net cash used in financing activities in the
amount of $69,523 for the fiscal year ended December 31, 1995.

     In July 1996, the Company consummated a short term bridge loan with Gelt
Financial Corporation in the amount of $125,000. The terms of the Gelt loan
provided for interest at a rate of prime plus five percent, and a placement fee
of $15,625 together with 15,000 shares of the Company's common stock.

This issuance of common stock resulted in a $26,100 finance charge representing
the market value of the Company's common stock at date of issue. As additional
security for the loan, an aggregate of 250,000 shares of the Company's common
stock held by affiliates of Charles Loccisano, the Chairman and Chief Executive
Officer of the Company and Alan Gottlich, the President and Chief Financial
Officer of the Company were pledged to Gelt. The Gelt loan was fully repaid from
the proceeds of the Triarc Restaurant Group transaction.

     In August 1996, the Company closed a purchase agreement with Triarc
Restaurant Group d/b/a/ Arby's, Inc. ("Triarc") through which (a) Triarc
purchased the trademarks, service marks, recipes and secret formulas of the
Company, (b) Triarc licensed back to the Company the rights to operate existing
franchised bakery locations and to distribute T.J. Cinnamons products through
retail grocery outlets, and (c) the Company entered into a management agreement
with Triarc to manage the franchise system.

     The Company received payments of $25,000 at the execution of the agreement,
$1,765,000 at the closing, a promissory note in the amount of $1,650,000 which
is being paid in fifteen (15) equal monthly installments which began on October
1, 1996, and a promissory note in the amount of $100,000 which is being paid in
twenty four (24) equal monthly installments which began on October 1, 1996 with
a $50,000 balloon payment on September 1, 1998. In addition, the purchase
agreement provides for contingent payments of up to a maximum of an additional
$5,500,000 over time dependent upon the amount of T.J. Cinnamons product sales
by Triarc exceeding a minimum base system wide sales of $26.3 million.

     Simultaneous with the closing of the Triarc transaction, the Company
entered into an agreement with Heinz Bakery Products to terminate the 1992
manufacturing and license agreement. Under the terms of the agreement, the
Company paid Heinz Bakery Products $600,000 at closing, and assigned to Heinz
the Triarc promissory note in the amount of $100,000 payable with interest in
equal installments over a twenty four (24) month period with a $50,000 balloon
payment.

     In December, 1996 the Company consummated a short term loan with Gelt in
the amount of $100,000, and in March, 1997 the Company increased the loan with
Gelt by an additional $175,000. The terms of these Gelt loans provided for
interest at a rate of prime plus three and one half percent, and a placement fee
of 5.5%. These loan have been

                                       23
<PAGE>

secured by a security interest in the 15 month note receivable from Triarc in
the original principal amount of $1,650,000, and will be fully amortized and
paid in full by December 1, 1997. The proceeds of these loans were used to pay
outstanding indebtedness and fund working capital.

     Following the closing of the Triarc transaction, the Company's operations
have been concentrated exclusively on its wholesale development activities.
Accordingly, the Company is entirely dependent on its wholesale operations as
its primary source of revenues in addition to the additional revenues generated
from the Triarc transaction. The Company has applied the proceeds from the
Triarc transaction towards a reduction of its existing indebtedness, to develop
its wholesale bakery production facility, and to provide working capital for its
operations. Management believes that funds generated from the Triarc transaction
will provide sufficient working capital for its planned product manufacturing
and distribution expansion plans at least through December, 1997.

                                       24
<PAGE>

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Item 13(a)(1) in Part IV.

                                       25
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     On January 31, 1997 the Company dismissed Goldstein, Golub, Kessler & Co.
P.C. ("GGK") as its independent auditors. Such dismissal was approved by the
Company's Board of Directors. GGK's report upon the Company's financial
statements for its fiscal years ended December 31, 1995 and 1994 did not contain
an adverse opinion or a disclaimer of opinion, nor was such report qualified or
modified as to audit scope or accounting principles. The report was prepared
assuming that the Company will continue as a going concern. During the Company's
fiscal years ended December 31, 1995 and 1994 to the date of GGK's dismissal
(the "Interim Period"): (i) there were no disagreements (of the nature
contemplated by Item 304 (a) (1) (iv) of Regulation S-K ("Disagreements"))
between the Company and GGK; and (ii) there were no reportable events of the
nature contemplated by Item 304(a) (2) (i) - (ii) of Regulation S-K.

     On January 31, 1997 the Company engaged Arthur Andersen LLP ("AA") as its
independent public accountants for the Company's fiscal year ended December 31,
1996. During the Company's two fiscal years ended December 31, 1995 and the
Interim Period, the Company did not consult with AA with respect to any of the
matters contemplated by Item 304 (a) (2) (i) - (ii) of Regulation S-K.

     On February 14, 1997 AA resigned its position as the Registrant's
independent auditors. Such resignation was necessitated because AA concluded
that it had a conflict of interest in reporting on the Registrant's financial
statements for the fiscal year ended December 31, 1996 due to the fact that
during 1996 AA had rendered financial advisory services to the Registrant for
which it received a fee. During the Company's engagement of AA through the date
of AA's withdrawal (the "Second Interim Period"): (i) there were no
disagreements (of the nature contemplated by Item 304 (a) (1) (iv) of Regulation
S-K ("Disagreements")) between the Company and AA; and (ii) there were no
reportable events of the nature contemplated by Item 304(a) (2) (i) - (ii) of
Regulation S-K.

     On February 21, 1997 the Company engaged Amper, Politziner & Mattia
("AP&M") as its independent public accountants for the Company's fiscal year
ended December 31, 1996. During the Company's two fiscal years ended December
31, 1995, the Interim Period and the Second Interim Period, the Company did not
consult with AP&M with respect to any of the matters contemplated by Item 304
(a) (2) (i) - (ii) of Regulation S-K.

                                       26
<PAGE>

                                    Part III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS;

     COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The information required for this item is incorporated by reference to the
Company's 1996 Definitive Proxy Statement which the Company will file with the
Securities and Exchange Commission no later than 120 days subsequent to December
31, 1996.

                                       27
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

     The information required for this item is incorporated by reference to the
Company's 1996 Definitive Proxy Statement which the Company will file with the
Securities and Exchange Commission no later than 120 days subsequent to December
31, 1996.

                                       28
<PAGE>



ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The information required for this item is incorporated by reference to the
Company's 1996 Definitive Proxy Statement which the Company will file with the
Securities and Exchange Commission no later than 120 days subsequent to December
31, 1996.


                                       29
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required for this item is incorporated by reference to the
Company's 1996 Definitive Proxy Statement which the Company will file with the
Securities and Exchange Commission no later than 120 days subsequent to December
31, 1996.


                                       30
<PAGE>

                                     PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K                                                               PAGE

(a)  Documents filed as part of this report.

     1. Financial Statements

              Independent Auditor's Report                                 F-2

              Independent Auditor's Report                                 F-3

              Consolidated Balance Sheet                                   F-4

              Consolidated Statements of Operations                        F-5

              Consolidated Statement of Stockholders' Equity               F-6

              Consolidated Statements of Cash Flows                        F-7

              Notes to Consolidated Financial Statements             F-8 - F-18

     2. Exhibits

              1.1 *   ......  Underwriters Agreement with Paragon Capital Cor-
                              poration

              2.1 *   ......  Certificate of Ownership and Merger regarding the
                              merger of Signature Acquisition Corp. with and 
                              into T.J. Cinnamons, Inc.

              2.2 *   ......  Certificate of Ownership and Merger regarding the
                              merger of Signature Foods, Inc. with and into T.J.
                              Cinnamons, Inc.

              2.3 *** ......  Purchase Agreement between the Registrant and
                              Triarc Restaurant Group

              3.1 *   ......  Restated Certificate of Incorporation of the
                              Registrant

              3.2 *   ......  By-Laws of the Registrant

              9.1 *   ......  Modification Agreement (the "Modification Agree-
                              ment") among Signature Foods, Inc., The Charles N.

<PAGE>

                              Loccisano Irrevocable Trust f/b/o Michael Loccis-
                              ano, The Charles N. Loccisano Irrevocable Trust
                              f/b/o Marissa Loccisano, The Ted H. Rice and Joyce
                              Rice Family Trust, U/T/I dated August 8, 1986, The
                              Roger L. Cohen Trust U/T/D/ dated January 26,
                              1984 and the Kenneth D. Hill Revocable Trust U/T/I
                              dated march 29, 1989, Signature Acquisition Corp.,
                              the Registrant, Charles N. Loccisano and Alan S.
                              Gottlich relating to a Stock Purchase Agreement 
                              (the "Stock Purchase Agreement") among them

              9.2 *   ......  Waiver of Default under the Modification Agree-
                              ment, as amended

              9.3 *   ......  Amendment to Stock Purchase Agreement

              9.4 *   ......  Stock Purchase Agreement

              10.1 *  ......  Trademark and Technology License and Manufac-
                              turing Agreement ("License Agreement") by and
                              between Signature Acquisition Corp. and Pro Bakers
                              Ltd.

              10.1(a) *...... Amendment to License Agreement

              10.1(b) *...... Second Amendment to License Agreement

              10.1(c)  ...... Termination of the License Agreement

              10.2 *   ...... 1993 Stock Option Plan

              10.9 *   ...... Lease regarding the Company's principal executive
                              offices

              10.13    ...... License agreement with Triarc Restaurant Group

              10.14    ...... Management Agreement with TJ Holding Company,
                              Inc.

              10.15    ...... Lease regarding the Santa Ana bakery facility

              16.1     ...... Letter from Goldstein Golub and Kessler, the
                              Registrant's former independent accountant

              16.2     ...... Letter from Arthur Andersen LLP

                                     
<PAGE>



              21.1     ...... Certificate of Incorporation of Interbake Brands,
                              Inc.

              24.1     ...... Powers of Attorney to sign Form 10-KSB (set forth
                              on page 31)

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

     *    Incorporated by reference to the Company's Registration Statement on
          Form SB-2 and the amendments thereto.

     **   Incorporated by reference to the Company's Annual Report on Form
          10-KSB for the fiscal year ended December 31, 1995.

     ***  Incorporated by reference to the Company's Current Report on Form 8-K
          dated June 18, 1996.

     (b)  The Company filed one Current Report on Form 8-K during the fiscal
          year ended December 31, 1996 regarding the Triarc transaction. Such
          Current Report on Form 8-K included unaudited pro forma financial
          statements at June 30, 1996 and a copy of the Purchase Agreement
          between TJ Holding Company, Inc. and T.J. Cinnamons, Inc.





<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Secaucus, New Jersey, on , 1997.

                                        PARAMARK ENTERPRISES, INC.


                                       By:
                                          Charles N. Loccisano, Chairman


                                POWER OF ATTORNEY

     Each of the undersigned hereby appoints Charles N. Loccisano and Alan S.
Gottlich as his attorney-in-fact to sign his or her name, in any and all
capacities, to any amendments to this form 10-KSB and any other documents filed
in connection therewith to be filed with the Securities and Exchange Commission.
Each of such attorneys has the power to act with or without the others.

     In accordance with the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following person on behalf of the Registrant
and in the capacities and on the dates stated.

Signature                           Title(s)                        Date


_________________________         Chairman (principal                   , 1997
Charles N. Loccisano              executive officer)
                                  and Director

_________________________         President, Chief                      , 1997
Alan S. Gottlich                  Financial Officer (principal
                                  financial and accounting officer)
                                  and Director

_________________________         Director                              , 1997
Philip Friedman

_________________________         Director                               ,1997
Dan Feldman

_________________________         Director                               ,1997
Paul Bergrin

                                       33
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.

                           Paramark Enterprises, Inc.


Dated:                     By:
                              Charles N. Loccisano, Chairman
                              and Chief Executive Officer


                           By:
                              Alan S. Gottlich, President
                              and Chief Financial Officer
                              (Principal Accounting Officer)

<PAGE>
                           PARAMARK ENTERPRISES, INC.
                 (Formerly T.J. Cinnamons, Inc.) and SUBSIDIARY

                      For the Year Ended December 31, 1996







                                                                            Page

Independent Auditors' Report                                                F-2

Independent Auditors' Report                                                F-3

Consolidated Balance Sheet                                                  F-4

Consolidated Statements of Operations                                       F-5

Consolidated Statement of Stockholders' Equity                              F-6

Consolidated Statements of Cash Flows                                       F-7

Notes to Consolidated Financial Statements                           F-8 - F-18

                                       F-1

<PAGE>

                         Report of Independent Auditors

The Board of Directors
Paramark Enterprises, Inc.
 (formerly T. J. Cinnamons, Inc.) and Subsidiary

We have audited the accompanying balance sheet of Paramark Enterprises, Inc.
(formerly T. J. Cinnamons, Inc.) and Subsidiary at December 31, 1996, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the year then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Paramark Enterprises, Inc.
(formerly T. J. Cinnamons, Inc.) and Subsidiary as of December 31, 1996 and the
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.



                                     AMPER, POLITZINER & MATTIA

March 10, 1997
Edison, New Jersey

                                       F-2

<PAGE>

Independent Auditors Report

The Board of Directors
Paramark Enterprises, Inc.

We have audited the accompanying statements of operations, stockholders' equity,
and cash flows of Paramark Enterprises, Inc. (formerly T. J. Cinnamons, Inc.)
for the year December 31, 1995. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Paramark
Enterprises, Inc. for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations, has a working capital deficiency, a net capital
deficiency and is not in compliance with the terms of a note payable to a
licensee that raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might
result from the outsome of this uncertainty.



/S/ GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.

GOLDSTEIN GOLUB KESSLER & COMPANY, P.C.
February 23, 1996
New York, New York

                                       F-3

<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                           Consolidated Balance Sheet
                                December 31, 1996

                                     Assets
<TABLE>
<CAPTION>
<S>                                                                        <C>    
Current assets
    Cash                                                                   $49,667
    Accounts receivable, less allowance for
     doubtful accounts of $64,000                                          335,322
    Notes receivable - current maturities                                1,383,836
    Inventory                                                               82,201
    Prepaid expenses and other current assets, net                          40,380
                                                                       -----------
       Total current assets                                              1,891,406

Property and equipment                                                     188,547
Excess of cost over fair value of net assets acquired                      531,666
Notes receivable, net of current maturities                                 39,675
                                                                       -----------

                                                                        $2,651,294

                      Liabilities and Stockholders' Equity

Current liabilities
    Accounts payable and accrued expense                                  $833,319
    Current maturities of long-term debt                                   168,809
    Other current liabilities                                               53,383
                                                                       -----------
       Total current liabilities                                         1,055,511

Long-term debt, net of current maturities                                   39,675
                                                                       -----------

       Total liabilities                                                 1,095,186

Commitment and contingencies

Stockholders' equity
    Preferred stock - $.01 par value; authorized 1,000,000 shares,
     none issued                                                                --
    Common stock - $.01 par value; authorized 10,000,000 shares,
     issued and outstanding 3,068,833 shares                                30,689
    Additional paid-in capital                                           6,757,491
    Accumulated deficit                                                 (5,232,072)
                                                                       -----------
       Total stockholders' equity                                        1,556,108
                                                                        $2,651,294
</TABLE>
                   See independent auditors' report and notes
                      to consolidated financial statements.
                                       F-4
<PAGE>
                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                      Consolidated Statements of Operations
                        For the Years Ended December 31,
<TABLE>
<CAPTION>

                                                              1995             1996
<S>                                                      <C>                 <C>     
Revenue
    Wholesale sales                                      $        --         $861,894
    Sales from Company-owned stores                          434,063          256,023
    Royalties, licensing fees and other                      559,983          311,087
    Initial franchise fees                                    25,510           17,500
    Other                                                     19,533           43,333
                                                         -----------      -----------
       Total revenue                                       1,039,089        1,489,837
                                                         -----------      -----------


Expenses
    Cost of goods sold                                       301,552          925,228
    Selling, general and administrative                    1,738,401        1,696,830
    Interest expense, net of interest income of
     $6,790 and $39,904, respectively                         65,425           96,841
                                                         -----------      -----------
       Total expenses                                      2,105,378        2,718,899
                                                         -----------      -----------

Loss from operations                                      (1,066,289)      (1,229,062)

Other income - Gain on sale of assets (Note 1)                    --        1,286,197
                                                         -----------      -----------

Income (loss) before extraordinary item                   (1,066,289)          57,135

Extraordinary item - forgiveness of debt (Note 10)                --          162,729
                                                         -----------      -----------

Net income (loss)                                        $(1,066,289)        $219,864
                                                         ===========      ===========

Income (loss) per common share:
    Income (loss) before extraordinary item                    $(.37)            $.02
    Extraordinary item                                            --              .06
                                                         -----------      -----------

Net income (loss) per common share                             $(.37)            $.08
                                                         ===========      ===========

Weighted average number of common shares outstanding       2,910,833        2,926,417

</TABLE>

                   See independent auditors' report and notes
                      to consolidated financial statements.
                                       F-5
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                 Consolidated Statement of Stockholders' Equity
                        For the Years Ended December 31,
<TABLE>
<CAPTION>
                                                                           Additional                               Total
                                                   Common Stock              Paid-In           Accumulated       Shareholders'
                                             Shares          Amount          Capital              Deficit          Equity

<S>                                       <C>            <C>           <C>                 <C>               <C>           
Balance at December 31, 1994                 2,910,833      $  29,109     $    6,704,421      $ (4,385,647)     $    2,347,883

    Net loss                                         -              -                  -        (1,066,289)        (1,066,289)
                                        --------------      ---------     --------------      -------------     --------------

Balance at December 31, 1995                 2,910,833         29,109          6,704,421        (5,451,936)          1,281,594

    Issuance of common stock for
     services                                  158,000          1,580             53,070                 -             54,650

    Net income                                       -              -                  -           219,864            219,864
                                        --------------      ---------     --------------      -------------     -------------

Balance at December 31, 1996                 3,068,833      $  30,689     $    6,757,491      $ (5,232,072)     $   1,556,108
                                        ==============      =========     ==============      =============     =============
</TABLE>

                   See independent auditors' report and notes
                      to consolidated financial statements.
                                       F-6
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                      Consolidated Statements of Cash Flows
                        For the Years Ended December 31,

<TABLE>
<CAPTION>

                                                          1995              1996
<S>                                                   <C>                 <C>     
Cash flows from operating activities
Net income (loss)                                     $(1,066,289)        $219,864
                                                      -----------      -----------
Adjustments to reconcile net income (loss) to net
 cash from operating activities
      Depreciation and amortization                       207,901          151,471
      Licensing revenue                                   (41,051)         (12,500)
      Provision for doubtful accounts                     (28,527)         138,139
      Noncash interest expense                             74,360           70,822
      (Gain) loss on sale of assets                        28,281       (1,286,197)
      Gain from forgiveness of debt                            --         (162,729)
      Noncash consulting fees                                  --           28,250
    (Increase) decrease in
      Accounts receivable                                  51,624         (378,841)
      Inventories                                              --          (82,201)
      Prepaid expenses and other current assets            84,465          (12,316)
      Franchise offering costs                            (65,672)              --
      Other assets                                          9,664            1,155
    Increase (decrease) in
      Accounts payable and accrued expenses                84,774          312,135
      Other current liabilities                            81,348          (14,116)
                                                      -----------      -----------
        Total adjustments                                 487,167       (1,246,928)
                                                      -----------      -----------
                                                         (579,122)      (1,027,064)
                                                      -----------      -----------

Cash flows from investing activities
    Purchases of property and equipment                   (32,574)        (154,893)
    Proceeds from sale of assets                            7,850        1,424,043
    Cash collected on notes receivable                         --          326,489
                                                      -----------      -----------
                                                          (24,724)       1,595,639

Cash flows from financing activities
    Principal payments on long-term debt                  (69,523)        (748,237)
    Proceeds from long-term debt                               --          201,500
    Principal payments on notes payable                        --          (23,848)
                                                      -----------      -----------
                                                          (69,523)        (570,585)
                                                      -----------      -----------

Net decrease in cash                                     (673,369)          (2,010)

Cash - beginning                                          725,046           51,677
                                                      -----------      -----------

Cash - ending                                             $51,677          $49,667
                                                      ===========      ===========
</TABLE>

                   See independent auditors' report and notes
                      to consolidated financial statements.
                                       F-7
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements


Note 1 - Principal Business Activity and Sale of Assets
     Operations
     Paramark Enterprises, Inc. (formerly T.J. Cinnamons, Inc.) and Subsidiary
     (the "Company"), a Delaware corporation, was incorporated on August 23,
     1993 as a wholly owned subsidiary of Signature Acquisition Corp. ("SAC").
     In October 1993, SAC and its wholly owned subsidiary, Signature Foods, Inc.
     ("Signature"), were merged with and into the Company. In October 1996, the
     Company formed Interbake Brands, Inc., a Delaware corporation, as a wholly
     owned subsidiary to conduct all wholesale bakery operations.

     Sale of Assets
     In August 1996, the Company closed a purchase agreement ("the Transaction")
     with Triarc Restaurant Group d/b/a Arby's, Inc. ("Triarc") through which
     (a) Triarc purchased the trademarks, service marks, recipes and secret
     formulas of the Company, (b) Triarc licensed back to the Company the rights
     to operate existing franchised bakery locations and to distribute T.J.
     Cinnamons products through retail grocery outlets, and (c) the Company
     entered into a management agreement with Triarc to manage the franchise
     system.

     The Company received payments of $25,000 at the execution of the
     Transaction, $1,765,000 at the closing, a promissory note in the amount of
     $1,650,000 which is being paid in fifteen (15) equal monthly installments
     beginning October 1, 1996, and a promissory note in the amount of $100,000
     which is being paid in twenty four (24) equal monthly installments
     beginning October 1, 1996. In addition, the Transaction provides the
     potential for contingent payments to the Company of up to a maximum of an
     additional $5,500,000 over time dependant upon the amount of T.J. Cinnamons
     product sales by Triarc exceeding a minimum base system wide sales of $26.3
     million. Pursuant to the terms of the purchase agreement, T.J. Cinnamons,
     Inc. changed its name to Paramark Enterprises, Inc.

     In connection with the Transaction, the Company has agreed not to declare a
     dividend prior to September 1997. Additionally, major stockholders of the
     Company, related to an officer of the Company, with holdings of 1,013,390
     shares of the Company's common stock as of December 31, 1996, signed a
     stock sale restriction agreement. Under the terms of this agreement, these
     stockholders are prohibited, through August 1998, without prior written
     consent of Triarc, to sell more than 2.5% of the total issued and
     outstanding shares of the Company. Subsequent to August 1998, and during
     the existence of the license agreement with Triarc, the threshold will be
     increased from 2.5% to 10%.

                                       F-8
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 1 - Principal Business Activity and Sale of Assets - (continued)

     Sale of Assets - (continued)
     Simultaneous with the closing of the Transaction, the Company entered into
     an agreement with Heinz Bakery Products to terminate a 1992 manufacturing
     and license agreement (see Note 7). Under the terms of this agreement, the
     Company paid Heinz Bakery Products $600,000 at closing, and assigned to
     Heinz the Triarc promissory note in the amount of $100,000 payable with
     interest in equal installments over a two year period.

     Liquidity
     Following the closing of the Transaction, the Company's operations have
     been concentrated exclusively on its wholesale development activities.
     Accordingly, the Company is entirely dependent on its wholesale operations
     as its sole source of future revenues in addition to any additional
     revenues generated from the Transaction. The Company applied the proceeds
     from the Transaction towards a reduction of its indebtedness and to provide
     working capital for its operations. The Company is currently experiencing
     cash flow deficits from its operating activities primarily because its
     current expenses exceed its current revenues. These deficits are currently
     being funded by the Triarc notes receivable payments. The Company will
     continue to incur cash flow deficits from its operating activities until
     such time that the Company is able to attain sales levels sufficient to
     support its operations. Management believes that funds generated from the
     Transaction will provide sufficient working capital for its wholesale
     grocery product manufacturing and distribution expansion plans at least
     through December 1997.

Note 2 - Summary of Significant Accounting Policies

     Principles of Consolidation
     The consolidated financial statements include the accounts of Paramark
     Enterprises, Inc. (formerly T.J. Cinnamons, Inc.) and its wholly owned
     subsidiary Interbake Brands, Inc., after elimination of all significant
     intercompany balances and transactions.

     Revenue Recognition
     Royalty revenue is based upon a percentage of sales of the Company's
     franchisees. Royalty revenue is recognized by the Company when sales are
     made by the franchisee. Initial franchise fees are recognized as revenue by
     the Company upon commencement of operations by the franchisee. Licensing
     fees are based on a percentage of sales using the Company's trademark
     and/or trade name. License fees are recognized when the sale is made by the
     licensor.

     In conjunction with the Transaction, the Company entered into a management
     agreement with Triarc for the management of the franchise system. Under
     this agreement, royalty fees collected are recorded as revenue, and paid to
     Triarc via a management fee.

                                       F-9

<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies - (continued)

     Inventory
     Inventory is stated at the lower of cost (first-in, first-out basis) or
     market, and consists principally of raw materials at December 31, 1996.

     Property and Equipment
     Depreciation of furniture and equipment is being provided for by the
     straight-line method over the estimated useful lives of the related assets.
     Leasehold improvements are amortized over the term of the lease.

     Income Taxes
     The Company recognizes deferred income tax liabilities and assets for the
     expected future tax consequences of temporary differences between the
     carrying amounts and the tax basis of assets and liabilities.

     Intangibles
     The excess of cost over fair value of net assets acquired ("goodwill") is
     being amortized using the straight-line method through 2006. Accumulated
     amortization was $168,333 on December 31, 1996.

     At each balance sheet date the Company determines whether an impairment
     exists with respect to the Company's goodwill. In determining whether an
     impairment exists, the Company compares the projected future cash flows
     attributable to the goodwill with its carrying value.

     In connection with the Transaction, the unamortized goodwill was reduced
     $1.7 million, and the amortization period decreased from twenty to ten
     years. This reduction represents the portion of goodwill attributable to
     the assets sold and is reflected in the gain on sale of assets for the year
     ended December 31, 1996.

     Organization costs, trademarks and franchise offering costs were being
     amortized by the straight-line method over five, ten and three years,
     respectively, through the date of the Transaction.

     Stock-Based Compensation
     Statement of Financial Accounting Standards No. 123, "Accounting for
     Stock-Based Compensation," encourages, but does not require companies to
     record compensation costs for stock-based employee compensation plans at
     fair value. The Company has chosen to continue to account for stock-based
     compensation using the intrinsic value method prescribed in Accounting
     Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees," and related Interpretations. Accordingly, compensation cost for
     stock options is measured as the excess, if any, of the quoted market price
     of the Company's stock at the date of the grant over the amount an employee
     must pay to acquire the stock.

                                      F-10
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies - (continued)

     Use of Estimates
     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period. Actual results could differ from those
     estimates.

     Earnings Per Share
     Net income (loss) per common share is calculated by dividing net income
     (loss) by the weighted average number of shares of common stock outstanding
     for each period presented. Stock options and warrants have been excluded
     from the computation of weighted average shares outstanding since their
     effect is antidilutive.

Note 3 - Initial Public Offering and Other Financing Activities
     On May 12, 1994, the effective date of the Company's Registration Statement
     on Form SB-2 under the Securities Act of 1933, the Company completed an
     initial public offering of 970,000 shares of common stock at an offering
     price of $5.00 per share; 970,000 redeemable Class A warrants at an
     offering price of $.10 per warrant, each to purchase one share of common
     stock and one Class B warrant for $4.00; and 485,000 redeemable Class B
     warrants at an offering price of $.10 per warrant, each to purchase one
     share of common stock for $5.00. The net proceeds to the Company, after
     giving effect to previously paid offering expenses of $135,000 and after
     deducting underwriting commissions and expenses of the offering of
     approximately $1,224,200, were approximately $3,906,300.

     In connection with the IPO certain existing stockholders of the Company
     have agreed to place into escrow an aggregate of 750,000 shares of common
     stock ("Escrow Shares"). Approximately 80% of the Escrow Shares are held by
     the Company's management either directly or indirectly. The Escrow Shares
     will be released from escrow and delivered to such stockholders if the
     Company's income before provision for income taxes equals or exceeds the
     amounts below. Otherwise, all of the Escrow Shares will be released from
     escrow and delivered to such stockholders on the seventh anniversary of the
     consummation of the IPO. The releases of these shares are not considered to
     be compensatory.

            Year Ending        Minimum           Escrow Shares
            December 31,   Pretax Earnings       to be Released
               1997          $1,800,000             150,000
               1998           2,700,000             150,000

     Minimum pretax earnings in 1995 and 1996 were not sufficient to cause the
     release of 300,000 and 150,000 shares eligible for release in 1995 and
     1996, respectively; however, such shares shall nevertheless be released if
     there are minimum pretax earnings of $800,000 in fiscal years 1997 or 1998.
     For financial reporting purposes these shares have been considered
     outstanding for all periods presented.

                                      F-11
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 3 - Initial Public Offering and Other Financing Activities - (continued)

     In November and December 1993, the Company completed private placements of
     26 units and 1 unit, respectively, at an offering price of $25,000 per
     unit. Each unit consisted of a $25,000 note convertible into 6,250 shares
     of common stock and an option to acquire, for no consideration, Class A
     warrants to purchase 12,500 shares of common stock. These notes were
     converted into an aggregate of 168,750 shares of common stock and 337,500
     Class A warrants following completion of the IPO.

     Additionally, in connection with the IPO, the Company's underwriters
     acquired an additional 145,500 Class A warrants and 72,750 Class B warrants
     with the same terms as described above.

Note 4 - Notes Receivable

Note receivable from a Corporation, due in
monthly installments of $116,905, including
interest at 9.25%, maturing December 1997                            $1,335,027

Note receivable from a Corporation, due in monthly installments of
$4,580, including interest at 9.25% maturing September 1998 
Payments on the note are restricted to satisfy
the note payable to a former licensee (Note 8)                           88,484
                                                                     ----------
                                                                      1,423,511
Less current maturities                                               1,383,836
                                                                        $39,675
                                                                     ==========

Note 5 - Property and Equipment
     At December 31, 1996, property and equipment, at cost, consists of the
     following:

                                                              Depreciation and
                                                            Amortization Period

     Furniture and fixtures                  $  22,212               5 years
     Equipment                                 134,713          5 - 10 years
     Leasehold improvements                     58,894               5 years
                                            ----------
                                               215,819
     Less accumulated depreciation and
     amortization                               27,272
                                             $ 188,547

     Depreciation and amortization expense for property and equipment was
     $14,452 and $15,989 for 1995 and 1996, respectively.

                                      F-12
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 6 - Accounts Payable and Accrued Expenses

               Trade accounts payable and other     $411,455
               Accrued professional fees             216,618
               Accrued payroll                       162,326
               Accrued other                          42,920
                                                    --------
                                                    $833,319

Note 7 - Agreement with Licensee

     In June 1992, the Company entered into a licensing agreement for the
     manufacturing, production, packaging and distribution of certain products
     under a trade name and trademarks held by the Company. Under the terms of
     the agreement, the Company was entitled to receive licensing fees for all
     products sold based upon various percentages of non-franchisee sales and
     amounts specified in the agreement for sales to Company franchisees. The
     term of the agreement was twenty years unless sooner terminated (see
     below). In connection with the licensing agreement the Company entered into
     an agreement providing for royalties of 4% of the licensing fees earned by
     the Company under the licensing agreement to be paid to an unaffiliated
     entity. In addition, the Company issued to this entity 45,662 shares of its
     common stock, which the Company valued at $40,000.

     The agreement provided for the Company to receive $1,425,000 of the
     licensing fees in advance, which the Company had received through 1993.

     In August 1994, an agreement with the licensee was reached whereby the
     Company paid $400,000 to the licensee and the $770,000 balance of the
     unearned licensing fees was converted to a note payable. In consideration
     for this extended payment schedule, royalties payable to the Company from
     the licensee for sales in excess of $5,000,000 were reduced from 4% to 3%.

     This license agreement was terminated and the balance of the note payable
     was paid in August 1996 pursuant to the Triarc Transaction (Note 1).

Note 8 - Long-term Debt

Note payable to former licensee, monthly payments of $4,580,
including interest at 9.25%, due September 1998. The note is being
satisfied directly from payment on a note
receivable (Note 4)                                                    $88,484

Note payable to former lessor, monthly payments of
$2,000, noninterest bearing, due July 1997                              20,000

                                      F-13
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 8 - Long-term Debt - (continued)

Note payable to a financing institution, monthly
payments of $8,873, including interest at prime plus
3.5%, due December 1997.  Collateralized by the
promissory note from Triarc (Note 4)                      100,000
                                                         --------
                                                          208,484
Less current maturities                                   168,809
                                                          $39,675

     The prime rate at December 31, 1996 was 8.25%

Note 9 - Related Party Transactions

     Included in prepaid expenses and other current assets is a loan receivable
     from an officer, in the amount of $13,600, which consists of advances made,
     prior to the IPO, to an officer of the Company and a partnership affiliated
     with officers of the Company.

     Included in accounts payable and accrued expenses, are bonuses due to
     officers aggregating $107,000, to be paid in the ordinary course of
     business.

     During the period November 1995 through June 1996, the Company borrowed
     approximately $184,500 from affiliates of Charles Loccisano, the Company's
     Chairman, Chief Executive Officer and Director, and Alan Gottlich, the
     Company's President, Chief Financial Officer and Director in order to fund
     its operating cash deficit. These loans were repaid out of the proceeds of
     the Triarc transaction based on terms which were unanimously approved by
     the Company's Board of Directors, including initial loan fees of 25% and
     interest at a rate of five points above the prime rate. Interest expense
     and fees, related to these loans, charged to operations for the year ended
     December 31, 1996 amounted to $53,900.

     In July 1996, the Company entered into a loan agreement with Gelt Financial
     Corporation ("Gelt") providing for a loan to the Company in the amount of
     $125,000. As additional collateral provided to Gelt, an aggregate of
     250,000 shares of the Company's common stock held by affiliates of Charles
     Loccisano, the Company's Chairman, Chief Executive Officer and Director,
     and Alan Gottlich, the Company's President, Chief Financial Officer and
     Director, were pledged to Gelt and limited suretyship agreements were
     entered into by such affiliates. This loan was fully repaid out of the
     proceeds of the Triarc Transaction, resulting in the release of the pledged
     shares of common stock and the cancellation of the limited suretyship
     agreements.

     In November 1996, the Company granted 5,000 shares of the Company's common
     stock to Philip Friedman, a member of the Company's Board of Directors.
     These shares were issued in consideration for consulting services rendered
     in the amount of $7,500, the fair market value of the shares on the date of
     issuance.


                                      F-14

<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 9 - Related Party Transactions - (continued)

     In November 1996, the Company granted 125,000 shares of the Company's
     common stock to the Loccisano Irrevocable Trusts, affiliates of Charles
     Loccisano, the Company's Chairman and CEO. These shares were issued in
     consideration for shares previously conveyed by the Trusts on behalf of the
     Company to Dan Feldman, a member of the Company's Board of Directors, in
     exchange for an agreement to serve as a Director.

     The Company paid consulting fees in the amount of $6,212 during 1996 and
     $10,600 during 1995 to a Company owned by a member of the Company's Board
     of Directors.

Note 10 - Forgiveness of Debt

     Forgiveness of debt resulted from the termination of the manufacturing and
     license agreement with Heinz Bakery Products for $93,409 and $69,320 from
     negotiations with vendors.

Note 11 - Income Taxes

     Deferred tax assets at December 31, 1996 consist of the following:

               Loss carryforwards                     $1,000,000
               Expenses not currently deductible          26,000
                                                     -----------
               Gross deferred tax asset                1,026,000
               Valuation allowance                    (1,026,000)
                                                     -----------
               Net deferred tax asset                $        --
                                                     ===========

     The provisions for income taxes for the year ended December 31, 1996 have
     been reduced $90,000 by the benefits of net operating loss carryforwards.

     At December 31, 1996, the Company has net operating loss carryforwards for
     financial reporting purposes of approximately $2,500,000 available to
     offset future taxable income. These carryforwards expire in the years 2008
     through 2011. Utilization of the net operating loss carryforwards may be
     significantly limited based on changes in the Company's ownership.

Note 12 - Stock Option Plan

     The Company's 1993 Incentive Stock Option Plan has authorized the grant of
     options to management personnel for up to 450,000 shares of the Company's
     common stock. All options granted have ten year terms, other than 10%
     shareholders that have five year terms, and vest and become fully
     exercisable upon grant.

     Pro forma information regarding net income and earnings per share is
     required by Statement of Financial Accounting Standards No. 123,
     "Accounting for Stock-Based Compensation," and has been determined as if
     the Company had accounted for its employee stock options under the fair
     value method of that Statement. The fair value for these options was
     estimated at the date of grant using a Black-Scholes option pricing model
     with the following weighted-average assumptions: risk-free interest rates
     of 6.0%, dividend yields of 0%; volatility factors of the expected market
     price of the Company's common stock of .72%; and a weighted-average
     expected life of the option of five years.

                                      F-15

<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 12 - Stock Option Plan - (continued)

     The Black-Scholes option valuation model was developed for use in
     estimating the fair value of traded options which have no vesting
     restrictions and are fully transferable. In addition, option valuation
     models require the input of highly subjective assumptions including the
     expected stock price volatility. Because the Company's employee stock
     options have characteristics significantly different from those of traded
     options, and because changes in the subjective input assumptions can
     materially affect the fair value estimate, in management's opinion, the
     existing models do not necessarily provide a reliable single measure of the
     fair value of its employee stock options.

     For purposes of pro forma disclosures, the estimated fair value of the
     options is amortized to expense over the options' vesting period. The
     Company's pro forma information follows:

                                                      1995              1996

Pro forma net income (loss)                      $(1,396,289)        $151,864

Pro forma earnings (loss) per common share             $(.48)            $.05


     There was no compensation expense arising from stock options for the years
     ended December 31, 1995 and 1996, respectively.

     A summary of the Company's stock option activity, and related information
     for the years ended December 31, follows:
<TABLE>
<CAPTION>
                                     1995                             1996
                                         Weighted-Average                 Weighted-Average
                             Options      Exercise Price      Options      Exercise Price
<S>                           <C>                <C>          <C>                  <C>  
Outstanding -
 beginning of year            95,312             $5.40        457,812              $2.38

Granted                      362,500              1.58         55,000               1.94
Exercised                         --                --             --                 --
Forfeited                         --                --       (107,500)              4.77
                             -------             -----        -------              -----

Outstanding -
 end of year                 457,812             $2.38        405,312              $1.68
                             =======             =====        =======              =====
</TABLE>
                                      F-16
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 12 - Stock Option Plan - (continued)

                                      1996
           Options
         Outstanding              Exercise                 Expiration
         End of Year                Price                     Date

             17,812               $   2.81               December 1998
            192,500                   1.58               June 2000
            140,000                   1.58               June 2005
             55,000                   1.94               November 2006
      -------------
            405,312
      =============

     All options outstanding at December 31, 1996 are exercisable.

     In November 1996, the Company established and approved the 1996 Stock
     Option Plan for grants of options (each option carries the right to
     purchase one share of the Company's common stock) to directors, management
     and consultants for up to 500,000 shares of the Company's common stock. As
     of December 31, 1996, no options were granted under this plan.

Note 13 - Other Transactions

     On April 12, 1994, the Company's principal stockholders granted an option
     to a stockholder, who was a holder of a note, to purchase from them 250,000
     shares of common stock for $.12 per share, commencing on the effective date
     of the IPO and expiring on April 12, 1998. This option was granted as
     consideration for the holder to agree to be named as a nominee for director
     of the Company for a period of four years and to serve as such if duly
     elected. For financial reporting purposes, the grant of this option is
     deemed to be compensatory. The difference between the IPO price of $5.00
     per share and the exercise price of $.12 per share resulted in a charge to
     the Company's operations of $1,220,000 in 1994.

     In 1995, the stockholder agreed to terminate the option agreement to
     purchase 250,000 shares of common stock at $.12 per share in exchange for
     125,000 shares of common stock from the principal stockholder.

Note 14 - Supplemental Cash Flow Information

     During the year ended December 31, 1996, the Company issued 33,000 shares
     of its common stock as payment for consulting services rendered and
     interest expense on certain debt obligations in the amount of $28,250 and
     $26,400, respectively, the fair market value of the shares on the date(s)
     of issuance.

     During the years ended December 31, 1995 and 1996, the Company paid
     interest of $9,895 and $110,345 respectively.


                                      F-17
<PAGE>

                           PARAMARK ENTERPRISES, INC.
                 (formerly T. J. Cinnamons, Inc.) and SUBSIDIARY
                   Notes to Consolidated Financial Statements

Note 15- Major Customers

     The Company had two major customers that accounted for substantially all of
     the Company's wholesale sales during the year ended December 31, 1996, and
     substantially all of the Company's accounts receivable as of December 31,
     1996.

Note 16 - Commitments and Contingencies

     Rent
     The Company leases space for its main offices, retail bakery, and wholesale
     bakery operation under noncancelable operating leases. The retail bakery
     lease provides for additional rents based upon sales volume. The Company is
     required to pay all real estate taxes in connection with the retail bakery
     lease.

     At December 31, 1996, aggregate minimum annual payments due under the
     leases are as follows:

                     Year Ending
                     December 31,
                         1997          $113,000
                         1998            44,500
                         1999            38,000
                         2000            20,000
                                       --------
                                       $215,500
                                       ========

     Rent expense charged to operations for the years ended December 31, 1995
     and 1996 amounted to approximately $91,000 and $115,000, respectively. In
     June 1996, the Company began sub leasing 50% of its main offices to a
     related party. This sub lease is based on an oral month to month agreement,
     with 50% of the rental and related charges being paid by the sub tenant.
     Amounts charged to the sub tenant during 1996 were $14,000.

     Litigation
     The Company is presently and from time to time involved in routine
     litigation, including litigation with vendors, suppliers and franchisees.
     None of those litigations in which the Company is currently involved are
     material to its financial condition or results of operations.

     In May 1996, a default judgment of $80,120 was entered against the Company
     on behalf of a claim filed by a former franchisee. The Company believes the
     plaintiff 's claims for damages are without foundation and has filed an
     appeal. As of December 31, 1996, management has accrued $10,000 for its
     estimate of possible losses. It is reasonably possible that a change in
     this estimate will occur in the near term.


                                      F-18