SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    Form 10-Q

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

                For the quarterly period ended September 30, 1996

                         Commission file number 0-21003

                               TWINLAB CORPORATION
             (Exact name of registrant as specified in its charter)

        Delaware                                   11-3317986
(State of incorporation)                (I.R.S. Employer Identification No.)

                   2120 Smithtown Avenue, Ronkonkoma, NY 11779
               (Address of principal executive office) (zip code)

                                 (516) 467-3140
              (Registrant's telephone number, including area code)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

YES             NO     X
     ------         ------

     At October 31, 1996, the  registrant  had 1,000,000  shares of common stock
outstanding.


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES
                               INDEX TO FORM 10-Q


                                                                            Page



Part I.  Financial Information
         Item 1. Financial Statements
                 


         Consolidated  Balance  Sheets  at  September  30,  1996  and
         December 31, 1995                                                     2


         Consolidated  Statements  of  Income  for the Three and Nine
         Months Ended September 30, 1996 and 1995                              3


         Consolidated  Statements  of Cash Flows for the Nine  Months
         Ended September 30, 1996 and 1995                                     4


         Notes to Consolidated Unaudited Financial Statements              5 - 9

          Item 2.  Management's  Discussion and Analysis of Financial  
                   Condition and Results of Operations.                  10 - 15

Part II.  Other Information                                                   16

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

          Item 6.  Exhibits and Reports on Form 8-K.

Signatures                                                                    17


<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

                      TWINLAB CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                (In thousands except share and per share amounts)
<TABLE>
<CAPTION>

                                                                       September 30,    December 31,
                                                                           1996           1995 (1)
                                                                       -----------      -----------
Assets                                                                 (unaudited)
Current assets:
<S>                                                                     <C>             <C>      
  Cash and cash equivalents                                             $   8,367       $   7,945
  Marketable securities                                                        --             201
  Accounts receivable, net of allowance for bad debts of
    $228 and $177, respectively                                            25,071          24,372
  Inventories                                                              30,779          25,273
  Deferred tax assets                                                         112              --
  Prepaid expenses and other current assets                                 1,347             872
                                                                        ---------       ---------
    Total current assets                                                   65,676          58,663
Property, plant and equipment, net                                         13,456          13,036
Deferred tax assets                                                        54,020              --
Other assets                                                               10,256           3,610
                                                                        =========       =========
Total                                                                   $ 143,408       $  75,309
                                                                        =========       =========

Liabilities and Shareholders' Equity (Deficit)
Current liabilities:
  Current portion of long-term debt                                     $      86       $   1,479
  Current portion of capital lease obligations                                143             136
  Loan payable - bank                                                          --             660
  Notes payable - shareholders                                                 --             846
  Accounts payable                                                         10,366           6,854
  Accrued expenses and other current liabilities                           13,040           4,258
                                                                        ---------       ---------
    Total current liabilities                                              23,635          14,233
Long-term debt, less current portion                                       47,273           5,367
Capital lease obligations, less current portion                               195             304
Senior subordinated notes                                                 100,000              --
                                                                        ---------       ---------
                                                                        ---------       ---------
    Total liabilities                                                     171,103          19,904
                                                                        ---------       ---------
Senior redeemable cumulative preferred stock, $.01 par value;
  156,410 shares authorized;30,000 shares outstanding as of
  September 30, 1996                                                       30,000              --
                                                                        ---------       ---------
Junior redeemable cumulative preferred stock, $.01 par value;
  140,090 shares authorized; 37,000 shares outstanding as of
  September 30, 1996                                                       37,000              --
                                                                        ---------       ---------
Commitments and contingencies
Shareholders' equity (deficit):
  Common stock, $1 par value; 75,000,000 shares authorized;
  1,000,000 shares outstanding as of September 30, 1996 and
  450,000 shares outstanding as of December 31, 1995                        1,000             450
  Additional paid-in capital                                               80,701              68
  Retained Earnings (deficit)                                            (176,396)         54,887
                                                                        ---------       ---------
    Total shareholders' equity (deficit)                                  (94,695)         55,405
                                                                        ---------       ---------
Total                                                                   $ 143,408       $  75,309
                                                                        =========       =========
</TABLE>

(1)   The Consolidated Balance Sheet as of December 31, 1995 has been taken from
      the audited financial statements at that date.


                                       2


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                     (In thousands except per share amounts)
<TABLE>
<CAPTION>


                                                            Three months ended                 Nine months ended
                                                               September 30,                     September 30,
                                                       ------------------------------    --------------------------
                                                           1996             1995             1996           1995
                                                       -------------    -------------    -------------     --------
                                                                (unaudited)                       (unaudited)
<S>                                                      <C>             <C>             <C>             <C>      
Net sales                                                $  39,393       $  35,002       $ 121,230       $ 104,822
Cost of sales                                               23,830          21,899          71,682          63,945
                                                         ---------       ---------       ---------       ---------
Gross profit                                                15,563          13,103          49,548          40,877
Operating expenses                                           7,828           6,742          22,644          20,521
                                                         ---------       ---------       ---------       ---------
Income from operations                                       7,735           6,361          26,904          20,356
                                                         ---------       ---------       ---------       ---------
Other (expense) income:
  Interest income                                              137              80             452             227
  Interest expense                                          (4,312)           (221)         (6,903)           (638)
  Transaction expenses                                          --              --            (400)             --
  Nonrecurring non-competition agreement expense                --              --         (15,300)             --
  Other                                                         38            (289)             15            (193)
                                                         ---------       ---------       ---------       ---------
                                                            (4,137)           (430)        (22,136)           (604)
                                                         ---------       ---------       ---------       ---------
Income before provision for income taxes                     3,598           5,931           4,768          19,752
Provision for income taxes                                   1,433              47           3,266             139
                                                         =========       =========       =========       =========
Net income                                               $   2,165       $   5,884       $   1,502       $  19,613
                                                         =========       =========       =========       =========
Pro forma for change in tax status (Note 2)
Historical income before provision for income taxes      $   3,598       $   5,931       $   4,768       $  19,752
Pro forma provision for income taxes                         1,439           2,347           8,027           7,818
                                                         ---------       ---------       ---------       ---------
Pro forma net income (loss)                                  2,159       $   3,584          (3,259)      $  11,934
                                                                         =========                       =========
Senior and junior preferred stock dividends                 (2,139)                         (3,386)
                                                          ---------                      ---------
Pro forma net income (loss) applicable to common
  stock                                                  $      20                       $  (6,645)
                                                         =========                       =========
Pro forma net income (loss) per share                    $    0.02                       $   (6.65)
                                                         =========                       =========
Weighted average shares outstanding (Note 4)                 1,000                           1,000
                                                          =========                      =========
</TABLE>                                                                  


                                       3


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (In thousands)
<TABLE>
<CAPTION>

                                                                                             Nine months ended
                                                                                               September 30,
                                                                                       ------------------------------
                                                                                           1996             1995
                                                                                       -------------    -------------
                                                                                                (unaudited)
Cash flows from operating activities:
<S>                                                                                       <C>             <C>      
    Net income                                                                            $   1,502       $  19,613
    Adjustment to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                                         1,322             664
        Gain on sale of equipment                                                                --             (58)
        Bad debt expense                                                                        128             116
        Deferred income taxes                                                                 3,168              --
        Nonrecurring non-competition agreement expense                                       15,300              --
        Changes in operating assets and liabilities:
            Accounts receivable                                                                (827)            521
            Inventories                                                                      (5,506)         (7,096)
            Prepaid expenses and other current assets                                          (475)           (190)
            Accounts payable                                                                  3,512           2,550
            Accrued expenses and other current liabilities                                    5,396           1,580
                                                                                          ---------       ---------
                    Net cash provided by operating activities                                23,520          17,700
                                                                                          ---------       ---------

Cash flows from investing activities:
    Maturities of marketable securities                                                         201           1,159
    Proceeds from sales of property, plant and equipment                                         10             825
    Acquisition of property, plant and equipment                                             (1,253)         (2,465)
    (Increase) decrease in other assets                                                      (7,145)            201
                                                                                          ---------       ---------
                    Net cash used in investing activities                                    (8,187)           (280)
                                                                                          ---------       ---------

Cash flows from financing activities:
    Proceeds from issuance of debt                                                          153,000           4,675
    Proceeds from issuance of senior and junior preferred stock                              67,000              --
    Distributions to shareholders                                                            (8,929)        (20,595)
    Payments of debt                                                                        (13,993)         (4,481)
    Issuance of capital stock                                                                 5,500              --
    Principal payments of capital lease obligations                                            (102)           (115)
    Repurchase of shareholders' common stock and recapitalization                          (217,387)             --
                                                                                          ---------       ---------
                    Net cash used in financing activities                                   (14,911)        (20,516)
                                                                                          ---------       ---------

Net increase (decrease) in cash and cash equivalents                                            422          (3,096)
Cash and cash equivalents at beginning of period                                              7,945           5,735
                                                                                          =========       =========
Cash and cash equivalents at end of period                                                $   8,367       $   2,639
                                                                                          =========       =========
Supplemental disclosures of cash flow information:
     Cash paid during the periods for:
            Interest                                                                      $   1,999       $     546
                                                                                          =========       =========
            Income taxes                                                                  $   1,162       $     162
                                                                                          =========       =========
</TABLE>


                                       4


<PAGE>
                      TWINLAB CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

           (All amounts in thousands, except share and per share data)

1.   In the  opinion of  management,  the  accompanying  consolidated  unaudited
     financial  statements  include all  necessary  adjustments  (consisting  of
     normal  recurring  accruals) and present  fairly the financial  position of
     Twinlab  Corporation and subsidiaries as of September 30, 1996, the results
     of its  operations  for the three and nine months ended  September 30, 1996
     and 1995,  and its cash flows for the nine months ended  September 30, 1996
     and 1995, in conformity with generally accepted  accounting  principles for
     the  interim  financial  information  applied on a  consistent  basis.  The
     results of  operations  for the three and nine months ended  September  30,
     1996, are not necessarily  indicative of the results to be expected for the
     full year.

     Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles have been omitted.  These financial statements should be read in
     conjunction with the audited  consolidated  financial  statements and notes
     thereto included in Twinlab  Corporation's  registration  statement on Form
     S-1 as filed with the Securities and Exchange  Commission ("SEC") (File No.
     333-05191).

2.   Description  of Entity  and Basis of  Presentation  - Prior to May 7, 1996,
     Twin Laboratories  Inc.  ("Twin") and its affiliates,  Twinlab Export Corp.
     ("Export"),  Twinlab Specialty Corporation ("Specialty"),  Alvita Products,
     Inc.  ("Alvita"),  Natur-Pharma  Inc.  ("Natur-Pharma"),  B.  Bros.  Realty
     Corporation  ("B.  Bros.")  and  Advanced   Research  Press,  Inc.  ("ARP")
     (collectively the "Companies")  operated as separate  corporations,  all of
     which were wholly-owned by the same individuals (with some companies having
     different   ownership   percentages  among  such  individuals)  except  for
     Natur-Pharma  and B. Bros.  which were only  ninety-seven  percent owned by
     such individuals.

     In July 1995, the shareholders of the Companies signed a non-binding letter
     of intent to sell an interest in the  Companies  and  subsequently  entered
     into a stock purchase and sale agreement (the "Acquisition Agreement") (see
     Note 3).

     On February  27,  1996,  Twinlab  Corporation  (formerly  TLG  Laboratories
     Holding Corp.) ("TLC") was incorporated in contemplation of the Acquisition
     Agreement.  The accompanying  consolidated financial statements include the
     accounts of TLC and subsidiaries  (the "Company") after giving  retroactive
     effect, in a manner similar to a pooling of interests, to the merger of the
     Companies pursuant to the Acquisition Agreement.

     The Companies  had been S  Corporations,  pursuant to the Internal  Revenue
     Code,  through May 7, 1996. Upon  completion of the Acquisition  Agreement,
     the Companies  terminated their S Corporation  status. The pro forma income
     statement information reflects adjustments to the historical net income had
     the Companies not elected S Corporation  status for income tax purposes for
     all periods presented.

3.   Acquisition  Agreement and related  transactions - The  shareholders of the
     Companies  entered  into the  Acquisition  Agreement,  which is dated as of
     March 5, 1996 and which was consummated on May 7, 1996,  pursuant to which,
     among other things,  (i) TLC acquired all of the outstanding  capital stock
     of  Natur-Pharma,  (ii) Green Equity  Investors II, L.P.  ("GEI")  acquired
     480,000 shares (48%) of the common stock of TLC for aggregate consideration
     of $4,800,  and shares of non-voting junior  redeemable  preferred stock of
     TLC for aggregate  consideration of $37,000,  (iii) certain other investors
     acquired  70,000 shares (7%) of the common stock of TLC  (however,  each of
     these  other  investors  own less than 5% of the  common  stock of TLC) for
     aggregate


                                       5


<PAGE>
                      TWINLAB CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

           (All amounts in thousands, except share and per share data)

     consideration of $700 and shares of non-voting senior redeemable  preferred
     stock of TLC for aggregate  consideration  of $30,000,  (iv) certain of the
     shareholders of the Companies (the "Continuing Shareholders") received from
     TLC,  in  exchange   for  certain  of  their  shares  of  common  stock  of
     Natur-Pharma,  450,000  shares  (45%) of the  outstanding  shares of common
     stock of TLC valued at $4,500,  and (v) the  shareholders  of the Companies
     received  a total of  $212,500  in  consideration  of the  balance of their
     shares  of  common  stock of  Natur-Pharma  and for all of their  shares of
     capital stock of Twin, Alvita, Export, Specialty, B. Bros., and ARP. Of the
     total  cash  consideration  to  the  shareholders,   approximately  $15,300
     represented  consideration for  non-competition  agreements entered into by
     the  shareholders of the Companies,  which was recognized as a nonrecurring
     expense upon the consummation of the Acquisition Agreement.

     Pursuant to the terms of the Acquisition  Agreement,  Twin, Alvita, Export,
     Specialty, and B. Bros. were merged into Natur-Pharma,  ARP was merged with
     Natur-Pharma  II, Inc., a  wholly-owned  subsidiary  of  Natur-Pharma,  and
     Natur-Pharma became a wholly-owned  subsidiary of TLC. Natur-Pharma changed
     its name to Twin  Laboratories  Inc.  ("New Twin").  TLC's initial board of
     directors  consists  of  five  of the  Continuing  Shareholders  and  three
     designees  of GEI. A majority  of TLC's  shareholders  have the  ability to
     elect a majority of its directors.  However,  regardless of the composition
     of the board of  directors,  pursuant to the terms of the TLC  shareholders
     agreement,  a  wide  range  of  actions  to be  taken  by TLC  require  the
     affirmative  approval  of both a  majority  of the  Continuing  Shareholder
     directors  and a majority  of the GEI  designee  directors.  These  actions
     include,  but are not limited to, payment of certain dividends,  engagement
     in new  businesses,  acquisition  of  other  businesses,  entering  certain
     contracts,   incurring   certain  debt  or   obligations,   making  certain
     investments,  relocation  of executive  offices,  selection of location and
     date  of  the  annual   shareholders   meeting,   termination  or  material
     modification of any employee  benefit plan,  selection of auditors or legal
     counsel, adoption or amendment of strategic plans or operating budgets, and
     election or termination  of any executive  officers.  In addition,  certain
     fundamental  corporate actions,  including but not limited to amendments to
     the  certificate of  incorporation,  the sale of  substantially  all of the
     assets of the Company,  and the merger or  combination  of the Company with
     another entity,  additionally  require an affirmative vote of holders of at
     least 80% of the issued and  outstanding  common stock of TLC.  Such voting
     rights are generally  effective  until such time as the common stock of TLC
     is publicly held. Because the transactions  contemplated by the Acquisition
     Agreement  do not result in a change in  control  as  defined  in  Emerging
     Issues Task Force Issue No. 88-16, "Basis in Leveraged Buyout Transactions"
     ("EITF 88-16"),  the transactions were accounted for as a  recapitalization
     under the  guidance of EITF 88-16 and the  Companies'  historical  basis of
     accounting were applied to the consolidated financial statements of TLC.

     Upon consummation of the Acquisition  Agreement,  the Companies  terminated
     their S Corporation status. The mergers of Twin, Alvita, Export, Specialty,
     and B. Bros. Into  Natur-Pharma were treated as taxable asset purchases for
     federal  and  state  income  tax  purposes  and as a  recapitalization  for
     financial accounting  purposes.  For federal and state income tax purposes,
     the purchase price was allocated among the various  corporations  and their
     respective assets and liabilities based on the respective fair values as of
     the closing of the Acquisition  Agreement.  This resulted in different book
     and tax asset bases for the assets of these  companies,  which  resulted in
     deferred tax assets of approximately $57,300.

     New Twin obtained additional financing necessary to effect the transactions
     contemplated  by  the  Acquisition   Agreement,   repay  certain   existing
     indebtedness of the


                                       6


<PAGE>
                      TWINLAB CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

           (All amounts in thousands, except share and per share data)

     Companies,  and pay the fees and expenses  incurred in connection  with the
     Acquisition   Agreement  through  the  incurrence  of  debt  which  totaled
     $153,000.  Such debt included:  (1) borrowings of $53,000 under a term loan
     credit facility provided by certain banks, financial institutions and other
     entities,  and (2) gross proceeds of $100,000 from the private placement of
     subordinated debt securities which securities were  subsequently  exchanged
     on October 28, 1996 for  registered  debt  securities.  A six-year  $15,000
     revolving credit facility was also obtained from the term loan lenders,  to
     provide for working capital requirements.

     Borrowings of New Twin under the term loan and revolving credit  facilities
     and the indenture  governing the subordinated  debt restrict the payment of
     dividends and the making of loans,  advances or other distributions to TLC,
     except in certain limited circumstances. The transfer of assets of New Twin
     and ARP to TLC as loans,  advances and other distributions is restricted by
     such financing arrangements. The subordinated debt is jointly and severally
     guaranteed  by TLC and ARP on a full  and  unconditional  unsecured  senior
     subordinated basis.

     The assets,  results of  operations  and  shareholders'  equity of New Twin
     comprise  substantially  all of  the  assets,  results  of  operations  and
     shareholders'  equity of TLC on a consolidated  basis.  TLC has no separate
     operations and has no significant assets other than TLC's investment in its
     wholly-owned  subsidiary New Twin and, through New Twin, in ARP, New Twin's
     wholly-owned  subsidiary.  TLC has no direct or indirect subsidiaries other
     than New Twin and ARP;  and  neither  New Twin nor ARP has any  stockholder
     other than,  respectively,  TLC and New Twin. Accordingly,  the Company has
     determined that separate financial statements of New Twin and ARP would not
     be material to investors and, therefore,  such financial statements are not
     included herein.


     Summarized financial information of New Twin is as follows:

                                                  September 30,     December 31,
                                                      1996               1995
                                               ----------------   --------------
                                                   (unaudited)
Current assets                                    $  65,676       $  58,663
Noncurrent assets                                    77,732          16,646
Current liabilities                                  20,249          14,233
Noncurrent liabilities                              147,468           5,671
Shareholders' equity (deficit)                      (24,309)         55,405


                            Three months ended             Nine months ended
                                 September 30,                September 30,
                      ----------------------------   --------------------------
                       1996           1995             1996            1995
                      ------      ------------      ---------       -----------
Net sales           $ 39,393        $ 35,002        $121,230        $104,822
Gross profit          15,563          13,103          49,548          40,877
Net income             2,165           5,884           1,502          19,613


                                       7


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

           (All amounts in thousands, except share and per share data)

       Summarized financial information of ARP is as follows:

                                             September 30,      December 31,
                                                 1996               1995
                                             -------------      ------------
                                             (unaudited)
Current assets                                 $1,650               $1,266
Noncurrent assets                                 171                  168
Current liabilities                             1,338                1,211
Noncurrent liabilities                             --                   --
Shareholders' equity                              483                  222


                            Three months ended             Nine months ended
                                 September 30,                September 30,
                      ----------------------------   --------------------------
                       1996           1995             1996            1995
                      ------        -------           -------        -------
Net sales             $1,408        $1,285             $4,446        $4,011
Gross profit             125            17                592           473
Net income (loss)         41           (66)               317           231

4.   Pro forma net income  (loss)  per share - Pro forma net  income  (loss) per
     share for the three  months and nine months  ended  September  30, 1996 has
     been computed by dividing pro forma net income (loss),  after reduction for
     senior and junior  preferred  stock  dividends,  by the number of  weighted
     average shares outstanding and for the nine months ended September 30, 1996
     assumes as outstanding for the entire period, the 550,000 shares which were
     issued on May 7, 1996 in connection with the Acquisition Agreement.

5.    Classification of inventories is:

                       September 30,              December 31,
                            1996                     1995
                      -------------               ------------
                        (unaudited)
Raw Materials             $13,293                   $11,006
Work-in-process             8,850                     4,550
Finished Goods              8,636                     9,717
                      ============                ==========
                          $30,779                   $25,273
                      ============                ==========

6.   Changes in authorized  capital - In July 1996,  the Board of Directors (the
     "Board")  and the  stockholders  authorized  an  increase  in the number of
     shares of common  stock  authorized  to  75,000,000  and an increase in the
     number  of  shares  of  preferred  stock  authorized  to  2,000,000,  which
     preferred  stock may be  issued  by the  Board on such  terms and with such
     rights,  preferences and  designations as the Board may determine,  without
     further stockholder action.

7.   Stock  incentive  plan - In July 1996,  the Board and  stockholders  of TLC
     approved and adopted the Twinlab Corporation 1996 Stock Incentive Plan (the
     "1996  Plan").  The 1996 Plan provides for the issuance of a total of up to
     400,000  authorized and unissued  shares of common stock,  treasury  shares
     and/or shares  acquired by TLC for purposes of the 1996 Plan.  Awards under
     the 1996 Plan may be made in the form of (i) incentive stock options,  (ii)
     nonqualified  stock  options,   (iii)  stock  appreciation   rights,   (iv)
     restricted  stock and (v) performance  shares.  Options become  exercisable
     over five


                                       8


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

           (All amounts in thousands, except share and per share data)

     years from the date of grant at the rate of 20% of the grant each year.  As
     of September 30, 1996, no awards have been made under the 1996 plan.

8.   Proposed   initial  public  offering  -  On  June  4,  1996,  TLC  filed  a
     registration statement on Form S-1 in respect of an offering by TLC for the
     sale to the public  (the  "IPO") of shares of its common  stock,  $1.00 par
     value.  The registration  statement has not yet been declared  effective by
     the SEC. The registration  statement,  as subsequently amended, states that
     the maximum aggregate  offering price of the securities to be registered is
     $156,400.  The  expected  use of the net  proceeds  of the IPO and,  to the
     extent  necessary,  available  cash  resources of the Company,  would be to
     redeem all of the outstanding  shares of senior  preferred stock and all of
     the  outstanding  shares of junior  preferred  stock of TLC, which together
     have an  aggregate  liquidation  preference  of $67,000  (plus  accrued and
     unpaid  dividends  thereon);  and to prepay all of the $47,000 of remaining
     outstanding  indebtedness  under the term loan  facility,  plus accrued and
     unpaid interest  thereon.  The balance,  if any, of the net proceeds of the
     IPO would be used for general corporate purposes.

     Prior to the  consummation  of the IPO,  the Board will  authorize  a stock
     split  (effected  in the  form  of a stock  dividend),  of all  issued  and
     outstanding  common  shares at the rate of 18.5 for 1, which will  increase
     the number of issued and outstanding shares from 1,000,000 to 18,500,000.

9.   Amended and restated  revolving  credit  facility - In connection  with the
     IPO,  New Twin  expects  to  enter  into a  $50,000  amended  and  restated
     revolving  credit  facility  (the  "Amended and Restated  Revolving  Credit
     Facility") which would expire on May 7, 2002.  Borrowings under the Amended
     and  Restated  Revolving  Credit  Facility  would  bear  interest,  at  the
     borrower's discretion,  at either the Alternative Base Rate, as defined, or
     at the Eurodollar Rate, plus a margin of 1.25%, as defined.  Interest rates
     are subject to  increase  or  reduction  based upon the  Company's  meeting
     certain  financial  tests.   Borrowings  under  the  Amended  and  Restated
     Revolving   Credit   Facility  would  be  available  for  working   capital
     requirements and for general corporate purposes, including up to $35,000 of
     which would be  available to fund  permitted  acquisitions,  as defined.  A
     portion of the Amended and Restated Revolving Credit Facility not to exceed
     $15,000  would be  available  for the  issuance of letters of credit  which
     generally  would have an initial term of one year or less.  The Amended and
     Restated  Revolving  Credit  Facility  is  expected  to be secured by first
     priority secured interests in most of the tangible and intangible assets of
     New Twin. In addition,  the Amended and Restated  Revolving Credit Facility
     would be subject to certain restrictive  covenants  including,  among other
     things,  the  maintenance  of  certain  debt  coverage  ratios,  as well as
     restrictions  on  additional  indebtedness,  dividends  and  certain  other
     significant transactions.


                                       9


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES

 Item 2. Management's Discussion and Analysis of Financial Condition and Results
                                  of Operations


The following  should be read in conjunction with the response to Part I, Item 1
of this report.

Results of Operations

The following table sets forth, for the periods  indicated,  certain  historical
income  statement  and other data for the Company and also sets forth certain of
such data as a percentage of net sales.
<TABLE>
<CAPTION>

                                           Nine Months Ended September 30,         Three Months Ended September 30,
                                         ------------------------------------    -----------------------------------
                                               1996                  1995             1996             1995
                                         -------------------   --------------    -------------   -------------------
                                           $        %          $        %         $        %         $        %
                                         -------------------   --------------    -------------   -------------------
                                                         (dollars in millions)
<S>                                   <C>          <C>    <C>          <C>    <C>         <C>    <C>         <C>
Vitamins, Minerals & Amino Acids      $   29.2     24.1%  $   25.6     24.4%  $   9.9     25.2%  $   7.3     20.8%
Sports Nutrition                          43.7     36.0       38.4     36.6      15.0     38.1      13.8     39.5
Special Formulas                          31.4     25.8       26.5     25.3       9.7     24.4       9.6     27.5
Herbal Supplements & Phytonutrients       16.5     13.7       14.6     13.9       5.4     13.8       5.1     14.4
Herb Teas                                  5.7      4.7        4.1      3.9       1.6      4.1       0.9      2.5
Publishing                                 4.1      3.4        4.2      4.1       1.3      3.3       1.3      3.8
                                         ------    -----     ------    -----     -----    -----     -----    -----
       Gross Sales                       130.6    107.7      113.4    108.2      42.9    108.9      38.0    108.5
       Discounts & Allowances             (9.4)    (7.7)      (8.6)    (8.2)     (3.5)    (8.9)     (3.0)    (8.5)
                                         ------    -----     ------    -----     -----    -----     -----    -----
       Net Sales                      $  121.2    100.0%  $  104.8    100.0%  $  39.4    100.0%  $  35.0    100.0%
Gross Profit                              49.6     40.9       40.9     39.0      15.6     39.5      13.1     37.4
Operating Expenses                        22.6     18.7       20.5     19.6       7.8     19.9       6.7     19.3
Income From Operations                    26.9     22.2       20.4     19.4       7.7     19.6       6.4     18.2
</TABLE>

The  Company  consisted  of "S"  corporations  through the  consummation  of the
Acquisition Agreement on May 7, 1996. Accordingly,  federal and state taxes were
generally  paid at the  shareholder  level only.  The provision for income taxes
through  May 7, 1996  represented  state  taxes for New  York,  which  imposes a
corporate tax for all income in excess of $0.2 million. Upon consummation of the
transactions  related to the Acquisition  Agreement,  the Company eliminated its
"S" corporation status and, accordingly,  is subject to federal and state income
taxes.

Nine Months Ended September 30, 1996 Compared to
   Nine Months Ended September 30, 1995

Net Sales.  Net sales for the nine months  ended  September  30, 1996 was $121.2
million,  an increase of $16.4  million,  or 15.7%,  as compared to net sales of
$104.8 million for the nine months ended  September 30, 1995. The 15.7% increase
was  attributable  to  increases  in gross  sales in each of the  Company's  six
product  categories  other than  publishing,  partially offset by an increase in
discounts and allowances which was due to the Company's  increased sales volume.
Vitamins,  minerals and amino acids  contributed  $29.2 million,  an increase of
$3.6 million,  or 14.3%,  as compared to $25.6 million for the nine months ended
September 30, 1995. The increase in gross sales of vitamins,  minerals and amino
acids was primarily due to continued strong consumer interest in these products.
Sports  nutrition  products  contributed  $43.7  million,  an  increase  of $5.3
million,  or 13.7%,  as  compared to $38.4  million  for the nine  months  ended
September 30, 1995, primarily due to the increased demand for a variety of these
products,  including  $1.2 million of gross sales in  September  1996 (the first
month of introduction) from the Company's newly-


                                       10


<PAGE>


                      TWINLAB CORPORATION AND SUBSIDIARIES


introduced line of Ma Huang-free  products.  Special formulas  contributed $31.4
million, an increase of $4.9 million, or 18.4%, as compared to $26.5 million for
the nine months ended September 30, 1995. The increase in gross sales of special
formulas was primarily due to the  successful  introduction  of a variety of new
product  formulations.  Herbal supplements and phytonutrients  contributed $16.5
million, an increase of $1.9 million, or 13.3%, as compared to $14.6 million for
the nine  months  ended  September  30,  1995,  and herb teas  contributed  $5.7
million,  an increase of $1.6 million, or 39.8%, as compared to $4.1 million for
the nine months  ended  September  30,  1995.  The gross sales  increase in both
herbal  supplements  and  phytonutrients  and herb teas was primarily due to new
product  introductions,  continued strong consumer interest in existing products
and  increased  penetration  of the  Company's  line of  Nature's  Herbs  herbal
supplements  and  phytonutrients  and the  Company's  line of  Alvita  herb  tea
products into domestic health food stores.  Publishing  contributed $4.1 million
as compared to $4.2 million for the nine months ended September 30, 1995.

Gross  Profit.  Gross  profit for the nine months ended  September  30, 1996 was
$49.6  million,  which  represented  an increase of $8.7 million,  or 21.2%,  as
compared to $40.9 million for the nine months ended  September  30, 1995.  Gross
profit margin was 40.9% for the nine months ended September 30, 1996 as compared
to 39.0% for the nine months ended  September 30, 1995. The overall  increase in
gross profit dollars was  attributable to the Company's  higher sales volume for
the nine months ended  September  30, 1996.  The increase in gross profit margin
for the nine  months  ended  September  30,  1996 as compared to the nine months
ended  September 30, 1995 was due primarily to a more favorable  product mix, to
higher gross profit margins on recently introduced new product  formulations and
product  line  extensions,  to a reduction  in sales  discounts  and  allowances
offered on certain of the Company's lines of TWINLAB (vitamins,  minerals, amino
acids, fish and marine oils, sports nutrition products and special formulas) and
Nature's Herbs  products under certain sales programs  introduced in 1995 and to
continued  absorption  of  manufacturing  overhead  expenses over a larger sales
base.

Operating  Expenses.  Operating  expenses were $22.6 million for the nine months
ended September 30, 1996, representing an increase of $2.1 million, or 10.3%, as
compared to $20.5  million for the nine months ended  September  30, 1995.  As a
percent of net sales, operating expenses declined from 19.6% for the nine months
ended  September 30, 1995 to 18.7% for the nine months ended September 30, 1996.
The  increase in  operating  expenses was  primarily  attributable  to increased
selling and advertising  expenses and higher operating  expenses  resulting from
the Company's  increased  level of sales for the nine months ended September 30,
1996. The decline in operating expenses as a percent of net sales was due to the
Company's  ability to maintain its expenditures for research and development and
certain general and administrative  functions at approximately the same level as
in the nine months ended September 30, 1995, while substantially  increasing the
Company's sales volume.

Income from  Operations.  Income from  operations was $26.9 million for the nine
months ended September 30, 1996,  representing  an increase of $6.5 million,  or
32.2%,  as compared to $20.4  million for the nine months  ended  September  30,
1995. Income from operations margin increased to 22.2% of net sales for the nine
months ended  September 30, 1996, as compared to 19.4% of net sales for the nine
months ended  September  30, 1995.  The increase in income from  operations  and
income from  operations  margin was primarily due to the Company's  higher sales
volume for the nine months ended  September  30, 1996 together with higher gross
margins and lower operating expenses as a percent of net sales.


                                       11


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES

Other  Expense.  Other  expense  was $22.1  million  for the nine  months  ended
September  30,  1996,  as  compared to $0.6  million  for the nine months  ended
September 30, 1995.  The net increase is primarily  attributable  to (i) a $15.3
million charge relating to the write-off of certain  non-competition  agreements
related to the consummation of the Acquisition  Agreement,  (ii) $0.4 million of
expenses  related to the  consummation of the Acquisition  Agreement and related
transactions  and  (iii) a $6.3  million  increase  in  interest  expense  which
resulted from increased borrowings,  partially offset by an increase in interest
and other income.

Three Months Ended  September 30, 1996 ("third  quarter 1996") Compared to Three
   Months Ended September 30, 1995 ("third quarter 1995")

Net Sales.  Net sales for third quarter 1996 was $39.4  million,  an increase of
$4.4  million,  or 12.5%,  as  compared  to net sales of $35.0  million in third
quarter 1995. The 12.5% increase was attributable to increases in gross sales in
each of the  Company's  six  product  categories  other than  publishing  (which
remained unchanged from third quarter 1995),  partially offset by an increase in
discounts and allowances which was due to the Company's  increased sales volume.
Vitamins, minerals and amino acids contributed $9.9 million, an increase of $2.6
million,  or 36.2%,  as  compared to $7.3  million in third  quarter  1995.  The
increase in gross sales of vitamins,  minerals and amino acids was primarily due
to  continued  strong  consumer  interest in these  products.  Sports  nutrition
products  contributed  $15.0 million,  an increase of $1.2 million,  or 8.6%, as
compared to $13.8 million in third quarter 1995.  The increase in gross sales of
sports  nutrition   products  was  primarily  due  to  sales  of  the  Company's
newly-introduced line of Ma Huang-free products which contributed gross sales of
$1.2  million in  September  1996,  their first month of  introduction.  Special
formulas  contributed $9.7 million, as compared to $9.6 million in third quarter
1995.  Herbal  supplements  and  phytonutrients  contributed  $5.4  million,  an
increase of $0.3 million,  or 7.8%, as compared to $5.1 million in third quarter
1995, and herb teas  contributed $1.6 million,  an increase of $0.7 million,  or
82.2%,  as compared to $0.9 million in third quarter 1995. The increase in gross
sales of herb teas was  primarily  due to new product  introductions,  continued
strong  consumer  interest in existing  products and  increased  penetration  of
Alvita products into domestic health food stores.  Publishing  contributed  $1.3
million in each of third quarter 1996 and third quarter 1995.

Gross  Profit.  Gross  profit for third  quarter 1996 was $15.6  million,  which
represented an increase of $2.5 million,  or 18.8%, as compared to $13.1 million
for third quarter 1995.  Gross profit margin was 39.5% for third quarter 1996 as
compared to 37.4% for third quarter 1995.  The overall  increase in gross profit
dollars was  attributable to the Company's  higher sales volume in third quarter
1996.  The increase in gross profit  margin in third quarter 1996 as compared to
third quarter 1995 was due primarily to a more favorable  product mix, to higher
gross profit margins on recently introduced new product formulations and product
line extensions,  and to continued absorption of manufacturing overhead expenses
over a larger sales base.

Operating Expenses. Operating expenses were $7.8 million for third quarter 1996,
representing an increase of $1.1 million,  or 16.1%, as compared to $6.7 million
for third quarter 1995. As a percent of net sales,  operating expenses increased
from 19.3% in third quarter 1995 to 19.9% in third quarter 1996. The increase in
operating  expenses,  and  operating  expenses  as a percent of net  sales,  was
attributable  to a $0.7  million  increase  in selling and  marketing  expenses,
primarily due to increased  advertising  expense, and a $0.4 million increase in
general and administrative expenses in third quarter 1996.


                                       12


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES

Income from Operations. Income from operations was $7.7 million in third quarter
1996,  representing  an increase of $1.3 million,  or 21.6%, as compared to $6.4
million for third quarter 1995. Income from operations margin increased to 19.6%
of net sales in third  quarter  1996, as compared to 18.2% of net sales in third
quarter 1995. The increase in income from  operations and income from operations
margin was primarily  due to the Company's  higher sales volume in third quarter
1996 together with higher gross margins.

Other Expense.  Other expense during third quarter 1996 amounted to $4.1 million
as compared to $0.4 million in third quarter 1995. The increase is primarily due
to a $4.1 million  increase in interest  expense which  resulted from  increased
borrowings.

Liquidity and Capital Resources

For the nine months  ended  September  30,  1996,  cash  provided  by  operating
activities was $23.5  million,  as compared to $17.7 million for the nine months
ended September 30, 1995. The increase in cash provided by operating  activities
was primarily  attributable to an increase in income from operations.  Cash used
in financing  activities  was $14.9 million for the nine months ended  September
30,  1996,  reflecting  the net cash effect of the  transactions  related to the
Acquisition Agreement, the repayment of $6.0 million of outstanding indebtedness
under the Company's term loan  facility,  and  distributions  of $8.9 million to
certain  stockholders of the Company.  Cash used in financing activities for the
nine months ended  September 30, 1995 primarily  consisted of  distributions  to
stockholders of $20.6 million.

Capital  expenditures  were $1.2  million  and $2.5  million for the nine months
ended September 30, 1996 and 1995, respectively. Historical capital expenditures
were  primarily  used to purchase  production  equipment,  expand  capacity  and
improve  manufacturing  efficiency.  Capital  expenditures  are  expected  to be
approximately  $0.5 million and $3.4 million  during the fourth  quarter of 1996
and  fiscal  1997,  respectively,  and  will be used to  purchase  manufacturing
equipment and fund plant expansion to support the Company's  future growth.  The
Company is engaged in negotiations for the purchase of an approximately  110,000
square foot warehouse and  manufacturing  facility in  Ronkonkoma,  New York. If
this acquisition is completed, the Company anticipates making additional capital
expenditures   of   approximately   $6.8  million  in  fiscal  1997,   including
approximately  $2.0 million of anticipated  renovations  to such  facility.  The
Company estimates that its historical level of maintenance capital  expenditures
has been approximately $0.5 million per fiscal year.

In connection  with the Acquisition  Agreement,  TLC issued shares of its senior
preferred stock and junior preferred stock for aggregate  consideration of $67.0
million,  entered into a credit  facility and borrowed $53.0 million in the form
of a term loan thereunder, and issued $100.0 million principal amount of 10-1/4%
Senior Subordinated Notes due 2006. Subsequent to the Acquisition Agreement, the
Company  repaid $6.0  million of  outstanding  indebtedness  under the term loan
facility.  On June 4, 1996,  TLC filed a  registration  statement on Form S-1 in
respect of an  offering  by TLC for the sale to the public (the "IPO") of shares
of its common stock,  $1.00 par value.  The  registration  statement has not yet
been declared effective by the SEC. The registration  statement, as subsequently
amended,  states that the maximum aggregate  offering price of the securities to
be  registered  is  $156,400.  The net  proceeds  of the IPO and,  to the extent
necessary,   available  cash  resources  of  the  Company  (including   possible
borrowings  available under the Amended and Restated  Revolving  Credit Facility
which is expected to be entered into in connection with the  consummation of the
IPO), will be used to repay all of the Company's outstanding  indebtedness under
the term loan facility,  plus accrued and unpaid interest thereon, and to redeem
all  of  the  outstanding  shares  of  senior  preferred  stock  and  all of the
outstanding  shares of junior  preferred  stock,  together  having an  aggregate
liquidation preference of


                                       13


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES


$67.0  million,  plus  accrued  and unpaid  dividends  thereon.  There can be no
assurance that the Company will consummate the IPO.

TLC has no operations of its own and  accordingly  has no  independent  means of
generating  revenue.  As a holding  company,  TLC's internal sources of funds to
meet its cash needs,  including  payment of expenses,  are  dividends  and other
permitted  payments  from  its  direct  and  indirect  subsidiaries.   Financing
arrangements under which Twin Laboratories Inc. is the borrower contain, and the
Amended and Restated  Revolving Credit Facility is expected to contain,  certain
financial  and  operating  covenants  which,  among  other  things,  require the
maintenance  of a  maximum  leverage  ratio and a minimum  fixed  charge  ratio.
Borrowings of Twin  Laboratories  Inc. under the term loan and revolving  credit
facilities  and the  indenture  governing  the  subordinated  debt  restrict the
payment of dividends and the making of loans, advances or other distributions to
TLC,  except in certain  limited  circumstances.  The transfer of assets of Twin
Laboratories Inc. and ARP to TLC as loans,  advances and other  distributions is
restricted by such financing arrangements.

Management  believes  that  the  Company  has  adequate  capital  resources  and
liquidity  to  meet  its  borrowing  obligations,   fund  all  required  capital
expenditures and pursue its business  strategy.  The Company's capital resources
and  liquidity  are  expected  to be provided  by the  Company's  cash flow from
operations,  its  existing  revolving  credit  facility  and,  if entered  into,
borrowings under the Amended and Restated Revolving Credit Facility.

One of the Company's business strategies is to pursue acquisition opportunities,
including  product line  acquisitions,  that complement its existing products or
are  compatible  with  its  business  philosophy  and  strategic  goals.  Future
acquisitions  could be financed by internally  generated funds, bank borrowings,
public  offerings  or  private  placements  of equity or debt  securities,  or a
combination of the foregoing. In connection with the IPO, the Company expects to
enter into the Amended and Restated Revolving Credit Facility, which is expected
to provide for a revolving credit facility of $50.0 million, up to $35.0 million
of which is expected to be  available to fund  acquisitions,  subject to certain
conditions  and  reductions.  There can be no assurance that the Company will be
able to make  acquisitions  on terms  favorable to the Company and that funds to
finance an  acquisition  will be  available  or  permitted  under the  Company's
financing instruments. If the Company completes acquisitions,  it will encounter
various associated risks, including the possible inability to integrate business
into the Company's  operations,  potentially  increased  goodwill  amortization,
diversion of management's  attention and unanticipated  problems or liabilities,
some or all of which  could  have a  material  adverse  effect on the  Company's
results of operations and financial  condition.  In addition,  such acquisitions
could result in substantial equity dilution to existing stockholders.

The mergers of Twin  Laboratories  Inc., Alvita Products,  Inc.,  Twinlab Export
Corp.,  Twinlab  Specialty  Corporation  and B. Bros.  Realty  Corporation  into
Natur-Pharma  Inc. were treated as taxable asset purchases for federal and state
income tax purposes and as a recapitalization for financial accounting purposes.
For federal and state  income tax  purposes,  the purchase  price was  allocated
among the various corporations and their respective assets and liabilities based
on the respective  fair values as of the closing of the  Acquisition  Agreement.
This  resulted  in  different  book and tax asset  bases for the  assets of Twin
Laboratories  Inc.,  Alvita  Products,   Inc.,  Twinlab  Export  Corp.,  Twinlab
Specialty  Corporation  and B.  Bros.  Realty  Corporation,  which  resulted  in
deferred tax assets of approximately  $57.3 million which will reduce future tax
liabilities.


                                       14


<PAGE>

                      TWINLAB CORPORATION AND SUBSIDIARIES

Certain Factors That May Affect Future Results

Information  contained or  incorporated  by reference in this periodic report on
Form 10-Q and in other SEC  filings  by the  Company  contains  "forward-looking
statements" within the meaning of the Private  Securities  Litigation Reform Act
of 1995 which can be identified by the use of  forward-looking  terminology such
as  "believes,"  "expects,"  "may,"  "will,"  "should" or  "anticipates"  or the
negative thereof of other variations  thereon or comparable  terminology,  or by
discussions of strategy.  No assurance can be given that future results  covered
by the forward-looking statements will be achieved, and other factors could also
cause actual results to vary  materially from the future results covered in such
forward-looking statements.


                                       15


<PAGE>

                                     PART II
                                OTHER INFORMATION


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

(a)  By  unanimous  written  consent  dated July 30,  1996,  the  holders of all
outstanding shares of common stock of TLC approved the following matters:

     (i) A proposal to amend and restate TLC's Amended and Restated  Certificate
     of Incorporation to, among other things,  increase the number of authorized
     shares  of  common  stock to  75,000,000  and to  increase  the  number  of
     authorized  shares  of  preferred  stock,  par  value  $.01 per  share,  to
     2,000,000.  The Second Amended and Restated Certificate of Incorporation of
     TLC  authorizes  the Board of  Directors to issue  authorized  but unissued
     shares of preferred  stock in one or more series,  and to fix by resolution
     the voting  powers,  designations,  preferences  and relative,  optional or
     other special rights  thereof,  including  liquidation  preferences and the
     dividend, conversion and redemption rights of each such series.

     (ii) A proposal to amend and restate the By-laws of TLC, to provide,  among
     other  things,  that the Board of  Directors be comprised of such number of
     directors  as  determined  from time to time by the Board,  but in no event
     less than eight members.

     (iii) A proposal to authorize the Twinlab  Corporation 1996 Stock Incentive
     Plan,  which  provides  for  the  issuance  of up  to a  total  of  400,000
     authorized and unissued shares of common stock in the form of (1) incentive
     stock  options,  (2)  nonqualified  stock options,  (3) stock  appreciation
     rights, (4) restricted stock and (5) performance shares.

(b) In addition,  by unanimous written consents dated July 30, 1996, the holders
of the 14% Senior  Cumulative  Preferred  Stock of TLC and the holders of the 11
1/4% Junior  Cumulative  Preferred  Stock of TLC each approved the proposals set
forth in sections (a)(i) and (ii), above.

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:


               3.1 Second Amended and Restated  Certificate of  Incorporation of
               Twinlab Corporation  (incorporated by reference to Exhibit 3.4 to
               Amendment No. 1 of the Registration  Statement on Form S-4, dated
               September 18, 1996, filed by Twin Laboratories Inc.).

               3.2  Amended  and   Restated   By-laws  of  Twinlab   Corporation
               (incorporated  by reference to Exhibit 3.5 to Amendment  No. 1 of
               the Registration Statement on Form S-4, dated September 18, 1996,
               filed by Twin Laboratories Inc.).

               10.1 Twinlab  Corporation 1996 Stock Incentive Plan (incorporated
               by  reference  to  Exhibit  10.30  to  Amendment  No.  4  of  the
               Registration Statement on Form S-1, dated October 23, 1996, filed
               by Twinlab Corporation).

               27 Financial Data Schedule.

(b)  Reports on Form 8-K:

               No report on Form 8-K was filed by the Company during the quarter
               ended September 30, 1996.


                                       16


<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  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.





                               TWINLAB CORPORATION


                              By:/s/ Ross Blechman
                                  --------------------------
                                     Ross Blechman
                                     Chairman, President and
                                     Chief Executive Officer


Dated: November 12, 1996      By:/s/ Brian Blechman
                                 --------------------------
                                      Brian Blechman
                                      Executive Vice President - Treasurer,
                                      Chief Accounting Officer


                                       17