UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K/A#1
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 15, 1999
TRANSMEDIA ASIA PACIFIC, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3760219
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
11 St. James's Square, London SW1Y 4LB, England
-----------------------------------------------------------
(Address of principal executive offices including zip code)
011-44-171-930-0706
-------------------
(Telephone number including area code)
- --------------------------------------------------------------------------------
<PAGE>
TRANSMEDIA ASIA PACIFIC, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Item 2. Acquisition or Disposal of Assets
On June 15, 1999 Transmedia Asia Pacific, Inc. (the "Company") and Transmedia
Europe, Inc. ("TME") purchased from William D. Marks, Donna M. Marks, Kevin R.
Drewyer and Direct Investors, Inc. (collectively the "Sellers") 100% of the
membership interests of DSS Direct Connect, L.L.C. ("DBS Direct"). TME is a
Delaware corporation. The Company and TME have worked closely together for a
number of years and are joint owners of a number of member benefit businesses.
The Company and TME each acquired 50% of the outstanding capital stock of DBS
Direct.
DBS Direct is head quartered in Seattle where it commenced operations in July
1998.DBS Direct has the right, on a preferred basis, to provide localized
turn-key sales and installation services for DirecTV and USSB, the leading
providers of digital, "direct-to-the-home" multi-channel video programming
services. The DBS Direct contracts with DirecTV and its programming partner will
allow it to become the first nationwide telemarketing, door-to-door sales, and
full-service installer of DirecTV's Digital Broadcast Satellite in the United
States. DBS Direct has two contracts with DirecTV and USSB, one covering Single
Family Units ("SFU's") and the other covering Multi-Dwelling Units ("MDU's").
The "SFU" contract grants DBS Direct the right to an initial coverage area which
includes 12 major metropolitan markets in the United States, representing
approximately 25 million television households, or 25% of the total television
households in the United States. DirecTV will add additional SFU markets to the
DBS Direct SFU coverage upon successful launch of its services in currently
contracted markets. The "MDU" contract grants DBS Direct the entire continental
United States as its territory, an additional 25 million television households.
The transaction (the "Acquisition") was consummated pursuant to an Equity
Purchase Agreement dated May 10, 1999, as amended June 11, 1999 (the
"Acquisition Agreement") among the Company, DBS Direct, the Sellers and TME. The
consideration paid by the Company for its 50% interest in DBS Direct comprised
4,589,732 shares of the Company's common stock. TME paid a consideration of
4,831,057 shares of its common stock for the remaining 50% of DBS Direct. In
addition, the Company and TME each contributed $500,000 (five hundred thousand
dollars) to the capital of DBS Direct at the closing of the Acquisition. Such
capital contribution was used to repay existing indebtedness of DBS Direct.
Additionally, the Company and TME have agreed to each contribute a further
$875,000 (eight hundred seventy five thousand dollars) to the capital of DBS
Direct to fund the expansion of its network of sales offices nationally.
Pursuant to the terms of the Acquisition Agreement, William D. Marks entered
into an employment agreement with DBS Direct and joined the board of directors
of both the Company and TME. The employment agreement is for a period of three
years and provides for an annual salary of $175,000. Mr. Marks will serve as
President of DBS Direct. The employment agreement also provides for
participation in any incentive stock option plans which may be established in
the future by the Company and TME.
2
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of the Business Acquired
In accordance with Rule 210.3-05(b) of regulation S-X the audited
financial statements of DBS Direct covering the period from inception on
March 3, 1998 to September 30, 1998 and the period October 1, 1998 to June
14, 1999 are attached to this report as Exhibit 99.5(a).
(b) Pro Forma Financial Information
The pro-forma unaudited consolidated balance sheets as of September 30,
1998 and March 31, 1999 are presented as if the acquisition of DBS Direct
had occurred on March 3, 1998 the date of inception of DBS Direct. The
pro-forma unaudited consolidated statement of operations for the year
ended September 30, 1998 and the six months ended March 31, 1999 are
presented as if the acquisition of DBS Direct had occurred on March 3,
1998, the date of inception of DBS Direct. The pro-forma data is presented
for informational purposes only and may not be indicative of future
results of operations and the future financial position of the Company or
what the results of operations and financial position of the Company would
have been if the acquisition of DBS Direct had occurred on the dates set
forth. The pro-forma financial information should be read in conjunction
with the historic financial statements of the Company and notes thereto.
(c) Exhibits
10.2(h) Equity Purchase Agreement dated May 10, 1999 by and among DSS
Direct Connect, L.L.C., William D. Marks, Donna M. Marks, Kevin R.
Drewyer, Direct Investors, Inc. Transmedia Europe, Inc. and
Transmedia Asia Pacific, Inc., as amended June 11, 1999. *
99.5(a) Audited financial statements of DSS Direct Connect LLC covering
the period from inception on March 3, 1998 to September 30, 1998
and the period October 1, 1998 to June 14, 1999 together with
unaudited pro-forma financial information.
* Incorporated by reference.
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.
TRANSMEDIA ASIA PACIFIC, INC.
By: /s/ Grant White
- -------------------
Chief Executive Officer and Principal Accounting Officer
3
Exhibit 99.5(a)
DSS Direct Connect, L.L.C.
Financial Statements
For the periods from inception (March 3, 1998) through September 30, 1998
and the period from October 1, 1998 through June 14, 1999
<PAGE>
DSS Direct Connect, L.L.C.
================================================================================
Financial Statements
For the periods from inception (March 3, 1998) through September 30, 1998
and the period from October 1, 1998 through June 14, 1999
<PAGE>
DSS Direct Connect, L.L.C.
Contents
================================================================================
Independent Auditor's Report.............................................. 1
Balance Sheets............................................................ 2
Statements of Operations.................................................. 3
Statement of Shareholders' Deficit........................................ 4
Statements of Cash Flows.................................................. 5
Notes to Financial Statements.............................................6 - 10
<PAGE>
Independent Auditors' Report
To The Shareholders of
DSS Direct Connect, L.L.C.
We have audited the accompanying balance sheets of DSS Direct Connect, L.L.C.
("the Company") as of June 14, 1999 and September 30, 1998 and the related
statements of operations, shareholders' deficit, and cash flows for the periods
from October 1, 1998 through June 14, 1999 and from inception (March 3, 1998)
through September 30, 1998. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of DSS Direct Connect, L.L.C. as
of June 14, 1999 and September 30, 1998, and the results of its operations and
its cash flows for the periods from October 1, 1998 through June 14, 1999 and
from inception (March 3, 1998) through September 30, 1998, in conformity with
generally accepted accounting principles.
BDO Seidman, LLP
Seattle, Washington
January 11, 2000
1
<PAGE>
DSS Direct Connect, L.L.C.
Balance Sheets
================================================================================
<TABLE>
<CAPTION>
=======================================================================================================================
June 14, September 30,
1999 1998
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets
Cash $ 2,728 $ --
Accounts receivable 32,545 7,250
Prepaid and other assets 4,600 6,263
Inventory 54,345 20,881
- -----------------------------------------------------------------------------------------------------------------------
Total Current Assets 94,218 34,394
- -----------------------------------------------------------------------------------------------------------------------
Security Deposits 2,087 2,500
Furniture and Equipment, net of accumulated depreciation of
$11,320 and $4,000 149,198 40,693
- -----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 245,503 $ 77,587
=======================================================================================================================
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Checks issued in excess of deposits $ -- $ 22,639
Accounts payable 57,483 51,346
Accrued liabilities 492,756 161,415
Current portion of long-term debt 365,000 --
Current portion of long-term debt to related party 450,000 245,000
- -----------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 1,365,239 480,400
- -----------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT TO RELATED PARTY, less current portion 300,000 300,000
- -----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,665,239 780,400
- -----------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' DEFICIT
Common stock, $1 par value; 10,000 shares authorized, 5,000 issued and
outstanding 5,000 5,000
Accumulated deficit (1,424,736) (707,813)
- -----------------------------------------------------------------------------------------------------------------------
Total Shareholders' Deficit (1,419,736) (702,813)
- -----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 245,503 $ 77,587
=======================================================================================================================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
DSS Direct Connect, L.L.C.
Statements of Operations
================================================================================
<TABLE>
<CAPTION>
October 1, 1998 From inception
through (March 3, 1998)
June 14, 1999 September 30, 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REVENUES $ 861,367 $ 114,803
COST OF SALES 517,251 83,992
- ------------------------------------------------------------------------------------------------------------------------
Gross Profit 344,116 30,811
- ------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Selling Expenses 204,583 37,247
General and administrative 836,824 701,569
- ------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 1,041,407 738,816
- ------------------------------------------------------------------------------------------------------------------------
Loss from Operations (697,291) (708,005)
- ------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE)
Interest income -- 92
Other income (expense) (19,632) 100
- ------------------------------------------------------------------------------------------------------------------------
Total Other Income (Expense) (19,632) 192
- ------------------------------------------------------------------------------------------------------------------------
Net Loss $ (716,923) $ (707,813)
========================================================================================================================
Net Loss per Share - Basic and Diluted $ (143.38) $ (141.56)
========================================================================================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
DSS Direct Connect, L.L.C.
Statement of Shareholders' Deficit
================================================================================
<TABLE>
<CAPTION>
Common Stock
------------------------------- Paid In Accumulated
Shares Amount Capital Deficit Total
========================================================================================================================
<S> <C> <C> <C> <C> <C>
Issuance of common stock
for cash 5,000 $ 5,000 $ -- $ -- $ 5,000
Net loss -- -- -- (707,813) (707,813)
- ------------------------------------------------------------------------------------------------------------------------
Balance, September 30, 1998 5,000 5,000 -- (707,813) (702,813)
Net loss -- -- -- (716,923) (716,923)
- ------------------------------------------------------------------------------------------------------------------------
Balance, June 14, 1999 5,000 $ 5,000 $ -- $(1,424,736) $(1,419,736)
========================================================================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
DSS Direct Connect, L.L.C.
Statements of Cash Flows
================================================================================
INCREASE (DECREASE) IN CASH
<TABLE>
<CAPTION>
October 1, 1998 From inception
through (March 3, 1998)
June 14, 1999 September 30, 1998
=======================================================================================================================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (716,923) $ (707,813)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation 7,320 4,000
Changes in assets and liabilities:
Accounts receivable (25,295) (7,250)
Inventory (33,464) (20,881)
Prepaid and other assets 1,663 (6,263)
Security deposits 413 (2,500)
Checks issued in excess of deposits (22,639) 22,639
Accounts payable 6,137 51,346
Accrued liabilities 331,341 161,415
- -----------------------------------------------------------------------------------------------------------------------
Net Cash Used in Operating Activities (451,447) (505,307)
- -----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisition of furniture and equipment (115,825) (44,693)
- -----------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (115,825) (44,693)
- -----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 570,000 545,000
Proceeds from issuance of common stock -- 5,000
- -----------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 570,000 550,000
- -----------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash 2,728 --
Cash, beginning of period -- --
- -----------------------------------------------------------------------------------------------------------------------
Cash, end of period $ 2,728 $ --
=======================================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid with cash $ 5,614 $ --
=======================================================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1: Description of Business - DSS Direct Connect,
Description of Business and L.L.C. ("DSS" or the "Company") was formed on
Summary of Significant March 3, 1998 for the purpose of selling and
Accounting Policies installing direct broadcast satellite system
receivers, on behalf of DirecTV, to end
users. The Company obtained a non-exclusive
license to sell these systems to single
family users in specified markets or cities
in Arizona, California, Illinois, Nevada,
Oregon, Texas and Washington. The Company is
currently operating in Washington and
Illinois.
The licensing agreement began on April 1,
1998 and has an initial term of 5 years.
Within three months of the expiration of the
agreement, either party may notify the other
of its desire to continue the agreement
beyond the initial term. Terms of any
extension will be negotiated by the parties
at that time.
Inventory - Inventories are valued at the
lower of cost or market, which approximates
the first-in, first-out method.
Furniture and Equipment- Furniture and
equipment are stated at cost. Depreciation is
computed for financial reporting purposes
using the straight-line method over estimated
useful lives of primarily 3 to 7 years.
Replacements and improvements that
significantly extend asset lives are
capitalized. Leasehold improvements are
amortized over 5 years using the
straight-line method. Maintenance and repairs
are charged to expense as incurred.
Revenue Recognition - The Company recognizes
revenue when a receiver system is sold to the
consumer. The Company also receives a
commission when the consumer opens a new
account with DirecTV, which is recognized as
revenue when received from DirecTV, as the
Company's earning process is completed at
that time.
If the consumer does not fulfill their
obligations under the equipment purchase and
subscription agreements, the Company will be
charged back by DirecTV and the consumer is
required to reimburse the Company for any
amounts charged back related to their
account.
An allowance for potentially uncollectible
charge backs has been provided based on the
Company's past history.
6
<PAGE>
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1: Income Taxes - The Company accounts for
Description of Business and income taxes in accordance with the
Summary of Significant provisions of Statement of Financial
Accounting Policies Accounting Standards No. 109, "Accounting for
(continued) Income Taxes," ("SFAS 109"). SFAS 109
requires the recognition of deferred tax
assets and liabilities for the expected
future income tax consequences of events that
have been recognized in a company's financial
statements or tax return. Under this method,
deferred tax assets and liabilities are
determined based on the temporary differences
between the financial statement carrying
amounts and their tax basis using enacted tax
rates in effect in the years in which the
temporary differences are expected to
reverse. Valuation allowances are provided
when management determines that the
realization of deferred tax assets fails to
meet the more likely than not standard
imposed by SFAS 109.
Advertising Expense - The cost of advertising
is expensed as incurred. The Company incurred
$89,775 and $10,082 in advertising costs
during the periods ended June 14, 1999 and
September 30, 1998, respectively.
Concentration of Credit Risk and Financial
Instruments - The Company buys its product
from local and national companies and
distributors throughout the United States and
internationally. Net purchases from the
Company's two largest vendors represented 99%
and 99% of net purchases during the 37 weeks
ended June 14, 1999, and from inception
(March 3, 1998) to September 30, 1998,
respectively.
Use of Estimates - The Company's financial
statements are prepared in conformity with
generally accepted accounting principles
which 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
revenue and expenses during the reporting
period. Actual results could differ from the
estimates.
Loss per Share - SFAS 128, issued in February
1997, requires presentation of basic and
diluted earnings per share. Basis earnings
per share are computed by dividing net income
by the weighted average number of common
shares outstanding.
The Company has no common stock equivalents
or options outstanding at June 14, 1999 and
September 30, 1998.
7
<PAGE>
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
NOTE 1: Recent Accounting Pronouncements - New
Description of Business and accounting pronouncements having relative
Summary of Significant applicability to the Company include SFAS
Accounting Policies 130, " Reporting Comprehensive Income", SFAS
(continued) 131, "Disclosures about Segments of an
Enterprise and Related Information", SFAS
133, "Accounting for Derivative Instruments
and Hedging Activities", SFAS 137,
"Accounting for Derivative Instruments and
Hedging Activities - Deferral of the
Effective Date of FASB Statement 133 (an
amendment of FASB Statement 133). Adoption of
these statements did not impact the Company's
financial position, results of operations or
cash flows and any effect was limited to the
form and content of its disclosures.
NOTE 2: Furniture and Equipment is comprised of the
Furniture and following:
Equipment
<TABLE>
<CAPTION>
June 14, September 30,
1999 1998
============================================================================
<S> <C> <C>
Computer and equipment $ 78,489 $ 16,389
Equipment 7,012 3,587
Furniture and Fixtures 41,965 6,665
Leasehold improvements 33,052 18,052
----------------------------------------------------------------------------
160,518 44,693
Accumulated depreciation (11,320) (4,000)
----------------------------------------------------------------------------
Furniture and Equipment, net $ 149,198 $ 40,693
============================================================================
</TABLE>
NOTE 3: As of June 14, 1999 and September 30, 1998,
Income Taxes the Company had net deferred tax assets of
approximately $243,000 and $240,000 primarily
due to loss carry forwards, which begin to
expire in 2018. A 100% valuation allowance
has been recorded against these deferred tax
assets as management has yet to establish
that their recovery is more likely than not.
8
<PAGE>
DSS Direct Connect, L.L.C.
Notes to Financial Statements
================================================================================
<TABLE>
<CAPTION>
NOTE 4: June 14,
Notes Payable 1999 September 30, 1998
=========================================================================================
<S> <C> <C>
Subordinated notes payable to a related
company, interest at 8%, due March 27, 2001,
payable at maturity. $ 300,000 $ 300,000
Note payable to Shareholder, interest at 15%,
due September 27, 1999, payable at maturity. 100,000 100,000
Note payable to Shareholder, interest at 15%,
due September 27, 1999, payable at maturity. 145,000 145,000
Note payable to Shareholder, interest at 15%,
due September 27, 1999, payable at maturity. 120,000 --
Note payable to Shareholder, interest at 10%,
due September 27, 1999, payable at maturity. 200,000 --
Note payable to Shareholder, interest at 10%,
due September 27, 1999, payable at maturity. 250,000 --
----------------------------------------------------------------------------------------
Total Long-Term Obligations 1,115,000 545,000
Current portion 815,000 245,000
----------------------------------------------------------------------------------------
Long-term obligations, less current portion $ 300,000 $ 300,000
=========================================================================================
</TABLE>
All the notes payable to shareholder
disclosed above were repaid on or shortly
after June 15, 1999.
NOTE 5: The Company conducts its business operations
Operating Leases from facilities that are leased under
agreements which expire at various dates. The
Company also pays a pro rata portion of all
common area charges including property taxes,
insurance, and maintenance charges. Annual
minimum rental commitments under operating
leases that have initial or remaining
non-cancelable lease terms are as follows:
<TABLE>
<CAPTION>
Operating
Year ending September 30, Leases
----------------------------------------------------------------------------------------
<S> <C>
2000 $ 395,320
2001 367,792
2002 369,914
2003 372,098
2004 361,140
----------------------------------------------------------------------------------------
Future net minimum payments $ 1,866,264
========================================================================================
</TABLE>
9
<PAGE>
NOTE 5: Rent expense under operating leases was
Operating Leases approximately $44,000 and $10,500 for the
(continued) period from October 1, 1998 through June 14,
1999 and from inception (March 3, 1998) to
September 30, 1998, respectively. Significant
increases in future rent expense are expected
due to new facilities being leased to allow
the Company to expand its operations.
NOTE 6: Certain operating expenses are paid by
Related Party Transactions related parties, which in turn are reimbursed
by the Company. For the period ended June 14,
1999 these expenses were $112,967.
The Company paid key employees under
consulting agreements during the period ended
June 14, 1999 and September 30, 1998. The
expense of these agreements totaled $205,000
and $56,250, respectively. The consulting
agreements terminated on June 14, 1999.
NOTE 7: On June 15, 1999, DSS entered into an equity
Subsequent Events purchase agreement with Transmedia Europe,
Inc. and Transmedia Asia, Inc. (collectively
"Transmedia Group") to sell and transfer all
of the outstanding equity of the Company in
exchange for common stock of Transmedia
Group. Additionally Transmedia Group agreed
to provide additional working capital up to
$3 million in the form of cash and assumption
of certain liabilities.
NOTE 8: Like other companies, DSS Direct Connect,
Year 2000 L.L.C. could be adversely affected if the
(Unaudited) computer systems its suppliers or customers
use do not properly process and calculate
date-related information and data from the
period surrounding and including January 1,
2000. This is commonly known as the "Year
2000" issue. Additionally, this issue could
impact non-computer systems and devices such
as production equipment, elevators, etc.
While the Company's project to assess and
correct Y2K related issues regarding the year
2000 has been completed, and the Company has
not experienced any significant Y2K related
events, interactions with other companies'
systems make it difficult to conclude there
will not be future effects. Consequently, at
this time, management cannot provide
assurances that the Year 2000 issue will not
have an impact on the Company's operations.
<PAGE>
Transmedia Asia Pacific, Inc.
Pro-forma Financial Information
<PAGE>
Transmedia Asia Pacific, Inc
Pro Forma Consolidated Statement of Operations
<TABLE>
<CAPTION>
Year ended Pro-forma Note Pro-forma
September 30, Adjustments Year ended
1998 September 30,
(audited) 1998
<S> <C> <C> <C> <C>
Revenues $4,667,556 $0 $4,667,556
Cost of revenues (1,074,103) 0 (1,074,103)
----------------- ----------------- -----------------
Gross Profit 3,593,453 0 3,593,453
S G & A (6,842,906) 0 (6,842,906)
----------------- ----------------- -----------------
Loss from operations (3,249,453) 0 (3,249,453)
Share of losses from
affiliated companies (1,186,734) (744,037) 2 & 3 (1,930,771)
Interest expense (277,751) 0 (277,751)
Interest income 19,249 0 19,249
----------------- ----------------- -----------------
Loss before tax (4,694,689) (744,037) (5,438,726)
Income tax (188,198) 0 (188,198)
Minority interest 143,076 0 143,076
----------------- ----------------- -----------------
Net loss (4,739,811) (744,037) (5,483,848)
----------------- ----------------- -----------------
Net loss per common
share (0.27) (0.28) (0.27)
Weighted average
number of common
shares outstanding 17,691,690 2,653,242 4 20,344,932
</TABLE>
<PAGE>
Transmedia Asia Pacific, Inc
Pro Forma Consolidated Statement of Operations
<TABLE>
<CAPTION>
6 mths ended Proforma Note Proforma
March 31, 1999 adjustments 6 mths ended
March 31, 1999
<S> <C> <C> <C> <C>
Revenues $2,034,869 $0 $2,034,869
Cost of revenues (411,288) 0 (411,288)
----------------- --------------- -----------------
Gross Profit 1,623,581 0 1,623,581
S G & A (3,060,193) 0 (3,060,193)
----------------- --------------- -----------------
Loss from operations (1,436,612) 0 (1,436,612)
Share of losses from affiliated
Companies 5,692 (591,286) 2 & 3 (585,594)
Interest expense (214,782) 0 (214,782)
Interest income 0 0 0
----------------- --------------- -----------------
Loss before tax (1,645,702) (591,286) (2,236,988)
Income tax 71,793 0 71,793
Minority interest (4,309) 0 (4,309)
----------------- --------------- -----------------
Net loss (1,578,218) (591,286) (2,169,504)
----------------- --------------- -----------------
Net loss per common share (0.08) (0.13) (0.08)
Weighted average number
of common shares
Outstanding 20,116,426 4,589,732 24,706,158
</TABLE>
<PAGE>
Transmedia Asia Pacific, Inc
Pro Forma Consolidated Balance Sheet
<TABLE>
<CAPTION>
As of Proforma Note As of
September 30, adjustments Proforma
1998 September 30,
(audited) 1998
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents $1,504,921 $1,504,921
Trade accounts receivable 446,193 446,193
Restaurant credits 195,548 195,548
Amounts due from related parties 591,916 591,916
Prepaid & other assets 26,394 26,394
------------------ ------------------ -----------------
Total current assets 2,764,972 0 2,764,972
------------------ ------------------ ------------------
Non-current assets
Invest in affiliated companies 2,877,728 5,294,784 2 & 3 8,172,512
Property and equipment 240,269 240,269
Goodwill, net of amortization 3,759,284 3,759,284
Other intangibles 1,073,297 1,073,297
Other assets 243,212 243,212
------------------ ------------------ ------------------
Total non-current assets 8,193,790 5,294,784 13,488,574
------------------ ------------------ ------------------
TOTAL ASSETS 10,958,762 5,294,784 16,253,546
------------------ ------------------ ------------------
Liabilities and Stockholders' Equity
Current Liabilities
Trade accounts payable 538,708 538,708
Deferred income 467,588 467,588
Accrued liabilities 990,672 990,672
Sign-on fees payable 296,500 296,500
Amts from/(to) related parties 3,924,386 3,924,386
Notes payable 1,615,000 1,615,000
Bank line of credit
------------------ ------------------ ------------------
Total current liabilities 7,832,854 0 7,832,854
------------------ ------------------ ------------------
Minority interest 629,784 629,784 629,784
------------------ ------------------ ------------------
Stockholders equity
Common stock 196 46 1 242
Additional paid in capital 14,823,648 6,038,775 1 20,862,423
Cumulative foreign currency adjust (211,268) (211,268)
Accumulated deficit (12,116,452) (744,037) 2 & 3 (12,860,489)
------------------ ------------------ ------------------
Total stockholders' equity 2,496,124 5,294,784 7,790,908
------------------ ------------------ ------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 10,958,762 5,924,568 16,253,546
------------------ ------------------ -----------------
</TABLE>
<PAGE>
Transmedia Asia Pacific, Inc
Pro Forma Consolidated Balance Sheet
<TABLE>
<CAPTION>
As of Proforma Note As of
March 31, 1999 adjustments Proforma
(audited) March 31, 1999
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents $1,066,091 $1,066,091
Trade accounts recev 167,590 167,590
Restaurant credits 191,602 191,602
Amounts due from related parties 403,921 403,921
Prepaid & other assets 174,827 174,827
------------------ ------------------ -----------------
Total current assets 2,004,031 0 2,004,031
------------------ ------------------ ------------------
Non-current assets
Invest in affiliated companies 2,981,722 4,703,498 2 & 3 7,685,220
Property and equipment 200,917 200,917
Goodwill, net of amortization 4,314,000 4,314,000
Other intangibles 1,016,661 1,016,661
Other assets 479,177 479,177
------------------ ------------------ ------------------
Total non-current assets 8,992,477 4,703,498 13,695,975
------------------ ------------------ ------------------
TOTAL ASSETS 10,996,508 4,703,498 15,700,006
------------------ ------------------ ------------------
Liabilities and Stockholders' Equity
Current Liabilities
Bank line of credit
Trade accounts payable 909,396 909,396
Deferred income 286,076 286,076
Accrued liabilities 722,212 722,212
Sign-on fees payable 0
Amts from/(to)to related parties 1,605,490 1,605,490
Notes payable 4,855,672 4,855,672
------------------ ------------------ ------------------
Total current liabilities 8,378,846 0 8,378,846
------------------ ------------------ ------------------
Minority interest 20,772 20,772
------------------ ------------------ ------------------
Stockholders equity
Common stock 210 46 1 256
Additional paid in capital 16,330,165 6,038,775 1 22,368,940
Cumulative foreign currency adjust (23,798) (23,798)
Accumulated deficit (13,709,687) (1,335,323) 2 & 3 (15,045,010)
------------------ ------------------ ------------------
Total stockholders' equity 2,596,890 4,703,498 7,300,388
------------------ ------------------ ------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 10,996,508 4,703,498 15,700,006
------------------ ------------------ -----------------
</TABLE>
<PAGE>
Transmedia Asia Pacific, Inc
DBS - Pro Forma Adjustments
Acquisitioon of 50% of the Common stock of DBS is accounted for using the equity
method as effective control over DBS is exercised by Transmedia Europe, Inc.
Note 1: To record the cost of the acquisition of 50% of the common stock of DBS
<TABLE>
<CAPTION>
September 30, March 31,
1998 1999
<S> <C> <C>
Common stock (4,589,732 shares at $.00001 per share) $46 $46
Additional paid-in capital 6,038,775 6,038,775
--------- ---------
Total contribution 6,038,821 6,038,821
--------- ---------
Note 2: To record the equity profits of DBS for period and 6 months to September
30, 1998 and March 31, 1999
Loss for period March 3, (date of inception) through
September 30, 1998 $(707,813)
---------
Company's share of profits (50%) (353,907)
---------
Loss for the 6 months to March 31, 1999 (507,704)
--------
Company's share of profits (50%) (253,852)
--------
Note 3: To record amortisation of goodwill on acquisition of DBS
Net liabilities acquired (1,419,736)
----------
Company's share (50%) (709,868)
Consideration 6,038,821
----------
Goodwill 6,748,689
----------
` Amortization period - 10 years
Amortization charge for period from March 3, 1998 (date of
inception) through September 30, 1998 390,130
Amortization for 6 months to March 31, 1999 337,434
Note 4: Increase in Weighted average number of shares
Shares issued
Weighted average - for period from March 3, 1999 to September
30, 1998 =211/365 X 4,589,732 2,653,242 4,589,732
</TABLE>
