1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
FORM 10-K (Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended SEPTEMBER 30, 1996
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OR\
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-24404
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TRANSMEDIA EUROPE, INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 13-3701141
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(State or other jurisdiction (I.R.S. Employer
of incorporation of organisation Identification No.)
11 ST. JAMES'S SQUARE, LONDON SW1Y 4LB, ENGLAND
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(Address of principal executive offices) (zip code)
U.K. 011-44-171-930-0704
------------------------------------------------
(Registrant's telephone number,
including area code)
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange
------------------- on which registered
-------------------------
NONE NONE
Securities registered pursuant to Section 12 (g) of the Act:
COMMON STOCK, PAR VALUE $.00001 PER SHARE
-----------------------------------------
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of December, 18 1996 was: $10,487,248, based upon the last sales
price on such date of a share of Common Stock on Nasdaq SmallCap Market.
Number of shares outstanding of Registrant's Common Stock, as of December 18,
1996: 12,841,180
DOCUMENTS INCORPORATED BY REFERENCE:
Location in Form 10-K in which
Document Document is Incorporated
-------- ------------------------------
Registrant's Proxy Statement Part III
relating to the 1997
Annual Meeting of Stockholders
2
PART I
ITEM 1 - BUSINESS
BACKGROUND
Transmedia Europe, Inc. is a Delaware corporation which was formed in
February 1993 and began business operations in London, England, in October
1993. As used in this Report, the term "Company" includes Transmedia
Europe Inc. and its subsidiaries unless otherwise indicated. On May 19,
1993 the Company acquired from Conestoga Partners, Inc. ("Conestoga") the
rights Conestoga had previously acquired from Transmedia Network, Inc.
("Network"), an independent company which owns less than 5% of the
Company, through Network's affiliate TMNI International Inc., pursuant to
a Master License Agreement ("License Agreement") dated December 14, 1992
as amended April 12, 1993 and August 11, 1993. The rights acquired were an
exclusive license (the "License") to use certain trademarks and service
marks, proprietary computer software programs and know-how of Network in
establishing and operating a discount restaurant charge card business in
all the countries of Europe, Turkey and the other countries outside of
Europe that were formerly part of the Union of Soviet Socialist Republics
(the "Licensed Territories").
BUSINESS ACTIVITIES
The business of the Company is the exploitation of the rights acquired
under the License Agreement. The Company is currently operating in the
United Kingdom and plans in the future to develop the License within the
Licensed Territories directly, through subsidiaries, and through the sale
of sub-licenses and franchises to others. In June 1995 the Company
announced a joint venture to operate the Restaurant Card in France, which
joint venture began operations in April 1996.
The Company advances money to restaurants selected by it which agree to
become participating restaurants ("Company Participating Restaurants") in
exchange for food and beverage credits, typically in the ratio of (pound)2
of food and beverage credits for every (pound)1 advanced. The Company
recovers its advances ("Restaurant Credits") from food and beverages
purchased net of taxes and service ("Food and Beverage Credits") from
Company Participating Restaurants by cardholders ("Company Cardholders"),
who complete applications to become holders of the restaurant card ("The
Restaurant Card") offered by the Company and are accepted. The Company
keeps a current record of the amount of Food and Beverage Credits
outstanding at each Company Participating Restaurant. As food and
beverages are consumed by Company Cardholders at Company Participating
Restaurants by such Company Cardholders charging the retail price of such
food and beverages with The Restaurant Card, the Food and Beverage Credits
outstanding are reduced and the Restaurant Credits outstanding are also
reduced by one-half of such Food and Beverage Credits used.
Each Company Cardholder receives on each purchase a credit equal to either
20% or 25% of the Food and Beverage Credits used. The Company
Participating Restaurant is paid its taxes and service by the Company from
a portion of the proceeds received by the Company from the payment by a
Company Cardholder of the amount charged on The Restaurant Card. The
Company retains the balance which reduces the Restaurant Credits by 50% of
the Food and Beverage Credit used. The Company pays a royalty of 2% of
Food and Beverage Credits used to Network and 2.5% of Food and Beverage
Credits used as sales commissions.
The Restaurant Card is a discount restaurant charge card used by a Company
Cardholder in lieu of a major credit card to charge food and beverages
purchased at a Company Participating Restaurant. The Restaurant Card
charges are transferred to the major credit card used by the Company
Cardholder as listed in his application for the Restaurant Card. The full
amount of the charge is listed on the major credit card bill along with a
separate credit equal to either the 20% or 25% of the cost of food and
beverages at a Company Participating Restaurant (excluding taxes and
service). As at December 18, 1996, the Company had approximately 430
Company Participating Restaurants and approximately 48,000 Company
Cardholders. Company Cardholders either have a 20% free membership card,
introduced during 1996, or a 25% membership card with an annual fee of 35
pounds (UK). The annual fee is waived for an initial period of up to six
months in most instances or otherwise shared with the entity which assists
in obtaining the new account.
The Company receives its revenues from (a) the difference between the
amount of its Restaurant Credits to Company Participating Restaurants and
Food and Beverage Credits used at Company Participating Restaurants by
Company Cardholders, net of either the 20% or 25% discount to Company
Cardholders, sales commissions and the Network royalty, (b) annual
membership fees and renewal fees of Company Cardholders, and (c)
sub-license and franchise
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fees when and if received by the Company from future franchises and
sub-licenses, net of minimum up-front payments to Network with regard to
such franchises and licenses. The Company obtains the majority of its
Company Cardholders through promotional campaigns with joint marketing
partners such as newspapers, banks, and companies involved in the
travel/leisure business. Joint marketing partners have included MBNA,
Barclays Bank, Financial Times and The Sunday Times. The Company will
continue to develop additional campaigns to attract new Company
Cardholders. Any campaign is likely to involve the waiver of the annual
fee for some limited period of time, typically up to a maximum of 6
months. The Company has recently launched a 20% free membership card with
MBNA as joint marketing partner.
On June 30, 1995 the Company announced the establishment of Transmedia La
Carte Restaurant S.A. ("Transmedia France"), in which it would be a major
shareholder, to operate the Restaurant Card in France. The total share
capital of Transmedia France is 25,000,000 Ffr (approximately $5,000,000)
of which the Company invested 9,000,000 Ffr (approximately $1,660,000).
The Company granted a sub-license to operate the Restaurant Card in France
to Conestoga Partners, Inc. for an initial fee of $1,000,000, which has
been paid. The sub-license has subsequently been transferred to Transmedia
France for the same consideration. The Transmedia License requires the
payment of a one time royalty to Network in the event that the Company
opens in another country, being the greater of $250,000 or 25% of the
initial license payment, and $250,000 was paid during the year ended
September 30, 1995. Under the terms of the sub-license agreement the
Company will receive, quarterly in arrears, a royalty from Transmedia
France of 5% of gross sales of which 2% will be paid to Network.
The shareholders agreement provides for "put" and "call" options. The
Company has a call option to acquire 100% of Transmedia France in the
fourth year of operations at a price based upon a valuation equal to ten
times operating cash flows. The joint venture partners have put options in
years 2 and 4. The basis for valuation under the year 2 option is equal to
120% of capital invested and under the year 4 option is equal to ten times
operating cash flows. Since the restaurant card business is considered to
be a banking activity under French law, Transmedia France is required to
have, a banking license. Transmedia France applied for and was granted a
provisional banking license necessary for its operations. Management
considers the grant of the provisional bank license to have been a
significant accomplishment since, in addition to authorising operations in
France, it may establish a precedent throughout the rest of the European
Union easing expansion into other countries.
A test launch to approximately 400 cardholders is being used to evaluate
and develop systems, especially the newly developed swipe card facility,
prior to the main launch. Transmedia France has recruited approximately
200 restaurants in France.
On April 19, 1996 Transmedia France completed a rights issue of shares.
Whilst the Company declined to subscribe it did acquire 15,000 shares, in
an unrelated transaction, from International Advance, Inc., a company of
which Edward J Guinan III, President of the Company, is the principal
shareholder and an officer and director, in exchange for $300,000 and
certain rights to jointly develop systems unrelated to the business of
Transmedia France. Accordingly the Company's interest was reduced to 36%.
In December 1996 the Company reached an agreement, effective January 1997,
with Transmedia France under which it granted sub-licenses for
Belgium/Luxembourg, Spain, Italy and French speaking Switzerland for
9,250,000Ffr (approximately $1,780,000). This payment will be used by the
Company to increase its interest in Transmedia France to 60%. Network has
agreed to defer the 25% royalties due upon the completion of the agreement
($800,000 in aggregate) with payment to be made as each country area is
opened of $250,000 except for $50,000 for French speaking Switzerland.
Under certain circumstances the payment schedule might be accelerated.
Network, from whose affiliate, TMNI, the License was granted and on whose
business the Company's operations are modelled, is a publicly traded
company operating in the United States both directly and through licensees
and franchisees. Under the License the Company is authorised to engage in
business within the Licensed Territories in the same manner as Network
operates in the United States, except that under the License Agreement the
Company must pay certain royalties to Network based both on operations and
the sale of license rights and must get the approval of Network for
certain changes in key executives and principal shareholdings.
In December 1996 Network and TMNI agreed, at the Company's request, to
amend the License. The principal revisions are that the Company is now
permitted to expand into new businesses, acquire Countdown PLC and
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undertake a corporate restructure. In consideration a $750,000 fee will be
payable when, and if, the acquisition of Countdown PLC is completed and a
$250,000 fee will be payable when, and if, a corporate restructuring is
completed. Network owns 496,284 shares of the Company's Common Stock,
which it acquired as partial consideration for the sale of the License to
the Company, and has the right to designate one director of the Company,
which right is not currently being exercised. The Company has no ownership
interest in Network. Company Cardholders and cardholders of Network and
its franchisees are able to use The Restaurant Card to purchase meals in
all territories covered by the Company, Network and its franchisees. The
Company will realise all financial benefits from meals consumed within the
Licensed Territories and no financial benefit from meals consumed outside
of the Licensed Territories.
Transmedia Asia Pacific, Inc. ("Transmedia Asia Pacific"), of which Edward
Guinan III, President of the Company, is the principal shareholder and an
officer and director, has acquired an equivalent license from TMNI
covering essentially all of Asia and other Pacific Rim countries.
Transmedia Asia Pacific commenced operations in Sydney, Australia in
November 1994 and has obtained approximately 22,000 cardholders since its
launch. Transmedia Asia Pacific licenses certain operating software from
the Company at an annual fee.
TRANSACTION ILLUSTRATION
The following is a descriptive illustration of a hypothetical transaction
by a Company Cardholder at a Company Participating Restaurant.
The Company, through a commissioned sales representative, recruits
Restaurant A, a full service restaurant operating in London, as a Company
Participating Restaurant. The Company grants Restaurant Credits in the
amount of 3,000 pounds (UK) which entitles the Company to collect the
proceeds from 6,000 pounds (UK) of Food and Beverage Credits charged by
Company Cardholders on The Restaurant Card at Restaurant A. John Smith, a
Company Cardholder, enjoys a meal at Restaurant A and pays the 100 pound
(UK) check (consisting of 80 pounds (UK) for food and beverages and 20
pounds (UK) for taxes and service) with The Restaurant Card. Mr Smith
presents The Restaurant Card. Restaurant A delivers The Restaurant Card
receipt for Mr Smith's meal to the Company for processing through the
Major Credit Card Account designated by Mr Smith in The Restaurant Card
application and for payment. The Company utilises 80 pounds (UK) of
Restaurant A's Food and Beverage Credits (for which it has made Restaurant
Credits of 40 pounds (UK)) and reduces the Restaurant Credits due to it
from Restaurant A by 40 pounds (UK). The Company then submits a credit to
Mr Smith's Major Credit Card Account in the amount of 20 pounds (UK)
(representing 25% of the 80 pounds (UK) of food and beverages consumed).
Upon receipt of The Restaurant Card receipt of Mr Smith of 100 pounds
(UK), the Company forwards 20 pounds (UK) of this amount (representing the
tax and service portion of Mr Smith's meal check) to Restaurant A. The
Company forwards 1.60 pounds (UK) as a royalty to Network (2% of the 80
pounds (UK) of Food and Beverage Credits used) and keeps 58.40 pounds
(UK). This compares with Restaurant Credits made by the Company of 40
pounds (UK) to Restaurant A and the 80 pounds (UK) of Food and Beverage
Credits utilised in providing Mr Smith his meal. The Company is
responsible for paying the commissions of its sales representatives whose
commissions are currently 2.5% of Food and Beverage Credits used.
The allocation of the hypothetical 100 pound (UK) check can be summarised
as follows:
Name Amount Received Nature of Allocation
---- --------------- --------------------
Mr Smith 20 pounds (UK) 25% of food and beverage
charges (exclusive of tip and taxes)
credited to
his Major Credit Card account.
Restaurant A 20 pounds (UK) Payment of service and taxes.
Restaurant A -0- The Restaurant Credits due to the
Company by Restaurant A are
reduced by 40 pounds (UK).
Network 1.60 pounds (UK) A royalty fee of 2% of the 80
pounds (UK) of Food and Beverage
Credits used is payable to
Network.
The Company 58.40 pounds (UK) This represents a reduction of
Restaurant Credits by 40 pounds
(UK) plus 18.40 pounds (UK) of
gross profit.
From this amount a sales
representative of the Company
will typically receive a
commission of 2.5% of Food and
Beverage Credits used or in this
example 2 pounds (UK).
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EMPLOYEES
As of December 11, 1996, the Company employed 19 persons, none of whom are
affiliated with a union. The Company believes that its relationship with
its employees is good.
COMPETITION
The charge card business, including the discount restaurant card business,
is highly competitive, both internationally and in the United Kingdom. The
Company competes to enrol Company Participating Restaurants and Company
Cardholders against other discount programs. Competitors include discount
programs offered by major credit card companies such as American Express,
Barclaycard, and the NatWest Card, as well as Visa, Mastercard and Diners
Club. Moreover, other companies offer different kinds of discount
marketing programs relating to sales at their own outlets. Many of the
Company's competitors are larger than the Company and have substantially
greater financial, personnel, technological, marketing, administrative and
other resources than the Company.
The Company believes that the unique feature of The Restaurant Card is
that it can be used by Company Cardholders at Company Participating
Restaurants with virtually no restrictions, that The Restaurant Card
provides substantial savings without the need for a Company Cardholder to
present discount coupons when paying for a meal, and that Company
Participating Restaurants are provided with cash in advance of customer
charges. The Company believes that all these features contribute to the
Company's competitiveness. Although the Company is not aware of any
discount programs featuring either restaurant financing or discount
restaurant charge cards, in any of the areas in the Licensed Territories,
there is no guarantee that others will not offer, in the future, similar
services in any of the Licensed Territories.
The Company also believes that advertising and promotion, which will
require significant cash outlays, will be necessary to maintain
competitiveness. However, competitive pressure may require significant
additional cash expenditures for advertising and promotion, the amount and
timing of which may be dictated in part by the marketing policies of
competitors. If the revenues from the Company's operations are
insufficient to permit management to match promotional campaigns of
competitors, the number of Company Cardholders and Company Participating
Restaurants in the Licensed Territory may decline, with a resulting
adverse effect on the Company's financial condition.
GOVERNMENT REGULATION
The Company believes that it possesses all governmental permits or
licenses necessary to operate in the United Kingdom and that its affiliate
has obtained provisional governmental approval to operate The Restaurant
Card in France. However, other than in the United Kingdom and France, it
does not possess any governmental permits or licenses for other portions
of the Licensed Territories and has not inquired yet whether any permits
or licenses will be required. In the event permits or licenses are
necessary for the conduct of the Company's business in other portions of
the Licensed Territories, or that additional licenses or permits are
required in respect of operations in the United Kingdom, there is no
guarantee that the Company will be able to procure them, the failure of
which could have a material adverse effect on the Company's ability to
operate or expand its operations in the Licensed Territories.
ITEM 2 - PROPERTIES
The Company leases office space of approximately 3,400 square feet in
London at 11 St. James's Square. The lease is for a period of 5 years
expiring on September 8, 1998, at a net rental of $150,846 per annum.
ITEM 3 - LEGAL PROCEEDINGS
The Company is the defendant in a law suit relating to the granting of a
sub-license to operate in Belgium. Management believe that the ultimate
outcome of the case will not have a material impact on the financial
statements. Otherwise at the date of this Report there are no other
material legal proceedings pending involving the Company.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended September 30, 1996, no matters were submitted to
a vote of the security holders.
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PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information: Since August 23, 1994, shares of the Company's Common
Stock $.00001 par value (the "Common Stock") have traded on Nasdaq
SmallCap Market (symbol "TMNE"). The following table sets forth, for the
periods indicated and as reported by Nasdaq SmallCap Market, the high and
low sales prices for shares of the Common Stock.
Quarter Ended High Low
------------- ---- ---
December 31, 1994 $ 3 3/4 $ 2 3/8
March 31, 1995 $ 4 $ 2 1/8
June 30, 1995 $ 4 1/4 $ 2 33/64
September 30, 1995 $ 3 1/4 $ 2
December 31, 1995 $ 2 1/2 $ 1 5/8
March 31, 1996 $ 2 1/4 $ 1 3/16
June 30, 1996 $ 3 1/8 $ 1 1/8
September 30, 1996 $ 2 7/8 $ 1 3/8
September 30, 1996 through
December 18,1996 $ 1 3/4 $ 1
(b) Holders of Common Stock: The number of stockholders of record of the
Common Stock on December 18, 1996, was approximately 200. The Company
believes that in addition there are a significant number of beneficial
owners of its Common Stock whose shares are held in "Street Name".
(c) Dividends: The Company has never paid cash dividends with respect to the
Common Stock, except for stock dividends paid to founders on inception.
The Company intends to retain future earnings, if any, that may be
generated from the Company's operations to help finance the operations and
expansion of the Company and accordingly does not plan, for the
foreseeable future, to pay dividends to holders of the Common Stock. The
Company issued 590,857 shares of 6 1/2 % Convertible Preferred Stock in
July 1995 and paid dividends on these shares on November 1, 1995 and May 1
1996 and intends to pay dividends semi-annually in arrears thereafter.
Such dividends have been provided for in the financial statements as at
September 30, 1996. Any decision as to the future payment of dividends on
Common Stock will depend on the results of operations and financial
position of the Company and such other factors as the Company's Board of
Directors, in its discretion, deems relevant.
(d) Recent sales of unregistered securities: In August 1996 the Company issued
892,857 shares of Common Stock for cash to one investor at a price of
$1.40 per share. In December 1996 the Company issued a further 556,250
shares of Common Stock for cash to nine investors at a price of $2.00 per
share. With regard to both issues the Company has claimed an exemption
from the registration requirements of the Securities Act of 1933, as
amended ('Securities Act') by relying on section 4 (2) of the Securities
Act, which allows for an exemption for transactions by an issuer not
involving a public offering, and the rules and regulations thereunder. No
underwriter was involved in these transactions.
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ITEM 6 - SELECTED FINANCIAL DATA
The following table sets forth a summary of selected financial data for each of
the last three fiscal years. This information should be read in conjunction with
"Management's Discusion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements of the Company included in
this Report.
Income Statement Data
Fiscal Years ended September 30,
1996 1995 1994
----------- ----------- -----------
Total revenues and fees $ 3,696,400 $ 3,967,997 $ 2,178,722
Gross profit 1,610,495 1,701,411 817,778
Loss from operations (2,059,812) (2,114,975) (2,038,128)
Net loss after preferred share dividends $(2,695,524) $(2,215,452) $(1,945,236)
Net loss per common share $ (0.24) $ (0.19) $ (0.19)
Balance Sheet Data
As at September 30,
1996 1995 1994
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Restaurant credits $1,309,279 $1,622,571 $1,581,898
Intangible assets 1,297,026 1,405,112 1,513,198
Total assets 3,926,355 5,821,680 4,647,125
Total liabilities 1,774,166 2,008,620 915,513
Total equity 2,152,189 3,813,060 3,731,612
Other Data
Number of Participating Restaurants 440 460 430
Number of Company Cardholders 43,500 19,000 14,000
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ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The discussion and analysis of financial condition and results of operations
should be read in conjunction with the consolidated financial statements, the
related disclosures and the selected financial data.
The nature of the Company's business is such that there is a lead time before
profitable operations can be anticipated. This is demonstrated in the financial
results for the years ended September 30, 1996, 1995 and 1994. The success of
the Company is dependent upon increasing the number of Company Cardholders and
Company Participating Restaurants, as well as obtaining increased usage of The
Restaurant Card by Company Cardholders. Our joint venture marketing partners are
predominantly large size organisations, with lengthy internal procedures.
Consequently preparing campaigns for launch and the resulting anticipated
increase in Company Cardholders is taking considerably longer than was initially
anticipated. As of December 18, 1996 the Company had approximately 48,000
Company Cardholders and 430 Company Participating Restaurants.
Certain statements in this Report under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation,
statements regarding future cash requirements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: the loss of a large number of
Company Cardholders or Company Participating Restaurants; general economic and
business conditions; industry capacity; industry trends; demographic changes;
competition; changes in business strategy or development plans; quality of
management; availability, terms and deployment of capital; business abilities
and judgment of personnel; availability of qualified personnel; changes in, or
the failure to comply with, government regulations; and other factors referenced
in this Report.
RESULTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995 COMPARED TO YEAR ENDED SEPTEMBER 30, 1994
The Company generated revenues of $3,399,831 (an increase of 66% over 1994) for
the year ended September 30, 1995. The increase in revenues reflected the
activity generated by an existing cardholder base for a full twelve months and
new cardholder's obtained primarily from The Times of London and Sunday Times
promotions. The Company increased its number of Cardholders from 14,000 to
19,000 and increased its number of Participating Restaurants from 430 to 460 at
September 30, 1994 and at September 30, 1995 respectively. Membership fees for
the year ended September 30, 1995 of $518,166 were significantly greater than
the $85,847 reported for 1994 and are as a result of the Company billing Company
Cardholders for the first time following the typically waived membership period.
Other income represents the non-refundable deposits received for two 90 day
options to acquire the franchise for Belgium, which have now lapsed.
Cost of sales amounted to $2,266,586 (an increase of 66% over 1994) for the year
ended September 30, 1995, in line with the 66% increase in revenues. Cost of
sales are approximately 50% of the gross food and beverages value consumed by
Company Cardholders and represents the recovery of the restaurant credits made
by the Company to the respective Company Participating Restaurants.
Selling, general and administrative expenses, consisting primarily of the costs
of operations, for the year ended September 30, 1995 amounted to $3,816,386
representing an increase of 33% over 1994. In the quarter ended September 30,
1995 the Company incurred a number of additional costs relating to: the
development of card marketing opportunities and cardholder activity of $90,000,
system development costs of $200,000, an increased general provision for
irrecoverable restaurant credits of $100,000, and the $250,000 royalty payment
to Network on the granting of the French sub-license. All system development
costs for the Company and Transmedia Asia Pacific Inc. were consolidated into
the Company where the Company is making enhancements to the system and
converting the system to operate in France and other countries. An agreement
exists between the Company and Transmedia Asia Pacific, Inc. to supply the
system for an initial fee of $50,000 paid in fiscal year 1994 and an annual fee
of $12,000. The Company may receive income in the future for the supply of the
system to other countries.
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The Company earned $28,978 for the 1995 fiscal year from the temporary
investment of excess cash funds. The Company remains in a net operating loss
carry forward position for income tax purposes and no tax benefit has been
recognised for the year ended September 30, 1995.
YEAR ENDED SEPTEMBER 30, 1996 COMPARED TO YEAR ENDED SEPTEMBER 30, 1995
The Company generated revenues of $3,125,975 (a decrease of 8% over 1995) for
the year ended September 30, 1996. The decrease in revenues is principally due
to the fact that The Times of London and Sunday Times promotions in 1995 gave
rise to a high level of non repeat business which has not been fully replaced by
the revenues generated by the 1996 campaigns. The Company increased its number
of Cardholders from 19,000 to 43,500 at September 30, 1995 and at September 30,
1996 respectively, largely as a result of the 17,500 Company Cardholders
produced by the MBNA campaign since August 1996. The Company marginally
decreased its number of Participating Restaurants from 460 to 440 at September
30, 1995 and at September 30, 1996 respectively. This decrease is attributable
to the Company's policy of rationalising Participating Restaurants with low
levels of business. Membership fees for the year ended September 30, 1996 of
$570,425 are 10% higher than 1995 as a result of the increasing numbers of
Company Cardholders.
Cost of sales amounted to $2,085,905 (a decrease of 8% over 1995) for the year
ended September 30, 1995, in line with the 8% decrease in revenues.
Selling, general and administrative expenses, consisting primarily of the costs
of operations, for the year ended September 30, 1996 amounted to $3,670,307
representing a decrease of 4% over 1995. The decrease can be attributed to a
cost evaluation exercise that was undertaken in June 1996 which resulted in
savings in printing and staff costs.
Transmedia France incurred losses of approximately $1,250,000 after revenues of
$156,370, for the year ended September 30, 1996, being its first year of
operations which commenced on a trial basis in April 1996. The Company's share
of those losses amounted to $509,404. For the year ended September 30, 1995
Transmedia France incurred pre-trading losses of approximately $182,624. The
Company's share of those losses amounted to $92,455.
The Company earned $8,112 for the 1996 fiscal year from the temporary investment
of excess cash funds. The Company remains in a net operating loss carry forward
position for income tax purposes and no tax benefit has been recognised for the
year ended September 30, 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company was initially capitalised with 6,206,896 shares, (after giving
retroactive effect to stock dividends,) for consideration of $500. On August 11,
1993, the Company issued 3,718,784 shares of common stock of which (i) 225,000
shares were issued to Conestoga, a corporation which is related to the Company
by virtue of the majority shareholding in Conestoga held by Edward J. Guinan
III, the President, Chief Executive Officer and Director of the Company, in
consideration of costs incurred on behalf of the Company by Conestoga, with
respect to raising capital for the Company; (ii) 496,284 shares were issued to
Network, as partial consideration for the purchase of the License; (iii) 275,000
shares were issued to Conestoga as reimbursement for a down payment of $275,000
made by Conestoga to Network for the purchase of the License; and (iv) the
remaining 2,722,500 shares were sold to private investors in a private placement
at an offering price of $1 per share. In addition, the Company issued 85,000
shares of Common Stock as consideration for services rendered in connection with
the raising of capital in the Company's private placement of shares in August
1993, of the cash proceeds of $2,722,500, $850,000 was paid to Network for
further consideration for the purchase of the Transmedia License from the
private placement of shares, leaving a balance, after issue costs, of $1,744,623
available to the Company for use as working capital in respect of the
utilisation by the Company of its rights under the License Agreement.
In February 1994, the Company completed a second private placement of 700,000
shares of Common Stock at a price of $3 per share. The net proceeds of such
private placement were used as working capital in respect of the utilisation by
the Company of its rights under the License Agreement. In addition, the Company
separately issued 10,000 shares of Common Stock as consideration for services
rendered in connection with the raising of capital in the second private
placement in February 1994.
In July 1995 the Company issued 590,857 shares of 6 1/2% Convertible Preferred
Stock at a price of $3.50 per share. The net proceeds of $1,964,600 have been
used to finance the Company's investment in France and to provide working
capital to existing operations.
-8-
10
In July 1996 the Company issued 892,857 shares of Common Stock at a price of
$1.40 per share. The net proceeds of $1,235,000 have been used to provide
working capital to existing operations. In December 1996 the Company issued
556,250 shares of Common Stock at a price of $2.00 per share. The net proceeds
of $1,097,500 will be used to provide working capital to existing operations.
Net cash used in operating activities for the years ended September 30, 1996,
1995 and 1994 were $1,189,923, $1,071,496 and $2,456,271, respectively, of which
$206,619, $(323,052)and $(1,659,726), respectively, represents the net cash
inflow/(outflow) for advances to Company Participating Restaurants. These cash
outflows were funded by the 1994 issue of Common Stock which generated
$2,031,097, the 1995 issue of 6 1/2% Convertible Preferred Stock and the 1996
issue of Common Stock.
The Company made investments in Transmedia France of $300,000 and $1,500,000
during the years ended September 30, 1996 and 1995, respectively. In addition,
there were cash flows to related parties of $338,053, $55,965 and $201,282 for
the years ended September 30, 1996, 1995 and 1994, respectively.
In June 1996 the Company purchased 148,853 and 48,142 shares of Common Stock
from E Guinan III and Conestoga Partners Inc. at $2.625 per share, as repayment
of their outstanding loans.
The Restaurant Credits are generally unsecured and are recoverable only as
Company Cardholders utilise The Restaurant Card at the respective Company
Participating Restaurant. In a small number of cases, the Company may request a
personal guarantee from the owner. Generally, no other forms of collateral or
security are obtained from restaurant owners. Recovery of Restaurant Credits as
well as generation of gross profit from operations is strongly dependent upon
the frequency of use by existing Company Cardholders of The Restaurant Card. The
Company makes provisions for irrecoverable restaurant credits.
With the exception of the commitments made to the joint venture in France and
those made under the license as disclosed above, the Company has not made any
other significant capital commitment. The Company does not have an immediate
plan to make other significant capital commitments related to the operation of
its business in the United Kingdom.
Although the Company anticipates that its current cash, together with revenues
expected to be derived from operations, should, based upon its internal
calculations, be sufficient to fund operating, and other capital needs for the
next year, the Company will be required to seek additional financing during such
period in the event it either intends to make acquisitions or that there are
delays, cost overruns, sales declines or unanticipated expenses. While the
Company is confident that sufficient funds will be available to meet its
anticipated business expansion needs for the next year there can be no assurance
that the Company will be able to obtain such additional financing during such 12
month period.
INFLATION AND SEASONALITY
The Company does not believe that its operations have been materially influenced
by inflation. The business of individual Company Participating Restaurants may
be seasonal depending on their location and the type of food and beverages
served. However, the Company at this time has no basis on which to project
seasonal effects, if any, to its business as a whole.
-9-
11
ITEM 8- FINANCIAL STATEMENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Report of Independent Auditors. F1
Consolidated Balance Sheets as at September 30, 1996 and 1995. F2-F3
Consolidated Statements of Operations for the years ended F4
September 30, 1996, 1995 and 1994.
Consolidated Statements of Changes in Stockholders' Equity for the F5
years ended September 30, 1996 and 1995 and 1994.
Consolidated Statements of Cash Flows for the years ended F6
September 30, 1996, 1995 and 1994.
Notes to the Consolidated Financial Statements. F7-F16
-10-
12
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Transmedia Europe, Inc.
We have audited the accompanying consolidated balance sheets of Transmedia
Europe, Inc. and subsidiaries as of September 30, 1996 and 1995 and the related
consolidated statements of operations, changes in stockholders' equity, and cash
flows for each of the years in the three-year period ended September 30, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. These standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Transmedia Europe, Inc. and subsidiaries as of September 30, 1996 and 1995, and
the results of their operations and cash flows for each of the years in the
three-year period ended September 30, 1996, in conformity with generally
accepted accounting principles in the United States.
December 20, 1996
KPMG
London
England
-F1-
13
TRANSMEDIA EUROPE, INC.
Consolidated Balance Sheets
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------- -------------------
ASSETS
CURRENT ASSETS
Cash (including temporary cash investments of $ 61,661 $ 796,911
$730,767 at September 30, 1995)
Trade accounts receivable 105,167 131,555
Restaurant credits (net of allowance for irrecoverable credits 1,309,279 1,622,571
of $399,328 at September 30, 1996 and of $357,557 at
September 30, 1995)
Amounts due from related parties (note 3) 114,246 709,585
Prepaid expenses and other current assets 264,478 113,640
---------- ----------
TOTAL CURRENT ASSETS 1,854,831 3,374,262
NON-CURRENT ASSETS
Investment in affiliated company (note 2) 698,141 938,413
Property and equipment, net of accumulated depreciation of 76,357 103,893
$104,262 at September 30, 1996 and $64,366 at September 30,
1995 (note 5)
Intangible assets, net of accumulated amortisation of $324,248 at
September 30, 1996 and $216,172 at September 30, 1995
(note 4) 1,297,026 1,405,112
---------- ----------
TOTAL ASSETS $3,926,355 $5,821,680
========== ==========
See accompanying notes to the consolidated financial statements.
- F2-
14
TRANSMEDIA EUROPE, INC.
Consolidated Balance Sheets
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ -- $ 109,422
Trade accounts payable 483,229 322,901
Deferred membership fee income 352,542 356,814
Accrued liabilities (note 7) 438,395 303,203
Amount due to related parties (note 3) -- 416,280
----------- -----------
Total current liabilities 1,274,166 1,508,620
NON-CURRENT LIABILITIES
Deferred license fee income (note 2) 500,000 500,000
----------- -----------
Total liabilities 1,774,166 2,008,620
----------- -----------
STOCKHOLDERS' EQUITY
6 1/2% Convertible Preferred Shares, $0.01 par value, 5,000,000
shares authorised, 590,857 issued and outstanding shares at
September 30, 1996 and 1995 5,909 5,909
Common stock, $.00001 par value, 20,000,000 shares authorised,
12,319,537 issued and outstanding shares at September 30,
1996 and 11,426,680 at September 30, 1995 123 114
Additional paid in capital 9,647,072 8,412,081
Accumulated deficit (6,908,928) (4,213,404)
Treasury stock, 196,995 shares of common stock at cost (517,112) --
Unearned compensation - restricted stock (note 11) (78,000) (402,000)
Cumulative foreign currency translation adjustment 3,125 10,360
----------- -----------
Total stockholders' equity 2,152,189 3,813,060
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,926,355 $ 5,821,680
=========== ===========
See accompanying notes to the consolidated financial statements.
- F3 -
15
TRANSMEDIA EUROPE, INC.
Consolidated Statements of Operations
Years ended September 30,
1996 1995 1994
------------ ------------ ------------
Revenues $ 3,125,975 $ 3,399,831 $ 2,042,126
Membership fee 570,425 518,166 85,847
Other income -- 50,000 50,799
------------ ------------ ------------
Total revenue and fees 3,696,400 3,967,997 2,178,772
Cost of sales 2,085,905 2,266,586 1,360,994
------------ ------------ ------------
Gross profit 1,610,495 1,701,411 817,778
Selling, general and administrative expenses (3,670,307) (3,816,386) (2,855,906)
------------ ------------ ------------
Loss from operations (2,059,812) (2,114,975) (2,038,128)
Share of losses of associated company (509,404) (92,455) --
Interest income 8,112 28,978 92,892
------------ ------------ ------------
Loss before income tax (2,561,104 (2,178,452) (1,945,236)
Income taxes (note 10) -- -- --
------------ ------------ ------------
Net loss before preferred share dividends (2,561,104) (2,178,452) (1,945,236)
Preferred share dividends (134,420) (37,000) --
------------ ------------ ------------
Net loss after preferred share dividends $ (2,695,524) $ (2,215,452) $ (1,945,236)
------------ ------------ ------------
Loss per common share (0.24) (0.19) (0.19)
Weighted average number of common
shares outstanding 11,448,212 11,423,680 10,427,383
------------ ------------ ------------
See accompanying notes to the consolidated financial statements.
- F4 -
16
TRANSMEDIA EUROPE, INC.
Consolidated Statements of Changes in Stockholders' Equity
NUMBER OF NUMBER OF ADDITIONAL
COMMON COMMON PREFERRED PREFERRED PAID-IN
SHARES STOCK SHARES STOCK CAPITAL
Balance, September 30, 1993 10,010,680 $100 -- $ -- $ 3,366,307
Issuance of common stock 710,000 7 -- -- 2,129,993
Issue costs -- -- -- -- (98,903)
Net loss -- -- -- -- --
Issuance of restricted stock 700,000 7 -- -- 1,049,993
Effect of foreign currency
translation -- -- -- -- --
Compensation expense -
restricted stock -- -- -- -- --
---------- ---- ------- ------ -----------
Balance, September 30, 1994 11,420,680 114 -- -- 6,447,390
Issuance of common stock
due to exercise of options 6,000 -- -- -- 6,000
Issuance of convertible
preferred stock -- -- 590,857 5,909 2,062,091
Issue costs -- -- -- -- (103,400)
Net loss after preferred
share dividends -- -- -- -- --
Effect of foreign currency
translation -- -- -- -- --
Compensation expense -
restricted stock -- -- -- -- --
---------- ---- ------- ------ -----------
Balance, September 30, 1995 11,426,680 $114 590,857 $5,909 $ 8,412,081
Issuance of common stock 892,857 9 -- -- 1,249,991
Issue costs -- -- -- -- (15,000)
Net loss after preferred
share dividends -- -- -- -- --
Effect of foreign currency
translation -- -- -- -- --
Compensation expense -
restricted stock -- -- -- -- --
Treasury stock -- -- -- -- --
---------- ---- ------- ------ -----------
Balance, September 30, 1996 12,319,537 $123 590,857 $5,909 $ 9,647,072
========== ==== ======= ====== ===========
CUMULATIVE
FOREIGN CURRENCY UNEARNED
TREASURY TRANSLATION COMPENSATION ACCUMULATED
STOCK ADJUSTMENT RESTRICTED STOCK DEFICIT TOTAL
Balance, September 30, 1993 $ -- $ -- $ -- $ (52,716) $ 3,313,691
Issuance of common stock -- -- -- -- 2,130,000
Issue costs -- -- -- -- (98,903)
Net loss -- -- -- (1,945,236) (1,945,236)
Issuance of restricted stock -- -- (1,050,000) -- --
Effect of foreign currency
translation -- 8,060 -- -- 8,060
Compensation expense -
restricted stock -- -- 324,000 -- 324,000
--------- -------- ----------- ----------- -----------
Balance, September 30, 1994 -- 8,060 (726,000) (1,997,952) 3,731,612
Issuance of common stock
due to exercise of options -- -- -- -- 6,000
Issuance of convertible
preferred stock -- -- -- -- 2,068,000
Issue costs -- -- -- -- (103,400)
Net loss after preferred
share dividends -- -- -- (2,215,452) (2,215,452)
Effect of foreign currency
translation -- 2,300 -- -- 2,300
Compensation expense -
restricted stock -- -- 324,000 -- 324,000
--------- -------- ----------- ----------- -----------
Balance, September 30, 1995 -- $ 10,360 $ (402,000) $(4,213,404) $ 3,813,060
Issuance of common stock -- -- -- -- 1,250,000
Issue costs -- -- -- -- (15,000)
Net loss after preferred
share dividends -- -- -- (2,695,524) (2,695,524)
Effect of foreign currency
translation -- (7,235) -- -- (7,235)
Compensation expense -
restricted stock -- -- 324,000 -- 324,000
Treasury stock (517,112) -- -- -- (517,112)
--------- -------- ----------- ----------- -----------
Balance, September 30, 1996 $(517,112) $ 3,125 $ (78,000) $(6,908,928) $ 2,152,189
========== ======== =========== =========== ===========
See accompanying notes to the consolidated financial statements.
-F5-
17
TRANSMEDIA EUROPE, INC.
Consolidated Statements of Cash Flows
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1994
----------- ----------- -----------
Cash flows from operating activities:
- - Net loss before preferred share dividends $(2,561,104) $(2,178,452) $ (1,945,236)
Adjustment to reconcile net loss to net cash used in operating activities:
- - Depreciation and amortisation 151,265 149,497 129,979
- - Amortisation of unearned compensation 324,000 324,000 324,000
- - Provision for irrecoverable restaurant credits 41,771 281,357 76,200
- - Share of losses of associated company 509,404 92,455 --
Changes in assets and liabilities:
- - Trade accounts payable 173,244 125,409 197,492
- - Accrued liabilities 84,590 (53,114) 317,717
- - Restaurant credits 206,619 (323,052) (1,659,726)
- - Trade accounts receivable 21,125 (17,426) (114,129)
- - Prepaid expense and other current assets (150,838) (41,465) (70,087)
- - Deferred membership fees 10,001 69,295 287,519
- - Deferred license fee income -- 500,000 --
----------- ----------- -----------
Net cash used in operating activities (1,189,923) (1,071,496) (2,456,271)
----------- ----------- -----------
Cash flows from investing activities:
- - Due to related parties (338,053) (55,965) (201,282)
- - Purchase of property and equipment (18,141) (17,594) (135,824)
- - Loan to associated company 30,868 (30,868) --
- - Net investment in associated company (300,000) (1,000,000) --
----------- ----------- -----------
Net cash used in investing activities (625,326) (1,104,427) (337,106)
----------- ----------- -----------
Cash flows from financing activities:
- - Net proceeds received from issuance of:
common stock 1,235,000 -- 2,031,097
convertible preferred shares -- 1,964,600 --
- - Payment of preferred dividend (71,685) -- --
- - Bank overdraft (109,422) 109,422 --
- - Exercise of options -- 6,000 --
----------- ----------- -----------
Net cash provided by financing activities 1,053,893 2,080,022 2,031,097
----------- ----------- -----------
Effect of foreign currency on cash 26,106 377 10,788
----------- ----------- -----------
Net decrease in cash and temporary
cash investments (735,250) (95,524) (751,492)
----------- ----------- -----------
Cash and temporary cash investments at
beginning of period 796,911 892,435 1,643,927
----------- ----------- -----------
Cash and temporary cash investments
at end of period $ 61,661 $ 796,911 $ 892,435
=========== =========== ===========
Supplemental disclosures of cash flow information:
No amounts of cash were paid for income taxes for each of the periods presented.
Interest paid during the fiscal year ended September 30, 1996 was $13,750 (1995
:$12,022, 1994 :$nil).
See accompanying notes to the consolidated financial statements.
-F6-
18
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Description of business
Transmedia Europe, Inc. ('the Company') was incorporated in Delaware on
February 9, 1993.
The Company's main business activity through its wholly owned
subsidiary company, Transmedia UK plc, is to make 'cash advances' to
restaurants for food and beverage credits from certain participating
restaurants, which are then recovered as the Company's cardholders
utilise their restaurant charge cards (see note 1(d)). Presently, the
Company's operations are in the United Kingdom and there is an
affiliate company operating in France.
The Company has been granted a license, (the 'Transmedia License'), to
operate a specialised restaurant charge card business in Europe, Turkey
and the countries of the former U.S.S.R. by Transmedia Network Inc.
('Network'), a corporation which is incorporated in the United States
of America. The agreement to purchase the Transmedia License was
initially entered into by Conestoga Partners Inc. ('Conestoga'), a
corporation which is related to the Company by virtue of the majority
shareholding in Conestoga held by Edward J Guinan III, the President,
Chief Executive Officer, Chief Financial Officer and Director of the
Company (see note 3).
The Company intends to expand operations in other portions of the
licensed territories through wholly-owned subsidiaries, unaffiliated
sublicensees and franchisees or through joint ventures.
As of September 30, 1996, Transmedia Europe, Inc. had equity interests
in the following companies:
Name Country of Incorporation % Owned
Transmedia Europe plc United Kingdom 100
Transmedia UK plc United Kingdom 100
Transmedia UK, Inc. United States of America 100
Transmedia La Carte Restaurant S.A France 36
(b) Principles of consolidation
The consolidated financial statements include the financial statements
of the Company and its wholly-owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in
consolidation.
(c) Investment in France
The Company has invested a total of $1,800,000 in Transmedia La Carte
Restaurant S.A. which operates the Restaurant Card in France. The
investment is accounted for using the equity method, as under the
current structure the Company will be unable to exercise unilateral
control by virtue of the Company owning just 36% of the equity and
having the right to appoint two of the four directors.
The shareholder agreement provides for "put" and "call" options. The
Company has a call option to acquire the joint venture partner's shares
in Transmedia La Carte Restaurant S.A. in the fourth year of operations
at a price based upon a valuation equal to ten times operating cash
flows. The joint venture partners have put options in years 2 and 4.
The basis for valuation under the year 2 option is equal to 120 % of
capital invested and under the year 4 option is equal to ten times
operating cash flows.
(d) Restaurant Credits
Restaurant credits represent the total advances made to participating
restaurants in exchange for credits less the amount by which these
credits are recouped by the Company as a result of Company cardholders
utilising their cards at participating restaurants. The amount by which
such credits are recouped amounts to approximately 50% of the retail
value of food and beverages consumed by cardholders. The Company
reviews recoverability of credits and establishes an allowance for
credits to restaurants that have ceased operations or whose credits may
not be utilised by cardholders.
- F7 -
19
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
(d) Restaurant Credits (continued)
The funds advanced to participating restaurants are generally unsecured
and are recoverable as cardholders utilise their restaurant charge card
at the respective restaurant. In certain cases, the Company may request
a personal guarantee from the owner of a restaurant with respect of the
recoverability of the advance if the restaurant ceases operations or
ceases to be a participating restaurant. Generally, no other forms of
collateral or security are obtained from the restaurant owners.
(e) Intangible assets
Intangible assets consist entirely of the cost of the Transmedia
License and represents the consideration paid to Network in both cash
and the fair value of Company shares for the Transmedia License to
operate in the licensed territories using the systems, procedures and
"know how" of the Transmedia business.
The license cost is being amortised on a straight line basis over its
estimated useful life of 15 years from the commencement of operations
on October 1, 1993.
The Company evaluates the carrying value of its investment in license
costs for impairment based on an estimate of future undiscounted cash
flows that are expected to be generated and are directly attributable
to the Transmedia License. If the sum of those estimated future
undiscounted cash flows is less than the carrying value of the license
costs, it is the policy of the Company to measure impairment on the
basis of the fair value of the license costs, using a discounted cash
flow technique. In the opinion of management, there was no permanent
impairment in the carrying value of the license costs at September 30,
1996 or September 30, 1995.
(f) Property and equipment
Property and equipment are stated at cost. Depreciation on property and
equipment is calculated using the straight line method over the
estimated useful lives of the assets as follows:
Furniture and fixtures 5 years
Office equipment 4-5 years
(g) Income taxes
The Company recognises deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in
the financial statements or tax returns. Accordingly, deferred tax
liabilities and assets are determined based on the difference between
financial statement and tax basis of assets and liabilities using
enacted rates in effect for the year in which the differences are
expected to reverse. The effect on deferred tax assets and liabilities
of a change in tax rates is recognised in income in the period that
includes the enactment date.
A valuation allowance is established to reduce the deferred tax assets
when management determines it is more likely than not that the related
tax benefits will not be realised.
(h) Revenues
Revenues represent the retail value of food and beverages acquired from
participating restaurants by the Company's cardholders, less the 20% or
25% discount offered to cardholders. Membership fees collected on the
25% discount card are deferred and recognised as revenue in equal
monthly instalments over the periods benefited.
(i) Unearned compensation
The Company has recorded unearned compensation for shares of restricted
common stock issues in exchange for certain consultancy and financial
advisory services. The restricted shares and the unearned compensation
have been recorded at the fair value of the shares at the date at which
they were issued. Compensation expense is recorded on a periodic basis
as the restriction of such shares expires.
- F8 -
20
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES (continued)
(j) Cardholder bonuses
The Company operates a number of cardholder "Bonus" programs whereby
the cardholder receives a bonus of food and beverage, credited to their
account. The bonus is utilised as the cardholder uses The Restaurant
Card and is processed as an additional saving to the standard 20 % or
25% saving offered by the Company. The bonus is accrued by the Company
when the bonus is granted to the Company Cardholder.
(k) Loss per common share
Loss per common share is computed by dividing net loss by the weighted
average number of common stock outstanding. Common stock equivalents
have not been included because they are considered anti-dilutive.
(l) Foreign currencies
The reporting currency of the Company is the United States dollar.
For consolidation purposes, the assets and liabilities of overseas
subsidiary undertakings are translated at the closing exchange rates.
Consolidated statements of income of such undertakings are consolidated
at the average rates of exchange during the period. Exchange
differences arising on these translations are taken directly to
stockholders' equity.
Transactions in foreign currencies are recorded using the rate of
exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated using the
rate of exchange ruling at the balance sheet date and the gains or
losses on translation are included in the consolidated statement of
operations. In the year to September 30, 1996 the Company recorded an
exchange loss of $55,775 (1995 a gain of $3,653).
(m) Temporary cash investments
For purposes of the statements of cash flows, the Company considers all
investments with an original maturity of three months or less to be a
cash equivalent.
(n) Advertising costs
The Company expenses advertising costs as incurred. Advertising costs
for the years ended September 30, 1996, 1995 and 1994 were $56,610,
$nil and $24,537 respectively. The Company has used direct response
advertising in the past and may use such advertising in the future.
However, the Company did not have costs related to direct response
advertising campaigns during the years ended September 30, 1996, 1995
and 1994 that should be capitalised.
(o) Use of estimates
Management of the Company has made a number of estimates and
assumptions relating to the reporting of assets and liabilities to
prepare these financial statements in conformity with generally
acepted accounting principles. Actual results could differ from those
estimates.
-F9-
21
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
2. INVESTMENT IN AFFILIATED COMPANY
The Investment in Transmedia La Carte Restaurant S.A. ("Transmdia
France") consists of the following:
1996 1995
---- ----
Cost of investment $ 1,800,000 $ 1,500,000
Less: Share of license fee (466,667) (500,000)
----------- -----------
1,333,333 1,000,000
Share of losses (635,192) (92,455)
Amounts due from affiliate -- 30,868
----------- -----------
$ 698,141 $ 938,413
----------- -----------
Due to the provision of "put" and "call" options in the shareholders
agreement which establish a basis under which Transmedia France may
become a wholly owned subsidiary, $500,000 of the $1,000,000
sub-license fee paid to the Company by Transmedia France in 1995 has
not been recognised but instead has been deferred until such time as
these options are exercised or expire. The remaining balance of
$500,000 has also been deferred against the investment in the
Transmedia France and is being amortised over a 15 year period
commencing October 1995.
The Transmedia License requires the payment of a royalty to Network in
the event that the Company opens in another country being the greater
of $250,000 or 25% of the initial fee.
On April 19, 1996 Transmedia France completed a rights issue of shares.
Whilst the Company declined to subscribe it did acquire 15,000 shares,
in an unrelated transaction, from International Advance, Inc., a
company of which Edward J Guinan III, President of the Company, is the
principal shareholder and an officer and director, in exchange for
$300,000 and certain rights to jointly develop systems unrelated to the
business of Transmedia France. Accordingly the Company's interest was
reduced to 36%. In December 1996 the Company reached an agreement,
effective January 1997, with Transmedia France under which it granted
sub-licenses for Belgium/Luxembourg, Spain, Italy and French speaking
Switzerland for 9,250,000Ffr (approximately $1,780,000). This payment
will be used by the Company to increase its interest in Transmedia
France to 60%. Network has agreed to defer the 25% royalties due upon
the completion of the agreement ($800,000 in aggregate) with payment to
be made as each country area is opened of $250,000 except for $50,000
for French speaking Switzerland. Under certain circumstances the
payment schedule can be accelerated.
3. RELATED PARTY TRANSACTIONS
On February 9, 1993, Edward J Guinan III purchased 100 shares of common
stock for $100 and subsequently received a stock dividend of 1,000
shares on February 10, 1993. He was issued with 4,550,623 shares of
common stock in a stock split effected in the form of a stock dividend
paid to holders of record at the close of business on May 5, 1993.
Edward J Guinan III, the President, Chief Executive Officer, and a
Director of the Company is also the President, Secretary, Treasurer and
a Director of Conestoga. Mr Guinan owns 73% of the outstanding common
stock of Conestoga.
Conestoga sold the License to the Company on May 19, 1993, for an
initial down payment of $275,000 plus the assumption by the Company of
all expenses incurred by Conestoga with respect to the License on or
after January 1, 1993. Pursuant to an amendment dated August 10, 1993,
Conestoga agreed to purchase 500,000 shares of common stock at a price
of $1.00 per share by forgiving $500,000 of costs and advances of the
Company for part consideration for the License of $275,000 and costs of
$225,000 incurred in the course of raising capital.
In connection with the relocation of Mr Guinan from New York to London,
the Company made certain arrangements including the loan of $284,566 to
Mr Guinan in February 1994 to pay the outstanding balance on his
mortgage. The Company also reimbursed Mr Guinan's relocation expenses
in the amount of approximately $3,108.
-F10-
22
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
3. RELATED PARTY TRANSACTIONS (CONTINUED)
Pending resolution of Mr Guinan's residence status in London, the
Company advanced payment on the rental costs of his residence and other
sundry amounts in lieu of the payment of a portion of his salary. The
amount so advanced during 1995 was $224,991 of which $133,120 relates
to the rental of his residence, $22,376 is for travel expenses and the
balance of $69,495 for other sundry amounts. Mr Guinan had repaid
$192,000 of these amounts through September 30, 1995. The amount
advanced to Mr Guinan increased by $230,991 during the year ended
September 30, 1996. The cumulative total amount due to the Company has
been satisfied by repayment to the Company of $176,149 and the sale of
148,853 shares of Common Stock at $2.625 per share to the Company.
During 1995 the Company advanced $259,837 to International Advance,
Inc., a company of which Edward J Guinan III, President of the Company,
is the principal shareholder and an officer and director. The balance
at September 30, 1996 was $20,946.
The amount due to related parties of $416,280 at September 30, 1995
represents temporary funding and advances provided by Transmedia Asia
Pacific, Inc. offset by management charges from the Company. Transmedia
Asia Pacific, Inc. is an affiliate due to the significant shareholding
held by Edward J. Guinan III, the President, Chief Executive Officer,
Chief Financial Officer and Director of the Company. The main movements
during the year ended September 30, 1996 are for working capital
requirements but additions include $1,250,000 for proceeds for the
private placement of common stock on August 1, 1996 which has resulted
in Transmedia Asia Pacific, Inc. owing the Company $93,300 at the year
end.
The net amounts due from related parties consist of the following:
September 30, September 30,
1996 1995
E Guinan III $ -- $ 335,897
Conestoga Partners, Inc. -- 113,851
International Advance, Inc 20,946 259,837
Transmedia Asia Pacific, Inc. 93,300 (416,280)
--------- ---------
$ 114,246 $ 293,305
========= =========
The loans are unsecured and non interest bearing. Information regarding
the activity with respect to the amounts due from related parties is as
follows:
E. Guinan III Conestoga International Transmedia
------------- --------- ------------- ----------
Partners Advances Asia Pacific
-------- -------- ------------
Inc.
----
Balance at September 30, 1994 $ 302,906 $ 44,597 $ - $ (110,163)
Additions 224,991 69,254 259,837 (385,000)
Amounts charged - - - 78,883
Amounts collected (192,000) - - -
---------- ---------- --------- -----------
Balance at September 30, 1995 335,897 113,851 259,837 (416,280)
Additions 230,991 12,522 281,750 1,340,307
Amounts charged - - 183,914 362,793
Amounts collected (176,149) - (704,555) (1,193,520)
Treasury stock (390,739) (126,373) - -
---------- ---------- --------- -----------
Balance at September 30, 1996 $ - $ - $ 20,946 $ 93,300
========== ========== ========= ===========
-F11-
23
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
4. INTANGIBLE ASSETS
Intangible assets consist of the costs of the Transmedia License as
follows:
1996 1995
---- ----
Acquisition cost $ 1,621,284 $ 1,621,284
------------ ------------
Accumulated amortisation:
Balance at beginning of year 216,172 108,086
Charge for the year 108,086 108,086
------------ ------------
Balance at end of year (324,258) (216,172)
------------ ------------
Net book value at September 30, $ 1,297,026 $ 1,405,112
============ ============
5 PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
FURNITURE AND OFFICE TOTAL
FIXTURES EQUIPMENT -----
-------- ---------
COST
At September 30, 1994 $ 10,548 $ 137,853 $ 148,401
Additions 7,221 10,373 17,594
Foreign exchange 167 2,097 2,264
--------- --------- ---------
At September 30, 1995 17,936 150,323 168,259
Additions -- 18,141 18,141
Foreign exchange (1,887) (3,894) (5,781)
--------- --------- ---------
At September 30, 1996 16,049 164,570 180,619
--------- --------- ---------
ACCUMULATED DEPRECIATION
At September 30, 1994 1,545 21,069 22,614
Charge for the year ended
September 30, 1995 2,904 38,507 41,411
Foreign exchange 25 316 341
--------- --------- ---------
At September 30,1995 4,474 59,892 64,366
Charge for the year ended
September 30, 1996 3,209 39,970 43,179
Foreign exchange (111) (3,172) (3,283)
--------- --------- ---------
At September 30, 1996 7,572 96,690 104,262
--------- --------- ---------
NET BOOK VALUE AT SEPTEMBER 30, 1996 $ 8,477 $ 67,880 $ 76,357
========= ========= =========
NET BOOK VALUE AT SEPTEMBER 30, 1995 $ 13,462 $ 90,431 $ 103,893
========= ========= =========
-F12-
24
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
6. ALLOWANCE FOR IRRECOVERABLE RESTAURANT CREDITS
Changes in the Company's allowance for irrecoverable restaurant credits
were as follows:
Year ended Year ended September 30,
September 30, 1996 1995
Balance at the beginning of the period $ 357,557 $ 76,200
Additions - charged to costs and expenses 41,771 281,357
---------- ----------
Balance at end of period $ 399,328 $ 357,557
========== ==========
7. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
September 30, September 30,
1996 1995
Accrued payroll and holiday pay $ 69,061 $ 94,907
Income taxes payable - 1,600
Cardholder bonuses 8,762 -
Tips and tax 113,102 47,717
Food and beverage provision 71,098 -
Professional fees 54,600 100,713
Royalties payable 22,037 21,266
Preferred share dividends 99,735 37,000
------------ -----------
$ 438,395 $ 303,203
============ ===========
8. STOCK OPTIONS AND WARRANTS
Under the Company's 1993 stock option and rights plan (the 'Plan'), the
Company may grant stock options and stock appreciation rights to
persons who are now or who during the term of the Plan become key
employees (including those who are also directors) and to independent
sales agents. Stock options granted under the Plan may either be
incentive stock options or non-qualified stock options for US federal
income tax purposes. The Plan provides that the stock option committee
of the board of directors may grant stock options or stock appreciation
rights with respect of a maximum of 250,000 shares of common stock at
an exercise price not less than the fair market value at the date of
grant for qualified and non-qualified stock options.
The Company has allocated options to purchase 206,000 shares of common
stock under the Plan at a price of $1.00 exercisable at any time
through August 31, 1998. No stock appreciation rights have been
granted.
The per share fair value of the stock options granted in 1996 was $0.40
on the date of grant using the Black Scholes valuation method with the
weighted average assumptions being an expected dividend yield of 0%, a
risk free interest rate of 6% and an expected life being the remaining
term of the option.
The Company has also issued warrants to purchase 597,619 shares of
common stock at an exercise price ranging from $1.40 to $2.50 per
share. The warrants have a three to five year term expiring through
July 2000.
-F13-
25
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
8. STOCK OPTIONS AND WARRANTS (CONTINUED)
Stock option and warrant activity during the periods indicated is as
follows:
Options Warrants
Number of Number of Weighted Average
Shares Exercise Price Shares Exercise Price
--------------- --------------- --------------- ---------------
Balance at September 30, 1994 6,000 $1.00 - -
Granted - - 200,000 $1.50
Exercised (6,000) $1.00 - -
--------------- --------------- --------------- ---------------
Balance at September 30, 1995 - - 200,000 $1.50
Granted 40,000 $1.78 397,619 $1.68
Exercised - - - -
--------------- --------------- --------------- ---------------
Balance at September 30, 1995 40,000 $1.78 597,619 $1.62
=============== =============== =============== ===============
The Company applies APB Opinion No.25 in accounting for its stock
options and, accordingly, no compensation cost has been recognised for
its stock options in the financial statements. Had the Company
determined compensation cost based upon the fair value at the grant
date for its stock options under SFAS No.123, the Company's net losses
for the year ended September 30, 1996, would have been increased to the
pro forma amounts indicated below:
Net loss As reported $ (2,695,524)
Pro forma $ (2,711,364)
Loss per share
As reported $ (0.24)
Pro forma $ (0.24)
Pro forma net loss reflects only options granted in 1996. Therefore,
the full impact of calculating compensation cost for stock options
under SFAS No.123 is reflected in the pro forma net loss amounts
presented above.
9. LEASES
The Company leases certain office space under lease agreements.
Future minimum lease payments under non-cancellable operating leases as
of September 30, 1996, are as follows:
Year ending September 30
1997 $ 150,846
1998 150,846
------------
Total minimum lease payments $ 301,692
------------
The amount charged to the consolidated statement of operations for rent
expense in the year ended September 30, 1996 was $149,449 (1995:
$111,526).
-F14-
26
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
10. INCOME TAXES
Income taxes reflected in the accompanying statements of operations
differ from the amounts computed by applying the US federal tax rate of
34% to loss before taxes as a result of the following:
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1994
----------- ------------ -------------
Computed 'expected' tax benefit $ (871,000) $ (740,000) $ (661,000)
Non deductible expenses 57,000 60,000 6,000
Change in valuation allowance for deferred tax assets 807,000 747,000 662,000
Other (net) 7,000 (67,000) (7,000)
----------- ----------- -----------
Income tax expense $ -- $ -- $ --
----------- ----------- -----------
The tax effects of temporary differences that give rise to deferred tax
assets are as follows:
YEAR ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1996 1995 1994
----------- ------------ -------------
Deferred tax assets:
Net operating loss carry forwards $ 1,463,000 $ 890,000 $ 593,000
Deferred license fee 170,000 170,000 --
Investment in affiliated company 375,000 201,000 --
Royalties 188,000 119,000 46,000
Pre operating costs capitalised for
tax purposes 7,000 11,000 17,000
Other 13,000 18,000 6,000
----------- ----------- -----------
Total 2,216,000 1,409,000 662,000
Less valuation allowance (2,216,000) (1,409,000) (662,000)
----------- ----------- -----------
Net deferred tax assets $ -- $ -- $ --
=========== =========== ===========
The US Federal net operating loss carry forward at September 30,1996 of
approximately $2.3 million will begin to expire in the year 2009. The
foreign net operating loss carry forward of approximately $2.0 million
may be carried forward indefinitely.
11. COMMITMENTS
The Company has an employment agreement with its Chairman which
provides for salary at an annual rate of 100,000 pounds (UK) or
$156,000 using the average exchange rate for the year of $1.56 to
(pound)1. The agreement was initially for a three year term up to
August 30, 1996 and is subject to automatic one-year renewals.
Each quarter the Company must pay to Network in cash for any part of
the licensed territories developed by the Company or any affiliate of
the Company a royalty equal to 2% of gross sales. 'Gross sales' are
defined as the gross reduction during the quarter in Food and Beverage
Credits. The Company will also pay Network 2% of the gross sales
resulting from any other services that Network in the future may
provide to cardholders or participating restaurants. Royalties charged
to income pursuant to this agreement for the years ended September 30,
1996, 1995 and 1994 amounted to $83,498, $108,834 and $54,456
respectively.
-F15-
27
TRANSMEDIA EUROPE, INC.
Notes to the Consolidated Financial Statements
11. COMMITMENTS (CONTINUED)
In order to maintain full rights under the Transmedia License (1) no
person or group of persons, without the prior permission of Network,
may acquire beneficial ownership of 30% or more of the Company; (2)
Edward J Guinan III is required to maintain beneficial ownership of no
less than the lower of 20% of common stock, or 15% of the common stock
(as long as three other largest stockholders beneficially own no more
than 15% in the aggregate); (3) the Company must commence operations
(a) in the United Kingdom within 4 months after the August 11, 1993
closing date under the Transmedia License (the 'Closing Date'), (b) in
another country other than the United Kingdom within 3 years after the
Closing Date, and (c) in a second other country within the earlier of 2
years after the first country or 5 years from the Closing Date; (4) the
Company must procure in the United Kingdom (a) 100 participating
restaurants within the first 12 months or 250 participating restaurants
within the first 24 months of the full rights under the Transmedia
License; (b) 2,000 cardholders within the first 12 months or 5,000
cardholders within the first 24 months of the Transmedia License
(including those receiving cards without the payment of the initial
fee) and (c) participating restaurant renewals at the rate of 70% per
year. As at September 30, 1996 the Company has complied in all
material respects with all the covenants contained in the License
Agreement.
The Company also has other obligations under the Transmedia License
respecting business practices, use of Network software programs,
marketing, training, confidentiality and standard of performance, among
others, the material breach of any of which may result in the
termination of the full rights under the Transmedia License.
Effective as of October 15, 1993 the Company entered into an agreement
with Bostoner International, pursuant to which Bostoner International
agreed to provide certain counselling and financial advisory services
to the Company through December 31, 1996. Pursuant to such agreement,
the Company has issued 700,000 shares of common stock to Bostoner
International. A portion of such shares are subject to forfeiture if
such agreement is terminated prior to December 31, 1996 at the rate of
18,000 shares for each complete month remaining at the date of
termination until December 31, 1996. As of September 30, 1996
approximately 648,000 of such shares are no longer subject to
forfeiture. The restricted shares and an equal amount of the unearned
compensation have been included in the balance sheet at the fair value
of the shares at the date at which they were issued, considered to be
$1.50 per share, and compensation expense for services rendered is
recorded on a periodic basis as the restriction of such shares expire.
12. BUSINESS AND CREDIT CONCENTRATIONS
Most of the Company's customers are located in the United Kingdom. No
single customer accounted for more than 10% of the Company's service
revenues in the period under review. No single restaurant's credit was
greater than 10% of the Company's total restaurant credit balance at
September 30, 1996.
13. CONTINGENCY
The Company is the defendant in a law suit relating to the granting of
a sub-license to operate in Belgium. Management believe that the
ultimate outcome of the case will not have a material impact on the
financial statements.
14. NEED FOR FUTURE FUNDING
Although the Company anticipates that its current cash, together with
revenues expected to be derived from operations, should, based upon its
internal calculations, be sufficient to fund operating, and other
capital needs for the next year, the Company will be required to seek
additional financing during such period in the event it either intends
to make acquisitions or that there are delays, cost overruns, sales
declines or unanticipated expenses. While the Company is confident that
sufficient funds will be available to meet its anticipated business
expansion needs for the next year there can be no assurance that the
Company will be able to obtain such additional financing during such 12
month period.
-F16-
28
ITEM 9 - CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
- 11 -
29
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information called for by Item 10 will be set forth under the heading "Election
of Directors" in the Company's definitive Proxy Statement for its 1997 annual
meeting of shareholders (the "Proxy Statement"), to be filed on or before
January 28, 1997, and is incorporated herein by this reference.
ITEM 11 - EXECUTIVE COMPENSATION
Information called for by Item 11 will be set forth under the heading "Executive
Compensation" in the Proxy Statement, and is incorporated herein by this
reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information called for by Item 12 will be set forth under the heading "Security
Ownership of Certain Beneficial Owners and Management" in the Proxy Statement,
and is incorporated herein by this reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information called for by Item 13 will be set forth under the heading "Certain
Relationships and Related Transactions" in the Proxy Statement, to be filed on
or before January 28, 1997, which is incorporated herein by this reference.
- 12 -
30
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following documents are being filed as part of this Report.
(a) (1) Financial Statements:
Transmedia Europe, Inc.
See "Index to Consolidated Financial Statements" contained
in Part II, Item 8
(a) (2) Financial Statement Schedules:
All schedules are omitted because they are not applicable or
the required information is shown in the Consolidated
Financial Statements or the Notes thereto.
(a) (3) Exhibits:
10.1 (o) Sublicense Agreement dated June 30, 1995, by and
between the Company, International Advance,
Inc. and Network
10.1 (p) Master License Agreement amendment, dated December 6,
1996, by and between Network, the Company and Transmedia
Europe, Inc.
10.1 (q) First Amendment to Sublicense Agreement, to be dated,
by and between Network, the Company, International Advance,
Inc. and Transmedia France.
(b) Reports on Form 8-K
None
(c) Exhibits:
See paragraph (a) (3) above for items filed as exhibits to this Form
10-K as required by item 601 of Regulation S-K.
(d) Financial Statement Schedules:
See paragraphs (a) (1) above for financial statement schedules.
- 13 -
31
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized
TRANSMEDIA EUROPE, INC.
(Registrant)
Date: December 20, 1996 /s/ Edward J. Guinan III
---------------------------------------------
Name: Edward J. Guinan III
Title: Chairman, Chief Executive Officer and
Director
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, this Report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Date: December 20, 1996 /s/ Edward J. Guinan III
---------------------------------------------
Name: Edward J. Guinan III
Title: Chairman, Chief Executive Officer and
Director
Date: December 20, 1996 /s/ Paul L. Harrison
---------------------------------------------
Name: Paul L. Harrison
Title: Director
Date: December 20, 1996 /s/ Walter M. Epstein
---------------------------------------------
Name: Walter M. Epstein
Title: Secretary, Director
Date: December 20, 1996 /s/ Joseph Vittoria
---------------------------------------------
Name: Joseph Vittoria
Title: Director
Date: December 20, 1996 /s/ Helene Ploix
---------------------------------------------
Name: Helene Ploix
Title: Director
32
Exhibit Index
Exhibit DESCRIPTION
- ------- -----------
10.1 (o) Sublicense Agreement dated June 30, 1995, by and
between the Company, International Advance,
Inc. and Network
10.1 (p) Master License Agreement amendment, dated December 6,
1996, by and between Network, the Company and Transmedia
Europe, Inc.
10.1 (q) First Amendment to Sublicense Agreement, to be dated,
by and between Network, the Company, International Advance,
Inc. and Transmedia France.