UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Pursuant to Section 12, 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: May 2, 1997

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

CALIFORNIA
(State or other jurisdiction of incorporation)

0-12386 95-2871296
(Commission File Number) (I.R.S. Employer
Identification No.)

21031 VENTURA BOULEVARD, SUITE 1100, WOODLAND HILLS, CALIFORNIA 91364
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (818) 887-3400

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since
last report)

Total number of pages in this document: 3

TABLE OF CONTENTS

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS . . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Schedule of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . 4
Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . 4

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
YEAR ENDED JUNE 30, 1996
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . 6

Financial Statements:
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Statement of Income and Deficiency . . . . . . . . . . . . . . . . . 8
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . 9
Notes to Financial Statements . . . . . . . . . . . . . . . . . 10-14

SIX MONTHS ENDED DECEMBER 31, 1996
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . 15

Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Statement of Income and Deficiency . . . . . . . . . . . . . . . . . 17
Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . 18
Notes to Financial Statements . . . . . . . . . . . . . . . . . 19-23

PRO FORMA FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . 24

EXHIBITS
Form of Stock Purchase Agreement . . . . . . . . . . . . . . . . . . . . A
Form of Promissory Note . . . . . . . . . . . . . . . . . . . . . . . . B
Employment Agreement Between California Interactive Computing, Inc.
and Jerry C. Buckley . . . . . . . . . . . . . . . . . . . . . . . . C

GENERAL

On May 2, 1997, Incomnet, Inc. ("Company") acquired 88,370.5 shares representing
100% of the outstanding common stock of California Interactive Computing, Inc.
("CIC"), a private corporation headquartered in Valencia, California. The
Company agreed to pay a total of $1,758,302 in cash, payable over a five year
period of time. See Item 5. Other Information - Acquisition of California
Interactive Computing, Inc. - Schedule of Payments." In addition, the Company
has agreed to assume the outstanding balance of $418,527.91 for loans to CIC
made by two of CIC's shareholders. The Company has also signed an employment
agreement for a period of two years with Jerry C. Buckley, CIC's former
president and CEO, pursuant to which it will pay Mr. Buckley $10,000 per month
in consideration for Mr. Buckley's services as the Director of Strategic
Planning for CIC. The Company has also agreed to provide 10,000 and 20,000 stock
options, respectively, in CIC to two former shareholders when a plan is
established for CIC's officers, directors, employees and key consultants.

CIC is engaged in the development and marketing of software that is used to
process insurance-related claims, including workers compensation, disability,
general medical and property & casualty. Its software is leased to companies who
provide their own insurance and claims administration, to insurance companies,
and to third-party administrators who process claims for either self-insured
companies or insurance companies. CIC was incorporated in 1977 in California
and has provided software for claims processing for 20 years.

SCHEDULE OF PAYMENTS

At the close of the transaction on May 2, 1997, the Company paid a total of
$249,818 to the former shareholders of CIC, $84,818 of which was paid to
acquire CIC's stock and $165,000 of which was utilized to pay down loans to
two former CIC shareholders. The Company has signed promissory notes in the
aggregate principal amount of $1,927,016.91 to four former shareholders of
CIC to repay the balance of the loans owed by CIC ($253,527.91 as of May 2,
1997) and to pay the balance of the price to purchase their CIC stock by the
Company ($1,674,489 as of May 2, 1997). These notes bear interest at the
simple rate of 8% per annum. The stock of CIC purchased by the Company is
held in an escrow account until the promissory notes issued by the Company to
CIC former shareholders are repaid in full. The outstanding balances owed on
these notes can be repaid at any time, which would lower the total amount of
scheduled payments, including interest.

During the first year after the acquisition, the Company has agreed to pay
$27,859 to one shareholder in 12 equal monthly payments of principal and
interest. During the 13th - 24th month after the acquisition, the Company has
contracted to pay a total of $591,175 of principal and interest, of which
$369,136 is scheduled to be paid for the purchase of CIC stock from four former
shareholders and of which $222,039 is scheduled to pay down the outstanding
loans owed by CIC to two former shareholders.

During the 25th - 36th month after the acquisition, the Company has
contracted to pay a total of $559,662 of principal and interest, of which
$514,662 is scheduled to be paid for the purchase of CIC stock from four
former CIC shareholders and of which $45,000 is scheduled to pay off the
remaining balance of the loans owed by CIC to two former CIC shareholders.

During the 37th - 48th month after the acquisition, the Company is contracted to
pay a total of $574,572 of principal and interest for the purchase of CIC stock
from four former shareholders.

During the 49th - 60th month after the acquisition, the Company is contracted to
pay a total of $514,662 of principal and interest for the purchase of CIC stock
from four former shareholders.

PRODUCTS AND SERVICES

CIC develops and markets a trademarked line of software products designed to
handle insurance-related claims processing. Insurance-related products include
GenCOMP-TM-, GenMED-TM-, GenDIS-TM-, GenPAC-TM-, GenRISK-TM-, GenIRIS-TM- and
Top Rate-TM-. In addition, CIC also offers several computer and service-related
products, including GenARS-TM-, which is an optical disk-based information
storage and retrieval system, and GenSERVE-TM-, which is a maintenance and
service program customers.

GenCOMP, GenMED, GenDIS and GenPAC automate claims processing for workers'
compensation, general medical, disability and property & casualty, respectively.
Top Rate is used to rate the strength of a disability claim in the State of
California.

DIRECTORS AND OFFICERS

The former directors of CIC tendered their resignation, effective at the
acquisition. The Company has named Melvyn Reznick, its President and CEO,
Stephen A. Caswell, its Vice President and Corporate Secretary, and Jerry C.
Buckley, CIC's former President and CEO, to serve on CIC's Board of
Directors. Mr. Reznick will serve as Chairman, President, CEO and CFO of CIC.
Mr. Caswell will serve as Executive Vice President and Secretary of CIC. Mr.
Buckley will serve as a director.

CIC has engaged Mr. Buckley in an employment contract for a period of two
years at a rate of $120,000 per year. During the term of his employment
agreement, Mr. Buckley will serve as the Director of Strategic Planning for
CIC. CIC has no other employment agreements. The Company has named Eric
Hoffberg, Michael Ewing and Nora Kenner as officers of CIC. Mr. Hoffberg will
serve as General Manager of CIC. Mr. Ewing will serve as Vice President of
Marketing and Ms. Kenner will serve as Vice President of Consulting Services.

Prior to joining CIC at the acquisition, Michael Ewing served as the Regional
Director of Channel Sales for Business Objects (Newport Beach, CA) from May
1996 through May 1997. Prior to that, he served as Regional Manager of Sales
for VMark Software (Irvine, CA) from October 1990 through May 1996. In 1978,
he received a B. A. in Public Administration from UCLA.

Eric Hoffberg has been employed at CIC since January 1990 and has more than
20 years of experience in the insurance industry. From January 1991 to his
promotion to General Manager upon the acquisition of CIC by the Company, he
served as CIC's Vice President of System Services. From January 1990 to
December 1990, he served as the Director of Systems & Programming for CIC.
Prior to joining CIC, he worked as Assistant Vice President & MIS Director
for a subsidiary of Continental Insurance from 1988 to 1990. Mr. Hoffberg is
married to Nora Kenner. In 1976, he received a B. A. in Business
Administration from Long Beach State University in 1976.

Nora Kenner has been employed by CIC since 1980 when she joined as an
administrative assistant. From January 1991 to her promotion to Vice
President of Consulting Services upon the acquisition of CIC by the Company,
she served as Assistant Vice President of Consulting Services. Prior to 1991,
she served in various capacities for CIC, including Director of Consulting
Services from 1988 to 1991. Ms. Kenner is married to Mr. Hoffberg. In 1979,
she received a B.A. in Biology from UCLA.

Mr. Buckley was one of the founders of CIC in 1977 and has served as CIC's
President and CEO since CIC's inception. Prior to founding CIC, he was
employed in various positions in software development and engineering by
Lockheed. He received a B.A. in Geology from USC in 1960.

INDEPENDENT AUDITORS' REPORT

Board of Directors
California Interactive Computing, Inc.
Valencia, California

We have audited the accompanying balance sheet of California Interactive
Computing, Inc. as of June 30, 1996, and the related statements of income and
deficiency and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of California Interactive
Computing, Inc. as of June 30, 1996, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.

/s/ STONEFIELD JOSEPHSON
- -------------------------
ACCOUNTANCY CORPORATION

Santa Monica, California
April 21, 1997

CALIFORNIA INTERACTIVE COMPUTING, INC.

BALANCE SHEET - JUNE 30, 1996

ASSETS

CURRENT ASSETS:
Cash $ 40,002
Accounts receivable, net of allowance
for doubtful accounts of $12,000 457,962
Prepaid expenses 3,205
-------------
Total current assets $ 501,169

PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 138,108

DEPOSITS 11,842
-------------
Total assets $ 651,119
-------------

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 336,142
Deferred revenue 117,203
Current portion of notes payable, officer-stockholders 37,199

Total current liabilities $ 490,544
-------------

NOTES PAYABLE, OFFICER-STOCKHOLDERS 399,554

STOCKHOLDERS' DEFICIENCY:
Common stock; 200,000 shares authorized,
88,371 shares issued and 111,630 shares outstanding 5,700
Deficiency (244,679)
-------------
Total stockholders' deficiency (238,979)
-------------
$ 651,119
-------------

See accompanying independent auditors' report and notes to financial statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.

STATEMENT OF INCOME AND DEFICIENCY

YEAR ENDED JUNE 30, 1996

AMOUNT PERCENT
-------------- -------
NET SALES $ 2,602,559 100.0%

COST OF SALES 1,565,253 60.1
-------------- -----
GROSS PROFIT 1,037,306 39.9

OPERATING EXPENSES 936,245 36.0
-------------- -----
INCOME FROM OPERATIONS 101,061 3.9%
-------------- -----
-----
DEFICIENCY, beginning of year,
as previously reported (147,405)

PRIOR PERIOD ADJUSTMENT FOR CORRECTION
OF ERRORS (198,335)
--------------

DEFICIENCY, beginning of year, as restated (345,740)
--------------

DEFICIENCY, end of year $ (244,679)
--------------

See accompanying independent auditors' report and notes to financial
statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED JUNE 30, 1996

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Net income $ 101,061

ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES -
depreciation and amortization $ 46,320

CHANGES IN ASSETS AND LIABILITIES:
(INCREASE) DECREASE IN ASSETS:
Accounts receivable (145,042)
Prepaid expenses 3,730
Deposits 7,726

INCREASE (DECREASE) IN LIABILITIES:
Accounts payable and accrued expenses 184,949
Deferred revenue (93,132)
--------------
Total adjustments 4,551
--------------
Net cash provided by operating activities 105,612

CASH FLOWS USED FOR INVESTING ACTIVITIES -
payments to acquire property and equipment (44,380)

CASH FLOWS USED FOR FINANCING ACTIVITIES -
payments on notes payable, officer-stockholders (50,803)
--------------
NET INCREASE IN CASH 10,429
CASH, beginning of year 29,573
--------------

CASH, end of year $ 40,002
--------------
--------------

See accompanying independent auditors' report and notes to financial statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BUSINESS ACTIVITY:

The Company sells computer hardware and software and offers
installation, consulting, and repairs and maintenance services to its
customers throughout the United States.

USE OF ESTIMATES:

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

FAIR VALUE:

Unless otherwise indicated, the fair values of all reported assets and
liabilities which represent financial instruments (none of which are
held for trading purposes) approximate the carrying values of such
amounts.

CASH EQUIVALENTS:

For purposes of the statement of cash flows, cash equivalents include
all highly liquid debt instruments with original maturities of three
months or less which are not securing any corporate obligations.

PROPERTY AND EQUIPMENT:

Property and equipment are valued at cost. Depreciation and
amortization are being provided by use of the straight-line and
accelerated methods over the estimated useful lives of the assets.

DEFERRED REVENUE RELATING TO MAINTENANCE SERVICES:

The Company offers maintenance services which, in most instances,
cover a period of less than one year. The amount of deferred revenue,
as presented in the financial statements, represents amounts collected
from maintenance services which have not yet been rendered as of June
30, 1996.

(2) INCOME TAXES:

Effective July 1, 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income Taxes", the
effect of which was immaterial to the Company's financial statements.

DEFERRED INCOME TAXES

Temporary differences between the financial statement carrying amounts and
tax bases of assets and liabilities that give rise to significant portions
of the deferred income tax assets and liabilities are as follows:

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996

Deferred tax assets:
Net operating loss carryforwards $ 137,766
Deferred revenue 46,881
----------

Subtotal 184,647

Deferred tax liability - difference between
cash and accrual method of accounting 48,728
----------

Subtotal 135,919
Valuation allowance (135,919)
----------

Net deferred taxes $ -
----------
----------

Income tax benefits are recognized only when their realization is assured.
Accordingly, potential future income tax benefits resulting from net
operating losses incurred to date are not reflected in the financial
statements.

NET OPERATING LOSS CARRYFORWARDS

The Company has available $344,416 in federal net operating loss
carryforwards, which can be used to offset future taxable income until
expiration in various years through 2004. The potential tax benefit
related to these carryforwards will not be recognized in income by the
Company until realized, and therefore an allowance of $135,919, equal to
the estimated amount of the net deferred tax assets and liability booked by
the Company, has been established at June 30, 1996. Upon change in control
(see note 10), there will be significant limitations on the utilization of
this carryforward.

PAYMENTS

Income taxes paid amounted to $7,918 during the year ended June 30, 1996.

(3) ACCOUNTS RECEIVABLE:

Included in accounts receivable at June 30, 1996 is approximately $43,000
due from one customer. Sales to this customer amounted to approximately
$369,000 for the year ended June 30, 1996.

(4) PROPERTY AND EQUIPMENT:

A summary is as follows:

Computers $ 536,900
Office furniture and equipment 275,478
---------

812,378
Less accumulated depreciation and amortization 674,270
---------

$ 138,108
---------
---------

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996

(5) ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

A summary is as follows:

Purchases and services $ 137,800
Accrued vacation 104,072
Accrued salaries and wages 50,416
401(k) contributions payable 20,827
Customer deposit 10,000
Payroll taxes payable 3,984
Sales tax payable 3,513
Income tax payable 3,500
Accrued commission and other expenses 2,030
---------

$ 336,142
---------

Approximately $87,000 of the accounts payable and accrued expenses balance
is owed to two suppliers. Purchases from these suppliers amounted to
approximately $230,000 for the year ended June 30, 1996. Also included in
accounts payable and accrued expenses is approximately $71,000 payable to
related parties who are also officer-stockholders of the Company.

(6) 401(K) CONTRIBUTORY PROFIT SHARING PLAN:

The Company initiated a contributory 401(k) profit sharing plan effective
January 1, 1996, whereby eligible employees can make contributions. The
employer may make annual discretionary contributions. Employer
contributions for the year ended June 30, 1996 amounted to $8,139. At June
30, 1996, the Company is holding $17,464 in employee deferrals. These
amounts are included in accounts payable and accrued expenses.

At June 30, 1996, the Plan's net assets available for distribution amounted
to approximately $282,000.

(7) NOTES PAYABLE, OFFICER-STOCKHOLDERS:

A summary is as follows:

12% note payable, officer-stockholder, secured by
58,333 shares of the Company's common stock,
payable in monthly installments of $4,000, including
interest, through August 1, 2007 $ 294,225

12% note payable, officer-stockholder, secured by
25,000 shares of the Company's common stock,
payable in monthly installments of $3,340, including
interest, through February 1, 2001 142,528
---------

436,753
Less current maturities 37,199
---------

$ 399,554
---------
---------

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996

The following is a schedule, by years, of principal payments due under the
notes:

Year ending June 30,
1997 $ 37,199
1998 42,417
1999 47,990
2000 53,858
2001 46,639
Beyond five years 208,650
---------

$ 436,753
---------
---------

Total interest paid amounted to $58,213 for the year ended June 30, 1996,
of which $56,946 relates to the above notes payable, officer-stockholders
and the balance represents interest paid to other parties.

(8) COMMITMENTS:

The following is a schedule by years of future minimum rental payments
required under operating leases that have noncancellable lease terms in
excess of one year as of June 30, 1996:

TOTAL OFFICE * EQUIPMENT
Year ending June 30,
1997 $ 91,380 $ 71,784 $ 19,596
1998 91,380 71,784 19,596
1999 91,380 71,784 19,596
2000 31,560 11,964 19,596
2001 3,898 - 3,898
--------- --------- --------

$ 309,598 $ 227,316 $ 82,282
--------- --------- --------
--------- --------- --------

* The office lease is personally guaranteed by an officer-stockholder.

Rent expense under all leases amounted to $89,955 for the year ended June
30, 1996.

(9) PRIOR PERIOD ADJUSTMENT:

The beginning of the year deficiency has been restated for correction of
errors in the recording of maintenance service fees and accrued vacation.

(10)ACQUISITION BY INCOMNET, INC.:

On February 26, 1997, Incomnet, Inc. ("Incomnet") entered into a Letter of
Intent to acquire a controlling interest in the Company ("CIC") on terms
set as follows:

- Incomnet will acquire 100% of the holdings in CIC of shareholders Jerry
Buckley, Ralph Flygare, Robert Reisbaum, E.V. Schmidt and the remaining
minority investors in separate transactions.

- Incomnet will purchase the stock CIC owned by Jerry Buckley and Ralph
Flygare for total consideration of $608,290 per person, including
interest, to be paid in monthly installments

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 1996

commencing 12 months after the transaction closes ("Close") as
follows: $10,000 per month for the first 12 months and $13,563.58
for the next 36 months.

- Upon the Close, Incomnet will assume the loan owed by CIC to Mr.
Buckley of $300,000 and the loan owed by CIC to Mr. Flygare of
$150,000. Incomnet will immediately pay off one-half of the
outstanding loan balances to Mr. Buckley and Mr. Flygare. Mr.
Buckley will receive $150,000 and Mr. Flygare will receive $75,000.
Commencing 12 months after the Close, Incomnet will pay off the
balance of the loan in 12 monthly installments of $13,500 each to
Mr. Buckley and $6,750 each to Mr. Flygare, commencing one year
after the Close, based upon loan balances of $300,000 owed to Mr.
Buckley and $150,000 owed to Mr. Flygare. Payments will be adjusted
accordingly should the balances be different.

- Incomnet will provide to Mr. Buckley a consulting contract for a
period of two (2) years at an annual fee of $120,000, plus the
Company's standard medical coverage now being provided to Mr.
Buckley. The contract will require Mr. Buckley's services for 40
hours per week. Payment of the contract will be spread over four
years at a rate of $5,000 per month.

- Incomnet will reorganize CIC's Board of Directors. Jerry Buckley
will be appointed as a Board member, along with two members named by
Incomnet.

- Incomnet will agree to invest into CIC approximately $750,000 over a
period of 18 months to expand CIC's sales and marketing and software
development capabilities.

- Incomnet will agree to create a stock option program for the
directors, employees and key consultants to CIC that will allow such
personnel to participate in the appreciation of the value of CIC.

The above offer is subject to the following contingencies:

- The stock purchase transactions are consummated with Robert
Reisbaum, E.V. Schmidt and the remaining minority investors.

- Eric Hoffberg agrees to serve as the General Manager of CIC.

- Mike Ewing agrees to serve as CIC's Vice President of Sales and
Marketing, reporting to Mr. Hoffberg.

- CIC undergoes financial and software audits by firms named by
Incomnet to verify CIC's value as represented by CIC's management,
including, but not limited to: that CIC's revenues for 1996 are
approximately $2.5 million, that CIC's earnings for 1996 are
approximately $100,000, that CIC has no long-term debts other than
the loans to Mr. Buckley and Mr. Flygare of approximately $300,000
and $150,000, that CIC has no short-term debts that would be
inconsistent with its revenues and earnings, that CIC properly owns
all of the software products to which it claims ownership, that CIC
has no outstanding litigation or other potential claims against the
Company or other liabilities that is disclosed in its financial
statements, that CIC has a stable base of customers with a minimum
of 80% having no plans to switch to a new software provided, and
that CIC's software performs as claimed by CIC.

- Incomnet will prepare definitive purchase agreements for the shares
owned by Mr. Buckley and Mr. Flygare upon successful completion of
the due diligence.

- The purchase is subject to final review and approval of Incomnet's
Board of Directors, Jerry Buckley, Ralph Flygare and, if required,
CIC's Board of Directors.

Board of Directors
California Interactive Computing, Inc.
Valencia, California

We have reviewed the accompanying balance sheet of California Interactive
Computing, Inc. as of December 31, 1996, and the related statements of
operations and deficiency and cash flows for the six months then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of
the Board of Directors and management of California Interactive Computing,
Inc.

A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such
an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.

/s/ STONEFIELD JOSEPHSON
- ------------------------

ACCOUNTANCY CORPORATION

Santa Monica, California
April 21, 1997

CALIFORNIA INTERACTIVE COMPUTING, INC.

BALANCE SHEET - DECEMBER 31, 1996

ASSETS

CURRENT ASSETS:
Cash $ 6,648
Accounts receivable, net of allowance
for doubtful accounts of $12,000 354,116
Prepaid expenses 3,142
--------
Total current assets $363,906

PROPERTY AND EQUIPMENT, net of
accumulated depreciation and amortization 130,136

DEPOSITS 11,842
--------
$505,884
--------
--------
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
Accounts payable and accrued expenses $323,117
Deferred revenue 78,001
Note payable, officer-stockholder 22,000
Current portion of long-term notes payable,
officer-stockholders 39,958
--------
Total current liabilities $463,076

NOTES PAYABLE, OFFICER-STOCKHOLDERS 382,098

STOCKHOLDERS' DEFICIENCY:
Common stock; 200,000 shares authorized,
88,371 shares issued and 111,630 shares outstanding 5,700
Deficiency (344,990)
--------
Total stockholders' deficiency (339,290)
--------
$505,884
--------
--------

See accompanying accountants' review report and notes to financial statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.

STATEMENT OF OPERATIONS AND DEFICIENCY

SIX MONTHS ENDED DECEMBER 31, 1996

Amount Percent
--------- -------
NET SALES $ 986,985 100.0%
COST OF SALES 656,866 66.6
--------- ------
GROSS PROFIT 330,119 33.4

OPERATING EXPENSES 430,430 43.6
--------- ------
NET LOSS (100,311) (10.2)%
------
------
DEFICIENCY, beginning of period (244,679)
---------
DEFICIENCY, end of period $(344,990)
---------
---------

See accompanying accountants' review report and notes to financial statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.

STATEMENT OF CASH FLOWS

SIX MONTHS ENDED DECEMBER 31, 1996

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
Net loss $ (100,311)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED FOR) OPERATING ACTIVITIES -
depreciation and amortization $ 23,160

CHANGES IN ASSETS AND LIABILITIES:
DECREASE IN ASSETS:
Accounts receivable 103,846
Prepaid expenses 63

DECREASE IN LIABILITIES:
Accounts payable and accrued expenses (13,025)
Deferred revenue (39,202)
--------------

Total adjustments 74,842
--------------

Net cash used for operating activities (25,469)

CASH FLOWS USED FOR INVESTING ACTIVITIES -
payments to acquire property and equipment (15,188)

CASH FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:
Proceeds from note payable, officer-stockholder 22,000
Payments on notes payable, officer-stockholders (14,697)
--------------

Net cash provided by financing activities 7,303
--------------
NET DECREASE IN CASH (33,354)
CASH, beginning of period 40,002
--------------

CASH, end of period $ 6,648
--------------
--------------

See accompanying accountants' review report and notes to financial statements.

CALIFORNIA INTERACTIVE COMPUTING, INC.
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

BUSINESS ACTIVITY:

The Company sells computer hardware and software and offers
installation, consulting, and repairs and maintenance services to its
customers throughout the United States.

USE OF ESTIMATES:

FAIR VALUE:

CASH EQUIVALENTS:

PROPERTY AND EQUIPMENT:

Property and equipment are valued at cost. Depreciation and
amortization are being provided by use of the straight-line and
accelerated methods over the estimated useful lives of the assets.

DEFERRED REVENUE RELATING TO MAINTENANCE SERVICES:

(2) INCOME TAXES:

DEFERRED INCOME TAXES

CALIFORNIA INTERACTIVE COMPUTING, INC
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 1996

Deferred tax assets:
Net operating loss carryforwards $ 137,766
Deferred revenue 31,200
------------

Subtotal 168,966

Deferred tax liability - difference between
cash and accrual method of accounting 43,584
------------

Subtotal 125,382
Valuation allowance (125,382)
------------

Net deferred taxes $ --
------------

NET OPERATING LOSS CARRYFORWARDS

The Company has available $344,416 in federal net operating loss
carryforwards as of June 30, 1996, which can be used to offset future
taxable income until expiration in various years through 2004. The
potential tax benefit related to these carryforwards will not be recognized
in income by the Company until realized, and therefore an allowance of
$125,382, equal to the estimated amount of the net deferred tax assets and
liability booked by the Company, has been established at December 31, 1996.

PAYMENTS

Income taxes paid amounted to $800 during the six months ended December 31,
1996.

(3) ACCOUNTS RECEIVABLE:

Included in accounts receivable at December 31, 1996 is approximately
$111,000 due from two customers. Sales to these customers amounted to
approximately $271,000 for the six months ended December 31, 1996.

(4) PROPERTY AND EQUIPMENT:

A summary is as follows:

Computers $ 552,088
Office furniture and equipment 275,478
------------

827,566
Less accumulated depreciation and amortization 697,430
------------

$ 130,136
------------
------------

CALIFORNIA INTERACTIVE COMPUTING, INC.

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED DECEMBER 31, 1996

(5) ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

A summary is as follows:

Purchases and services $119,070
Accrued vacation 97,679
Payroll taxes payable 49,863
401(k) contributions payable 43,165
Accrued salaries and wages 9,573
Income tax payable 3,500
Sales tax payable 267
--------
$323,117
--------
--------

Approximately $22,000 of the accounts payable and accrued expenses balance
is owed to two suppliers. Purchases from these suppliers amounted to
approximately $41,000 for the six months ended December 31, 1996. Also
included in accounts payable and accrued expenses is approximately $65,000
payable to related parties who are also officer-stockholders of the
Company.

(6) 401(K) CONTRIBUTORY PROFIT SHARING PLAN:

The Company initiated a contributory 401(k) profit sharing plan effective
January 1, 1996, whereby eligible employees can make contributions. The
employer may make annual discretionary contributions. Employer
contributions for the six months ended December 31, 1996 amounted to
$8,342. At December 31, 1996, the Company is holding $36,048 in employee
deferrals. These amounts are included in accounts payable and accrued
expenses.

At December 31, 1996, the Plan's net assets available for distribution
amounted to approximately $341,000.

(7) NOTES PAYABLE, OFFICER-STOCKHOLDERS:

A summary is as follows:

12% note payable, officer-stockholder, secured by
58,333 shares of the Company's common stock,
payable in monthly installments of $4,000,
including interest, through August 1, 2007 $289,295

12% note payable, officer-stockholder, secured by
25,000 shares of the Company's common stock,
payable in monthly installments of $3,340,
including interest, through February 1, 2001 132,761
--------
422,056
Less current maturities 39,958
--------
$382,098
--------
--------

CALIFORNIA INTERACTIVE COMPUTING, INC.

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED DECEMBER 31, 1996

The following is a schedule, by years, of principal payments due under the
notes:

Year ending June 30,
1997 $ 22,502
1998 42,417
1999 47,990
2000 53,858
2001 46,639
Beyond five years 208,650
--------
$422,056
--------
--------

Total interest paid amounted to $26,909 for the six months ended December
31, 1996, of which $25,776 relates to the above notes payable, officer-
stockholders and the balance represents interest paid to other parties.

(8) COMMITMENTS:

The following is a schedule by years of future minimum rental payments
required under operating leases that have noncancellable lease terms in
excess of one year as of December 31, 1996:

Year ending June 30, Total Office* Equipment
-------- -------- ---------
1997 $ 45,690 $ 35,892 $ 9,798
1998 91,380 71,784 19,596
1999 91,380 71,784 19,596
2000 31,560 11,964 19,596
2001 3,898 - 3,898
-------- -------- -------
$263,908 $191,424 $72,484
-------- -------- -------
-------- -------- -------

* The office lease is personally guaranteed by an officer-stockholder.

Rent expense under all leases amounted to $47,755 for the six months ended
December 31, 1996.

(9) ACQUISITION BY INCOMNET, INC.:

On February 26, 1997, Incomnet, Inc. ("Incomnet") entered into a Letter of
Intent to acquire a controlling interest in the Company ("CIC") on terms
set as follows:

- Incomnet will acquire 100% of the holdings in CIC of shareholders Jerry
Buckley, Ralph Flygare, Robert Reisbaum, E.V. Schmidt and the
remaining minority investors in separate transactions.

- Incomnet will purchase the stock CIC owned by Jerry Buckley and Ralph
Flygare for total consideration of $608,290 per person, including
interest, to be paid in monthly installments

CALIFORNIA INTERACTIVE COMPUTING, INC.

NOTES TO FINANCIAL STATEMENTS

SIX MONTHS ENDED DECEMBER 31, 1996

commencing 12 months after the transaction closes ("Close") as
follows: $10,000 per month for the first 12 months and $13,563.58
for the next 36 months.

- Incomnet will reorganize CIC's Board of Directors. Jerry Buckley
will be appointed as a Board member, along with two members named by
Incomnet.

- Incomnet will agree to invest into CIC approximately $750,000 over a
period of 18 months to expand CIC's sales and marketing and software
development capabilities.

- Incomnet will agree to create a stock option program for the
directors, employees and key consultants to CIC that will allow such
personnel to participate in the appreciation of the value of CIC.

The above offer is subject to the following contingencies:

- The stock purchase transactions are consummated with Robert
Reisbaum, E.V. Schmidt and the remaining minority investors.

- Eric Hoffberg agrees to serve as the General Manager of CIC.

- Mike Ewing agrees to serve as CIC's Vice President of Sales and
Marketing, reporting to Mr. Hoffberg.

- Incomnet will prepare definitive purchase agreements for the shares
owned by Mr. Buckley and Mr. Flygare upon successful completion of
the due diligence.

- The purchase is subject to final review and approval of Incomnet's
Board of Directors, Jerry Buckley, Ralph Flygare and, if required,
CIC's Board of Directors.

INCOMNET, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

On May 2, 1997, Incomnet, Inc. (the "Company") acquired 88,370.5 shares
representing 100% of the outstanding common stock of California Interactive
Computing, Inc. (CIC), a private corporation headquartered in Valencia,
California, for a cash purchase price of $1,758,302, which will be paid over
a period of five years. In addition, the Company assumed loans totaling
$418,528 made to CIC by two of CIC's former shareholders, which will be paid
over a period of three years. In connection with the acquisition, CIC
entered into an employment agreement for $240,000 for a period of two years
with Jerry C. Buckley, CIC's former president and CEO, and has agreed to
provide 10,000 and 20,000 stock options, respectively, in CIC to two former
shareholders when a plan is established for CIC's officers, directors,
employees and key consultants.

The acquisition will be accounted for as a purchase, with the assets acquired
and liabilities assumed recorded at fair values, and the results of CIC's
operations included in the Company's consolidated financial statements from
the date of acquisition.

The accompanying condensed consolidated financial statements illustrate the
effect of the acquisition ("Pro Forma") on the Company's financial position
and results of operations. The condensed consolidated balance sheet as of
December 31, 1996 is based on the historical balance sheets of the Company
and CIC as of that date and assumes the acquisition took place on that date.
The condensed consolidated statements of income for the year ended December
31, 1996 are based on the historical statements of income of the Company and
CIC for those periods. The pro forma condensed consolidated statements of
income assume the acquisition took place on January 1, 1996.

The pro forma condensed consolidated financial statements may not be
indicative of the actual results of the acquisition. In particular, the pro
forma condensed consolidated financial statements are based on management's
current estimate of the allocation of the purchase price, the actual
allocation of which may differ.

The accompanying condensed consolidated pro forma financial statements should
be read in connection with the historical financial statements of the Company
and CIC.

INCOMNET, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

DECEMBER 31, 1996
(in thousands)

Incomnet CIC Adjustments Pro Forma
-------- --- ----------- ---------

ASSETS

Current assets:
Cash and cash equivalents $ 2,214 $ 7 $ (250)(1) $ 1,971
Accounts receivable 13,137 339 13,476
Notes receivable-current 323 -- 323
Notes receivable-officers 438 -- 438
Inventories 2,760 -- 2,760
Other current assets 1,332 3 1,335
-------- ----- -------

Total current assets 20,204 349 20,303

Property and equipment, net 14,357 130 14,487
Patent rights, net 1,241 - 1,241
Goodwill, net 4,542 - 1,638 (1) 6,180
Investments, notes receivable
and other assets 243 12 255
-------- ----- -------
Total assets $ 40,587 $ 491 $ 42,466
======== ===== =======

LIABILITIES, MINORITY INTEREST AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 14,746 $ 323 $15,069
Accrued expenses 8,217 - 8,217
Notes payable-current 3,918 62 (62)(1) 3,918
Deferred income 4,040 78 4,118
-------- ----- ------

Total current liabilities 30,921 463 31,322

Other long-term liabilities 1,040 382 1,450 (1) 2,872

Shareholders' equity
Common stock 61,320 6 61,326
Preferred stock 2,355 - 2,355
Treasury stock (5,492) - (5,492)
Accumulated deficit (49,557) (360) (49,917)
-------- ----- ------
Total shareholders' equity 8,626 (354) 8,272
-------- ----- ------
Total liabilities and
shareholders' equity $ 40,587 $ 491 $42,466
======== ===== ======

See notes to pro forma consolidated financial statements (unaudited).

INCOMNET, INC. AND SUBSIDIARIES

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

YEAR ENDED DECEMBER 31, 1996
(in thousands, except per share amounts)

Incomnet CIC Adjustments Pro Forma
-------- --- ----------- ---------

Net Sales $ 106,905 $ 2,288 $ 109,193

Operating costs and expenses 158,422 2,338 $ 205(2) 160,966
---------- -------- ----------

Operating (loss) (51,517) (50) (51,773)

Income taxes (benefit) (7,812) - (7,812)
---------- --------

Loss before minority interest (43,705) (50) (43,961)
and extraordinary items

Minority interest 6,906 - 6,906

Extraordinary items (877) - (877)
---------- -------- ----------

Net (loss) $ (37,676) $ (50) $ (37,932)
---------- -------- ----------
---------- -------- ----------

Loss per common share and
common share equivalents:

Loss before extraordinary items $ (2.75) $ (2.75)
Cumulative effect of accounting
change (0.07) (0.07)
---------- ----------

Net (loss) per share $ (2.82) $ (2.82)
---------- ----------
---------- ----------

Weighted average common
shares and common share
equivalents outstanding 13,370 13,458
---------- ----------
---------- ----------

See notes to pro forma consolidated financial statements (unaudited).

INCOMNET, INC. AND SUBSIDIARIES

NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)

(1) The pro forma adjustments to the condensed consolidated balance sheet to
reflect the acquisition of CIC and to record the corresponding notes payable
are detailed as follows:

At the date of the transaction, the Company paid $249,818 to the former
shareholders of CIC, with $84,818 paid to acquire CIC's stock and $165,000
paid to reduce the balance of loans owed to the two former CIC shareholders.
To pay off the remaining balances to acquire the stock and to pay off the
loans, the Company has signed promissory notes with four former shareholders
of CIC. These notes are at an interest rate of 8% per annum. The
outstanding balances owed on these notes can be repaid at any time, which
would lower the total amount of scheduled payments, including interest.

Schedule of payments and purchase price at net present value:

Cash Net present value
Payments (discounted at 8%)
-------- ------------------
Cash paid at closing $ 84,818 $ 84,818

Payment first year 27,859 27,859

Months 13-24 369,136 303,179

Months 25-36 514,662 422,699

Months 37-48 574,572 436,948

Months 49-60 514,662 362,396
-------- ----------

$1,637,899
----------
----------

(2) The pro forma adjustments to the condensed consolidated statements of
income are as follows:

Adjustments to operating costs and expenses:

To record interest expense on notes payable
($1,553,084 x 8%) $124,246
To record goodwill amortization ($1,637,899 / 20 years) 81,895
--------
$206,141
--------
--------