Independent Auditor's Report



The Board of Directors and Shareholders
Net Lnnx, Inc. 
West Palm Beach, Florida 


We have audited the accompanying consolidated balance sheet of
Net Lnnx, Inc. as of December 31, 1997, and the related
consolidated statements of operations, shareholders' equity, and
cash flows for the years ended December 31, 1997 and 1996.  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 in the first
paragraph present fairly, in all material respects, the
consolidated financial position of Net Lnnx, Inc. as of December
31, 1997, the results of its consolidated operations and cash
flows for years ended December 31, 1997 and 1996 in conformity
with generally accepted accounting principles. 




March 20, 1998
Boynton Beach, Florida


<PAGE>


                         NET LNNX, INC.
                  CONSOLIDATED BALANCE SHEET
                       December 31, 1997


ASSETS

Current assets:
    Cash and cash equivalents                  $    33,171
    Loan receivables - related parties              10,500
    Loan receivable - Palm Capital                  50,000
    Prepaid expenses                                 1,550

       Total current assets                         95,221


Property and equipment (net)                         7,405


                                               $   102,626 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Accounts payable and accrued expenses        $    24,731

Stockholders' equity:
  Preferred stock - no par value,
    5,000,000 shares authorized,
    no shares issued or outstanding
  Common stock - no par value,
    20,000,000 authorized,            
    2,200,000 issued and outstanding                 1,000
  Additional paid-in capital                     1,687,936        
  Retained deficit                              (1,611,041)

       Total stockholders' equity                   77,895

                                               $   102,626


The accompanying notes are an integral part of these financial
statements.




                              -2-


<PAGE>

                         NET LNNX, INC.
             CONSOLIDATED STATEMENTS OF OPERATIONS
          For the Years ended December 31, 1997 and 1996


<TABLE>
<CAPTION>
                                     1997            1996
<S>                                <C>             <C>
Operating revenues                 $    -          $   -

Operating expenses                    735,077        376,848

                                     (735,077)      (376,848)
Other income:
   Installment sale income              8,388          -
   Interest income                     27,985          -

                                       36,373          -

Operating loss from continuing
  operations                       (  698,704)     (  376,848)
   
Discontinued operations:  

   Loss from operations of
    discontinued operations        (      665)     (   33,429)
   Loss from disposal of
    discontinued operations        (  457,559)     (   45,000)
                                   (  458,234)     (   78,429)
Net loss                          $(1,156,928)    $(  445,277)


Basic loss per share:
   Loss from continuing
    operations                    $(    0.33)     $(    0.28)
   Loss from discontinued
    operations                    $(    0.00)     $(    0.03)
   Loss from disposal of
    discontinued operations       $(    0.22)     $(    0.03)
   Net basic loss per share       $(    0.55)     $(    0.34)  

Number of shares used in
 earnings per common share
 computation                       2,108,945       1,330,099

</TABLE>






The accompanying notes are an integral part of these financial
statements.



                               -3-

<PAGE>


                         NET LNNX, INC.
        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
        For the Years Ended December 31, 1997 and 1996 


<TABLE>
<CAPTION>

                                                              Additional   Retained
                                       Common      Stock        Paid-In    Earnings
                                       Shares      Amount       Capital    (Deficit)      Total
<S>                                   <C>         <C>         <C>          <C>            <C>

Balance at January 1, 1996            3,300,000   $  1,000        -        $    1,164     $    2,164
 Reverse 1 for 20 spilt of stock     (3,135,000)  
 Exchange stock for a 55% interest
 In subsidiary                          942,959                 267,910                      267,910
 Common stock issued for stock           60,000                 205,000                      205,000
 Common stock exchanged for 
  professional fees                     251,095                 203,375                      203,375
    Common stock exchanged for
      Subsidiary's debt                  53,572                 220,000                      220,000
    Net loss                               -         -             -       (  455,277)    (  455,277)
Balance at December 31, 1996          1,472,626     1,000       896,285    (  454,113)       443,172

  Common stock issued for cash          500,000                 200,000                      200,000
   Common stock exchanged for
    professional fees                   227,374                 591,651                      591,651
  Net loss                                 -         -           -        ( 1,156,928)   ( 1,156,928)

Balance at December 31, 1997          2,200,000  $  1,000   $ 1,687,936   $(1,611,041)   $    77,895

</TABLE>





The accompanying notes are an integral part of these financial
statements.






                             -4-

<PAGE>


                        NET LNNX, INC.
            CONSOLIDATED STATEMENTS OF CASH FLOWS
        For the Years Ended December 31, 1997 and 1996





<TABLE>
<CAPTION>

                                              1997              1996
<S>                                         <C>              <C>
Cash flows from operating activities:
  Net income                                $(1,156,928)     $  (455,277)
  Adjustments to reconcile net income
    to net cash provided by (used for)
    operating activities:
      Depreciation                                3,376            1,660
      Professional fees
        exchanged for common stock              591,651          203,375  
      Subsidiary's debt exchanged for
        common stock                                             220,000
      Acquisition of subsidiary                                  267,910
      Net assets of discontinued
        operations                              450,400         (450,400)
      Changes in operating assets
        and liabilities:
          Loans receivable - related
            parties                             (10,500)
          Loan receivable - Palm
            Capital                             (50,000)
          Prepaid expenses                       (1,550)
          Accounts payable                      (18,866)          36,866
          Accrued expenses                        2,187            4,544
            Net cash used for operating
              activities                       (190,230)        (171,322)  
        
Cash provided by investing activities
  Acquisition of equipment                       (1,643)         (10,798)
  Proceeds from issuance of common stock        200,000          205,000
            Net cash provided by
              investing activities              198,357          194,202

Net increase in cash                              8,127           22,880

Cash, beginning of year                          25,044            2,164

Cash, end of year                            $   33,171       $   25,044

</TABLE>




Supplemental disclosure:   none



The accompanying notes are an integral part of these financial
statements.




                                -5-
<PAGE>


                           NET LNNX, INC.
                   NOTES TO FINANCIAL STATEMENTS

                        December 31, 1997


   1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Purpose  - Net Lnnx, Inc. (the "Company") was
organized as Chester County Security Fund, Inc. ("Chester")
December 31, 1988 under the laws of Pennsylvania as a wholly
owned subsidiary of Corporate Investment Company ("CIC").  On
May 5, 1989, CIC distributed the outstanding stock of Chester to
its shareholders as a one-share stock for stock dividend. 
Chester was a holding company conducting virtually no operations
other than its efforts to seek merger partners.

In January, 1996, the Company in a stock for stock exchange,
acquired a majority interest in Communications/USA, Inc.  The
Company also formed a wholly owned subsidiary, TrueNet, Inc. 
After the Company acquired and formed its subsidiaries, it
changed its name to Net Lnnx, Inc. and had a 1 for 20 reverse
stock split. 

Basis of Presentation  -  The accompanying financial statements
for 1997 are not consolidated as all subsidiaries were disposed
of during 1997. In prior years, the financial statements
included the accounts of the Company and all of its
subsidiaries.  All significant intercompany accounts and
transactions were eliminated.

Cash and Cash Equivalents  -  Represents actual balances in
banks or invested in liquid short-term investments with
maturities of three months or less when purchased.  All of the
balances are owned by the Company and are not encumbered in any
manner.

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 amounts reported in the financial statements and
accompanying notes.  Management believes that the estimates
utilized in preparing its financial statements are reasonable
and prudent.  Actual results could differ from those estimates.

Property and Equipment  -  Property and equipment are recorded
at cost.  The equipment is depreciated over its estimated useful
life.  Repairs and maintenance are expensed.

Fair Value of Financial Instruments  -  The fair value of the
Company's financial instruments such as accounts receivable and
accounts payable approximate their carrying value.

Compensated Absences  -  Compensated absences have not been
accrued, as they cannot be reasonably estimated.

Stock-Based Compensation  -  The Company accounts for
stock-based awards using the intrinsic value method in
accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"). 
Accordingly, no compensation cost has been recognized for its
stock options.  The Company provides additional pro forma
disclosures as required under Statement of Financial Accounting
Standard, No. 123, "Accounting for Stock-Based Compensation"
("FAS 123").


                            -6-

<PAGE>


                       NET LNNX, INC.
               NOTES TO FINANCIAL STATEMENTS


   1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes -  The Company accounts for income taxes on an
asset and liability approach to financial accounting.  Deferred
income tax assets and liabilities are computed annually for
temporary differences between the financial statement and tax
bases of assets and liabilities that will result in taxable or
deductible amounts in the future based on enacted tax laws and
rates applicable to the periods in which the differences are
expected to affect taxable income.  Valuation allowances are
established when necessary to reduce deferred tax assets to the
amount expected to be realized.  Income tax expense is the tax
payable or refundable for the period plus or minus the change
during the period in deferred tax assets and liabilities.

Loss per Share  -  The Company has adopted Financial Accounting
Standards No. 128, "Earnings per Share" ("FAS 128"), effective
October 1, 1997.  FAS 128 requires presentation of earnings or
loss per share on basic and diluted earnings per share.  The
company has potentially dilutive shares, however, because the
Company has a loss, the shares are deemed anti-dilutive and only
basic loss per share is presented.  Loss per share is computed
by dividing net income by the weighted average number of shares
outstanding during the period.  Restatement of the prior period
for this pronouncement had no effect on the loss per share
amounts.


   2.DISPOSITION OF OPERATIONS

Communications/USA, Inc.   -   On January 31, 1997, the
shareholders of the Company approved a Purchase Agreement dated
January 17, 1997 with Palm Capital, Inc. ("Palm") to sell to
Palm all of the Company's investment in Communications/USA, Inc.
("CUSA")  (the "Transaction").  

As consideration for the CUSA sale, Palm agreed to deliver to
the Company all of the Company's stock, options, and other
rights to the Company's common stock held by Palm and its
shareholders, plus the sum of $500,000, secured by 1,250,000
shares of CUSA's common stock.  The $500,000 was payable in cash
of $25,000 and a promissory note of $475,000 with interest at
7%.  Palm also agreed to the assumption of CUSA's liabilities.

During 1997, Palm sold all its CUSA stock.  The Company filed a
suit against Palm to collect the note that was in default.  On
January 26, 1998, the litigation was settled for $190,000.  The
Company charged to loss from disposal of discontinued operations
$408,959 and $45,000 in 1997 and 1996, respectively. The loss
for 1997 consisted of the write-down of the assets and other
expenses.
 
TrueNet, Inc.  -  On January 31, 1997, the Company entered into
a sale and purchase agreement with Banana Corporation, Inc.
("BCI") to sell to BCI 100% of the common stock and assets of
the Company's wholly owned subsidiary, TrueNet.  As
consideration, BCI transferred to the Company 10% (100,000
shares) of BCI's common stock.  In May 1997, BCI declared
bankruptcy.  The Company charged to loss from disposal of
discontinued operations $48,600 in 1997.



                            -7-

<PAGE>


                       NET LNNX, INC.
               NOTES TO FINANCIAL STATEMENTS


   3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

                                         1997          1996

       Computer Equipment               $ 7,441       $ 5,798
       Office furniture and fixtures      5,000         5,000

                                         12,441        10,798

       Less accumulated depreciation      5,036         1,660

                                        $ 7,405       $ 9,138


Depreciation expense for the 1997 and 1996 was $3,376 and $1,660
respectively.


   4.CHANGES IN STOCKHOLDER'S EQUITY

In 1997,  the Company exchanged stock for various professional
fees and services.  The value of the services was set by the
market value that its common stock was trading at the time of
the exchanges ranging from $ .125 to $ .875 per share.  

In 1996, 60,000 shares of common stock were issued for $205,000
in cash from an officer and director. Services valued at
$203,375 were exchanged for 251,095 shares of stock valued at
the market value of stock at the time of issue ranging from $
 .875 to $ 3.20 per share.  Debt of the subsidiary was exchanged
for 53,572 shares of stock, which was the value of the debt of
$220,000. 


   5.STOCK OPTION PLAN 

On January 20, 1997, the Company adopted a Restricted Stock
Plan, known as the 1997 Restricted Stock Plan ("the Plan"). 
Officers and directors of the Company and related corporations
may be granted nonqualified options to purchase up to 500,000
shares of the common stock of the Company.  The Plan terminates
January 20, 2006 unless extended by the Company.  The exercise
price of the nonqualified options granted under the Plan shall
in no event be less than the lesser of (1) the book value per
share of common stock as of the end of the fiscal year of the
Company immediately preceding the date of such grant, or (2) 50
percent of the fair market value per share of common stock on
the date of such grant.



                            -8-

<PAGE>


                       NET LNNX, INC.
                 NOTES TO FINANCIAL STATEMENTS


   5.STOCK OPTION PLAN (continued)

A summary of the stock option activity for 1997 under the
current plan is as follows:

<TABLE>
<CAPTION>
                                                Option Price Per Share
                                    Stock                         Weighted
                                    Options          Range         Average
<S>                                 <C>       <C>                 <C>
     Balance at January 1, 1997
       Granted                      400,000   $ 0.200 to $ 0.875  $ 0.706
       Exercised                        -          -          -       -
       Cancelled                        -          -          -       -

     Balance at December 31, 1997   400,000   $ 0.200 to $ 0.875  $ 0.706

</TABLE>

In accordance with APB 25 and related interpretations, no
compensation expense has been recognized for its stock based
compensation.  Possible compensation cost for the Company's
stock options has been determined based upon the fair value at
the grant date consistent with the Black-Scholes methodology
prescribed under FASB 123.  The Company did not recognize
compensation expense because the market price of the shares had
decreased to the point the shares do not generated expense under
the Black-Scholes formula.

The fair value of these options was estimated at the date of
grant with a Black-Scholes option pricing model using a dividend
yield of  0%, estimated volatility of 0%, a risk-free interest
rate of 6.42%, and an expected life of ten (10) years.


6.  INCOME TAXES

The Company has had no taxable income for the years ended
December 31, 1997, 1996, and 1995, and as a result, has recorded
no tax expense.  The Company recorded deferred tax assets
resulting from net operating losses of $606,743 and $171,931 in
1997 and 1996, respectively less a valuation allowance of the
same amount for each year.  The Company had available net
operating loss carry forwards of approximately $1,612,400 that
expire as follows: $200 in 2010, $455,300 in 2011 and $1,156,900
in 2012.


7. SUBSEQUENT EVENT

In January of 1998, the Company redeemed 175,000 stock options,
which had been granted but not exercised.  The redeemed price
was $ .20 for a total of $35,000 which will be recorded as
compensation in 1998.



                              -9-

<PAGE>

                         NET LNNX, INC.
                 NOTES TO FINANCIAL STATEMENTS


8.  CONTINUING OPERATIONS

The accompanying financial statements have been presented in
accordance with generally accepted accounting principles, which
assume the continuity of the Company as a going concern.  The
Company has no operations but continues to incur expenses.  With
the settlement of lawsuits, the Company has cash to operate for
the near future, however, its ability to continue is dependent
on obtaining a merger partner.  The Company has entered into
negotiations, but no agreement has been signed as of the date of
this financial statement.














                             -10-