U.S. SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549

                              FORM 10-KSB

(Mark One)
 X   Annual report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [Fee Required]

          For the fiscal year ended December 31, 1997.

     Transition report under Section 13 or 15(d) of the Securities
     Exchange Act of 1934 [No Fee Required]

          For the transition period        to       .

Commission File No. 0-18303                                            

LEC TECHNOLOGIES, INC. (formerly known as Leasing Edge Corporation)   
            (Name of small business issuer in its charter)

   Delaware                                          No. 11-2990598   
  (State or other jurisdiction of           (I.R.S. Employer Identifi-
   incorporation or organization)            cation No.)

6540 South Pecos Road, Suite 103, Las Vegas NV         89120          
  (Address of principal executive offices)           (Zip Code)

Issuer's telephone number                  (702) 454-7900             
(Including area code)

Securities registered under Section 12(b) of the Exchange Act:  
     None

Securities registered under Section 12(g) of the Exchange Act:
     Common Stock, Par Value $0.01 Per Share
     Series A Convertible Preferred Stock
     Common Stock Purchase Warrants
     Class C Common Stock Purchase Warrants
     Class D Common Stock Purchase Warrants

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes X  No   .

Check if there is no disclosure in this form of delinquent filers in
response to Item 405 of Regulation S-B, and if no disclosure will be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB.  [X]

State issuer's revenues for its most recent fiscal year: $30,714,624

State the aggregate market value of the voting stock held by non-
affilates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a
specified date within the past 60 days:  As of February 27, 1998, the
the approximate market value of the common stock (based upon the NASDAQ
closing price of $0.75 of stated shares on that date) held by non-
affiliates was $3,225,614.

State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:  As of February 27,
1998, the issuer had 4,704,069 shares of common stock, par value $0.01
per share, outstanding.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format:  Yes[ ]  No[X] 

                            AMENDMENT NO. 1

THE REGISTRANT HEREBY AMENDS ITS ANNUAL REPORT ON FORM 10-KSB FOR THE
YEAR ENDED DECEMBER 31, 1997 TO AMEND AND RESTATE ITEM 13 IN ITS
ENTIRETY IN ORDER TO ADD ELECTRONIC COPIES OF CERTAIN EXHIBITS
PREVIOUSLY FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP EXEMPTION









               LEC TECHNOLOGIES INC. AND SUBSIDIARIES
                   1997 ANNUAL REPORT ON FORM 10-KSB
                           TABLE OF CONTENTS                         
<TABLE>
<CAPTION>                                                            
                                                                 PAGE
<S>                                                              <C>
PART I

     Item 1.   DESCRIPTION OF BUSINESS                            2
     Item 2.   DESCRIPTION OF PROPERTY                            8  
     Item 3.   LEGAL PROCEEDINGS                                  8
     Item 4.   SUBMISSION OF MATTERS TO A VOTE OF
                    SECURITY HOLDERS                              9

PART II

     Item 5.   MARKET FOR COMMON EQUITY AND RELATED
                    STOCKHOLDER MATTERS                           9  
     Item 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                    PLAN OF OPERATION                            10  
     Item 7.   CONSOLIDATED FINANCIAL STATEMENTS                 15
     Item 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                    ON ACCOUNTING AND FINANCIAL DISCLOSURE       42   

PART III

     Item 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                    CONTROL PERSONS; COMPLIANCE WITH SECTION
                    16(a) OF THE EXCHANGE ACT                    43

     Item 10.  EXECUTIVE COMPENSATION                            44
     Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS  
                    AND MANAGEMENT                               45
     Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     Item 13.  EXHIBITS AND REPORTS ON FORM 8-K                  46
</TABLE>

















                                PART I

ITEM 1:   DESCRIPTION OF BUSINESS

General

LEC Technologies, Inc. and subsidiaries (collectively, the "Company" or
"LEC") is a technology services company, providing solutions that help
organizations reduce technology cost and risk, primarily through the
leasing, distribution and remarketing of high technology equipment.
Such equipment generally consists of midrange computer systems,
telecommunications systems, system peripherals (terminals, printers,
communications controllers, etc.) and point-of-sale systems.

As an independent organization, the Company provides customers with
technical, financial and product alternatives, irrespective of hardware
platform or manufacturer.  In addition to working with its customers to
develop strategies governing when to acquire equipment, upgrade existing
equipment and order new equipment to take advantage of current
technology, LEC also acts as an outlet for the equipment being
displaced.

LEC's business is diversified by customer, customer type, equipment
type, equipment manufacturer, and geographic location of its customers
and subsidiaries.  The Company's customers include "Fortune 1000"
corporations or companies of similar size as well as smaller
corporations.  A significant portion of the Company's business is with
long-term, repeat customers.  Three customers of the Company, Tiffany &
Co., Bed, Bath & Beyond and The Hertz Corporation, respectively,
accounted for approximately 15.0%, 9.2%, 3.7%, and 25.0%, 12.8% and 7.4%
of consolidated revenues for the years ended December 31, 1997 and 1996.
However, the Company does not believe its businesses are dependent on
any single customer or on any single source for the purchasing, selling
or leasing of equipment.

The Company's services are organized into three groups of related
businesses, and are provided generally through separate business units,
although there is a significant amount of interrelated activities.  The
three business groups are as follows:

     Leasing Services:  Leasing, remarketing, financial engineering,
     consulting and third-party maintenance and systems integration
     services for midrange systems, telecommunications equipment, point-
     of-sale systems and system peripherals.  The Company conducts its
     leasing services business under the trade name Leasing Edge
     Corporation.

     Distribution Services:  Sale of terminals, printers, communications
     controllers, supplies, technical consulting and third-party
     maintenance services.  Business units comprising distribution
     services are Superior Computer Systems, Inc. ("SCS") and Pacific
     Mountain Computer Products, Inc. ("PMCPI"), wholly-owned
     subsidiaries of LEC Technologies, Inc.

     Remarketing Services:  Remarketing of previously leased equipment,
     displaced equipment, and used equipment purchased from other
     lessors or brokers.  This unit also has consignment relationships
     with certain customers to assist such organizations in the sale of
     their used equipment.  Business units comprising remarketing
     services include Leasing Edge Corporation, SCS, PMCPI and Atlantic
     Digital International ("ADI"), a wholly-owned subsidiary of LEC
     Technologies, Inc., which specializes in the acquisition and
     remarketing of used computer equipment on both a domestic and
     international basis.        

The Company's leasing operations are conducted primarily through its
principal office in Las Vegas, Nevada and its distribution and
remarketing operations are conducted primarily through its subsidiaries'
offices located in Minneapolis, Minnesota, Woodland Hills, California
and Atlanta, Georgia.

Each business unit is directed by its own management team and has its
own sales and operations support personnel.  Each management team
reports directly to the Office of the President, which is responsible
for overall corporate control and coordination, as well as strategic
planning.  Coordination of the business units is also accomplished
through shared services, such as legal, risk management and accounting.

The business units maintain their own direct marketing force to manage
their customer base and to market their own as well as other units'
services.  In its business operations, the Company attempts to cross-
sell services where and when appropriate.
  
The Company was founded in 1980 under the name TJ Computer Services,
Inc. ("TJCS").  In 1989, all of the outstanding common stock of TJCS was
acquired by Harrison Development, Inc., an inactive public corporation
organized in Colorado, which then changed its name to TJ Systems
Corporation.  In October 1991, the Company reincorporated in the State
of Delaware and in June 1995 changed its name to Leasing Edge
Corporation.  In March 1997, the Company's shareholders approved a
change in the Company's name to LEC Technologies, Inc. to more
accurately reflect the evolving nature of the Company's business.  The
executive offices of the Company are located at 6540 S. Pecos Road,
Suite 103, Las Vegas, Nevada, 89120, and its telephone number is (702)
454-7900. 


Forward-Looking Statements

Statements about the Company's expectations, including future revenues,
earnings, its ability to compete effectively and to maintain market
share, to adapt to changes in its customers' technology requirements,
and all other statements in this Report on Form 10-KSB, including
Management's Discussion and Analysis or Plan of Operation and Note 11 of
Notes to Consolidated Financial Statements "Management's Plans",  and
other Company communications other than historical facts, are "forward-
looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Act of 1934, and the
Company intends that such forward-looking statements be subject to the
safe harbors created thereby.  Since these statements involve risks and
uncertainties and are subject to change at any time, the Company's
actual results could differ materially from expected results.  Reference
is made to "Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995" in Item 6 of this Report on Form 10-KSB.
     

Leasing Services

Management estimates that the world-wide market for high technology
equipment approximates $400 billion annually and that approximately ten
percent represents leasing activities.  The computer equipment leasing
industry consists of many products and services loosely divided into
several major submarkets.  These submarkets include mainframe and
midrange computer equipment, microcomputer sales and network design,
local area networks, point-of-sale equipment, disaster recovery services
and other engineering and technical support services.  The Company
believes that the size of the computer equipment leasing market reflects
the rapid technological improvements in and the development of new
equipment as well as the advantages that leasing offers over equipment
purchasing, including off-balance sheet financing,  lower monthly
payments and cash requirements, protection against technological
obsolescence and ease of disposal of equipment at the end of the lease
term.

Historically, the industry was dominated by the manufacturers of
mainframe computer equipment and their captive or related leasing
companies.  However, the introduction of new and more powerful
microcomputers offering increased capability at reduced prices has led
to an increase in the demand for midrange and microcomputer hardware,
software, accessories and related services.  Business users are
employing, at an increasing rate, midrange and microcomputer networks to
perform applications previously requiring a mainframe computer.  This
increase in technological capability and the relatively high cost of
mainframe systems has resulted in a fundamental shift in the demand for
information systems and services, creating new opportunities for more
efficient, flexible and competitive lessors and distributors of midrange
and microcomputers and related equipment.

The Company's structured lease transactions provide customers with a
full range of new and used data processing equipment, including midrange
central processing units, peripherals, point-of-sale systems and
telecommunications equipment produced by major manufacturers.  By
emphasizing a full range of products and manufacturers and by
maintaining a balanced client base, the Company maximizes its leasing
opportunities while providing stability to its lease portfolio.  Through
its leasing transactions, the Company serves as an intermediary between
end users of high technology equipment and sources of financing for
equipment purchases.

The Company purchases new equipment directly from the manufacturer and
obtains used equipment from its customer base and from the nationwide
secondary market for used data processing and telecommunications
equipment.  Management's experience in the secondary market, coupled
with the Company's portfolio of equipment under lease, enables the
Company to tailor systems to customer's specific needs by combining new
and used equipment configurations at competitive prices.  Similarly, the
Company is often able to facilitate new lease transactions by either
buying, remarketing or trading in a prospective customer's existing
equipment.

A significant amount of the equipment leased by the Company consists of
equipment manufactured by IBM, including computer systems, such as
midrange central processing units, and computer peripherals, such as
disk and tape drives, control units, printers, and work stations.  The
Company considers the leasing of IBM equipment to be generally
advantageous because of the large national IBM customer base and
equipment aftermarket, IBM's policy of supporting its users with
software and maintenance services, and IBM's reputation in the computer
equipment marketplace.

In a typical leasing transaction, the Company cultivates a customer
relationship, develops an understanding of the customer's requirements
and then delivers what the customer needs in the form of an advantageous
lease financing structure.  The terms and conditions of the lease are
negotiated and, if accepted by the customer, a master lease agreement is
executed and the equipment to be leased is secured either from a
manufacturer, reseller or from the Company's inventory.  The Company
arranges nonrecourse financing secured by the equipment by selling the
future lease rentals on a discounted basis.  The discount rate reflects
the credit standing of the lessee, the length of the lease and the total
amount financed.  The Company typically receives between 85% and 95% of
its equipment cost through nonrecourse financing.  The difference
between the cost of the equipment and the amount received through the
nonrecourse financing is referred to as the Company's "equity position"
in the equipment.  The Company usually finances its equity position in
a lease through internally generated funds and recourse bank borrowings.
The Company retains ownership of the equipment during the term of the
lease.  Upon expiration of the lease term, the Company seeks to maximize
the realization of the residual value of the leased equipment through
its remarketing activities on either a wholesale or retail basis.

Equipment lease terms generally range from monthly to five years, with
data processing and telecommunications equipment leases typically
spanning two to four years.  Additions to the lease portfolio frequently
result from a competitive bidding process.  Substantially all leases are
noncancelable, require the lessee to protect the equipment, at their
cost,  with the manufacturer's maintenance contract and place the risk
of loss or damage to the equipment on the lessee. 
                                  
The Company believes it provides its clients with superior customer
service and creative solutions for their data processing,
telecommunications and technical support needs.  The Company develops
close partnership relationships with its customers; by listening
carefully, the Company's management and employees are better able to
understand the Company's customers' complex data processing requirements
and deliver quick response, high impact and competitively priced
solutions appropriate for each environment and circumstance.  Close
client relationships and the expertise and experience of management
allow the Company to assist customers in their leasing decisions
regarding data processing or other technological equipment.  The Company
frequently participates, early on, in a customer's decision-making
process regarding the type of equipment to acquire to meet its needs and
also helps in developing a customized leasing structure.  The Company
believes that this strategy leads to customer satisfaction, encourages
a loyal customer base and contributes to repeat business.

The Company offers to customers a full range of new and used computer
and telecommunications equipment manufactured by a variety of major
manufacturers, including IBM, Unisys, AT&T, Sun Microsystems, DEC and
Tandem.  Over the last few years, the Company has strategically
diversified its lease portfolio to include equipment such as computer
storage hardware, point-of-sale and telecommunications equipment; the
Company believes these to be less susceptible to rapid technological
obsolescence than large computer central processing units.  The Company
further believes that an expanded equipment base mitigates the risks of
obsolescence associated with a specific type of equipment, as well as
reducing the Company's reliance on any one particular manufacturer.

The Company's leasing customers are generally creditworthy corporations
and other organizations that have significant data processing and tele-
communication needs.  These financial profiles allow the Company to
structure lower rate, long-term nonrecourse financing transactions with
various financial institutions on competitive terms.  Moreover, non-
recourse financing limits the Company's financial exposure on lease
transactions, thereby further enabling the Company to expand its lease
portfolio and customer base.


Distribution Services

Management estimates that the distribution market for the products
offered by its distribution subsidiaries, SCS and PMCPI, is
approximately $225 million annually.  The principal products offered by
SCS and PMCPI are midrange peripheral equipment, including TWINAX and
COAX terminals, ASCII terminals, desktop and network printers, emulation
boards, remote controllers and network adapters.  In addition to
equipment sales, the Company's distribution subsidiaries provide
customers with technical consulting and third-party maintenance
services.

Approximately 70 percent of the distribution subsidiaries' revenues
related to new equipment are derived from sales to resellers and
approximately 30 percent represents direct sales to end users.  Both SCS
and PMCPI secure their end-user customers through cold calls, referrals,
trade journal advertising and the cross-selling of the Company's leasing
customers.  Reseller customers are primarily generated through a nation-
wide on-line system and direct advertising via facsimile machine.

Both SCS and PMCPI are IBM Business Partners and Authorized
Distributors; PMCPI also has contractual relationships with Lexmark
Printer Company, IDEAssociates, Perle Systems, DataSouth Corporation,
Hewlett Packard Corporation and BOS.  SCS and PMCPI are highly dependent
on their suppliers, the manufacturers.  Most manufacturers extend terms
of net 30 days or provide an inventory line of credit for purposes of
ordering equipment.  Any event of default on any credit facility offered
by a manufacturer could materially and adversely affect the Company's
ability to acquire equipment for resale.

In May of 1997, SCS and IBM Printing Systems Company ("PSC") entered
into a letter agreement whereby SCS agreed to manage PSC's Try-Buy
Program (the "Try-Buy Program").  The Try-Buy Program allows qualified
prospective purchasers of certain PSC printers to test such printers for
a sixty-day trial period.  At the end of such period, the user may
return the printer(s) to SCS or purchase the trial unit(s).  In the
event of a return, SCS may sell the unit "as is" to a different customer
or refurbish the unit for future use under the Try-Buy Program.  The
Company believes that PSC's selection of SCS as the Try-Buy Program
manager demonstrates PSC's confidence in SCS' ability to deliver PSC's
products on a timely basis as well as SCS' technical expertise in
addressing customer inquiries during the trial period. 

Remarketing Services

The Company's remarketing services consist of the remarketing of
previously leased equipment, displaced equipment, and used equipment
purchased from other lessors and brokers.  Each of the Company's
business units (Leasing Edge Corporation, SCS, PMCPI and ADI) engage in
remarketing activities primarily related to their respective businesses,
although specific sales often result from coordinated efforts.  In
addition to the remarketing of IBM peripheral equipment, SCS also has
consignment relationships with certain customers to assist such
organizations in the disposal of their displaced equipment.  ADI cur-
rently specializes in the acquisition and remarketing of Digital
Equipment Corporation equipment on both a domestic and an international
basis.  The Company intends to expand ADI's product offering in 1998 to
include equipment manufactured by Sun Microsystems, IBM and Hewlett
Packard. 


Competition

The Company competes as a lessor and as a dealer of new and used
computer and selected other high technology equipment with different
firms, many of which are larger and better known than the Company and
which possess substantially greater financial resources than that of the
Company.  While its competitive methodologies will vary by business
unit, in general, the Company competes mainly on the basis of terms
offered in its transactions, its quick response and reliability in
meeting its commitments, its manufacturers' independence, its long-term
relationships with its customers and its ability to develop and offer
alternative solutions and options to high technology equipment users.  

The Company's competition with respect to leasing services includes
equipment manufacturers such as IBM, AT&T, DEC and Amdahl, other
equipment dealers, brokers and leasing companies (including captive or
related leasing companies of IBM and AT&T) as well as financial
institutions, including branches or divisions of national, regional and
local commercial banks and other commercial lending firms.  The Company
also competes with other small, independent leasing companies as well as
individuals and firms that act as leasing brokers and other
institutions.  Primarily as a result of rapid technological changes,
competition has increased in the leasing industry and the number of
companies offering competitive services, such as technical consulting
and other high technology equipment leasing, has increased.  Competitive
alliances have also impacted the leasing industry.  Management believes
that the level of competition will continue to increase in the future. 

SCS and PMCPI compete with other authorized distributors of midrange
peripherals as well as equipment manufacturers.  In the IBM terminal
distribution market, SCS and PMCPI are two of the six authorized IBM
distributors.   All authorized distributors receive identical discounts
for their products, so the Company and its competitors have equal
opportunity to sell such products.  Many times, availability of product
in inventory is a determining factor in a sale.  SCS and PMCPI compete
primarily on the basis of product knowledge, price, availability and
their long standing customer relationships.

ADI competes with numerous other used equipment brokers and dealers as
well as with the remarketing activities of lessors.  ADI competes
primarily on the basis of price and relationship selling.

Other

The Company does not own any patents, trademarks, licenses or franchises
which would be considered significant to the Company's business.

The Company's business is not seasonal, however, quarter-to-quarter
results from operations can vary significantly.

The amount of backlog orders is not significant to an understanding of
the Company's business.

The Company is not required to carry significant amounts of inventory
either for delivery requirements or to assure continuous availability of
equipment related to its leasing operations.  With respect to the
Company's distribution operations, product availability is often a
significant factor in generating sales.   

At December 31, 1997, the Company had 48 full-time employees.  None of
the Company's employees is represented by a union.  The Company believes
that relations with its employees are good.

ITEM 2:   DESCRIPTION OF PROPERTY

The Company leases approximately 5,250, 10,000, 7,500 and 1,100 square
feet of office and warehouse space in Las Vegas, NV, Minneapolis, MN,
Woodland Hills, CA and Atlanta, GA, respectively, under lease agreements
expiring individually through 2002.  Each respective lease agreement
requires the Company to pay all costs of operations, including real
property taxes, in addition to the basic rent.  All of the Company's
leased properties are in good condition.


ITEM 3:  LEGAL PROCEEDINGS

There are no pending legal proceedings which require disclosure pursuant
to Item 103 of Regulation S-B.


ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.


                               PART II  


ITEM 5:   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock trades on the Nasdaq SmallCap tier of The
Nasdaq Stock Market under the symbol LECE.  The following table sets
forth the high and low sales price quotations of the Company's common
stock for the periods indicated.

<TABLE>
<CAPTION>
                                1997                     1996
     Fiscal Quarter        HIGH      LOW            HIGH      LOW 
     <S>                  <C>       <C>            <C>       <C>
     First Quarter        $1.25     $0.88          $2.94     $1.56
     Second Quarter       $1.50     $0.63          $2.75     $1.38
     Third Quarter        $1.44     $0.75          $2.38     $1.69
     Fourth Quarter       $1.19     $0.59          $2.00     $1.00
</TABLE>

As of February 27, 1998 the Company had approximately 425 shareholders
of record.

The Company has not previously paid cash dividends on its common stock
and does not intend to pay such dividends for the foreseeable future.
The Company's Second Loan Modification Agreement, effective February 5,
1998, (the "Second Loan Modification Agreement") with Bank of America
National Trust and Savings Association ("Bank of America") also
restricts the payment of such dividends.

In September of 1997, the Company sold 156,250 shares of common stock at
a price of $0.80 per share to an accredited investor.  The sale of such
securities was exempt from registration under the Securities Act of
1933, as amended, pursuant to Section 4(2) thereof and Regulation D
promulgated thereunder.

American Stock Transfer & Trust Company, 40 Wall Street, New York, NY
10022 is the Company's registrar and transfer agent with respect to its
common stock and preferred stock and registrar, transfer agent and
warrant agent with respect to the Company's warrants.  

ITEM 6:   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

The Company's services are organized into three groups of related
businesses, and are provided generally through separate business units,
although there is a significant amount of interrelated activities.  The
three business groups are as follows:

     Leasing Services:  Leasing, remarketing, financial engineering,
     consulting and third-party maintenance and systems integration
     services for midrange systems, telecommunications equipment, point-
     of-sale systems and system peripherals.  The Company conducts its
     leasing services business under the trade name Leasing Edge
     Corporation.

     Distribution Services:  Sale of terminals, printers, communications
     controllers, supplies, technical consulting and third-party
     maintenance services.  Business units comprising distribution
     services are SCS and PMCPI, wholly-owned subsidiaries of LEC
     Technologies, Inc.

     Remarketing Services:  Remarketing of previously leased equipment,
     displaced equipment, and used equipment purchased from other
     lessors or brokers.  This unit also has consignment relationships
     with certain customers to assist such organizations in the sale of
     their used equipment.  Business units comprising remarketing
     services include Leasing Edge Corporation, SCS, PMCPI and ADI, a
     wholly-owned subsidiary of LEC Technologies, Inc., which
     specializes in the acquisition and remarketing of used computer
     equipment on both a domestic and international basis.       
                                 

Accounting Practices

     Accounting Classification of Leases:  Reported earnings are
significantly impacted by the accounting classification of leases.  The
Company's lease portfolio is comprised of sales-type, direct financing
and operating leases.  The Company classifies each lease at inception in
accordance with Statement of Financial Accounting Standards No. 13, as
amended and interpreted.  Sales-type and direct financing leases are
those leases which transfer substantially all of the costs and risks of
ownership of the equipment to the lessee.  Operating leases are those
leases in which substantially all of the benefits and risks of ownership
of the equipment are retained by the lessor.

     The accounting treatment and resulting impact on the financial
statements differs significantly during the term of the lease, depending
on the type of lease classification.  Under sales-type leases, the
present value of the minimum lease payments calculated at the rate
implicit in the lease is recorded as revenue and the cost of the
equipment less the present value of the estimated unguaranteed residual
value is recorded as leasing costs at lease inception.  Consequently, a
significant portion of the gross profit on the lease transaction is
recognized at lease inception.  Under direct financing leases, the
excess of the aggregate minimum lease payments plus the estimated
unguaranteed residual over the cost of the equipment is recorded as
unearned interest income at lease inception.  Such amount is then
recognized monthly over the lease term as a constant percentage of the
related asset.  There are no costs and expenses related to direct
financing leases since revenue is recorded on a net basis.  Under
operating leases, the monthly lease rental is recorded as revenue
ratably over the lease term.  The cost of the related equipment is
recorded as leased assets and is depreciated over the lease term to the
estimated unguaranteed residual value.  Regardless of the classification
of a lease transaction and the resultant accounting treatment during the
lease term, the aggregate gross profit recognized during the lease term
is identical.

     Residual Values:  The Company's cash flow depends to a great extent
on its ability to realize the residual value of leased equipment after
the initial term of the lease by re-leasing or selling such equipment.
The Company's financial results would be materially and adversely
affected if the residual value of the equipment could not be realized
when returned to the Company because of technological obsolescence or
for any other reason.  Estimated residual values for leased equipment
vary, both in amount and as a percentage of the original equipment cost,
depending upon many factors, including the type and manufacturer of the
equipment, the Company's experience with the type of equipment and the
term of the lease.  In estimating future residual values, the Company
relies on both its own experience and upon third-party estimates of
future market value where available.  The Company reviews its estimated
residual values at least annually and reduces them as necessary.  At the
time of expiration of a lease, the Company remarkets the equipment and
records the proceeds from the sale (in the event of a sale) or the
present value of the lease rentals (in the event of a sales-type lease)
as revenue and records the net book value of the related equipment as a
cost of sale or lease.

For a description of the Company's other accounting practices, see Note
1 of Notes to Consolidated Financial Statements.  The following analysis
of the Company's financial condition and operating results should be
read in conjunction with the accompanying consolidated financial
statements including the notes thereto.


Results of Operations
   
Year Ended December 31, 1997 Compared to Year Ended December 31, 1996

Revenues

Total revenues from leasing operations decreased 7.7% from $14,178,580
for the year ended December 31, 1996 to $13,085,616 for the year ended
December 31, 1997, a decrease of $1,092,964.  The decrease in revenues
is primarily due to the 1996 renewal, upgrade and consolidation of
several existing operating leases into a smaller number of new leases,
three of which were accounted for as sales-type leases pursuant to SFAS
No. 13 (see Note 2 of Notes to Consolidated Financial Statements for a
description of the Company's lease accounting policies).  As compared to
other lease transactions, sales-type leases result in a greater
percentage of the related revenue and expense from the transaction being
recognized at lease inception.  Consequently, revenue recognized
subsequent to lease inception consists only of the finance income
element of the transaction.  During 1997, two similar renewal/upgrade
transactions were consumated, which resulted in the Company recording
revenue from sales-type leases of approximately $2.1 million.
Management anticipates that total revenues from leasing operations in
1998 when compared to 1997 will reflect a similar decrease.  The Company
does not expect to regularly enter into transactions of this size in the
future.

Revenue from the portfolio base of operating leases decreased 11.1% from
$9,694,905 for the year ended December 31, 1996 to $8,618,861 for the
year ended December 31, 1997, a decrease of $1,076,044.  The decrease in
operating lease revenue is due primarily to a change in the mix of
leases written, principally as a result of the lease renewals referred
to previously.  The Company anticipates that the majority of its 1998
lease additions will be classified as either direct financing leases or
as operating leases.

Distribution sales, representing the activity of ADI, SCS and PMCPI,
increased 150.2% from $7,038,154 for the year ended December 31, 1996 to
$17,612,586 for the year ended December 31, 1997, an increase of
$10,574,432.  The increase in distribution sales was due primarily to
the acquisition of SCS on November 1, 1996 and the formation of ADI in
January of 1997.  SCS' revenues for the two-month period ended December
31, 1996 were $1,478,792 as compared to revenues of $9,416,880 for the
twelve months ended December 31, 1997.  SCS and PMCPI are distributors
of computer peripherals and data communications equipment.


Costs and Expenses

Total costs from leasing operations decreased 16.6% from $12,631,385 for
the year ended December 31, 1996 to $10,535,365 for the year ended
December 31, 1997, a decrease of $2,096,020.  The decrease in total
costs from leasing operations was due primarily to a 1996 fourth quarter
charge of $889,000 to reduce the carrying amount of certain off-lease
equipment and the estimated unguaranteed residual values of equipment on
lease (see Note 16 of Notes to Consolidated Financial Statements) due to
changed market conditions together with a decrease in depreciation
expense on operating leases of $1,239,953.  The decrease in operating
lease depreciation was consistent with the decrease in operating lease
revenue.  Gross profit from leasing operations (total revenues from
leasing operations less total costs from leasing operations) increased
64.8% from $1,547,195 for the year ended December 31, 1996 to $2,550,251
for the year ended December 31, 1997, an increase of $1,003,056.  Gross
margin (gross profit from leasing operations as a percentage of total
revenues from leasing operations) increased to 19.5% from 10.9% due to
the foregoing.

Leasing costs associated with the portfolio base of operating leases
decreased 18.0% from $6,881,020 for the year ended December 31, 1996 to
$5,641,067 for the year ended December 31, 1997, a decrease of
$1,239,953.  The decrease in costs from this segment of the Company's
lease portfolio is due primarily to the lease renewals/upgrades
mentioned above which were accounted for as sales-type leases.  Gross
profit on operating leases increased 5.8% from $2,813,885 for the year
ended December 31, 1996 to $2,977,794 for the year ended December 31,
1997, an increase of $163,909.  Gross margin from operating leases
increased from 29.0% for the 1996 period to 34.5% for the 1997 period as
a result of the foregoing.

Direct sales costs (leasing costs with respect to the sale of off-lease
equipment and leases with dollar buyout options treated as sales)
increased 47.6% from $1,224,406 for the year ended December 31, 1996 to
$1,806,939 for the year ended December 31, 1997, an increase of
$582,533.  This increase in direct sales costs was directly related to
a year-to-year increase in the volume of leases coming to term.  Direct
sales costs decreased as a percentage of the related revenue to 96.0%
from 107.6%.  The decrease in costs as a percentage of revenue is due to
residual value realization more closely matching stated values in 1997
as compared to 1996.
 
Distribution cost of sales increased 137.2% from $6,190,582 for the year
ended December 31, 1996 to $14,686,695 for the year ended December 31,
1997, an increase of $8,496,113.  Distribution cost of sales relates to
the distribution sales of ADI, SCS and PMCPI.  The increase in
distribution cost of sales is directly related to the acquisition of SCS
in November of 1996 and the formation of ADI in January of 1997.  Gross
margin on distribution sales increased to 16.6% for the year ended
December 31, 1997 from 12.0% for the year ended December 31, 1996 due
primarily to an increase in the contribution margin generated from sales
of used equipment and sales of new equipment directly to end users.  In
both instances, the Company is able to realize higher margins than those
realized through sales to other resellers.

Selling, general and administrative expenses increased 33.2% from
$3,416,093 for the year ended December 31, 1996 to $4,549,586 for the
year ended December 31, 1997, an increase of $1,133,493.  The increase
in selling, general and administrative expenses was due primarily to the
acquisition of SCS and the formation of ADI.  

Interest expense on non-lease related indebtedness increased 54.3% from
$397,656 for the year ended December 31, 1996 to $613,447 for the year
ended December 31, 1997, an increase of $215,791.  The increase in
interest expense on non-lease related indebtedness was due primarily to
interest costs associated with inventory flooring arrangements at SCS
and an increase in the interest rate on the Company's outstanding
indebtedness to Bank of America from approximately 10.5% in 1996 to
approximately 12.5% in 1997 (see Liquidity and Capital Resources below
and Note 7 of Notes to Consolidated Financial Statements).



Net Income

As a result of the foregoing, the Company recorded net income of
$329,531 for the year ended December 31, 1997 as compared to a net loss
of $(1,398,316) for the year ended December 31, 1996.                
          

Liquidity and Capital Resources

In October of 1997, PMCPI and Merrill Lynch Business Financial Services,
Inc. ("Merrill Lynch") replaced PMCPI's prior line of credit (the
"Merrill Line of Credit") with a term note in the amount of $443,848
(the "Merrill Note").  The Merrill Line of Credit was replaced by the
Merrill Note in anticipation of the Company entering into a new $1.75
million revolving line of credit facility with Finova Capital
Corporation (the "Finova Line") that would have been secured by the
inventory and accounts receivable of both PMCPI and SCS.  Subsequent to
executing the Merrill Note, the Company reevaluated the terms and
conditions of the Finova Line and determined it was too costly and that
it did not sufficiently address the Company's liquidity needs.
Consequently, the Company is currently negotiating a reinstatement of
the prior line of credit with Merrill Lynch or, in the event the line of
credit is not reinstated, a term out of the remaining obligation. The
Merrill Note is guaranteed by the Company and is secured by inventory
and accounts receivable of PMCPI (collectively, the "Merrill
Collateral").  

On December 1, 1997, the remaining principal balance of approximately
$394,000 outstanding under the Merrill Note plus accrued interest became
due and payable.  As of March 27, 1998, PMCPI has not made the December
1, 1997 payment.  Although no demand for payment has been made by
Merrill Lynch to date, PMCPI is currently in payment default under the
terms of the Merrill Note and Merrill Lynch may exercise any of the
rights and remedies available to it under the Merrill Note, the original
agreements with respect to the Merrill Line of Credit, or otherwise
available to it at law or in equity.  Such rights and remedies include
demanding immediate payment from PMCPI or the Company (pursuant to the
Company Guarantee) of the amounts due under the Merrill Note and
foreclosure on the Merrill Collateral.  Although the Company believes
that its current negotiations with Merrill Lynch will be successful,
there can be no assurance that the Company will be successful in its
efforts to reinstate the Merrill Line of Credit or negotiate a term out
upon terms satisfactory to the Company.  In the event that Merrill Lynch
were to demand immediate payment by PMCPI or the Company of the amounts
due and payable under the Merrill Note, the financial condition and,
consequently, the operations of the Company could be materially and
adversely affected.

The Second Loan Modification Agreement governs the Company's debt
obligation due January 1, 1998 to Bank of America (the "Term Loan").  At
February 5, 1998, the amount of unpaid principal on the Term Loan was
$1,366,365 and the interest rate was 12.5%.  The terms of the Second
Loan Modification Agreement require the Company to make monthly pricipal
payments of $45,546 plus interest at the prime rate plus 400 basis
points from January 15, 1998 through June 15, 1998; monthly principal
payments of $72,873 plus interest at the prime rate plus 500 basis
points from July 15, 1998 through December 15, 1998; monthly principal
payments of $109,309 plus interest at the prime rate plus 600 basis
points from January 15, 1999 through May 15, 1999; and to pay all
remaining unpaid principal, accrued and unpaid interest, and any unpaid
fees and expenses on June 15, 1999.  The Term Loan is secured by all of
the personal property, tangible and intangible, of the Company and its
wholly-owned subsidiary, TJ Computer Services, Inc. (dba Leasing Edge
Corporation).  Restrictive covenants under the Second Loan Modification
Agreement include the maintenance of consolidated tangible net worth (as
defined) of at least $4.5 million; restrictions on the payment of cash
dividends on shares of the Company's common stock; restrictions on
incurring additional indebtedness and creating additional liens on the
Company's property; and limitations on unfinanced capital expenditures
(as defined).
         
In November of 1995, the Company entered into a letter agreement with
Excel Bank N.A. ("Excel") (formerly Union Chelsea National Bank) whereby
Excel agreed to make available to the Company a $250,000 line of credit
(the "Equity Line") to be used to fund the Company's equity investment
in certain leases discounted by Excel (i.e., the difference between the
cost of the leased equipment and the discounted present value of the
minimum lease payments assigned to Excel).  Borrowings under the Equity
Line are evidenced by term notes and require monthly payments of
principal and interest over a period equal to the term of the related
discounted lease with a final balloon payment of  between 30 and 50
percent depending on the lease term.  Interest rates on the term notes
are at the applicable discounted lease rate plus 1.75%.  In July of 1996
and December of 1997, Excel increased its maximum commitment under the
Equity Line to $1,000,000 and $2,500,000, respectively.  Such maximum
commitment is reduced by the amount of outstanding recourse discounted
lease rentals funded by Excel, a term note and an outstanding capital
lease obligation of approximately $258,030, $160,838 and $122,982,
respectively, at December 31, 1997.  At December 31, 1997, the Company
had outstanding term notes and available credit under the Equity Line of
$1,049,133 and $709,017, respectively.

On March 9, 1998, ADI entered into a $500,000 Revolving Credit Agreement
(the "ADI Credit Agreement") with Excel for general corporate purposes.
Pursuant to the ADI Credit Agreement, Excel has agreed, subject to
certain conditions, to make advances to ADI from time to time prior to
October 15, 1998 of up to $500,000.  Amounts repaid under the ADI Credit
Agreement may be reborrowed until October 15, 1998, the date that the
loans under the ADI Credit Agreement mature.  The loans under the ADI
Credit Agreement bear interest at the prime rate plus 2.5%.  Accrued
interest, if any, will be payable monthly, beginning on April 1, 1998.
The ADI Credit Agreement is guaranteed by the Company and is secured by
a lien on the receivables, inventory and equipment of ADI.  Under the
ADI Credit Agreement, ADI has agreed not to incur any additional
indebtedness or to create any additional liens on its property other
than under the ADI Credit Agreement.  Upon consumation of the ADI Credit
Agreement, Excel reduced its maximum commitment under the Equity Line to
$2,000,000 and transferred the $160,838 term note to the ADI Credit
Agreement.  As of March 27, 1998, loans in the amount of $330,263 were
outstanding under the ADI Credit Agreement.

Due to the fact that the equipment the Company leases must be paid for
by the Company prior to leasing, the Company requires a substantial
amount of cash for its leasing activities.  The Company's growth has
been significantly dependent upon its ability to borrow funds or raise
equity or debt financing to acquire additional equipment for lease.
Historically, the Company has derived most of the funds necessary for
the purchase of equipment from nonrecourse financing and the remainder
from internally generated funds, recourse indebtedness and existing
cash.  Consequently, the Company is continuously seeking debt and/or
equity financing to fund the growth of its lease portfolio.  However,
should the Company fail to receive additional equity financing or
refinance its existing debt in 1998, the Company's portfolio growth and
resultant cash flows could be materially and adversely affected.  In
addition, there is no assurance that financial institutions will
continue to finance the Company's future leasing transactions on a
nonrecourse basis or that the Company will continue to attract customers
that meet the credit standards of its nonrecourse financing sources or
that, if it receives such additional financing for future lease
transactions, it will be on terms favorable to the Company.  At December
31, 1997, the Company had approximately $917,656 in cash and
availability under the Equity Line.
    
At the inception of each lease, the Company establishes the residual
value of the leased equipment, which is the estimated market value of
the equipment at the end of the initial lease term.  The Company's cash
flow depends to a great extent on its ability to realize the residual
value of leased equipment after the initial term of its leases with its
customers.  Historically, the Company has realized its recorded
investment in residual values through (i) renegotiation of the lease
during its term to add or modify equipment; (ii) renewal or extension of
the original lease; (iii) leasing equipment to a new user after the
initial lease term; or (iv) sale of the equipment.  Each of these
alternatives impacts the timing of the Company's cash realization of
such recorded residual values.  Equipment may be returned to the Company
at the end of an initial or extended lease term when it may not be
possible for the Company to resell or re-lease the equipment on
favorable terms.  Developments in the high technology equipment market
tend to occur at rapid rates, adding to the risk of obsolescence and
shortened product life cycles which could affect the Company's ability
to realize the residual value of such equipment.  In addition, if the
lessee defaults on a lease, the financial institution that provided
nonrecourse financing may foreclose on its security interest in the
leased equipment and the Company may not realize any portion of such
residual value.  If the residual value in any equipment cannot be
realized after the initial lease term, the recorded investment in the
equipment must be written down, resulting in lower cash flow and reduced
earnings.  During 1997 and 1996, the Company reduced residual values and
off-lease equipment inventory by approximately $75,331 and $1,099,089,
respectively, to their net realizable values.  There can be no assurance
that the Company will not experience further material residual value or
inventory write-downs in the future.

The Company intends to continue to retain residual ownership of all the
equipment it leases.  As of December 31, 1997, the Company had a total
net investment in lease transactions of $23.0 million compared to $22.5
million as of December 31, 1996.  The estimated residual value of the
Company's portfolio of leases expiring between January 1, 1998 and
December 31, 2003 totals $9,106,063, although there can be no assurance
that the Company will be able to realize such residual value in the
future.  As of December 31, 1997, the estimated residual value of the
Company's portfolio of leases by year of lease termination was as
follows:

<TABLE>
<CAPTION>

     Year ending December 31, 

             <S>                       <C>  
             1998                      $ 3,726,363
             1999                        1,572,600
             2000                        3,067,000
             2001                          701,100
             2002 and thereafter            39,000     

               Total                   $ 9,106,063
</TABLE>                 

Leased equipment expenditures of $9,872,360 for the year ended December
31, 1997 were financed through the discounting of $10,530,281 of
noncancelable lease rentals to various financial institutions.  The
difference of $657,921 reflects the refinancing of existing leases
either at the end of their original lease term or in connection with a
renewal/upgrade.

Management recognizes that certain risks are inherent in the leasing
services portion of the Company's business.  Such risks and assumptions
include, but are not limited to, technological obsolescence associated
with equipment the Company currently has on lease or in inventory, the
estimated residual values of such equipment and the timing of the
Company's cash realization of such residual values.  In an effort to
mitigate such risks, management has implemented a plan to expand and
diversify the non-leasing portion of the Company's business.  The first
step of this plan was the acquisition of SCS in November of 1996.  As a
result of such acquisition, management was able to eliminate certain
redundant administrative tasks at PMCPI, thereby returning PMCPI to
profitability during 1997.  A second phase of the Company's strategy was
implemented in January of 1997 by the formation of ADI, which
contributed positive earnings to the Company's consolidated financial
results.  

The Company intends to continue to pursue its strategy of diversifying
the technology services it offers through the acquisition of parallel
businesses as well as the expansion of its current product offerings.
Accordingly, management believes that revenues from the leasing services
unit of the Company's operations will continue to decline as a
percentage of consolidated revenues, although management believes that
the dollar amount of such revenues will remain relatively constant over
the near term.  Management further recognizes that the Company must
generate additional resources or consider modifications of its expansion
plan.  To the extent the Company is unable to achieve its funding plan,
either through the cash realization of estimated lease residuals or the
negotiation of expanded credit facilities, management has contingency
plans which include curtailing the rate of its planned expansion
activities and reducing existing infrastructure costs.

Based on the Company's anticipated residual value realization, existing
credit availability under the Equity Line and the ADI Credit Agreement,
and the anticipated contribution margin from the Company's distribution
services units, management believes that the Company will have adequate
capital resources to continue its operations at the present level for at
least the next twelve months.  Management further believes that the
Company's existing credit lines will be renewed as they come due.     

The Company believes that inflation has not been a significant factor in
its business.

The Company is aware of the issues associated with the programming code
in existing computer systems as the millennium approaches.  Independent
of such issues, management of the Company has initiated an information
systems project to standardize all of the Company's hardware and
software systems.  The systems selected by management are Year 2000
compliant.  The implementation of such systems is anticipated to be
completed during 1998.  Management does not believe that such
implementation will have a significant effect on the Company's earnings.


Recently Issued Accounting Standards

In June of 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS No. 130").
SFAS No. 130 requires companies to classify items of other comprehensive
income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from
retained earnings and additional paid-in capital in the equity section
of a statement of financial position, and is effective for financial
statements issued for fiscal years beginning after December 15, 1997.
The Company is currently assessing the impact of SFAS No. 130 on the
Company's financial statements for the years ended December 31, 1997 and
1996 and believes that SFAS No. 130 will not result in comprehensive
income different from net income as reported in the accompanying
financial statements.

In June of 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosure About Segments of an Enterprise and
Related Information" ("SFAS No. 131").  SFAS No. 131 establishes
additional standards for segment reporting in financial statements and
is effective for fiscal years beginning after December 15, 1997.  The
Company is currently assessing the impact of SFAS No. 131 on the
Company's financial statements for the years ended December 31, 1997 and
1996. 


                    Safe Harbor Statement under the
           Private Securities Litigation Reform Act of 1995

Certain statements herein and in the future filings by the Company with
the Securities and Exchange Commission and in the Company's written and
oral statements made by or with the approval of an authorized executive
officer constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, and the Company intends that such
forward-looking statements be subject to the safe harbors created
thereby.  The words and phrases "looking ahead", "we are confident",
"should be", "will be", "predicted", "believe", "expect", and
"anticipate" and similar expressions identify forward-looking
statements.  These and other similar forward-looking statements reflect
the Company's current views with respect to future events and financial
performance, but are subject to many uncertainties and factors relating
to the Company's operations and business environment which may cause the
actual results of the Company to be materially different from any future
results expressed or implied by such forward-looking statements.
Examples of such uncertainties include, but are not limited to, changes
in customer demand and requirements, the mix of leases written, the
availability and timing of external capital, the timing of the Company's
realization of its recorded residual values, new product announcements,
continued growth of the semiconductor industry, trend of movement to
client/server environment, interest rate fluctuations, changes in
federal income tax laws and regulations, competition, unanticipated
expenses and delays in the integration of newly-acquired businesses,
industry specific factors and worldwide economic and business
conditions.  With respect to economic conditions, a recession can cause
customers to put off new investments and increase the Company's bad debt
experience.  The mix of leases written in a quarter is a direct result
of a combination of factors, including, but not limited to, changes in
customer demands and/or requirements, new product announcements, price
changes, changes in delivery dates, changes in maintenance policies and
the pricing policies of equipment manufacturers, and price competition
from other lessors.  The Company undertakes no obligation to publicly
update or revise any forward-looking statements whether as a result of
new information, future events or otherwise.








ITEM 7:   CONSOLIDATED FINANCIAL STATEMENTS

              INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                 PAGE

Independent Auditors' Report - KPMG Peat Marwick LLP              16

Consolidated Balance Sheets As Of December 31, 1997 and 1996      17

Consolidated Statements of Operations For The Years Ended        
     December 31, 1997 and 1996                                   19

Consolidated Statements of Cash Flows For The Years Ended        
     December 31, 1997 and 1996                                   20

Consolidated Statements of Stockholders' Equity For The
     Years Ended December 31, 1997 and 1996                       22

Notes To Consolidated Financial Statements                        23


The consolidated financial statements of the Company are filed under
this Item 7 pursuant to Regulation S-B.  Financial statement schedules
are omitted because either they are not required under the instructions,
are inapplicable, or the information is included elsewhere in the
financial statements.



























                     Independent Auditors' Report

The Stockholders and Board of Directors
LEC Technologies, Inc.

We have audited the accompanying consolidated balance sheets of LEC
Technologies, Inc. (formerly Leasing Edge Corporation) and subsidiaries
as of December 31, 1997 and 1996, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the
years then ended.  These consolidated financial statements are the
responsibility of the Company's management.  Our resonsibility 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.  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 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 financial position of LEC
Technologies, Inc. and subsidiaries as of December 31, 1997 and 1996,
and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles.



                  
                                             /s/ KPMG Peat Marwick LLP

Las Vegas, Nevada
March 27, 1998

















                LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                             December 31,   December 31,
                                                 1997           1996  
                                             -----------    ------------
<S>                                          <C>            <C>
ASSETS:
  Cash                                       $   208,639    $   412,340
  Receivables - net of allowance for
    doubtful accounts of $157,405 and
    $170,699 at December 31, 1997 and
    1996, respectively                         2,372,159      1,096,868
  Notes receivable - employees                   176,311        199,185
  Inventory, net of reserve for
    obsolescence of $102,102 and
    $816,290 at December 31, 1997 and
    1996, respectively                         2,039,685      2,210,674
  Investment in leased assets:
    Operating leases, net                     15,284,177     17,617,934
    Sales-type and direct financing leases     7,738,825      4,927,894
  Furniture and equipment - net of
    accumulated depreciation of
    $310,378 and $304,495 at December 31,
    1997 and 1996, respectively                  363,970        157,112
  Other assets                                   272,338        397,712
  Goodwill, net of accumulated
    amortization of $134,543 and $84,408
    at December 31, 1997 and 1996,
    respectively                                 617,496        667,631
                                              ----------     ----------
TOTAL ASSETS                                 $29,073,600    $27,687,350
                                              ==========     ==========
</TABLE>

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

                                                       (continued)













                LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                             December 31,   December 31,
                                                 1997           1996
                                            -----------     ------------

LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                          <C>            <C>
LIABILITIES:
  Accounts payable                           $ 3,823,522    $ 2,946,365
  Accrued liabilities                            492,325        401,569
  Notes payable and lines of credit            3,128,764      3,881,882
  Nonrecourse and recourse discounted
    lease rentals                             15,905,823     14,808,581
  Other liabilities                              244,796        410,763
                                              ----------     ----------
    TOTAL LIABILITIES                         23,595,230     22,449,160
                                              ----------     ----------

STOCKHOLDERS' EQUITY:
  Series A convertible preferred
    stock, $.01 par value; 1,000,000 shares
    authorized, 380,000 shares issued;
    229,016 shares outstanding                    2,290           2,290
  Common stock, $.01 par value; 25,000,000
    and 12,500,000 shares authorized,
    4,882,269 and 4,407,019 shares issued
    and 4,789,069 and 4,340,919 shares
    outstanding at December 31, 1997 and
    1996, respectively                           48,823          44,071
  Additional paid-in capital                 10,382,421      10,437,915
  Accumulated deficit                        (4,716,732)     (5,046,263)
                                             ----------      ----------
                                              5,716,802       5,438,013
  Common stock held in treasury, at
    cost; 93,200 and 66,100 shares at
    December 31, 1997 and 1996, respectively   (144,682)       (106,073)
  Notes receivable from stockholders            (93,750)        (93,750)
                                             ----------      ----------
    TOTAL STOCKHOLDERS' EQUITY                5,478,370       5,238,190
                                             ----------      ----------
    TOTAL LIABILITIES AND
      STOCKHOLDERS' EQUITY                  $29,073,600     $27,687,350
                                             ==========      ==========
</TABLE>

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




                LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>                         
                                             Years Ended December 31, 
                                            -------------------------
                                               1997           1996
                                            ----------    -----------
<S>                                        <C>            <C>
Revenues:
  Operating leases                         $ 8,618,861    $ 9,694,905
  Sales-type leases                          2,108,977      2,721,483
  Finance income                               475,140        285,121
  Direct sales                               1,882,638      1,137,686
  Other                                           -           339,385
                                            ----------     ----------
Total revenues from
  leasing operations                        13,085,616     14,178,580
Distribution sales                          17,612,586      7,038,154
Other                                           16,422         20,666
                                            ----------     ---------- 
Total revenues                              30,714,624     21,237,400
                                            ----------     ----------
Costs and expenses:
  Operating leases                           5,641,067      6,881,020
  Sales-type leases                          1,685,134      2,101,426
  Interest expense                           1,326,894      1,325,444
  Direct sales                               1,806,939      1,224,406
  Write down of inventory and
    residual values                             75,331      1,099,089
                                            ----------     ----------
Total costs from
  leasing operations                        10,535,365     12,631,385
Distribution cost of sales                  14,686,695      6,190,582 
Selling, general and
  administrative expenses                    4,549,586      3,416,093
Interest expense                               613,447        397,656
                                            ----------     ----------
Total costs and expenses                    30,385,093     22,635,716
                                            ----------     ----------
Income (loss) before
  income taxes                                 329,531     (1,398,316)
Provision for income taxes                        -              -   
                                            ----------     ---------- 
Net income (loss)                          $   329,531    $(1,398,316)
                                            ==========     ========== 
Earnings (loss) per common share           $      0.02    $     (0.45)
                                            ==========     ==========
Earnings (loss) per common share
  assuming dilution                        $      0.02    $     (0.45)
                                            ==========     ==========
</TABLE>
The accompanying notes are integral part of these consolidated financial
statements.

                                           LEC TECHNOLOGIES, INC. AND
SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY
                                       FOR THE YEARS ENDED DECEMBER 31, 1997
AND 1996
<TABLE>
<CAPTION>

                         Preferred Stock      Common Stock      Additional     
                     Notes Receiv-     Total
                        -----------------  -------------------   Paid-in   
Accumulated   Treasury     able From    Stockholders'
                         Shares   Amount    Shares     Amount    Capital      
Deficit      Stock     Stockholders    Equity
                        --------  -------  ---------  --------  ---------- 
------------  ----------  ------------  ------------
<S>                      <C>      <C>      <C>       <C>        <C>        <C> 
         <C>          <C>           <C>      
Balance at
 December 31, 1995       229,016  $ 2,290  3,132,319  $ 31,324  $9,526,259 
$(3,647,947)  $ (12,000)  $ (25,000)     $ 5,874,926

Sale of common stock                         880,125     8,801     849,477     
                                         858,278
Exercise of stock
  options                                    127,375     1,274     173,867     
                        (68,750)         106,391
Exercise of "A"
  warrants                                    27,492       275        (275)    
                                            -
Acquisition of SCS                           239,708     2,397     117,603     
                                         120,000
Purchase of treasury
  stock                                                                        
            (94,073)                     (94,073)
Preferred stock
  dividends                                                       (229,016)    
                                        (229,016)
Net loss                                                                    
(1,398,316)                              (1,398,316)
                      
--------------------------------------------------------------------------------
-------------------------
Balance at
  December 31, 1996     229,016    2,290   4,407,019    44,071  10,437,915  
(5,046,263)   (106,073)    (93,750)       5,238,190

</TABLE>

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

                                                                               
          (Continued)






                                           LEC TECHNOLOGIES, INC. AND
SUBSIDIARIES
                                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS'
EQUITY
                                       FOR THE YEARS ENDED DECEMBER 31, 1997
AND 1996
<TABLE>
<CAPTION>


                         Preferred Stock      Common Stock      Additional     
                     Notes Receiv-     Total
                        -----------------  -------------------   Paid-in   
Accumulated   Treasury     able From    Stockholders'
                         Shares   Amount    Shares     Amount    Capital      
Deficit      Stock     Stockholders    Equity
                        --------  -------  ---------  --------  ---------- 
------------  ----------  ------------  ------------
<S>                      <C>      <C>      <C>        <C>      <C>          <C>
          <C>         <C>             <C>    
Balance at
  December 31, 1996      229,016  $ 2,290  4,407,019  $ 44,071 $10,437,915 
$(5,046,263)  $(106,073)  $ (93,750)      $5,238,190

Sale of common stock                         156,250     1,562     123,438     
                                         125,000
Issuance of common
  stock for services                          50,000       500      46,375     
                                          46,875
Exercise of "B"
  warrants                                   269,000     2,690      (2,690)    
                                            -
Stock option compen-
  sation expense                                                     6,399     
                                           6,399
Purchase of treasury
  stock                                                                        
            (38,609)                     (38,609)
Preferred stock
  dividends                                                       (229,016)    
                                        (229,016)
Net income                                                                     
329,531                                  329,531
                      
--------------------------------------------------------------------------------
-------------------------
Balance at
  December 31, 1997     229,016  $ 2,290  4,882,269   $ 48,823 $10,382,421 
$(4,716,732)  $(144,682)  $ (93,750)      $5,478,370
                      
================================================================================
=========================
</TABLE>

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





                LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             
<TABLE>
<CAPTION>
                                              Years Ended December 31,
                                             --------------------------
                                                1997           1996   
                                             -----------     ----------
<S>                                          <C>          <C> 
CASH FLOWS FROM OPERATING
  ACTIVITIES:
    Net income (loss)                        $   329,531  $(1,398,316)
    Adjustments to reconcile net income
      (loss) to net cash provided by
      operating activities:
        Depreciation and amortization          5,757,672    6,986,608
        Write down of inventory, residual
          values and other                        75,331    1,189,981
        Stock option compensation expense         53,274         -
        Change in assets and liabilities,
          net of effects of acquisition:
          Increase in receivables             (1,275,291)     (60,503)
          Increase inventory                    (135,879)    (354,532)
          Increase (decrease) in
            accounts payable                     877,157     (446,485)
          Increase (decrease) in
            accrued liabilities                   33,502      (52,583)
          All other operating activities        (309,593)     302,564
                                               ---------    ---------
     Net cash provided by operating
       activities                              5,405,704    6,166 734
                                             -----------   ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Sales and disposals of off-lease
    inventory and equipment                    1,734,074    2,786,579
  Purchases of inventory for lease            (6,253,853)  (5,579,587)
  Purchases of furniture and equipment          (132,908)     (52,277)
  (Increase) decrease in notes receivable         22,874      (50,435)
  Purchase of SCS, net of cash acquired             -          80,957
  Additions to net investment in
    sales-type and direct financing leases    (3,618,507)  (4,504,865)
  Sales-type and direct financing
    lease rentals received                     2,251,582    1,763,154
                                             -----------   ----------
  Net cash used in investing activities       (5,996,738)  (5,556,474)
                                             -----------   ----------
</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.
                                                       (Continued)


                LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                              Years Ended December 31,
                                             -------------------------
                                                 1997          1996
                                             -----------    ----------
<S>                                          <C>          <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from nonrecourse and
    recourse discounted lease rentals        10,530,281     9,186,720
  Payments on nonrecourse and recourse
    discounted lease rentals                 (9,433,039)  (10,638,141)
  Proceeds from notes payable                 1,051,373       817,647
  Payments on notes payable                  (1,944,911)     (363,905)
  Proceeds from exercise of stock
    options                                       -           106,391
  Proceeds from sale of stock, net              125,000       858,278 
  Proceeds from exercise of warrants            269,000        55,592
  Deferred equity transaction costs               -          (106,497)
  Purchase of treasury stock                    (38,609)      (94,073)
  Preferred stock dividends paid               (171,762)     (229,016)
                                                 -----------    ----------
 Net cash provided by (used in)
   financing activities                         387,333      (407,004)
                                             ----------    ----------
Net increase (decrease) in cash                (203,701)      203,256
Cash at beginning of period                     412,340       209,084
                                             ----------    ----------
Cash at end of period                       $   208,639   $   412,340
                                            ===========    ========== 

Supplemental Disclosure of Cash Flow
  Information:

  Cash paid during the period for:
    Interest                                $ 1,875,196   $ 1,729,001
                                             ==========    ==========
    Income taxes                            $     3,750   $    29,826
                                             ==========    ==========
</TABLE>

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









                  LEC TECHNOLOGIES, INC. AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Nature of Operations:  LEC Technologies, Inc. and subsidiaries (formerly
known as Leasing Edge Corporation)(collectively, the "Company" or "LEC") is
a technology services company, providing solutions that help organizations
reduce technology cost and risk.  The Company is primarily engaged in the
buying, selling, and leasing of data processing and other high technology
equipment and related services. 

Organization:  The Company was originally founded in 1980 under the name TJ
Computer Services, Inc. ("TJCS").  In 1989, all of the outstanding common
stock of TJCS was acquired by Harrison Development, Inc., an inactive public
corporation organized in Colorado, which then changed its name to TJ Systems
Corporation.  In October 1991, the Company reincorporated in the State of
Delaware and in June 1995, changed its name to Leasing Edge Corporation.  On
March 12, 1997, the Company's shareholders' approved a change in the
Company's name to LEC Technologies, Inc. 


NOTE 1:   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Principles of Consolidation
         
          The consolidated financial statements include the accounts of the
          Company and its wholly-owned subsidiaries.  Intercompany accounts
          and transactions have been eliminated in consolidation.

          Use of Estimates

          The preparation of these consolidated 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 revenue and expenses during
          the reporting period.  For lease accounting, this includes the
          estimated fair market value at lease termination of the related
          equipment, commonly referred to as "residual value".  Residual
          values are established at lease inception at amounts equal to the
          estimated value to be received from the equipment following
          termination of the initial lease, as determined by management.  In
          estimating such values, management considers all relevant
          information and circumstances regarding the equipment and the
          lessee, including historical experience by equipment type and
          manufacturer, adjusted for known trends.  On at least an annual
          basis, management assesses the realizability of recorded residual
          values and, if necessary, establishes a reserve to reduce the
          recorded values to their estimated net realizable value.  Actual
          results could differ from those estimates.

          

          Lease Accounting

          See Note 2 "Lease Accounting Policies" for a description of lease
          accounting policies, lease revenue recognition and related costs.
         
          Inventory

          Inventory of equipment that has come off lease is valued at the
          lower of cost or market based on specific identification. Inventory
          of equipment held for distribution is stated at the lower of cost
          (first in, first out) or market.

          Goodwill

          Goodwill, which represents the excess of purchase price over the
          fair value of net assets acquired, is amortized on a straight-line
          basis over 15 years.

          Nonrecourse Financing
         
          The Company assigns the rentals under its leases to financial
          institutions and other lenders primarily on a nonrecourse basis.
          The Company receives a cash amount equal to the discounted value of
          the minimum lease payments.  In the event of a default by a lessee,
          the lender has a security interest in the underlying leased
          equipment but has no recourse against the Company.  Proceeds from
          discounted lease rentals are recorded as nonrecourse discounted
          lease rentals.  Under sales-type and direct financing leases,
          leased assets and nonrecourse discounted lease rentals are reduced
          as lessees make payments under the lease to financial institutions.
          Under operating leases, leasing revenue is recorded and nonrecourse
          discounted lease rentals are reduced as lessees make rental
          payments to financial institutions.  The Company has no restrictive
          arrangements with these financial institutions as a result of the
          nonrecourse borrowings.

          Revenue Recognition

          Leasing activities:  See Note 2 "Lease Accounting Policies" for a
          description of lease revenue recognition.

          Direct sales:  Revenue from direct sales is generated from the
          remarketing of equipment off lease and leases with dollar buyout
          options treated as sales.  Revenue and related cost of sales
          is recognized at the time title to the equipment transfers to the
          customer.  

          Distribution sales:  Revenue from distribution sales is generated
          from the resale of equipment purchased for inventory.  Revenue and
          related cost of sales is recognized at the time title to the
          equipment transfers to the customer, generally upon shipment.  
          


          Furniture and Equipment

          Furniture and equipment are recorded at cost.  Expenditures that
          materially increase the life of the assets are capitalized.
          Ordinary repairs and maintenance are charged to expense as
          incurred.
         
          Depreciation and amortization are provided on the straight-line
          method over the following useful lives:      

               Computer equipment                 3 to 5 years
               Furniture and office equipment     5 to 7 years
               Leasehold improvements             Term of lease
         
          Impairment of Long-Lived Assets and Long-Lived Assets to Be
          Disposed Of
         
          Management periodically evaluates the carrying value of its long-
          lived assets, including operating leases, furniture and equipment
          and intangible assets.  Whenever events or changes in circumstances
          indicate that the carrying value of such assets may not be
          recoverable, the Company recognizes an impairment loss for the
          difference between the carrying value and the estimated net future
          cash flows attributable to such asset.  Management believes that no
          material impairment in the carrying value of long-lived assets
          existed at December 31, 1997 or 1996.
    
          Income Taxes

          The Company uses the asset and liability method to account for
          income taxes.  Deferred tax assets and liabilities are recognized
          for the future tax consequences attributable to differences between
          the financial statement carrying amounts of existing assets and
          liabilities and their respective tax bases.  The measurement of
          deferred tax assets is reduced, if necessary, by a valuation
          allowance for any tax benefits which may not ultimately be
          realized.

          Stock Option Plans

          Prior to January 1, 1996, the Company accounted for its stock
          option plans in accordance with the provisions of Accounting
          Principles Board Opinion No. 25, "Accounting for Stock Issued to
          Employees" ("APB No. 25"), and related interpretations.  As such,
          compensation would be recorded on the date of grant only if the
          current market price of the underlying stock exceeded the exercise
          price.  On January 1, 1996, the Company adopted Statement of
          Financial Accounting Standards ("SFAS") No. 123, "Accounting for
          Stock-Based Compensation" ("SFAS No. 123"), which permits entities
          to recognize as expense over the vesting period the fair value of
          all stock-based awards on the date of grant.  Alternatively, SFAS
          No. 123 also allows entities to continue to apply the provisions of
          APB No. 25 and provide pro forma net income and pro forma earnings
          per share disclosures for employee stock option grants made in 1995
          and future years as if the fair-value-based method defined in SFAS
          No. 123 had been applied.  The Company has elected to continue to
          apply the provisions of APB No. 25 and provide the pro forma
          disclosure provisions of SFAS No. 123.
         
          Earnings Per Share
         
          Basic and diluted earnings (loss) per share are computed in
          accordance with SFAS No. 128, "Earnings Per Share".
         
          Impact of Recently Issued Accounting Standards

          In June of 1997, the FASB issued SFAS No. 130, "Reporting
          Comprehensive Income" ("SFAS No. 130").  SFAS No. 130 requires
          companies to classify items of other comprehensive income by their
          nature in a financial statement and display the accumulated balance
          of other comprehensive income separately from retained earnings and
          additional paid-in capital in the equity section of a statement of
          financial position, and is effective for financial statements
          issued for fiscal years beginning after December 15, 1997.  The
          Company is currently assessing the impact of SFAS No. 130 on the
          Company's financial statements for the years ended December 31,
          1997 and 1996 and believes that SFAS No. 130 will not result in
          comprehensive income different from net income as reported in the
          accompanying financial statements.

          In June of 1997, the FASB issued SFAS No. 131, "Disclosure About
          Segments of an Enterprise and Related Information" ("SFAS No.
          131").  SFAS No. 131 establishes additional standards for segment
          reporting in financial statements and is effective for fiscal years
          beginning after December 15, 1997.  The Company is currently
          assessing the impact of SFAS No. 131 on the financial statements
          for the years ended December 31, 1997 and 1996.

          Reclassification

          Certain reclassifications have been made in the 1996 financial
          statements to conform to the 1997 presentation.

NOTE 2:   LEASE ACCOUNTING POLICIES

          SFAS No. 13 requires that a lessor account for each lease by either
          the direct financing, sales-type or operating method.

          Leased Assets

          Direct financing and sales-type leases - Direct financing and
          sales-type leased assets consist of the future minimum lease
          payments plus the present value of the estimated unguaranteed
          residual less unearned finance income (collectively referred to as
          the net investment).

          Operating Leases - Operating leased assets consist of the equipment
          cost less accumulated depreciation.         
          Revenue, Costs and Expenses

          Direct Financing Leases - Revenue consists of interest earned on
          the present value of the lease payments and residual and is
          included in finance income in the accompanying Consolidated
          Statements of Operations.  Revenue is recognized periodically over
          the lease term as a constant percentage return on the net
          investment.  There are no costs and expenses related to direct
          financing leases since revenue is recorded on a net basis.

          Sales-type Leases - Revenue consists of the present value of the
          total contractual lease payments and is recognized at lease
          inception.  Costs and expenses consist of the equipment's net book
          value at lease inception, less the present value of the residual.
          Interest earned on the present value of the lease payments and the
          residual, which is recognized periodically over the lease term as
          a constant percentage return on the net investment, is included in
          finance income in the accompanying Consolidated Statements of
          Operations.  

          Operating Leases - Revenue consists of the contractual lease
          payments and is recognized on a straight-line basis over the lease
          term.  Costs and expenses are principally depreciation on the
          equipment which is recognized on a straight-line basis over the
          term of the lease to the Company's estimate of the equipment's
          residual value.  

NOTE 3:   LEASED ASSETS

          The components of the net investment in sales-type and direct
          financing leases as of December 31 are as follows:
<TABLE>
<CAPTION>

                                                     1997             1996

          <S>                                    <C>              <C>
          Total future minimum lease payments    $7,448,044       $4,670,997

          Estimated unguaranteed residual
           values of leased equipment             1,225,500          797,300
     
          Less unearned finance income           (  934,719)      (  540,403)

               Total                            $ 7,738,825      $ 4,927,894
</TABLE> 

          Future minimum lease payments on sales-type and direct financing
          leases as of December 31, 1997 are as follows:





<TABLE>
<CAPTION>
               Years ending December 31,
                    <S>                                <C>           
                    1998                               $3,173,468
                    1999                                2,492,875
                    2000                                1,224,521
                    2001                                  372,979
                    2002 and thereafter                   184,201

                                                       $7,448,044

</TABLE>

          Assets under operating leases are as follows at December 31:

<TABLE>
<CAPTION>

                                                1997              1996
          <S>                               <C>               <C>
          Equipment at cost or net
               realizable value             $26,777,702       $29,056,736 

          Accumulated depreciation          (11,493,525)      (11,438,802)

          Total                             $15,284,177       $17,617,934

</TABLE>

          Depreciation expense related to operating leases was $5,641,067 and
          $6,881,020 for the years ended December 31, 1997 and 1996,
          respectively.

          Future minimum lease rentals on operating leases are due as
          follows:

<TABLE>
<CAPTION>
               Years ending December 31,
                    <S>                               <C>                 
                    1998                              $ 5,153,505
                    1999                                3,691,355
                    2000                                1,406,379
                    2001                                   66,705
                    2002                                   13,689

                                                      $10,331,633

</TABLE>

          The estimated residual value of the Company's portfolio of leases
          (including sales-type, direct financing and operating) by year of
          lease termination are as follows:

<TABLE>
<CAPTION>
          Years ending December 31,
                    <S>                                <C>                
                    1998                               $3,726,363
                    1999                                1,572,600         
                    2000                                3,067,000
                    2001                                  701,100
                    2002 and thereafter                    39,000

                                                       $9,106,063

</TABLE>

NOTE 4:   Acquisition of Superior Computer Systems, Inc. ("SCS")

          On November 1, 1996, the Company acquired all of the common stock
          of SCS, a distributor of computer peripherals, for 239,708 shares
          of the Company's common stock and two $100,000 non-interest bearing
          notes, payable at various dates through November 1997.  The
          acquisition was accounted for by the purchase method of accounting.
          The excess of the total acquisition cost over the fair value of net
          assets acquired of $299,923 was recorded as goodwill and is being
          amortized over 15 years.  The Consolidated Statement of Operations
          for the year ended December 31, 1996 includes SCS's results of
          operations for the period November 1, 1996 through December 31,
          1996.

          The following unaudited pro forma consolidated results of
          operations assume that the acquisition occurred on January 1, 1996
          and reflect the historical operations of the purchased business
          adjusted for amortization of goodwill resulting from the
          acquisition.

          (In thousands, except per share data)

<TABLE>
<CAPTION>
                                               Year ended  
                                            December 31, 1996
                                               (Unaudited)  
    
          <S>                                        <C>
          Total revenues                             32,203
          Net loss                                   (1,522)
          Loss per share                              (0.46)

</TABLE>

          The pro forma results of operations are not necessarily indicative
          of the actual results of operations that would have occurred had
          the acquisition been made at the beginning of the period, or of
          results which may occur in the future.
              
NOTE 5:   INCOME TAXES

          Total income tax expense (benefit) differed from the "expected"
          income tax expense (benefit) determined by applying the statutory
          federal income tax rate of 35% for the years ended              
          December 31 as follows:

<TABLE>
<CAPTION>
                                              1997           1996
         
          <S>                             <C>          <C>                
              
          Computed "expected" income tax
            expense (benefit)             $   115,336  $    (489,411)
          Change in valuation allowance
            for deferred tax assets          (119,701)        93,181
          Nondeductible expenses                4,365        396,230
               Total tax expense                 -              -   

</TABLE>

          The tax effects of temporary differences that give rise to
          significant portions of the deferred tax assets and tax liabilities
          at December 31, 1997 and 1996 are presented below:
<TABLE>
<CAPTION>

                                             December 31,    December 31,
                                                 1997            1996   
          <S>                                <C>             <C>
          Deferred Tax Assets     
          Allowances for doubtful accounts,
            inventory obsolescence and
            residual value realization not
            currently deductible             $   117,428      $  450,447
          Expenses accrued for financial
            statement purposes, not
            currently deductible                 576,450         576,450
          Net operating loss carryforwards     1,374,967       1,498,762
                                               ---------       ---------
          Total gross deferred tax assets      2,068,845       2,525,659
          Valuation allowance                   (248,757)       (368,458)
                                               ---------       ---------
            Net deferred tax assets            1,820,088       2,157,201
                                               ---------       ---------

          Deferred Tax Liabilities
          ------------------------
          Basis difference for sales-type and
            direct financing leases for
            financial statement purposes and
            sales for tax purposes               218,719         342,507
          Basis difference for operating
            leases, principally due to
            depreciation                       1,601,369       1,814,694
                                               ---------       ---------
          Total deferred tax liabilities       1,820,088       2,157,201
                                               ---------       ---------
               Net deferred taxes                  -               -
                                               =========       =========    

</TABLE>

          The Company has recorded a valuation allowance in accordance with
          the provisions of SFAS No. 109 "Accounting for Income Taxes" to
          reflect the estimated amount of deferred tax assets which may not
          be realized.  In assessing the realizability of deferred tax
          assets, management considers whether it is more likely than not
          that some portion or all of the deferred tax assets will not be
          realized.  The ultimate realization of deferred tax assets is
          dependent upon the generation of future taxable income during the
          periods in which those temporary differences become deductible.  At
          December 31, 1997 and 1996, the Company determined that $248,757
          and $368,458, respectively, of tax benefits did not meet the
          realization criteria.

          At December 31, 1997, the Company has net operating loss
          carryforwards for Federal income tax purposes of approximately
          $3,900,000 which are available to offset future taxable income, if
          any, through 2009.

NOTE 6:   NONRECOURSE AND RECOURSE DISCOUNTED LEASE RENTALS


          The Company assigns the rentals of its leases to financial
          institutions at fixed rates on a nonrecourse or, to a lesser
          extent, on a recourse basis but retains the residual rights.  In
          return for future lease payments, the Company receives a discounted
          cash payment.  Discounted lease rentals as of December 31, 1997 and
          1996 were $15,905,823 and $14,808,581 respectively of which
          $258,030 and $196,518 are recourse, respectively. Interest expense
          on discounted lease rentals for the years ended December 31, 1997
          and 1996 was $1,326,894 and $1,325,444, respectively.

          Principal and interest payments required on discounted lease
          rentals as of December 31, 1997 are as follows:

<TABLE>
<CAPTION>
               Years ending December 31,
                    <S>                               <C>                 
                    1998                              $ 8,195,787
                    1999                                6,154,015
                    2000                                2,626,387
                    2001                                  439,684
                    2002 and thereafter                   185,600

                         Total                         17,601,473
                         Less interest                 (1,695,650)

                         Principal amount             $15,905,823


</TABLE>

NOTE 7:   NOTES PAYABLE AND LINES OF CREDIT

          The Company and Bank of America National Trust and Savings
          Association ("Bank of America") have entered into a Second Loan
          Modification Agreement, effective February 5, 1998, (the "Second
          Loan Modification Agreement") governing the Company's debt
          obligation due January 1, 1998 to Bank of America (the "Term
          Loan").  At February 5, 1998, the amount of unpaid principal on the
          Term Loan was $1,366,365 and the interest rate was 12.5%.  The
          terms of the Second Loan Modification Agreement require the Company
          to make monthly pricipal payments of $45,546 plus interest at the
          prime rate plus 400 basis points from January 15, 1998 through June
          15, 1998; monthly principal payments of $72,873 plus interest at
          the prime rate plus 500 basis points from July 15, 1998 through
          December 15, 1998; monthly principal payments of $109,309 plus
          interest at the prime rate plus 600 basis points from January 15,
          1999 through May 15, 1999; and to pay all remaining unpaid
          principal, accrued and unpaid interest, and any unpaid fees and
          expenses on June 15, 1999.  The Term Loan is secured by all of the
          personal property, tangible and intangible, of the Company and its
          wholly-owned subsidiary, TJ Computer Services, Inc. (dba Leasing
          Edge Corporation).  Restrictive covenants under the Second Loan
          Modification Agreement include the maintenance of consolidated
          tangible net worth (as defined) of at least $4.5 million;
          restrictions on the payment of cash dividends on shares of the
          Company's common stock; restrictions on incurring additional
          indebtedness and creating additional liens on the Company's
          property; and limitations on unfinanced capital expenditures (as
          defined).
         
          In November of 1995, the Company entered into a letter agreement
          with Excel Bank N.A. ("Excel") (formerly Union Chelsea National
          Bank) whereby Excel agreed to make available to the Company a
          $250,000 line of credit (the "Equity Line") to be used to fund the
          Company's equity investment in certain leases discounted by Excel
          (i.e., the difference between the cost of the leased equipment and
          the discounted present value of the minimum lease payments assigned
          to Excel).  Borrowings under the Equity Line are evidenced by term
          notes and require monthly payments of principal and interest over
          a period equal to the term of the related discounted lease with a
          final balloon payment of between 30 and 50 percent depending on the
          lease term.  Interest rates on the term notes are at the applicable
          discounted lease rate plus 1.75%.  In addition, a fee equal to 15%
          of the original loan amount is due at maturity which amount is
          accrued ratably over the life of the loan.  The unaccrued portion
          thereof at December 31, 1997 was $117,080.  In July of 1996 and
          December of 1997, Excel increased its maximum commitment under the
          Equity Line to $1,000,000 and $2,500,000, respectively.  Such
          maximum commitment is reduced by the amount of outstanding recourse
          discounted lease rentals funded by Excel, a term note and an
          outstanding capital lease obligation of approximately $258,030, 
          $160,838 and $122,982, respectively, at December 31, 1997.  At  
          December 31, 1997, the Company had outstanding term notes and
          available credit under the Equity Line of $1,049,133 and $909,017,
          respectively.

          In October of 1997, PMCPI and Merrill Lynch Business Financial
          Services, Inc. ("Merrill Lynch") replaced PMCPI's prior line of
          credit (the "Merrill Line of Credit") with a term note in the
          amount of $443,848 (the "Merrill Note").  The Merrill Line of
          Credit was replaced by the Merrill Note in anticipation of the
          Company entering into a new $1.75 million revolving line of credit
          facility with Finova Capital Corporation (the "Finova Line") that
          would have been secured by the inventory and accounts receivable of
          both PMCPI and SCS.  Subsequent to executing the Merrill Note, the
          Company reevaluated the terms and conditions of the Finova Line and
          determined it was too costly and that it did not sufficiently
          address the Company's liquidity needs.  Consequently, the Company
          is currently negotiating a reinstatement of the prior line of
          credit with Merrill Lynch or, in the event the line of credit is
          not reinstated, a term out of the remaining obligation. The Merrill
          Note is guaranteed by the Company and is secured by inventory and
          accounts receivable of PMCPI (collectively, the "Merrill
          Collateral").  

          On December 1, 1997, the remaining principal balance of
          approximately $394,000 outstanding under the Merrill Note plus
          accrued interest became due and payable.  As of March 27, 1998,
          PMCPI has not made the December 1, 1997 payment.  Although no
          demand for payment has been made by Merrill Lynch to date, PMCPI is
          currently in payment default under the terms of the Merrill Note
          and Merrill Lynch may exercise any of the rights and remedies
          available to it under the Merrill Note, the original agreements
          with respect to the Merrill Line of Credit, or otherwise available
          to it at law or in equity.  Such rights and remedies include
          demanding immediate payment from PMCPI or the Company (pursuant to
          the Company Guarantee) of the amounts due under the Merrill Note
          and foreclosure on the Merrill Collateral.  Although the Company
          believes that its current negotiations with Merrill Lynch will be
          successful, there can be no assurance that the Company will be
          successful in its efforts to reinstate the Merrill Line of Credit
          or negotiate a term out upon terms satisfactory to the Company.  In
          the event that Merrill Lynch were to demand immediate payment by
          PMCPI or the Company of the amounts due and payable under the
          Merrill Note, the financial condition and, consequently, the
          operations of the Company could be materially and adversely
          affected.

          On March 9, 1998, ADI entered into a $500,000 Revolving Credit
          Agreement (the "ADI Credit Agreement") with Excel for general
          corporate purposes.  Pursuant to the ADI Credit Agreement, Excel
          has agreed, subject to certain conditions, to make advances to ADI
          from time to time prior to October 15, 1998 of up to $500,000.
          Amounts repaid under the ADI Credit Agreement may be reborrowed
          until October 15, 1998, the date that the loans under the ADI
          Credit Agreement mature.  The loans under the ADI Credit Agreement
          bear interest at the prime rate plus 2.5%.  Accrued interest, if
          any, will be payable monthly, beginning on April 1, 1998.  The ADI
          Credit Agreement is guaranteed by the Company and is secured by a
          lien on the receivables, inventory and equipment of ADI.  Under the
          ADI Credit Agreement, ADI has agreed not to incur any additional
          indebtedness or to create any additional liens on its property
          other than under the ADI Credit Agreement.  Upon consumation of the
          ADI Credit Agreement, Excel reduced its maximum commitment under
          the Equity Line to $2,000,000 and transferred the $160,838 term
          note to the ADI Credit Agreement.  As of March 27, 1998, loans in
          the amount of $330,263 were outstanding under the ADI Credit
          Agreement.
         
          In connection with the Company's 1994 acquisition of PMCPI, the
          Company issued a $250,000 non-interest bearing note payable to
          PMCPI's sole shareholder.  At December 31, 1996, the remaining
          obligation on such note, discounted at an imputed rate of 8.5%, was
          $50,000.  The note was paid in full at its maturity date of
          January 1, 1997.

          In connection with the Company's acquisition of SCS, the Company
          issued to each of SCS' two shareholders a $100,000 non-interest 
          bearing note payable due in varying installments through November
          1997.  At December 31, 1996, the remaining obligation due on such
          notes, discounted at an imputed rate of 10.0%, was $194,385.  The
          notes were paid in full in 1997.
 
          Notes payable and lines of credit consist of the following at
          December 31,

<TABLE>
<CAPTION>
                                                   1997         1996
                                                  ------       ------
          <S>                                   <C>         <C>
          Term loan with Bank of America, with        
          interest at prime plus 4.0 percent,
          due in varying installments through
          June 15, 1999                         $1,366,365  $ 2,476,365

          Term note with Merrill Lynch, due
          December 1, 1997, with floating
          interest rate, currently at 9.25
          percent                                  401,614        -

          Revolving line of credit agreement
          with Merrill Lynch, with floating
          interest rate of prime plus 1.0
          percent                                     -         499,937

          Secured notes payable to Excel,
          payable in installments through
          November, 1999 with fixed interest
          rates between 9.75 and 10.0 percent,
          secured by leased equipment            1,049,133      626,801

          Term note payable to Excel, due
          January 29, 1998, with floating
          interest rate of prime plus 2.5
          percent                                  160,838         -

          Acquisition notes payable, with                                 
          imputed interest ranging from 8.5 to                            
          10 percent, due in varying                                      
          installments through November 1997          -         244,385
         
          Other                                    150,814       34,394
                                                 ---------    ---------
                                                $3,128,764   $3,881,882
                                                 =========    =========
</TABLE>


          Required annual principal payments as of December 31, 1997 are as
          follows:
<TABLE>
<CAPTION>
                              <S>               <C>
                              1998              $1,612,663
                              1999               1,076,261
                              2000                 418,837
                              2001                  19,115
                              2002                   1,888
                                                 ---------
                                   Total        $3,128,764
                                                 =========       

</TABLE>

     NOTE 8:   COMMITMENTS AND CONTINGENCIES

          a)   Lease Agreements

               The Company leases office and warehouse space under operating
               leases expiring individually through 2002.  The following is
               a schedule by year of future minimum rental payments required
               as of December 31, 1997 under these operating leases that have
               initial or remaining noncancelable lease terms in excess of
               one year:

<TABLE>
<CAPTION>
               Years ending December 31,
                    <S>                                <C>           
                    1998                               $228,083
                    1999                                210,808
                    2000                                210,808
                    2001                                137,540
                    2002                                 51,386
                    Thereafter                             -  
                                                 
                         Total                         $838,625

</TABLE>

               Rental expense on operating leases was $267,552 and $206,342
               for the years ended December 31, 1997 and 1996, respectively.

          b)   Employment Contracts

               The Company has employment agreements with certain of its
               executive officers and management personnel with remaining
               terms of approximately four years.  Under these agreements,
               the employee is entitled to receive other employee benefits of
               the Company, including medical and life insurance coverage.
               The agreements may be terminated by either the Company or the
               employee at any time or for any reason.  If an agreement
               is terminated due to the death of an employee, a death benefit
               equal to six months salary shall be paid to the employee's 
               estate.  The employment agreement of the Company's President
               and Chief Executive Officer includes additional compensation
               in the form of a bonus based on Company performance.  The
               Company's annual expense under these agreements is
               approximately $930,000.


NOTE 9:   RELATED PARTY TRANSACTIONS

          a)   Company's Board of Directors
              
               A member of the Company's Board of Directors was formerly an
               officer of Tiffany & Co., a major customer of the Company.
               Such individual did not have approval authority over lease
               transactions on behalf of Tiffany & Co.  

         
          b)   Other Transactions

               Included in notes receivable from shareholders in the
               accompanying consolidated balance sheets at December 31, 1997
               and 1996 is a $25,000 note receivable from a current officer
               for the purchase of Company common stock.

          c)   Aggregate Effect of Transactions with Related Parties

               The Board of Directors of the Company has reviewed the
               aggregate effect on operations of the above-described
               transactions and concluded that such transactions were in the
               best interest of the Company and on terms as fair to the
               Company as could have been obtained from unaffiliated parties.

NOTE 10:  STOCKHOLDERS' EQUITY
         
          During the year ended December 31, 1997, the Company sold 156,250
          shares of common stock to an individual in a private placement
          transaction for proceeds of $125,000.

          Also in 1997, the Company issued an aggregate of 50,000 shares of
          restricted common stock to two individuals in connection with their
          employment at ADI.  The fair market value of the shares at date of
          issue was $46,875 and was expensed in 1997.

          During the year ended December 31, 1996, the Company sold an
          aggregate of 880,125 shares of common stock to two investment
          groups in private placement transactions.  The proceeds of these
          transactions, net of related costs of $131,692, was $858,278.

          In 1996, the Company issued 239,708 shares of restricted common
          stock in connection with the Company's acquisition of SCS.
          

          A.  SERIES A CONVERTIBLE PREFERRED STOCK

          In August of 1993, the Company completed the sale of 380,000 shares
          of Series A Convertible Preferred Stock.  The Preferred Stock is
          convertible at the holders option at any time into 1.75 shares of
          common stock at a conversion price of $5.68 per share.  If the
          Series A Preferred Stock is converted on or prior to August 4,
          1998, the holder will receive ten (10) warrants to purchase 1/8th
          share of common stock for each share of Series A Preferred Stock
          converted. Outstanding Series A Preferred Stock is redeemable by
          the Company at $10.00 per share plus accrued and unpaid dividends.
          The Series A Preferred Stock pays dividends in arrears at an annual
          rate of $1.00 per share.  A conversion bonus equal to $0.25 per 
          share of Series A Preferred Stock converted shall be payable to any
          holder who converts such shares after the date in any calendar
          quarter on which dividends accrue and prior to such date for the
          succeeding calendar quarter.

          At December 31, 1997 and 1996 there were 229,016 shares of
          preferred stock and 1,509,840 warrants outstanding.
         
          Preferred stock dividends of $171,762 and $229,016 were paid from
          additional paid in capital in 1997 and 1996, respectively.  Accrued
          and unpaid preferred stock dividends were $114,508 and $57,254 at
          December 31, 1997 and 1996, respectively.




          B.  WARRANTS AND STOCK OPTIONS

          Warrants
         
          In August of 1995, the Company registered 3,092,687 Class A Common
          Stock Purchase Warrants and 1,000,000 Class B Common Stock Purchase
          Warrants, together with the underlying common shares.  Each of the
          warrants entitles the holder thereof to purchase one share of the
          Company's common stock at an exercise price of $3.00 per share.

          On July 9, 1996, the Company reduced the exercise price of the
          Class A Common Stock Purchase Warrants and called for redemption,
          effective at the close of business on August 9, 1996, all of the
          Class A warrants.  The Company received gross proceeds of $55,592
          from the exercise of 27,492 Class A warrants.  All costs related to
          redeeming the Class A warrants in excess of the exercise proceeds
          were expensed in 1996.    

          On December 15, 1996, the Company reduced the exercise price of the
          Class B Common Stock Purchase Warrants and called for redemption,
          effective at the close of business on January 15, 1997, all of the
          Class B warrants.  Subsequent to December 31, 1996, 269,000 Class
          B Common Stock Purchase Warrants were exercised resulting in gross
          proceeds to the Company of $269,000.  All costs related to
          redeeming the Class B warrants in excess of the exercise proceeds
          were expensed in 1996. 

          During the year ended December 31, 1996, the Company issued an  
          aggregate of 2,319,993 Class C Common Stock Purchase Warrants
          and an aggregate of 2,319,993 Class D Common Stock Purchase
          Warrants at exercise prices of $1.625 and $1.75, respectively, in
          connection with two private placements of common stock.  In
          September of 1997, the Company's Board of Directors voted to reduce
          the exercise price of the warrants to $1.25.  Each of the warrants
          entitle the holders thereof to purchase one share of the Company's
          common stock at the exercise prices referred to above and expire on
          April 30, 1999.  At December 31, 1997, none of the Class C or Class
          D warrants had been exercised.

          Stock Options

          1)   Key Employee and Director

               The Company has five stock option plans covering an aggregate
               of 2,687,500 shares of common stock which provide for the
               granting of incentive stock options and/or nonqualified stock
               options to employees and directors of the Company to purchase
               shares of the Company's common stock.  Options granted to
               employees generally vest over a three to five year period and
               expire five years from the date of grant.  Options granted to
               directors are immediately vested and expire ten years from the
               date of grant.  Under the Company's stock option plans, the
               exercise price of each option at issuance equals the market
               price of the Company's common stock on the date of grant.

               Additionally, an officer of the Company has 58,125 options to
               acquire common stock at an exercise price of $0.08 per share.
               Such options were granted in 1993 in lieu of prospective
               commissions and were subject to a three year vesting.

               The Company applies APB Opinion No. 25 and related
               Interpretations in accounting for its plans.  Accordingly, no
               compensation cost has been recognized for its fixed stock
               option plans in the consolidated financial statements.  Had
               compensation cost for the Company's stock option plans been
               determined consistent with SFAS No. 123, the Company's net
               earnings (loss) available to common stockholders and earnings
               (loss) per common weighted average share would have been
               reduced to the pro forma amounts indicated below (in
               thousands, except per share data):

<TABLE>
<CAPTION>
                                                       1997       1996
               <S>                                   <C>        <C>
               Net earnings (loss) available to                            
                 common stockholders:
                   As reported                       $  101     $(1,627)
                   Pro forma                           (123)     (1,836)

               Earnings (loss) per common
                 weighted average share:
                   As reported                       $ 0.02     $ (0.45)
                   Pro forma                          (0.03)      (0.51)   
           
</TABLE>

               For purposes of calculating the compensation cost consistent
               with SFAS No. 123, the fair value of each option grant is
               estimated on the date of grant using the Black-Scholes option-
               pricing model with the following weighted average assumptions
               used for grants in 1997 and 1996, respectively: dividend yield
               of 0.0% for each year; expected volatility of 35 percent and
               19 percent; risk free interest rates of 5.96% and 5.94%; and
               expected lives of three years and five years.

               Additional information on shares subject to options is as
               follows:

<TABLE>
<CAPTION>
                                        1997                    1996
                                ----------------------  --------------------
                                  Weighted                Weighted
                                  Number      Average     Number    Average
                                    of        Exercise      of      Exercise
                                  Shares      Price       Shares    Price
                                ----------    --------  ----------  --------
               <S>              <C>           <C>        <C>        <C>
               Outstanding at
                 beginning of
                 year            1,214,625    $   1.62     419,625  $   1.36
               Granted           2,100,000        0.75     800,000      0.75
               Exercised              -            -          -          -
               Forfeited        (2,759,000)       0.76      (5,000)    (1.06)
                                 ---------     -------   ---------   -------
               Outstanding at
                 end of year       555,625        0.68   1,214,625      1.62
                                 =========     =======   =========   =======
               Options exer-
                 cisable at
                 year end          168,292        0.52     719,625      1.52
                                 =========     =======   =========   =======


               Weigted average
                 fair value of
                 options granted
                 during the year    $ 0.25                  $ 0.45
                                     =====                   =====

</TABLE>

               The following table summarizes information about stock options
               outstanding at December 31, 1997:

<TABLE>
<CAPTION>
                                               Options Outstanding
                                        --------------------------------
                                                  Weighted
                                                  Average       Weighted
                                         Number   Remaining     Average 
               Range of exercise           of     Contractual   Exercise
                 prices                  Shares   Life          Price
               ---------------------------------------------------------
               <S>                      <C>          <C>        <C> 
               $0.08                     58,125      5.7 yrs    $   0.08
                0.75                    497,500      4.1 yrs        0.75
                                        -------   ----------     -------
                                        555,625      4.3 yrs    $   0.68
                                        =======   ==========     =======

</TABLE>

<TABLE>
<CAPTION>
                                               Options Exercisable
                                           --------------------------
                                                            Weighted
                                             Number         Average
               Range of exercise               of           Exercise
                 prices                      Shares         Price
               ------------------------------------------------------
               <S>                          <C>             <C>
               $0.08                         58,125         $    0.08
                0.75                        110,167              0.75
                                            -------          --------
                                            168,292         $    0.52
                                            =======          ========

</TABLE>
              
          2)   Other Options
    
               Options granted by the Company to other than the Company's
               employees/directors are accounted for based on the fair value
               method pursuant to SFAS No. 123 utilizing the Black-Scholes
               option-pricing method. The amount charged to expense during
               1997 for such options was $6,399.

               In August of 1997, the Company granted an aggregate of 150,000
               options (50,000 at an exercise price of $0.75 and 100,000 at
               an exercise price of $1.00) to an unaffiliated company for
               services.  Such options were immediately vested and expire in
               August of 1999.  Subsequent to December 31, 1997, such grant
               was modified to eliminate the 100,000 options having the $1.00
               per share exercise price.

               In October of 1996, the Company granted 50,000 stock options
               to an individual at an exercise price of $1.56.  Such options
               were immediately vested and expire on April 7, 1998.

               During 1995, the Board of Directors of the Company approved
               the issuance of options covering 275,000 shares of the
               Company's common stock to two unaffiliated companies for
               services.  The exercise price of the options was $1.38 per
               share which was equal to the quoted market value of the
               Company's common stock on the date of grant.  Such options
               were immediately vested and expire on March 6, 2000.  During
               the year ended December 31, 1996, 77,000 of such options were
               exercised.

               In addition, the Board of Directors approved the issuance of
               options covering an aggregate of 150,000 shares of the
               Company's common stock to an existing shareholder of the
               Company and to one of the Company's directors as an inducement
               to such individuals to provide the Company with a short term
               loan during its transition and relocation from Hauppauge, New
               York to Las Vegas, Nevada.  The exercise price of such options
               ranged from $1.31 to $1.69 per share; such prices were equal
               to the quoted market value of the Company's common stock on
               the date of grant.  Such options were immediately vested and
               expire on various dates through June 7, 2000.

               Also in 1995, the Company issued options covering 25,000
               shares of the Company's common stock to an individual at an
               exercise price of $1.38.  Such options were immediately vested
               and were exercised during 1996.

               In 1993, the Company issued options covering 25,375 shares of
               the Company's common stock at an exercise price of $1.38.
               Such options were immediately vested and were exercised during
               1996.
               
          C.  OTHER

          Included in other assets in the accompanying consolidated balance
          sheet at December 31, 1996 is $269,000 of deferred costs associated
          with the Class B Common Stock Purchase Warrants.  Such capitalized
          costs were netted against the proceeds received in the first
          quarter of fiscal 1997.  

NOTE 11:  MANAGEMENT'S PLANS

          Management recognizes that certain risks are inherent in the
          leasing services portion of the Company's business.  Such risks and
          assumptions include, but are not limited to, technological
          obsolescence associated with equipment the Company currently has on
          lease or in inventory, the estimated residual values of such
          equipment and the timing of the Company's cash realization of such
          residual values.  In an effort to mitigate such risks, management
          has implemented a plan to expand and diversify the non-leasing
          portion of the Company's business.  The first step of this plan was
          the acquisition of SCS in November of 1996.  As a result of such
          acquisition, management was able to eliminate certain redundant
          administrative tasks at PMCPI, thereby returning PMCPI to
          profitability during 1997.  A second phase of the Company's
          strategy was implemented in January of 1997 by the formation of
          ADI, which contributed positive earnings to the Company's
          consolidated financial results.  

          The Company intends to continue to pursue its strategy of
          diversifying the technology services it offers through the
          acquisition of parallel businesses as well as the expansion of its
          current product offerings.  Accordingly, management believes that
          revenues from the leasing services unit of the Company's operations
          will continue to decline as a percentage of consolidated revenues,
          although management believes that the dollar amount of such
          revenues will remain relatively constant over the near term.
          Management further recognizes that the Company must generate
          additional resources or consider modifications of its expansion
          plan.  To the extent the Company is unable to achieve its funding
          plan, either through the cash realization of estimated lease
          residuals or the negotiation of expanded credit facilities,
          management has contingency plans which include curtailing the rate
          of its planned expansion activities and reducing existing
          infrastructure costs.

          Based on the Company's anticipated residual value realization,
          existing credit availability under the Equity Line and the
          ADI Credit Agreement, and the anticipated contribution margin
          from the Company's distribution services units, management believes
          that the Company will have adequate capital resources to continue
          its operations at the present level for at least the next twelve
          months.  Management further believes that the Company's existing
          credit lines will be renewed as they come due.    

NOTE 12:  MAJOR CUSTOMERS AND SUPPLIERS

          Revenue from leases with three customers of the Company accounted
          for 15.0%, 9.2%, and 3.7% and 25.0%, 12.8% and 7.4% of
          consolidated revenues for the years ended December 31, 1997 and
          1996, respectively.

          The Company currently purchases a significant amount of inventory
          for resale from a limited number of suppliers in connection with
          its distribution operations.  Consequently, the Company is
          dependent upon the availability of product from and the timeliness
          of delivery by such suppliers in fulfilling its customers' orders. 

NOTE 13:  EMPLOYEE BENEFIT PLANS

          The Company has a qualified 401(k) Profit Sharing Plan (the "Plan")
          covering all employees of the Company, including officers.
          Employees are eligible to participate in the Plan upon hire.  The
          Plan requires the Company to match 50% of each dollar contributed
          by a Plan participant up to the Participants qualified deferral
          amount.  During 1997 and 1996, the Company contributed its required
          amounts of $56,902 and $34,498 to the Plan on behalf of the Plan's
          participants.

NOTE 14:  SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING
          ACTIVITIES

          During the year ended December 31, 1997, the Company purchased
          computer hardware and software for $140,420 which was funded
          through a capital lease obligation.
         
          During the year ended December 31, 1997, operating lease assets of
          $1,128,453 were reclassified as sales-type or direct financing
          leases due to leases renewals/upgrades. 
         
          During the year ended December 31, 1996, the Company issued 67,500
          shares of common stock in exchange for a note receivable of $68,750
          and acquired all of the outstanding common stock of Superior
          Computer Services, Inc. in exchange for 239,708 shares of
          restricted common stock and a $200,000 non-interest bearing note
          payable.

NOTE 15:  DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

          The following disclosure of the estimated fair value of financial
          instruments was made in accordance with Statement of Financial
          Accounting Standards, "Disclosures about Fair Value of Financial
          Instruments" ("SFAS No. 107").  SFAS No. 107 specifically excludes
          certain items from its disclosure requirements such as the
          Company's investment in leased assets.  Accordingly, the aggregate
          fair value amounts presented are not intended to represent the
          underlying value of the net assets of the Company.

          The carrying amounts at December 31, 1997 for receivables,
          accounts payable, accrued liabilities, notes payable and lines of
          credit approximate their fair values due to the short maturity of
          these instruments.  As of December 31, 1997, the carrying amount of
          recourse discounted lease rentals of $258,030 approximate their
          fair values because the discount rates are comparable to current
          market rates of comparable debt having similar maturities and
          credit quality.

NOTE 16:  1996 FOURTH QUARTER CHARGES

          During the fourth quarter of 1996, the Company recorded a charge of
          $889,000 to reduce the carrying amount of certain previously leased
          equipment and the estimated unguaranteed residual values of
          equipment on lease.  These charges resulted from a decrease in the
          wholesale market value of the previously leased equipment due to an
          increase in availability in excess of current demand.  Although
          management believes that its recorded residual values are properly
          stated, there can be no assurance that the Company will not
          experience further material residual value or inventory write-downs
          in the future.
   
NOTE 17:  EARNINGS PER COMMON SHARE

          In February of 1997, the Financial Accounting Standards Board
          issued SFAS No. 128, "Earnings Per Share" ("SFAS No. 128").  SFAS
          No. 128 supercedes APB Opinion No. 15 and specifies the
          computation, presentation and disclosure requirements for earnings
          per share ("EPS").  It replaces the presentation of "primary EPS"
          with a presentation of "basic EPS" and "fully diluted EPS" with
          "diluted EPS".  Basic EPS excludes dilution and is computed by
          dividing income available to common stockholders by the weighted
          average number of shares outstanding for the period.  Diluted EPS
          reflects the potential dilution that could occur if securities or
          other contracts to issue common stock were exercised or converted
          into common stock and is computed similarly to fully diluted EPS
          under APB Opinion No. 15.  The following EPS amounts reflect EPS as
          computed under SFAS No. 128:

<TABLE>
<CAPTION>

                                             December 31,     December 31,
                                                 1997             1996
                                             ------------     ------------
          <S>                                   <C>              <C>
          Shares outstanding at
            beginning of period                 4,340,919        3,129,319
          Effect of issuance of common
            stock for services                     43,698            -
          Issuance of common stock
            pursuant to private place-
            ment transactions                      48,801          422,089
          Issuance of common stock
            related to 1996 acquisition
            of SCS                                   -              17,682
          Exercise of stock options                  -              52,049
          Exercise of "A" warrants                   -              10,891
          Exercise of "B" warrants                258,682            -
          Purchase of treasury stock              (18,078)          (6,375)
                                             ------------     ------------
          Weighted average common
            shares outstanding                  4,674,022        3,625,655
                                             ============     ============
         
          Net income (loss)                 $     329,531    $  (1,398,316)
          Preferred stock dividends              (229,016)        (229,016)
                                             ------------     ------------
          Net earnings available to
            common shareholders             $     100,515    $  (1,627,332)
                                             ============     ============
          Earnings (loss) per common      
            share                           $        0.02            (0.45)
                                             ============     ============

          Weighted average common
            shares outstanding                  4,674,022        3,625,655
          Effect of common shares
            issuable upon exercise of
            dilutive stock options                155,048           -
                                              -----------     ------------
          Weighted average common
            shares outstanding assuming
            dilution                            4,829,070        3,625,655
                                              ===========     ============
          Earnings (loss) per common
            share assuming dilution          $       0.02    $       (0.45)
                                              ===========     ============

</TABLE>

          The following potentially dilutive securities were not included in
          the computation of dilutive EPS because the effect of doing so
          would be antidilutive:
                        
<TABLE>
<CAPTION>

                                                  1997           1996
                                              ------------    ------------
          <S>                                   <C>            <C>
          Options                                 448,000      1,562,625
          Warrants                              4,828,716      5,828,716
          Convertible preferred stock             400,778        400,778
          Warrants issuable upon conversion
            of preferred stock if conversion
            occured prior to August 4, 1998       286,270        286,270
       
</TABLE>
















































ITEM 8:   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          None.


                                 PART III

ITEM 9:   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

          The names, ages and respective positions of the Executive
Officers and Directors of the Company are as follows:

<TABLE>
<CAPTION>
Name                     Age       Position

<S>                       <C>      <C>
Michael F. Daniels        49       Chairman of the Board, President and
                                   Chief Executive Officer

William J. Vargas         38       Vice President - Finance, Chief
                                   Financial Officer, Treasurer and
                                   Secretary

Larry M. Segall           43       Director

L. Derrick Ashcroft       69       Director


</TABLE>

MICHAEL F. DANIELS has served as Chairman of the Board of Directors,
President and Chief Executive Officer since April of 1994 and as a Director
of the Company since 1983.  He served as Chief Operating Officer of the
Company from March of 1993 to April of 1994 and as Senior Vice President -
Marketing of the Company for more than five years prior thereto.

WILLIAM J. VARGAS has served as Vice President - Finance, Chief Financial
Officer and Treasurer of the Company since May of 1995 and as Secretary of
the Company since February of 1996.  From July of 1993 to January of 1995
he was the Senior Director of Finance for Fitzgeralds Casino/Hotel and from
February of 1995 through April of 1995 he was an independent financial
consultant.  From January of 1992 to July of 1993 he was the Chief
Financial Officer of Sport of Kings, Inc., a publicly traded gaming
company.  

LARRY M. SEGALL has served as a Director of the Company since November of
1989.  Mr. Segall is currently the Chief Financial Officer of Vitamin
Industries, Inc.  From 1985 through October 1997, Mr. Segall was employed
by Tiffany & Co. as its Vice President - Treasurer and Controller.

L. DERRICK ASHCROFT has served as a Director of the Company since August of
1994.  From 1988 to 1995 he was Chairman of the Board of Cardiopet, Inc.,
an animal diagnostic firm.  Mr. Ashcroft is a graduate of Oxford
University, England.

Mr. William G. McMurtrey and Dr. David C. Ward resigned from the Company's
Board of Directors on March 25, 1997 and March 31, 1997, respectively.
Their were no disagreements related to such resignations.

Officers serve at the discretion of the Board of Directors.  All Directors
hold office for one year terms and until the election and qualification of
their successors.  The Company has a Key Employee Stock Option Committee
and an Audit Committee, each consisting of Messrs. Segall and Ashcroft.
The Board of Directors did not have a standing nomination committee or
committee performing similar functions during the year ended December 31,
1997.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission.  Officers, Directors and ten percent shareholders are required
by regulation to furnish the Company with all Section 16(a) forms they
file.  Based solely on the Company's copies of such forms received or
written representations from certain reporting persons that no Form 5's
were required for those persons, the Company believes that, during the time
period from January 1, 1996 through December 31, 1997, all filing
requirements applicable to its officers, Directors and greater than ten
percent beneficial owners were complied with.


ITEM 10.  EXECUTIVE COMPENSATION

The compensation paid and/or accrued to the Chief Executive Officer of the
Company for services rendered to the Company during the three fiscal years
ended December 31, 1997 and the compensation paid and/or accrued to the
Chief Financial Officer of the Company for services rendered to the Company
during the two fiscal years ended December 31, 1997 is presented in the
following table.  No other executive officer received annual compensation
in excess of $100,000 in any of the three fiscal years ended December 31,
1997.

(a)  Summary Compensation Table

<TABLE>
<CAPTION>
                                          Annual Compensation
                                 -------------------------------------
                                                          Other Annual    
Name of Individual and   Fiscal    Salary    Bonus        Compensation
  Principal Position      Year      ($)       ($)             ($)
----------------------   ------  --------   --------      ------------
<S>                       <C>    <C>           <C>        <C>
Michael F. Daniels        1997   $336,519      -          $181,653 (2)
  President & CEO         1996    273,077      -           258,619 (2)
                          1995    254,808  $ 25,000(1)     198,987 (2)

William J. Vargas         1997    128,871      -              -
  CFO & Secretary         1996    115,341      -              -

</TABLE>

(a)  Summary Compensation Table (cont'd)

<TABLE>
<CAPTION>

                                        Long Term Compensation
                                 -------------------------------------
                                         Awards              Payouts
                                 ------------------------   ----------    
                                             Securities     Long Term
                                 Restricted  Underlying     Incentive
Name of Individual and   Fiscal    Stock     Options/SARs     Plan
  Principal Position      Year    Awards($)      (#)        Payouts($)
----------------------   ------  ----------  ------------   ----------
<S>                       <C>        <C>        <C>             <C>
Michael F. Daniels        1997       -             -   (4)      -
  President & CEO         1996       -          250,000(4)      -
                          1995       -           79,000(4)      -

William J. Vargas         1997       -             -   (4)      -
  CFO & Secretary         1996       -           70,000(4)      -

</TABLE>

(a)  Summary Compensation Table (cont'd)

<TABLE>
<CAPTION>

                                        All
Name of Individual and   Fiscal        Other
  Principal Position      Year    Compensation($)
----------------------   ------   ---------------
<S>                       <C>          <C>
Michael F. Daniels        1997         $4,750 (3) 
  President & CEO         1996          4,750 (3)
                          1995          4,500 (3)

William J. Vargas         1997          4,750 (3)
  CFO & Secretary         1996          1,900 (3)

</TABLE>

(1)  Consists of accrued bonus pursuant to employment contract.

(2)  Consists of commission income based upon realization of excess       
     residual values related to leases entered into prior to May 15, 1993.

(3)  Represents Company matching contribution to 401(k) Profit Sharing
     Plan.

(4)  In January of 1997 and August of 1997, Messrs. Daniels and Vargas were
     granted stock options aggregating 816,000 and 345,000, respectively.
     On December 8, 1997, Messrs. Daniels and Vargas voluntarily rescinded
     their respective 1997 option grants, together with all grants received
     prior thereto, with the exception of 58,125 stock options received by
     Mr. Daniels during 1993.  Messrs. Daniels and Vargas received no
     compensation for such recissions.



(b)  Option/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>

             Number of       Percent of
             Securities      Total              
             Underlying      Options/SAR's    Exercise
             Options/SAR's   Granted to       or Base       Expiration
Name         Granted (#)     In Fiscal Year   Price($/Sh)   Date
-----------  -------------   --------------   -----------   ----------
<S>                <C>              <C>             <C>         <C>
Michael F.
  Daniels          -                -               -           -    
William J.
  Vargas           -                -               -           -     

</TABLE>

(c)  Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year
     End Option/SAR Values


<TABLE>
<CAPTION>

                                       Number of       Value of
                                       Securities      Unexercised
                                       Underlying      In-The-Money
                                       Options/SAR's   Options/SAR's
                                       At Fiscal       At Fiscal
              Shares                   Year End (#)    Year End ($)
              Acquired      Value      Exercisable/    Exercisable/
Name          On Exercise   Realized   Unexercisable   Unexercisable
-----------   -----------   --------   -------------   -------------
<S>                     <C>        <C>   <C>              <C>
Michael F.              0          0     58,125/          $37,200/
  Daniels                                  58,125          $0.00

William J.              0          0         0/0          $0.00/
  Vargas                                                   $0.00

</TABLE>

(d)  Directors Compensation

Each non-employee director of the Company is paid $1,000 per month.  In
addition, each director is entitled to participate in the Company's 1991
and 1993 Director Stock Option Plan and in the 1994 Stock Option Plan.
During 1996, the Company granted an aggregate of 300,000 options to non-
employee directors at an exercise price of $1.75 per share, which was the
market value of the Company's common stock on the date of grant.  The
Company does not pay its directors any additional fees for committee
participation.


(e)  Employment Contracts

Michael F. Daniels serves as the Company's President and Chief Executive
Officer under an employment agreement dated July 1, 1995 and expiring June
30, 2000.  Mr. Daniels' compensation under such agreement is $300,000 per
annum and he is eligible for a bonus based on company performance.  In
addition, Mr. Daniels is entitled to receive commissions equal to 25% of
the net proceeds realized by the Company in excess of the residual value of
equipment subject to leases which commenced prior to May 15, 1993 and for
which Mr. Daniels was the lead salesperson.  Pursuant to Mr. Daniels'
employment contract, if Mr. Daniels should die during the term thereof, a
death benefit equal to six-months salary ($150,000) shall be paid to his
estate.

William J. Vargas serves as the Company's Chief Financial Officer,
Treasurer and Secretary under an employment agreement dated July 1, 1995
and expiring June 30, 2000.  Mr. Vargas' compensation under such agreement
is $110,000 per annum.


ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 27, 1998, certain information
concerning those persons known to the Company, based on information
obtained from such persons, with respect to the beneficial ownership (as
such term is defined in Rule 13d-3 under the Securities Exchange Act of
1934) of shares of common stock, $0.01 par value, of the Company (the
"Common Stock") by (i) each person known by the Company to be the owner of
more than 5% of the outstanding Common Stock, (ii) each Director of the
Company, (iii) each executive officer of the Company named in the Summary
Compensation Table and (iv) all executive officers and Directors as a
group:

<TABLE>
<CAPTION>

                            Amount and Nature
Name and Address of         of Beneficial Own-     Percentage of
Beneficial Owner (1)        ership (2)             Class (3) 
----------------------      ------------------     -------------
<S>                              <C>                       <C>
Michael F. Daniels                 412,500 (4)              8.7%

William J. Vargas                   31,000                  0.7%

Larry M. Segall                    312,875 (5)              6.3%  

L. Derrick Ashcroft                255,000 (6)              5.1%

All Directors and
Executive Officers  
as a Group (4 persons)           1,011,375                 19.0%  


<F1> The address for all individuals identified herein is 6540 S. Pecos
     Road, Suite 103, Las Vegas, Nevada 89120.

<F2> Unless otherwise noted, the Company believes that all persons named in
     the table have sole investment power with respect to all shares of
     common stock beneficially owned by them.  A person is deemed to be the
     beneficial owner of securities that can be acquired by such person
     within 60 days from the date hereof upon the exercise of warrants or
     options or upon the conversion of convertible securities.  Each
     beneficial owner's percentage ownership is determined by assuming that
     options or warrants or shares of Series A Convertible Preferred Stock
     that are held by such person (but not those held by any other person)
     and which are exercisable or convertible within 60 days from the date
     hereof have been exercised or converted.

<F3> Based on 4,704,069 shares of common stock outstanding as of February
     27, 1998.

<F4> Includes options to purchase 58,125 shares of common stock granted to
     Mr. Daniels which are currently exercisable.

<F5> Includes options to purchase 300,000 shares of common stock granted to
     Mr. Segall which are currently exercisable.

<F6> Includes options to purchase 250,000 shares of common stock granted to
     Mr. Ashcroft which are currently exercisable.

</TABLE>

ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Segall, a director of the Company, was formerly an officer of Tiffany &
Co., one of the Company's customers.  Mr. Segall receives no cash or other
remuneration from the Company other than a fee for his services as a
director and participation in the Company's Director Stock Option Plans.
The Company believes that the terms of its lease arrangements with Tiffany
& Co. are fair and have been reached on an arms-length basis.


ITEM 13:  EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits
          (b)  Reports on Form 8-K: None.

(a)       Exhibits

<TABLE>
<CAPTION>

Exhibit
Number                             Description
 <C>           <S>
  3.1          Certificate of Incorporation.*
  3.2          Certificate of Amendment of Certificate of Incorporation,
               dated June 23, 1995.**
  3.3          Certificate of Amendment of Certificate of Incorporation,
               dated March 20, 1997.******
  3.4          By laws.*
  4.1          Specimen Common Stock Certificate.*
  4.2          Specimen Series A Convertible Preferred Stock Certificate.*
  4.3          Specimen Warrant Certificate.*
  4.4          Certificate of Designation of Series A Convertible Preferred
               Stock.*
  4.5          Form of Representative's Warrants.*
  4.6          Form of Class C Common Stock Purchase Warrant.*****
  4.7          Form of Class D Common Stock Purchase Warrant.*****
  4.8          Amended and Restated Warrant Agency Agreement Dated as of
               March 3, 1998, between the Company and American Stock
               Transfer and Trust Company, as Warrant Agent.*****
 10.1          Standard Office Lease - Gross dated April 7, 1995 between
               the Company and Jack Cason (relating to office space in     
               Clark County, Nevada).**
 10.2          1991 Directors' Stock Option Plan.*
 10.3          1991 Key Employees' Stock Option Plan.*
 10.4          1993 Directors' Stock Option Plan.*
 10.5          1993 Key Employees' Stock Option Plan.*
 10.6          1994 Stock Option Plan.****
 10.7          1996 Stock Option Plan.*****
 10.8          1997 Stock Option Plan.******
 10.9          Form of 1996 Non-Plan Director Stock Option Agreement.******
 10.10         Indemnification Agreement dated as of September 5, 1990
               between the Company and Michael F. Daniels.*
 10.11         Loan Agreement with Bank of America dated July 11, 1995.***
 10.12         Amendment No. 1 to Loan Agreement with Bank of America.***
 10.13         Amendment No. 2 to Loan Agreement with Bank of America.***
 10.14         Amendment No. 3 to Loan Agreement with Bank of America.***
 10.15         Amended and Restated Business Loan Agreement with Bank of
               America dated February 28, 1997.
 10.16         Bank of America Loan Modification Agreement dated July 24,
               1997.
 10.17         Second Bank of America Loan Modification Agreement dated
               February 5, 1998.
 10.18         Merrill Lynch Line of Credit Agreement.***
 10.19         Amendment No. 1 to Merrill Lynch Line of Credit Agree-
               ment.***
 10.20         Amendment No. 2 to Merrill Lynch Line of Credit Agree-
               ment.***
 10.21         Letter Agreement and Collateral Installment Note dated as of
               October 8, 1997 with Merrill Lynch Business Financial
               Services, Inc.
 10.22         Letter Agreement between the Registrant and Excel Bank, N.A.
               (formerly Union Chelsea National Bank) dated November 27,
               1995.***
 10.23         Revolving Credit Agreement with Excel Bank, N.A. dated as
               March 8, 1998.
 21            List of Subsidiaries.
 27            Financial Data Schedule.

<F*>      Incorporated by reference to the Company's Registration Statement
          on Form S-2, as filed with the Securities and Exchange Commission
          on June 10, 1993, Registration No. 33-64246.
<F**>     Incorporated by reference to the Company's Post Effective
          Amendment No. 1 on Form S-2 to its Registration Statement on Form
          S-2, as filed with the Securities and Exchange Commission on
          August 1, 1995, Registration No. 33-93274.
<F***>    Incorporated by reference to the Company's 1995 Annual Report on 
          Form 10-KSB/A, as filed with the Securities and Exchange
          Commission on April 23, 1996, Commission File No. 0-18303.      
<F****>   Incorporated by reference to the Company's 1994 Proxy Statement, 
          Commission File No. 0-18303.
<F*****>  Incorporated by reference to the Company's 1996 Proxy Statement, 
          Commission File No. 0-18303.
<F******> Incorporated by reference to the Company's Registration Statement
          on Form S-8/S-3, as filed with the Securities and Exchange
          Commission on June 11, 1997, Commission File No. 333-28921.

</TABLE>

                                SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                        LEC TECHNOLOGIES, INC.     
                                   

Date:  March 27, 1998              By:  /s/ Michael F. Daniels             
                                        Michael F. Daniels, President
                                        and Chief Executive Officer

In accordance with 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:  March 27, 1998              By:  /s/ Michael F. Daniels             
                                        Michael F. Daniels, President and
                                        Chief Executive Officer 
                                        (Principal Executive Officer)


Date:  March 27, 1998              By:  /s/ William J. Vargas              
                                        William J. Vargas, V.P.           
                                        Finance (Principal Financial and
                                        Accounting Officer)
                                             

Date:  March 27, 1998              By:  /s/ Larry M. Segall                
                                        Larry M. Segall, Director



Date:  March 27, 1998              By:  /s/ L. Derrick Ashcroft, Director  
                                        L. Derrick Ashcroft, Director