Exhibit 99.1
                            Paragon Homefunding, Inc.
                        (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)

                          Audited Financial Statements

                   The period from August 3, 2001 (inception)
                              To December 31, 2001

                                  Contents                              Page

Report of Independent Certified Public Accountants                        2

Financial Statements:

        Balance Sheet at December 31, 2001                                3

        Statement of Operations for the period from August 3, 2001
        (inception) to December 31, 2001                                  4

        Statement of Shareholder's Equity for the period from August
        3, 2001 (inception) to December 31, 2001                          5

        Statement of Cash Flows for the period from August 3, 2001
        (inception) to December 31, 2001                                  6

        Notes to Financial Statements                                     7

<PAGE>
               Report of Independent Certified Public Accountants


To the Board of Directors and Stockholders of Paragon Homefunding, Inc.:

In our opinion,  the  accompanying  balance sheet and the related  statements of
operations,  cash  flows,  and  stockholders'  deficit  present  fairly,  in all
material  respects,  the  financial  position  of Paragon  Homefunding,  Inc. (a
development  stage  enterprise)  at December  31,  2001,  and the results of its
operations  and its cash  flows for the  period  from  August  3, 2001  (date of
inception) to December 31, 2001 and, cumulatively, in conformity with accounting
principles  generally accepted in the United States of America.  These financial
statements   are  the   responsibility   of  the   Company's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
auditing  standards  generally  accepted in the United States of America,  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements,  the Company has suffered losses from operations and has a
net  capital  deficiency  that  raise  substantial  doubt  about its  ability to
continue as a going concern.  Management's  plans in regard to these matters are
also  described  in  Note  1.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.

As described in Note 7 to the financial  statements,  the Company is a defendant
in certain  litigation filed against  PlanetRx.com,  Inc.,  (merged with Paragon
Homefunding,  Inc.,  on May 31,  2002).  The  Company is unable to  predict  the
outcome  of the  suits and  their  ultimate  effect,  if any,  on the  Company's
financial condition, results of operations, or cash flows.




/s/ PricewaterhouseCoopers LLP

October 7, 2002


                                       2

<PAGE>

                            Paragon Homefunding, Inc.
                        (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)
                                  Balance Sheet
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                               2001
                                                                                       ----------------
ASSETS
<S>                                                                                             <C>
Current assets:
      Cash and cash equivalents                                                        $        --
                                                                                       ----------------

         Total current assets                                                                   --
                                                                                       ----------------
                  Total assets                                                         $        --
                                                                                       ================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                                                                 $        42
      Accrued salaries and related benefits                                                    154
                                                                                       ----------------
         Total liabilities                                                                     196

Commitments and contingencies (Note 7)

Stockholders' equity:
      Preferred Stock: issuable in series, $0.0001 par value;
      5,000 shares authorized; no shares issued and outstanding                                 --
      Common Stock: $0.0001 par value; 200,000 shares authorized;
      33,822 shares issued and outstanding at December 31, 2001                                  3
      Additional paid-in capital                                                                --
      Subscriptions receivable                                                                  (3)
      Deficit accumulated during development stage                                            (196)
                                                                                       ----------------
         Total stockholders' equity                                                           (196)
                                                                                       ----------------
                  Total liabilities and stockholders' equity                           $         0
                                                                                       ================
</TABLE>

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

                                       3
<PAGE>

                            Paragon Homefunding, Inc.
                        (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)
                             Statement of Operations
                    (in thousands, except per share amounts)
<TABLE>
<CAPTION>

                                                                                           Period from August 3,
                                                                                            2001 (inception) to
                                                                                             December 31, 2001
                                                                                         ------------------------


<S>                                                                                          <C>
Net revenue                                                                              $      --

Operating expenses:
         Salaries, wages and related benefits                                                  154
         Professional fees                                                                      25
         General and administrative                                                             17
                                                                                         --------------
                  Total operating expenses                                                     196
                                                                                         --------------
Net loss available to common shareholders                                                $    (196)
                                                                                         ==============
Basic and diluted net loss per share                                                     $   (0.01)
                                                                                         ==============
Weighted average shares used to compute basic and diluted net loss per share                31,954
                                                                                         ==============

</TABLE>

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

                                       4

<PAGE>

                            Paragon Homefunding, Inc.
                        (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)
                                    Statement
                             of Stockholders' Equity
      For the period from August 3, 2001 (inception) to December 31, 2001
                                 (in thousands)

<TABLE>
<CAPTION>


                                                Preferred Stock   Common Stock   Additional Stock         Deficit Accumulated
                                             ------------------ --------------   Paid-in    Subscriptions During the
                                             Shares    Amount   Shares  Amount   Capital    Receivable    Development Stage   Total
                                            -------- --------   ------  ------   ---------- ------------- ------------------- -----
<S>                                         <C>         <C>       <C>      <C>      <C>         <C>           <C>              <C>
Issuance of common shares August 3, 2001        --    $ --      $30,673  $ 3      $  --       $  (3)        $     --         $   --

Issuance of common shares August 3, 2001                          3,149  $ --                                                    --

Deficit accumulated during the development                                                                      (196)          (196)
                                            --------  -------   -------- ------   -------     ---------     ---------        -------
Balance at December 31, 2001                    --    $ --      $33,822  $ 3      $  --       $  (3)        $   (196)        $ (196)
                                            ========  =======   ======== ======   =======     =========     =========        =======
</TABLE>

                                       5
<PAGE>




                            Paragon Homefunding, Inc.
                       (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)
                             Statement of Cash Flows
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                              Period from August 3,
                                                                               2001 (inception) to
                                                                                December 31, 2001
                                                                              -----------------------


<S>                                                                                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net loss                                                                $    (196)

         Changes in assets and liabilities:
                  Accounts payable                                                   42
                  Accrued salaries and related benefits                             154
                                                                              -------------

                           Net cash used in operating activities                     --

CASH FLOWS USED IN INVESTING ACTIVITIES:
      Purchase of property and equipment                                             --

CASH FLOWS FROM FINANCING ACTIVITIES:
      Net proceeds from issuance of common stock                                     --
                                                                              -------------

Increase in cash and cash equivalents                                                --
Cash and cash equivalents at beginning of period                                     --
                                                                              -------------
Cash and cash equivalents at end of period                                    $      --
                                                                              =============
</TABLE>


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

                                       6

<PAGE>
                            Paragon Homefunding, Inc.
                        (A Development Stage Company that
                 merged with PlanetRx.com, Inc. on May 31, 2002)
                          Notes to Financial Statements
                    (in thousands, except per share amounts)

1.       The Company and Basis of Presentation

The Company

Paragon Homefunding,  Inc., ("Paragon"),  is a Delaware corporation incorporated
in  August  2001.  Paragon  is  a  privately  held,  development  stage  company
headquartered in Ponte Vedra Beach, Florida, that intends to enter the financial
services market through acquisitions. As of December 31, 2001 the Company had no
revenues.  These  financial  statements  have been prepared in  accordance  with
Statement of Financial  Accounting Standards No. 7, "Accounting and Reporting by
Development  Stage  Enterprises,"  to  recognize  the fact that the  Company  is
devoting  substantially  all of its efforts to  establishing  a new business and
planned  principal  operations have not commenced,  nor can the Company give any
assurance when or if operations  will ever  commence.  The Company has generated
losses  since its  inception  and has  placed  substantial  reliance  on raising
capital in order to meet its  obligations as they become due. As of December 31,
2001,  no  obligations  have been paid.  The continued existence of Paragon will
depend on a number of factors,  including the ability to secure adequate sources
of capital as well as locating and funding acquisitions of suitable companies.

2.       Summary of Significant Accounting Policies

Use of Estimates

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

Cash and cash equivalents

The Company  considers all  investments  with an original  maturity of less than
three  months  to be cash  and  cash  equivalents.  The  Company  evaluates  the
financial strength of institutions at which significant investments are made and
believes the related credit risk is limited to an acceptable level.

Property and Equipment

Property and equipment are stated at cost. The Company provides for depreciation
and amortization of equipment using the straight-line  method over the estimated
useful lives, generally ranging from two to seven years.

Preoperating Costs

Costs incurred during the development  stage,  such as expenses  associated with
the evaluation of potential acquisitions, are expensed as incurred.

Accounting for Stock-Based Compensation

The Company has adopted  Statement of Financial  Accounting  Standards  No. 123,
Accounting  for  Stock-Based  Compensation  (SFAS No. 123). As permitted by this
statement,  the Company  applies  Accounting  Principles  Board  Opinion No. 25,
Accounting  for Stock  Issued  to  Employees,  to  account  for its  stock-based
employee compensation arrangements.

                                       7
<PAGE>

Income Taxes

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting  Standards No. 109, Accounting for Income Taxes (SFAS No. 109). Under
SFAS No. 109,  deferred tax assets and liabilities are recognized for future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
basis.  A  valuation  allowance  equal  to the  deferred  tax  assets  has  been
established  since the Company is a  development  stage  entity and the deferred
assets will not be realized  unless the Company  produces  taxable  income.  The
deferred  tax  assets,  which  total  $74,  primarily  relate  to  nondeductible
compensation expenses of $58 and a net operating loss carryforward of $16.

3.       Net Loss per Share

Basic net loss per share is  computed  by  dividing  the net loss  available  to
common  stockholders  for the period by the weighted average number of shares of
common  stock  outstanding  during  the  period.  Diluted  net loss per share is
computed  using  the  weighted  average  number  of  common  shares  and  common
equivalent  shares  if  dilutive.   Common  equivalent  shares  consist  of  the
incremental  common  shares  issuable  upon the  exercise  of stock  options and
warrants  (using the treasury stock method),  and the common shares  outstanding
subject to repurchase.  The periods  presented  below exclude common  equivalent
shares,   as  the  effect  of  such  shares  on  a  weighted  average  basis  is
anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per
share for the periods indicated (in thousands, except per share amounts):

                                                        For the period August 3,
                                                           2001 (inception) to
                                                            December 31, 2001
                                                        ------------------------

Numerator: Net loss available to common shareholders    $   (196)

Denominator: Weighted average common shares               31,954
                                                        -----------
Basic and diluted net loss per share                    $  (0.01)
                                                        ===========

4.       Accrued Salaries, Benefits and related

The Company has entered into employment  agreements with its executive officers.
All executive  officers have elected to defer receipt of the salaries,  benefits
and other items due them pursuant to such contracts  until the Company  acquires
sufficient  operating  capital through the  acquisition of operating  companies,
fundraising  or both. At December 31, 2001 the Company had accrued $154 pursuant
to these contracts.

5.       Stockholders' Equity

The Company was founded on August 3, 2001 and 30,673 shares of common stock were
issued to its founders at a par value of $0.0001 per share. No cash was invested
and the Company  recorded a subscription  receivable in the amount of $3 for the
issuance of the shares.

In October the  Company  issued  3,149  shares to several  consultants  who were
assisting the Company with the  development  of its business plan. In accordance
with SFAS No. 123 the  shares  were  recorded  at their  fair  value,  which was
estimated to be par value.


                                       8
<PAGE>

6.       Subsequent Events (unaudited)

On May 31, 2002  PlanetRx.com  ("PlanetRx"  or the  "Company"),  a public  shell
company,  merged with Paragon  Homefunding,  Inc. For accounting  purposes,  the
transaction  has been  treated as a  recapitalization  of Paragon  with  Paragon
viewed  as the  acquirer  in a  reverse  acquisition.  As a  result,  historical
stockholders'  equity of  Paragon  prior to the  merger  has been  retroactively
restated for the equivalent  number of shares  received in the merger by Paragon
after  giving  effect  to the  difference  in par  value of the  PlanetRx's  and
Paragon's stock with the difference  recorded as paid-in  capital.  PlanetRx was
incorporated in Delaware on March 31, 1995 and operated as an online  healthcare
destination for commerce,  content and community.  The Company closed its online
health  store  in  March  2001 and  shortly  thereafter  began  the  process  of
liquidating and dissolving the Company.  The merger with Paragon  completed this
process.

Pursuant to the merger, a wholly-owned subsidiary of the Company merged with and
into Paragon, and the Company issued approximately 55,561 shares of common stock
to the Paragon stockholders  equaling 90% of the total outstanding shares of the
Company's  common  stock  immediately  after the merger.  As a result,  the then
existing stockholders of the Company saw their ownership stake reduced from 100%
to 10% of the outstanding common stock. As a result of the merger,  Paragon also
assumed  approximately $61 of PlanetRx's accured liabilities for legal services.
There could be further  dilution of this  interest  following  the merger in the
event that the  Company  issues  additional  shares of common  stock.  Paragon's
management has assumed control of the Company.  Paragon has no operating history
and we give no assurance when or if we will ever commence operations.  Thus, our
ability to continue to exist will depend on a number of factors,  including  the
ability to secure  adequate  sources of capital as well as locating  and funding
acquisitions of suitable companies.

In September  2002 the Company  entered into a  non-binding  letter of intent to
acquire a company in the  financial  services  field.  The proposed  transaction
contemplates,  among other things, that PlanetRx will issue approximately 53,000
unregistered  shares of common  stock to the seller.  The  Company is  currently
negotiating  the terms of definitive  agreements  and  determining  the ultimate
structure of, and  consideration in, the transaction and cannot assure that this
transaction will be entered into or closed.

7.       Commitments and Contingencies

On March 27, 2001, SDR Investors,  LP filed a lawsuit against PlanetRx,  certain
underwriters  of the  Company's  initial  public  offering in October  1999 (the
"IPO"),  and  certain  former and current  directors  of the  Company.  Named as
additional defendants in the suit, which was filed in the United States District
Court for the Southern District of New York, are The Goldman Sachs Group,  Inc.,
BancBoston  Robertson  Stephens,  Inc., Merrill Lynch,  Pierce,  Fenner & Smith,
Incorporated,  and Salomon Smith Barney,  Inc., each of which was an underwriter
of the IPO;  William  J.  Razzouk  and  Christos  M.  Cotsakos,  who are  former
directors  of the  Company;  and David M.  Beirne and Michael  Moritz,  who were
current  directors of the Company at the time the complaint  was filed,  but are
now former  directors  of the company.  Between  April 19, 2001 and May 4, 2001,
five virtually identical additional complaints were filed. One of the additional
complaints also names as defendants  Hambrecht & Quist LLC,  William Blair & Co.
LLC,  Bear  Stearns & Co.,  Inc.,  additional  underwriters  of the IPO,  Morgan
Stanley Dean Witter & Co.  Incorporated  and Credit  Suisse First Boston  Corp.,
which were not underwriters of the IPO, and Steve  Valenzuela,  a former officer
of the Company.  The suits generally allege that the defendants violated federal
securities  laws  by not  disclosing  certain  actions  allegedly  taken  by the
underwriter defendants in connection with the IPO. The suits allege specifically
that  the  underwriter  defendants,  in  exchange  for the  allocation  to their
customers of shares of the Company's common stock sold in the IPO, solicited and
received from their customers  undisclosed  commissions on transactions in other
securities and required  their  customers to purchase  additional  shares of the
Company's  common stock in the  aftermarket at  pre-determined  prices that were
above  the  IPO  price.  The  suits  seek   unspecified   monetary  damages  and
certification of a plaintiff class consisting of all persons who acquired shares
of the Company's  common stock between  October 6, 1999, and March 24, 2001. The
complaints  have  been  consolidated  into  a  single  action,  which  is  being
coordinated  with several hundred other nearly  identical  actions filed against
other  companies  before one judge in the U.S.  District  Court for the Southern
District of New York. No date has been set for any response to the complaint. As
of the date hereof, the Company is unable to predict the outcome of the suit and
its ultimate effect, if any, on the Company's  financial  condition,  results of
operations, or cash flows.

                                        9

<PAGE>

On June 19, 2001,  vTraction,  Inc.  filed a complaint for breach of contract in
the Chancery Court of Tennessee for the Thirtieth  Judicial  District at Memphis
alleging that the Company  entered into an oral agreement with vTraction to sell
certain  equipment  and  later  reneged,  and  claiming  damages  in  an  amount
including, but not limited to, the difference between the price agreed to in the
alleged oral  contract and the market  price of the  equipment.  The Company has
filed an answer  asserting the affirmative  defenses of failure of consideration
and statute of frauds and denying the existence of an oral  contract.  As of the
date  hereof,  the  Company is unable to predict the outcome of the suit and its
ultimate  effect,  if any,  on the  Company's  financial  condition,  results of
operations, or cash flows.

                                       10