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The Company has a policy to put on its Web Site all press releases for the previous 12 months with the exact wording as the releases were sent to shareholders and press wire services. No attempt is made to correct or update the releases in any manner. They are on the Web Site strictly to provide a historical record of releases for the last 12 months. As a result, all releases, particularly those with financial information or forward looking statements, should be read with the understanding that they may be out of date and that new information may be available in other press releases or in documents file with the Securities & Exchange Commission. Before reading any press release, please read the forward-looking statement included on this web page that describes the risks associated with any such statement made by the Company or its management.


List of Releases

Incomnet Revises Results For 4th Quarter 1997

Incomnet Submits Proposed Settlement Offer To SEC

Incomnet Reports 21% Gain in 3rd Quarter Revenues; Cites Progress in Resolving Legal Problems

Incomnet 3rd Quarter 1997 Earnings Release Conference Call

Incomnet Subsidiary Settles Consumer Protection Lawsuit

Incomnet Settles Class Action Lawsuit

Incomnet Responds To California Public Utility Commission Inquiry

Incomnet Adds New Board Members

Incomnet Reports Record Second Quarter

Incomnet to receive 1,047,966 shares of its stock in settlement of 16(b) litigation

Incomnet Reports Record 1997 First Quarter Results

Incomnet Holds First Quarter Conference Call

Incomnet Announces Preliminary Settlement

Former Shareholders Allowed to Opt Out of Class Action Suit

Incomnet Acquires California Interactive Computing Inc.

Incomnet Reports 1996 4th Quarter & Year End Results

Fourth Quarter 1996 & Year End Earnings Results Conference Call

ICNT Conference Call Anticipated Questions April 15, 1997

Incomnet Settles Two Shareholder Lawsuits

Incomnet's Rapid Cast Subsidiary Sells Minority Interest To J. P. Morgan Capital Corp. and The Clipper Group

Incomnet's NTC Subsidiary Names James Quandt President

Incomnet's Rapid Cast Subsidiary Settles Patent Lawsuit

Incomnet Announces Partial Spin-off of NTC Subsidiary

Home Page | About Incomnet | Letter to Shareholders | Market Information

 


INCOMNET

Incomnet Revises Estimated Results for Fourth Quarter 1997

WOODLAND HILLS, CA - December 15, 1997 - Incomnet, Inc. (Nasdaq: ICNT) today announced that it expects to report an operating loss for the fourth quarter ending December 31, 1997 resulting from lower than anticipated revenue at the Company’s NTC subsidiary. The Company stated that it anticipates revenues at NTC to approximate $25 million for the fourth quarter, which would represent an approximate 12% decline when compared to the same period of last year.

The Company said that the anticipated decline in revenue at its NTC subsidiary is due to (1) the attrition of long distance subscribers at NTC and (2) a slow-down in NTC’s marketing program resulting from after-effects of the Company’s previously announced settlement of a consumer protection lawsuit with the state of California.

Melvyn Reznick, Incomnet’s President and CEO, stated that NTC has taken a series of actions to correct this situation. "The Company has aggressively moved to increase its base of telephone customers and independent sales representatives. Last month, NTC launched a multi-city marketing campaign that is the largest in its history to attract new independent sales representatives. We expect to begin to see the results of these efforts in the first quarter of 1998," he said.

Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications and software/networking industries. Incomnet’s wholly-owned subsidiary, National Telephone & Communications, Inc., is a reseller of long distance and other communications products to residential and small business customers through its independent sales representatives using a network marketing strategy. Incomnet was recently ranked #10 on the list of 1997 Southern California Technology Fast 50 Companies.

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INCOMNET

INCOMNET SUBMITS PROPOSED SETTLEMENT OFFER TO SEC

WOODLAND HILLS, CA - DECEMBER 15, 1997 - Incomnet, Inc. (NASDAQ:ICNT) announced that it has submitted an Offer of Settlement to the Pacific Regional Office of the Securities and Exchange Commission (SEC) to resolve a proposed public administrative and cease and desist proceeding against the Company.

Under terms of the Offer of Settlement, the Company, without admitting or denying any specific findings by the SEC or paying any civil penalties, will agree to an order to cease and desist from committing or causing any violations of or any future violations of Section 10 (b) and 13 (a) of the Exchange Act and Rules 10b-5, 12b-20, 13a-11 and 13a-13 thereunder. In a proposed Order that accompanies the Offer of Settlement, the SEC has found that the Company violated the referenced statutes and regulations in connection with press releases issued by the Company in January 1995 and a Form 8-K filed by the Company in August 1995.

On November 15, 1995, the Company reorganized its Board of Directors to include more outside directors. On November 30, 1995, the Company’s former Chairman of the Board and Chief Executive Officer resigned and the new Board of Directors appointed new management.

The Offer of Settlement is subject to final acceptance by the Commission. There can be no assurances that such acceptance will be forthcoming. The Company’s offer was submitted solely for the purpose of settling the proceeding and with the express understanding that it would not be used in any proceeding unless accepted by the Commission.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet’s telecommunications services consist of telephone services provided by its wholly-owned subsidiary, National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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INCOMNET

Incomnet Reports 21% Gain in Third Quarter Revenues

Cites Progress in Resolving Legal Problems

 

WOODLAND HILLS, CA - November 4, 1997 - Incomnet, Inc. (Nasdaq: ICNT) today reported a 21% increase in revenues to $33.3 million for the Company’s third quarter ended September 30, 1997, as compared with $27.6 million in revenues for the same period last year. The Company also stated that it made significant progress in resolving its past legal issues during the quarter.

Incomnet said that in the current year’s third quarter, income before the effects of one-time charges for the period was approximately $800,000, or $0.06 per share on 13.7 million shares outstanding versus income before the effects of one-time charges for the same period last year of approximately $700,000, or $0.05 per share on 13.3 million shares outstanding. Including one-time charges related to legal and regulatory settlements, the Company reported a net loss of $9.6 million, or $0.70 per share on 13.7 million shares in this year’s third quarter, compared with a net loss after one-time charges for the third quarter last year of $9.3 million, or $0.70 per share on 13.3 million shares outstanding.

The net loss for the current period includes one-time charges of $8.65 million for settling a class action lawsuit against the Company, $1.6 million for settling a lawsuit and related regulatory actions against the Company’s wholly-owned subsidiary, National Telephone & Communications (NTC) and an additional $125,000 for other one-time legal-related expenses. The Company’s weighted average common shares and equivalents outstanding of 13.7 million shares for the quarter reflects 1.1 million shares that were returned to the Company by Sam D. Schwartz, the Company’s former Chairman and CEO, in settling a 16(b) lawsuit and a reserve of 1.5 million shares associated with the Company’s settling of a class action lawsuit.

Melvyn Reznick, Incomnet’s president and CEO, said, "We have made tremendous progress in untangling the Company from its legal troubles during the third quarter and are now in a better position to concentrate on growing the business. To this end, our NTC subsidiary is launching a multi-city marketing campaign this month that is the largest in its history."

For the first nine months of 1997, the Company has reported revenue of $99.3 million, a 29% growth rate when compared to reported revenue for the same period of last year of $77.3 million. Year-to-date income before the effects of non-recurring charges total $3.3 million, or $0.24 per share on 13.7 million shares outstanding, versus income before the effects of non-recurring charges of $1.4 million, or $0.11 per share on 13.3 million shares outstanding, for the same period last year. After the inclusion of non-recurring charges related to legal settlements, the Company has reported a year-to-date net loss of $7.2 million, or $0.53 per share on 13.7 million shares compared to a net loss of $8.6 million, or $0.65 per share on 13.3 million shares for the same period last year.

The Company’s NTC subsidiary achieved revenues of $32.3 million for the quarter ended September 30, 1997, a 25% increase over the $25.8 million reported for the third quarter of 1996. NTC had an operating profit of approximately $700,000 versus $1.2 million for the same period last year. For the 3rd quarter ended September 30, 1997, NTC reported an overall loss of approximately $940,000, or $0.07 per share, due to a reserve of $1.6 million for settlement of a civil consumer protection lawsuit with the State of California.

The Company’s software and networking division, which includes AutoNETWORK, and its 100%-owned subsidiary, GenSource Corporation, had revenues of $1.0 million and earnings of approximately $130,000 for the third quarter ended September 30, 1997. GenSource was acquired in May 1997 as California Interactive Computing, Inc. and changed its name in October 1997 to GenSource.

Incomnet’s consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, NTC and GenSource Corporation. Reported financial statements do not include consolidated results of Rapid Cast Inc., the Company’s 25% owned subsidiary, which is accounted for using the equity method of accounting under FASB statement No. 94. Prior to the first quarter of 1997 the Company owned 51% of Rapid Cast and used the consolidated method of accounting for Rapid Cast, Inc.

Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications and software/networking industries. Incomnet’s wholly-owned subsidiary, National Telephone & Communications, Inc., is a reseller of long distance and other communications products to residential and small business customers through its independent sales representatives using a network marketing strategy. Incomnet was recently ranked #10 on the list of 1997 Southern California Technology Fast 50 Companies.

 

THIRD QUARTER ENDED SEPTEMBER 30, 1997

  1997 1996
Revenues MM $33.3 $27.6
Income Before Effects of One-Time Charges MM $0.8 $0.7
Net Income/ (Loss) MM $(9.6) $(9.3)
Per Share $(0.70) $(0.70)
Weighted Average Common Shares and Equivalents MM 13.7 13.3

 

NINE MONTHS ENDED SEPTEMBER 30, 1997

  1997 1996
Revenues MM $99.3 $77.3
Income Before Effects of One-Time Charges MM $3.3 $1.5
Net Income/ (Loss) MM $(7.2) $(8.6)
Per Share $(0.53) $(0.65)
Weighted Average Common Shares and Equivalents MM 13.7 13.3

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INCOMNET

Incomnet Q3 1997 Conference Call

Good afternoon ladies and gentlemen and welcome to Incomnet's Third Quarter 1997 Operating Results Conference Call. I would like to thank everyone for joining us today. With me on this call are Jim Quandt, President and CEO of National Telephone and Communications, Steve Caswell, Incomnet's Corporate Secretary, and Mr. Sean Beers of Fi.Comm, our investor relations firm in Portland, Oregon.

This afternoon, we issued a press release that presented our third quarter 1997 results from operations. The purpose of this call is to review those results with you, to update everyone on significant events which have occurred during the third quarter, to further clarify the direction in which Incomnet's business is headed and to answer questions that any of you might have.

Starting with the income statement, revenue for the third quarter came in at $33.3 million which represents a 21% increase over the $27.6 million in revenue reported for the third quarter of 1996. We did, however, experience a slight decline in revenues from the second quarter of 1997 largely resulting from certain operational issues that transpired at our National Telephone and Communications subsidiary. Jim Quandt, the President of NTC, will lead us through a more detailed discussion of NTC's operations following this financial statement analysis.

Revenue at NTC was $32.3 million for the third quarter 1997, compared to revenue of $25.8 million for the same period of last year, a 25% growth rate. Here again, NTC experienced a slight downturn in sequential revenues and the reasons behind this situation will be covered a bit later in the call. Of the $32.3 million in revenue generated by NTC, $28.7 million came from telecommunications services and $3.6 million was generated through our marketing program.

As was the case in the last two quarters, absent from our financial presentation this quarter is any revenue or loss from our Rapid Cast subsidiary. This is a result of the accounting treatment for our investment in Rapid Cast. Since Incomnet now holds a 25% stake in Rapid Cast's business, we account for their operations on the equity basis as prescribed by generally accepted accounting principles. Our financial relationship with Rapid Cast, is now reflected on our balance sheet as an investment. When and if Rapid Cast turns profitable, we will be able to book our pro-rata portion of their earnings as revenues. And because we have written off our investment, we do not have to report any of their losses.

Moving on, our computer networking and software division reported revenues of $1.0 million for the quarter and operating earnings of $130,000. This division includes both our AutoNetwork, used parts locating network and our recent acquisition of California Interactive Computing, recently renamed GenSource, which is in the insurance related, claims processing software business. We remain extremely pleased with this operation as it has had an immediate positive impact on Incomnet's operating results, and the future potential for this business unit is very positive.

After accounting for non-recurring charges in the amount of $10,375,000, Incomnet reported a consolidated net loss of $9.6 million for the third quarter of 1997 as compared to the net loss of $9.3 million reported for the third quarter of last year. Without the effect of non-recurring, one-time charges for the quarter, Incomnet would have reported earnings of approximately $800,000, or $0.06 per share, as compared to earnings, exclusive of one time charges, of approximately $700,000, or $0.05 per share from the same period of last year. On a per share basis, we are reporting a loss of $0.70 per share on 13.7 million weighted average shares outstanding for the third quarter of 1997 as compared to a per share loss of $.70 on 13.3 million shares for the same period of last year.

Moving to the balance sheet. As of September 30th, 1997, cash and cash equivalents were at $1.2 million while net accounts receivable at quarter end stood at $18.9 million, which is an increase from net accounts receivable at year end of $13.2 million. The increase here is largely due to our increasing telephone revenues. Total current assets as of September 30th, 1997, were $23.4 million which is up from the $20.2 million at year end. Total assets as of September 30th, 1997, stood at $48.7 million, which is up significantly from the $40.6 million in total assets at the end of last year, largely again as a result of the increase in our accounts receivable.

Turning to the liability side of the balance sheet, our current liabilities as of September 30, 1997, were $24.3 million, which is down from the $30.9 million in current liabilities reported as of December 31, 1997. The company's current ratio is improving and now stands at 0.96 to 1.

Total stockholder equity at September 30th, 1997, increased to about $11.4 million, which is a significant increase from the $8.6 million that we reported at the end of last year. This fairly well covers the financial statement analysis. At this point, I would like to move on and review some significant events which have occurred during this quarter.

On July 10, 1997, Incomnet announced that the U.S. District Court for the Southern District of New York had given final approval to the settlement of the previously discussed 16(b) litigation involving the Company’s former chairman and president. Terms of the settlement provided that Sam D. Schwartz, Incomnet’s former chairman and president, pay to the company cash and stock with a total value of $4,250,000. The net proceeds to the Company, after legal fees and expenses, was $3,626,450. Incomnet received 1,047,966 shares of Incomnet common stock and $600,000 in cash. Needless to say, we are pleased to have this episode behind us.

On October 7, 1997, Incomnet announced that it had settled the class action lawsuit that had been filed against the Company in January of 1995 by persons who purchased Incomnet stock during the period of August 1, 1994 to September 1, 1995. This settlement, which is still subject to court approval, consists of a payment of $500,000 in cash plus securities with a value of $8.15 million for a total settlement value of $8.65 million. The securities consist of 1,500,000 shares of the Company’s common stock, plus a number of warrants to be determined if the value of the common stock does not equal at least $8.15 million after the settlement is approved. Due to the Company’s retiring 1,047,966 shares of common stock earlier in the quarter as a result of the previously mentioned settlement with Sam Schwartz, this settlement creates a net dilution to shareholders of 452,034 shares of common stock if no warrants are issued. If the court approves the settlement, the Company expects the valuation and distribution of securities to occur in the Spring of 1998. The effects of this settlement are fully reflected in the third quarter financial results, and, as such, Incomnet will not suffer any further financial damage related to this class action settlement. As most of you are aware, this has been an extremely long, expensive, and drawn out process, and at this point we are all very relieved to have this phase of Incomnet’s recovery behind us.

On September 17, 1997 Incomnet announced that the California Public Utility Commission had issued an order instituting investigation of our NTC subsidiary to determine whether NTC had violated PUC Code 2889.5 which governs the changing of a subscribers telephone service. Subsequent to the order of investigation, we have been working with the California Public Utilities Commission and the California Attorney Generals office in seeking a swift and fair resolution to this matter. Additionally, the Company has instituted the PUC’s required procedure for third party verification of all new customers as well as an in-house outbound calling program which will further protect the utility customers of California by ensuring that their service providers are not switched without their full consent and approval. On October 28, 1997, Incomnet announced that NTC had indeed reached a settlement with the State of California on this issue. The settlement provides that NTC cease the unauthorized switching of customers’ long distance service without their permission or knowledge and agree to pay $1,250,600 in costs and penalties. There is an as-yet un-resolved part of this settlement. It is probable that Incomnet will, as part of the settlement with the PUC, be required to provide restitution to the complainants. The eventual cost of the restitution is unknown at this time, but the Company has reserved what it feels is an adequate dollar amount to cover potential damages. Here again, the effects of this settlement are fully reflected in the third quarter financial results, and, as such, Incomnet will not suffer further financial damage related to the resolution of the PUC issue.

Also during the quarter Incomnet added three new members to its board of directors.

Richard M. Horowitz has served as President of Management Brokers Insurance Agency (Los Angeles, California) since 1974. He also serves as Chairman of Leviathan Corporation, a computer sales, consulting and software company, and is Chairman of Dial 800, Inc., a national telecommunications company. He is also a member of the Board of Directors of Trio-Tech International, a company that produces environmental testing equipment.

Stanley C. Weinstein is a co-founder and the Managing Shareholder of Weinstein Spira & Company, P.C. Certified Public Accountants, which was established in 1962 in Houston, Texas. His expertise includes diverse business consulting, executive recruitment and compensation, and the development and utilization of marketing strategies. Mr. Weinstein attended Rutgers University and obtained a B.B.A. from Upsala College. He is a member of the American Institute of certified Public Accountants (AICPA) and the Texas Society of Certified Public Accountants (TSCPA).

David Wilstein is the President and Chairman of the Realtech Group, a real estate development and management firm in Los Angeles, California, which he founded in 1968. He is also the Chairman of the Board of Aero Products Research, a company that develops plastic products and is a member of the Board of C. I. Systems, a company that develops electro-optical test equipment. Mr. Wilstein has a B.S. in civil-structural engineering from the University of Pittsburgh.

Each of these gentlemen brings diverse business experience and expertise to Incomnet’s board. The Company’s board is now more qualified to serve shareholders.

Regarding the SEC investigation, the process of resolution with the SEC is still in progress and the Company has reason to believe that this matter could possibly be concluded by year end. This is the extent to which I am able to comment on this situation at this.

I know many of you have questions regarding the previously discussed spin-off or IPO of NTC. At this point I can say that we are continuing to examine an alternative means of allowing NTC their independence and we hope to have this process completed during the first quarter 1998.

One final note, the Incomnet annual meeting will be held on December 15, 1997 at 9:30 am at the Marriot in Woodland Hills, California.

This covers the significant non-operating events which have occurred during the third quarter and since we last reported to you. At this point, I would like to brief everyone on the outlook for the several subsidiaries within Incomnet.

Before I do so, however, per the Private Investment Litigation Act of 1995, I need to remind everyone that any statements made or to be made on this conference call by myself or by any of the other officers on this call who are with me, including statements made with respect to financial condition, operating results, business prospects, settlement of the class action lawsuit or any other aspect of the company and its subsidiaries are forward looking in nature and are therefore necessarily subject to risk and uncertainty. Any statements made on this call regarding the company and its subsidiaries, actual financial condition, operating results and business performance may differ materially from those projected by the company in its forward looking statement.

For information about factors that could cause future results to be different than those suggested on this call, please see the company's Form 10K statement dated April 15th, 1997, filed with the Securities and Exchange Commission. In particular, I refer you to the section entitled ``Risk Factors and Management's Discussion and Analysis of Financial Conditions and the Result of Operations.''

As usual, when I go through the disclaimer that the Private Investment Litigation Act of 1995 requires, I remind everybody that we do this for your protection and for the protection of all Incomnet shareholders.

At this point, I would like to hand the call over to Jim Quandt, president of Incomnet's wholly owned subsidiary, National Telephone and Communications. Jim will lead you through a more thorough analysis of NTC's operations for the quarter and their prospects for the future. Jim--

 

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INCOMNET

INCOMNET SUBSIDIARY SETTLES CONSUMER PROTECTION LAWSUIT

 

WOODLAND HILLS, CA - October 28, 1997 - Incomnet, Inc. (NASDAQ:ICNT) announced that its wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC) has reached a settlement of a civil consumer protection lawsuit with the State of California.

In the settlement, which NTC reached without admitting any wrongdoing, NTC agreed to a court order requiring them to stop the practice of slamming (switching customers’ long distance telephone service without their permission or knowledge) and agreed to pay $1,250,600 in costs and penalties.

NTC also agreed to institute safeguards to prevent slamming violations from occurring in the future. Among those safeguards, NTC agreed to wait 24 hours after the consumer agrees to switch their telephone company to NTC before calling the customer to confirm that the consumer really wants to switch to NTC. This confirmation call, according to Michael R. Capizzi, the District Attorney of Orange County, will ensure that the consumers have not been slammed and will allow a "cooling off" period, giving consumers time to decide if they really want to switch.

The lawsuit was brought through the California Attorney General’s Office and the Orange County District Attorney Office. The California Public Utility Commission was the investigative agency. As part of a related administrative action, restitution to consumers is being sought by the Consumer Services Division of the California Public Utility Commission.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications, software and networking industries. Incomnet was recently ranked #10 on the list of 1997 Southern California Technology Fast 50 Companies.

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INCOMNET

INCOMNET SETTLES CLASS ACTION LAWSUIT

WOODLAND HILLS, CA - October 7, 1997 - In another major milestone in its recovery, Incomnet, Inc. (NASDAQ:ICNT) today announced that it has settled a class-action lawsuit filed against the Company in January 1995 by persons who purchased Company stock during the period of August 1, 1994 to September 1, 1995.

The settlement, which is subject to court approval, consists of a payment of $500,000 in cash plus securities with a value of $8.15 million for a total settlement value of $8.65 million. The securities consist of 1,500,000 shares of the Company's common stock, plus a number of warrants to be determined if the value of the common stock does not equal at least $8.15 million after the settlement is approved. As a result of the Company retiring 1,047,966 shares of common stock earlier in the quarter, the settlement will create a net dilution to shareholders of 452,034 shares of common stock if no warrants are issued. If the court approves the settlement, the Company expects the valuation and distribution of securities to occur in the Spring of 1998.

Incomnet said that it will take a one-time, net charge of approximately $5 million against earnings when it reports the results of its third quarter ended September 30, 1997. The charge will consist of $8.65 million to settle the class action lawsuit and an offsetting net gain of $3.63 million due to the return of 1,047,966 shares of the Company's common stock to the Company by Sam D. Schwartz, the Company's former Chairman and CEO to settle previously-announced 16(b) litigation.

Melvyn Reznick, President and Chief Executive Officer of Incomnet, stated, "This settlement hastens the pace of the Company's recovery and puts our most pressing legal problem behind us. With it, we have significantly lowered our legal costs and gained the confidence level of our employees, shareholders and potential investors."

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary, National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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INCOMNET

INCOMNET RESPONDS TO CALIFORNIA PUBLIC UTILITY COMMISSION INQUIRY

WOODLAND HILLS, CA - Wednesday - September 17, 1997 - Incomnet, Inc. (NASDAQ: ICNT) said today that the California Public Utility Commission (California PUC) has issued an order instituting investigation of the Company's wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC), to determine if NTC violated PUC Code 2889.5, which governs the changing of a subscriber's telephone service.

Incomnet's Chief Executive Officer Melvyn Reznick stated that NTC's management believes the order instituting investigation was issued as part of the California PUC's review of the long distance telephone industry resulting from a January 1, 1997 regulation requiring independent third-party verification when California residential customers are switched to a new long distance telephone company.

Reznick further stated that NTC's management has been, and is continuing to, aggressively implement procedures to insure that all new customers submitted to the Company by its independent sales representatives have their telephone service switched in accordance with all state and federal guidelines.

Commenting on the inquiry, James Quandt, NTC's President, stated, "It is the expressed intent of NTC to work with the California PUC to bring a swift and fair resolution to this matter. It is noteworthy that NTC voluntarily approached the PUC in May and is absolutely committed to eradicating the practice of unauthorized telephone service switching from NTC, and the industry, as expeditiously as possible."

NTC initiated its third-party verification process in California in April 1997 and nationwide in July 1997. NTC markets long distance telephone services, prepaid calling cards, pagers and Internet services through a network of 45,000 independent sales representatives.

The Company said that the extent of potential sanctions from the California PUC resulting from the allegations cannot be estimated at this time. There is no assurance that the investigation and related PUC actions will not have a material adverse impact on the Company's financial condition, operating results and future business performance. Further, it is anticipated that the plans to reconfigure NTC as its own public corporation will be delayed pending resolution of this matter.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary, National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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INCOMNET

INCOMNET ADDS NEW BOARD MEMBERS

WOODLAND HILLS - August 21, 1997 - Incomnet, Inc. (NASDAQ:ICNT) announced today that three new members have been added to its Board of Directors. The new members are Richard M. Horowitz, Stanley C. Weinstein and David Wilstein. The new members were added after the Company's Board adopted a Bylaw that changes the number of directors from six to seven.

Richard M. Horowitz has served as President of Management Brokers Insurance Agency (Los Angeles, California) since 1974. He also serves as Chairman of Leviathan Corporation, a computer sales, consulting and software company, and Chairman of Dial 800, Inc., a national telecommunications company. He is also a member of the Board of Directors of Trio-Tech International, a company that produces environmental testing equipment.

Stanley C. Weinstein is a co-founder and the Managing Shareholder of Weinstein Spira & Company, P.C. Certified Public Accountants, which was established in 1962 in Houston, Texas. His expertise includes diverse business consulting, executive recruitment and compensation, and the development and utilization of marketing strategies. Mr. Weinstein attended Rutgers University and obtained a B.B.A. from Upsala College. He is a member of the American Institute of certified Public Accountants (AICPA) and the Texas Society of Certified Public Accountants (TSCPA

David Wilstein is the President and Chairman of the Realtech Group, a real estate development and management firm in Los Angeles, California, which he founded in 1968. He is also the Chairman of the Board of Aero Products Research, a company that develops plastic products and is a member of the Board of C. I. Systems, a company that develops electro-optical test equipment. Mr. Wilstein has a B.S. in civil-structural engineering from the University of Pittsburgh.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and software and networking services provided by its California Interactive Computing, Inc. subsidiary and AutoNETWORK division.

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INCOMNET

Incomnet Reports Record Second Quarter Revenue

WOODLAND HILLS, CA - July 31, 1997 - Incomnet, Inc. (Nasdaq: ICNT) today reported results for the Company's second quarter ended June 30, 1997. Consolidated revenues were a record $34.9 million for the second quarter ended June 30, 1997 versus $25.3 million for the same period last year, an increase of 38%. Net income was $1.3 million, or $0.10 per share on 13.6 million shares for the second quarter ended June 30, 1997, versus net income of $230,429, or $0.02 per share on 13.3 million shares in the same period of last year.

For the first six months of 1997, Incomnet has reported revenue of $66 million, a 33% growth rate when compared to reported revenue for the same period of last year of $49.7 million. Year to date earnings for the Company total $2.3 million, or $0.17 per share on 13.6 million weighted average shares outstanding as compared to net income of $648,003, or $0.05 per share on 13.3 million shares for the same period of last year.

The Company's wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC) achieved record revenues of $34 million for the quarter ended June 30, 1997, a 44% increase over the $23.6 million reported for the second quarter of 1996. Earnings at NTC were $1.5 million for the second quarter ended June 30, 1997 versus $1.4 million for the same period last year. The Company's software and networking division, which includes AutoNETWORK and its 100%-owned subsidiary, California Interactive Computing, Inc. (CIC), acquired in May 1997, had revenues of $819,000 and earnings of $144,970 for the 2nd quarter ended June 30, 1997.

Melvyn Reznick, Incomnet's president and CEO, said, "We continue to aggressively drive growth at our NTC subsidiary, and this quarter's results reflect the success we are achieving in the marketplace. Looking ahead, we see great potential for NTC and we will continue to invest in management expertise, infrastructure and marketing programs."

Incomnet's consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, NTC and California Interactive Computing, Inc. Reported financial statements do not include consolidated results of Rapid Cast Inc., the Company's 35% owned subsidiary, which is accounted for using the equity method of accounting under FASB statement No. 94. Prior to the first quarter of 1997 the Company owned 51% of Rapid Cast and used the consolidated method of accounting for Rapid Cast, Inc.

Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications industries. Incomnet's wholly owned subsidiary, National Telephone & Communications, Inc., is engaged in the business of reselling long distance time to small business and residential customers through its independent sales representatives using a network marketing strategy.

SECOND QUARTER ENDED JUNE 30, 1997

1997 1996

REVENUES $34,854,000 $25,305,090

NET INCOME $1,327,000 $230,429

PER SHARE $0.10 $0.02

WEIGHTED AVERAGE COMMON

SHARES AND EQUIVALENTS 13.6 million 13.3 million

SIX MONTHS ENDED JUNE 30, 1997

1997 1996

REVENUES $66,023,000 $49,704,511

NET INCOME $2,338,000 $648,003

PER SHARE $0.17 $0.05

WEIGHTED AVERAGE COMMON

SHARES AND EQUIVALENTS 13.6 million 13.3 million

Notice Regarding Forward Looking Statements In Press Release

To the extent that this press release contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company and its subsidiaries, please be advised that the Company's and its subsidiaries' actual financial condition, operating results and business performance may differ materially from those projected by the Company in forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, adverse economic conditions, intense competition, including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the Company's products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the Company, including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the Company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors, and other specific risks that may be alluded to in this press release or in any reports made by the Company.

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INCOMNET

INCOMNET TO RECEIVE 1,047,966 SHARES OF ITS STOCK IN SETTLEMENT OF 16(b) LITIGATION

WOODLAND HILLS - Thursday - July 10, 1997 - Incomnet, Inc. (NASDAQ: ICNT) announced today that the United States District Court for the Southern District of New York has given final approval to a settlement of the previously-announced 16(b) litigation providing that Sam D. Schwartz, Incomnet's former president, pay to the Company cash and stock valued at $4,250,000.

Under the final agreement, Schwartz will deliver to the Company 1,047,966 shares of the Company's common stock and $600,000 in cash to settle litigation that was commenced in January 1996 by a shareholder of the Company for the benefit of the Company. Under the agreement, the Company is obligated to pay $626,450 in attorney's fees and expenses to the shareholder's counsel. The shares of stock and cash are presently in escrow and are expected to be delivered to the Company and paid to the shareholder's attorney within 10 days.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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INCOMNET

Incomnet Reports Record First Quarter Results

WOODLAND HILLS, CA - May 13, 1997 - Incomnet, Inc. (Nasdaq: ICNT) today reported results for the Company's first quarter ended March 31, 1997. Consolidated revenues were a record $31.2 million for the first quarter ended March 31, 1997 versus $24.4 million for the same period last year, an increase of 28%. Net income was $1 million, or $0.07 per share on 13,550,000 shares for the first quarter ended March 31, 1997, versus net income of $0.4 million, or $0.03 per share on 13,278,242 shares in the same period of last year.

The Company's wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC) achieved record revenues of $30.8 million for the quarter ended March 31, 1997, a 34% increase over the $22.9 million reported for the first quarter of 1996. Earnings at NTC were $1.4 million for the first quarter ended March 31, 1997 versus $1.3 million for the same period last year.

Incomnet's consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, NTC. Reported financial statements do not include consolidated results of Rapid Cast Inc., the Company's 35% owned subsidiary, which is accounted for using the equity method of accounting under FASB statement No. 94. Prior to the first quarter of 1997 the Company owned 51% of Rapid Cast and used the consolidated method of accounting for Rapid Cast, Inc.

Commenting on the quarter, Incomnet's President and Chief Executive Officer, Melvyn Reznick stated, "We are very pleased by our first quarter results, particularly since revenues from signing up new independent sales representatives at NTC increased by 113% from the same period last year from $2.7 million last year to $5.7 million this year. We consider this a leading indicator of future telephone service revenues and expect that we are now entering a period of accelerating growth and earnings because of our NTC subsidiary."

Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's wholly owned subsidiary, National Telephone & Communications, Inc., is engaged in the business of reselling long distance time to small business and residential customers through its independent sales representatives using a network marketing strategy. Incomnet's Rapid Cast, Inc. subsidiary manufactures and markets the FastCast™ LenSystem, which is based on a proprietary technology that allows retailers, opticians and optical laboratories to produce ophthalmic eyeglass lenses on demand in minutes and at a substantially lower cost than lenses produced by conventional methods.

INCOMNET, INC.

FIRST QUARTER ENDED MARCH 31, 1997

1997 1996

REVENUES ($ 000s) $31,169 $24,399

NET INCOME ($ 000s) 1,010 $418

PER SHARE $0.07 $0.03

WEIGHTED AVERAGE COMMON

SHARES AND EQUIVALENTS 13,550,000 13,278,242

Notice Regarding Forward Looking Statements In Press Release

To the extent that this press release contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company and its subsidiaries, please be advised that the Company's and its subsidiaries' actual financial condition, operating results and business performance may differ materially from those projected by the Company in forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, adverse economic conditions, intense competition, including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the Company's products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the Company, including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the Company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors, and other specific risks that may be alluded to in this press release or in any reports made by the Company.

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INCOMNET

Incomnet First Quarter 1997 Conference Call

May 13, 1997

Mel Reznick:

Good afternoon ladies and gentlemen, and welcome to Incomnet's first quarter 1997 operating results conference call. I would like to thank everyone for joining us today. With me on this call are Ed Jacobs, Chairman and CEO of National Telephone and Communications, Stephen Caswell, Incomnets' Corporate Secretary and Sean Beers of Fi.Comm, our investor relations firm in Portland, Oregon.

This afternoon we issued a press release that presented our first quarter 1997 results from operations. The purpose of this call will be to review those results with you, to update everyone on significant events which occurred during the first quarter, to further clarify the direction in which Incomnet's business is headed and to field any questions you might have.

Financial Review:

Starting with the income statement, revenue for the first quarter came in at $31.2 million, which represents a 28% increase over the $24.4 million in revenue reported for the first quarter of 1996. This top line growth is primarily the result of resumed growth at our NTC subsidiary. Revenue at NTC was $30.8 million for the first quarter 1997 compared to revenue of $22.9 million for the same period last year, a 34% growth rate. Of the $30.8 million in revenue generated by NTC, $25.1 million came from telecommunications services and $5.7 million was generated through our marketing programs. As we indicated in our last update, NTC's business has moved back into a growth mode and the increase in sales revenues as shown here would validate this assertion.

Absent from our financial presentation this quarter is any revenue or losses from our Rapid Cast subsidiary. This is a result of the accounting treatment for our investment in RapidCast. A year ago we were 51% owners of Rapid Cast and consequently we presented our financials on a consolidated basis. For the first quarter of this year, we are a 35% owner of Rapid Cast and we now account for this investment on the equity basis as per Generally Accepted Accounting Principles. Simply put, our financial relationship with Rapid Cast is now reflected on our balance sheet as an investment. When, and if, RCI turns profitable, we will be able to book our pro-rated portion of their earnings as revenues. Because we have written off our investment, however, we will not have to report any more of their losses.

Finally, our AutoNetwork division reported revenue of $400,000 for the quarter which was up over last year's reported $300,000.

G&A expenses for the quarter were $6.2 million, or 19.7% of sales as compared to G&A expenses of $6.3 million, or 25.7% of sales, for the first quarter last year. The trend here is obviously in the right direction and shows that our G&A expenses are becoming better controlled. Be aware, however, that we still had non-recurring legal expenses of $300,000 in the quarter. We also have in reserve approximately $950,000 to account for potential future legal expenses. As a result, G&A as a percentage of sales should continue to drift downward as our legal problems are put behind us and sales revenues continue to grow.

Incomnet reported consolidated net income of $1 million for the first quarter 1997, as compared to net income of $417,000 for the quarter last. On a per share basis Incomnet reported $0.07 per share in earnings on 13,550,000 shares for the first quarter 1997 as compared to $0.03 per share on 13,278,242 shares for the same period of last year.

Moving to the balance sheet, at March 31, 1997, cash and cash equivalents were at $2,164,000. Accounts receivable at quarter end stood at $14.2 million, which reflects our increasing telephone revenues. Total current assets at March 31, 1997 were $19 million.

Total assets at March 31, 1997 stood at $38.2 million, which is down slightly from the December 31 balance sheet total assets of $40,587,000 as a combined result of increased doubtful accounts and the absence of RCI related patent rights as compared to the end of the fourth quarter. At this point, we now carry no further patent rights on Incomnet's books.

Turning to the liability side of the balance sheet, our current liabilities at March 31, 1997 were $23.6 million which is down from the $30.9 million in current liabilities reported at December 31, 1996.

Long term debt at March 31, 1997 stood at $4.8 million as compared to long term debt of $1,041,000 at December 31, 1996. The increase is attributable to the line item entitled "liability in excess of asset" in the amount of $3.9 million associated with our write-off of RCI. This $3.9 million is an accounting entry, not a debt that we will have to pay in cash.

That fairly well covers the financial statement analysis. At this point I would like to move on and review some significant events which occurred during the quarter.

Quarter in Review:

Some of what I am about to report to you we previously reported during our year end conference call on April 15, 1997. To the extent that I reiterate certain events, I do so simply because these are events which are important to the future of Incomnet's business.

On January 6, 1997, we announced that James Quandt had been named as President of NTC. Jim is an excellent addition to our team as he brings many years of telecommunications industry experience with him to NTC and we look forward to benefiting greatly from his experienced leadership in directing day to day operations at NTC. Jim will provide us with an update on NTC momentarily.

On February 6, 1997, we announced the settlement of two separate shareholder lawsuits involving 32 current and or former shareholder plaintiffs. While we maintain that these suits were without merit, ultimately our board came to the conclusion that settlement was the most prudent course of action for the Company. Additionally, all expenses related to the settlements have been accrued and are fully behind us as of December 31, 1996. Not only did theses expenditures not enter into financial calculations for this quarter, but they have been fully recognized during the fourth quarter of last year.

On March 6, 1997 we announced the addition of Dr. Howard Silverman to the Incomnet board of directors. Dr. Silverman is a pioneer in ophthalmic lens casting technology and his presence on the board will be very important in guiding the future of our RapidCast subsidiary. Furthermore, Dr. Silverman's many years of Wall Street experience and his very broad based business background will be of great help to us in growing our businesses on all fronts.

On April 17, 1997, we announced that a preliminary settlement had been reached in the section 16(b) litigation that has been ongoing with the Company. As you'll recall, this litigation arose out of Sam Schwartz's trading of Incomnet stock on a short swing basis in violation of section 16(b) trading rules. Although this settlement has yet to be finalized , we anticipate receiving $4.25 million in cash and Company stock from Mr. Schwartz in the near future as terms of the settlement.

On May 6, 1997 we announced the acquisition of California Interactive Computing of Valencia, California, a privately held company that develops and markets computer software which automates insurance related claims processing functions. The total purchase price of $1,758,302 will be paid out over a five year period. In addition, Incomnet has assumed debt totaling an additional $418,527 which will be paid down over a period of three years. This acquisition is a return to our core networking competencies and, as such, we expect to be able to maximize CIC's business opportunities while at the same time reducing overhead costs related to administration and back office functions.

One last topic I would like to touch on briefly here is regarding pending litigation. As of this call the following legal issues are still outstanding.

The SEC inquiry is still open and pending at this time, though we are hopeful that this situation will be resolved by the end of the summer. At this point I cannot comment any further other than to say that we are confidant that this issue will be resolved shortly.

The status of the Class action suit has materially changed since we last reported to you. On May 6, 1997, the court ruled that approximately 20 former shareholders of the Company have the right to opt out of the class action lawsuit and file its own separate suit against the Company and Sam Schwartz, the Company's former president. We anticipate that these potential plaintiffs will file a separate suit in the near future. At this point I cannot estimate the extent of the damages this group will seek but here again we will keep you posted. With regard to the original class we are continuing to negotiate settlements with these current and or former shareholders and we remain optimistic that this process will conclude in the near future. Indeed, we are actively involved in meetings with the Class attorneys at the present time.

On April 25, 1997 the Company filed a lawsuit against Sam Schwartz and seeks

payment from Mr. Schwartz of the actual damages, attorneys fees and costs and reimbursements of all payments previously made to Mr. Schwartz pursuant to the severance Agreement with Mr. Schwartz. At this time the suit is in the discovery phase. That is the extent of my allowable comments on this subject.

As we announced on April 17, 1997 a preliminary settlement has been reached in the section 16(b) lawsuit which would allow the Company to recoup short swing profits in excess of $4 million in the form of cash and stock from Sam Schwartz. We will keep you updated as to the progress of this settlement in as timely a fashion as is possible.

That covers the significant events which have occurred during the first quarter and since we last reported to you. At this point I would like to brief everyone on the outlook for the separate subsidiaries within Incomnet.

Safe Harbor:

Before I do so, however, per the Private Investment Litigation Act of 1995 I need to remind everyone that any statements made or to be made on this conference call by myself or any of the officers on this call with me, including statements made with respect to financial condition, operating results, business prospects or any other aspect of the company and its subsidiaries are necessarily subject to risk and uncertainty.

Any statements made on this call regarding the company and its subsidiaries, actual financial condition, operating results and business performance may differ materially from those projected by the company in forward-looking statements.

The differences may be caused by a variety of factors including but not limited to adverse economic conditions, intense competition including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the company's products, technological problems with the company's or its subsidiaries' products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the company including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors and other specific risks that may be alluded to in this conference call.

For more information about these factors that could cause future results to be different than those suggested by the company personnel, please see the company's form 10-K statement dated April 15, 1997, filed with the Securities & Exchange Commission. In particular, I refer you to the section entitled, Risk Factors and Management's Discussion and Analysis of Financial Condition and the Result of Operations.

As usual when I go through the disclaimer that the Private Investment Litigation Act of 1995 requires I remind everybody that we do this for your protection, for the protection of all Incomnet shareholders.

That said, I will now hand the call over to Ed Jacobs, Chairman of NTC who will lead you through a discussion of NTC's business.

Conclusion:

In conclusion I would like to emphasis that while we see this first quarter as a nice rebound both in terms of top line growth as well in the return to profitability, we firmly believe that given the team we have assembled and the opportunities we see in the marketplace, the inherent potential in this company as it now stands is tremendous.

We will now be happy to answer any questions. Operator?

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INCOMNET

INCOMNET ANNOUNCES PRELIMINARY SETTLEMENT

Woodland Hills, CA ¾ April 17, 1997 ¾ Incomnet, Inc. (Nasdaq: ICNT) announced that a preliminary settlement has been reached in the Section 16(b) litigation that has been ongoing in New York on behalf of the Company. Under the agreement, which will be reviewed by, and is subject to, final approval by the Court on May 30, 1997, Sam D. Schwartz, the former president and chief executive officer of Incomnet, will pay to the Company $4.25 million in cash and Company stock.

This case is a derivative action brought by a shareholder of Incomnet on behalf of the Company to recover short-swing profits from Mr. Schwartz resulting from purchases and sales of Incomnet common stock by Mr. Schwartz and his affiliates within periods of less than six (6) months. Under the agreement, Mr. Schwartz will pay Incomnet $600,000 in cash and tender stock worth $3.65 million, to be valued based on the average between the bid and the asked price of Incomnets' stock on the Nasdaq Small Capital Market over the 30 calendar days prior to the Court's approval of the settlement, which the Company anticipates to be given at or soon after the May 30, 1997, hearing, including a ten percent (10%) deduction representing a lesser value to be accorded the shares being surrendered attributable to their large number in relation to normal trading volume and to possible limitations on their tradability.

Incomnet expects to send a Court notice outlining the preliminary settlement to all shareholders on April 21, 1997. Shareholders will have an opportunity to comment on the settlement. On May 30, 1997, the Court will conduct a fairness hearing to determine the adequacy of the settlement.

Counsel for the derivative shareholder is seeking attorneys' fees of $850,000, plus costs and expenses. Incomnet has indicated to the Court that the Company believes the terms of the settlement represents a reasonable resolution of the Section 16(b) claims, but intends to oppose the request for attorneys' fees as being excessive.

Mel Reznick, president of Incomnet, said that the preliminary settlement represents a positive step in the Company's ongoing efforts to resolve all of the litigation that it is facing based on allegations regarding the trading activity by the former President, Sam D. Schwartz.

Mr. Reznick said that the Company will continue its efforts to resolve these lawsuits, including the class action, Saundra Gayles, et al. V. Sam D. Schwartz and Incomnet, Inc., 95-0399 KMW (BQRx) (C.D. Cal.). However, there can be no assurance that settlements will be reached or regarding the terms of such settlements, if any.

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INCOMNET

FORMER SHAREHOLDERS ALLOWED TO OPT OUT OF CLASS ACTION SUIT

WOODLAND HILLS - May 9, 1997 - Incomnet, Inc. announced today that approximately twenty former shareholders of the Company have been granted the right to opt out of the class action lawsuit which is currently pending against the Company and its former president and to file their own lawsuit. The court gave the former shareholders a period of 10 days after the court order is issued in which to file a separate lawsuit. The Company expects the court to issue the order in the near future.

Incomnet had argued that these former shareholders, most of whom purchased Incomnet stock through a now-defunct brokerage firm named Everest Securities, should be included as class members because they failed to opt out of the class. The Company intends to vigorously defend the potential claims from the former shareholders if those claims are asserted against it.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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INCOMNET

Incomnet Acguires California Interactive Computing Inc

WOODLAND HILLS, CA - May 6, 1997 - Incomnet, Inc. has acquired California Interactive Computing, Inc. (CIC) of Valencia, CA, a privately-held company that develops and markets computer software that automates insurance-related claims processing functions. For its calendar year ended June 30, 1996, CIC had revenues of $2,602,559 and net operating income of $101,061.

CIC was acquired for $1,758,302, which will be paid out over a period of five years. In addition, the Company has agreed to assume loans totaling $418,527 made to CIC by two of CIC's former shareholders, which will be paid off over a period of three years. As part of the acquisition, CIC has signed an employment agreement for two years with Jerry C. Buckley, CIC's former president and CEO.

Melvyn Reznick, Incomnet's President and CEO said, "CIC is a small, but strategic, acquisition that complements our present computer networking business. In CIC, we will be able to leverage our core networking competencies and efficiencies in integrating and growing CIC's business. The fact that CIC is in a growing market provides Incomnet with significant opportunities during the next few years."

Incomnet stated that it will release first quarter 1997 operating results on May 13, 1997 after market close. The Company anticipates reporting revenues in excess of $30 million for the first quarter and expects to return to profitability.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

Notice Regarding Forward Looking Statements In Press Release

To the extent that this press release contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company and its subsidiaries, please be advised that the Company's and its subsidiaries' actual financial condition, operating results and business performance may differ materially from those projected by the Company in forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, the Company's ability to profitably integrate the acquisition of California Interactive Computing, Inc. (CIC), adverse economic conditions, intense competition, including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the Company's products, technological problems with the Company's or its subsidiaries' products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the Company, including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the Company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors, and other specific risks that may be alluded to in this press release or in any reports made by the Company.

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INCOMNET

Incomnet Reports 4th Quarter and Year-End Results

WOODLAND HILLS, CA - April 15, 1997 - Incomnet, Inc. (Nasdaq:ICNT) today reported results for the Company's fourth quarter and fiscal year ended December 31, 1996.

Revenues for the fourth quarter ended December 31, 1996 increased to $29.6 million, which represents a 21.3% increase over the $24.4 million in revenues reported for the same period of last year. The Company reported a net loss for the fourth quarter of $29.1 million, or $2.19 per share on 13,369,681 shares, as compared to a net loss of $2.1 million, or $0.17 per share on 13,262,648 shares in the same period of last year. The Company's fourth quarter net loss reflects a one-time, non-cash net write-off of $22.7 million for the remainder of the patent rights acquired in February 1995 with the Company's investment in its RapidCast, Inc. subsidiary.

For the year ended December 31, 1996, revenues increased 23% to $106.9 million as compared to the $86.6 million in revenue reported for the Company's fiscal year 1995. The Company reported a net loss for 1996 of $37.7 million, or $2.84 per share on 13,369,681 shares, compared to net earnings of $1.4 million, or $0.11 per share on 12,706,401 shares, for the same period of last year. The Company attributed the net loss for the year to one time non-cash charges totaling $30.7 million which were taken in the third and fourth quarters of 1996. The charges were for acquired patent rights associated with the Company's investment in its RapidCast, Inc. subsidiary.

Commenting on the quarter, Incomnet's President and Chief Executive Officer, Melvyn Reznick stated, "Given the fundamental strength of our core telecommunications business, we made the strategic decision to take a final, one-time non-cash charge in the fourth quarter to write off patent rights associated with the RapidCast acquisition. This final write-down will result in improved profitability in the future in the amount of approximately $0.12 per share annually."

The Company's wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC) achieved record revenues of $28.4 million and a net loss of $0.5 million for the quarter ended December 31, 1996 versus revenues of $23 million and a net loss of $0.1 million last year.

NTC's revenues for the year ended December 31, 1996 were $100.8 million and net earnings were $3.3 million, or $0.24 per share, versus revenues of $83.1 million and net earnings of $4.7 million, or $0.37 per share, for the same period last year.

Reznick continued, "NTC is now back on a strong growth track, with revenues increasing 10% from the third quarter of 1996 and 23% over last year's fourth quarter. Due to both increased investment in infrastructure of all types during 1996 and a change to a more conservative method of accounting for marketing revenues during the year, earnings have not kept pace with revenues. However, NTC is now well positioned to continue on its growth trajectory and to return to increasing profitability."

RapidCast, Inc. (RCI), the Company's 35% owned subsidiary, achieved revenues of $0.9 million for the fourth quarter of 1996 and $4.7 million for the year ended December 31, 1996. The Company's share of RCI's losses was $16.1 million for the fourth quarter of 1996 and $18.1 million for the year ended December 31, 1996.

"With RCI writing off patent rights associated with its acquisition of Q2100 in 1995, and Incomnet's charge against patent rights associated with our acquisition of RCI, our balance sheet now reflects more accurately the book value of our RCI investment. While the short term consequences of these write-downs are reflected in the fourth quarter and year end losses, going forward we emphasize that this accounting change will add approximately $2 million annually to our bottom line," Reznick said.

Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's wholly owned subsidiary, National Telephone & Communications, Inc., is engaged in the business of reselling Incomnet, Inc. (Nasdaq: ICNT) is a marketing driven company that provides innovative cost-saving products in the telecommunications and optical lens indu'tries. Incomnet's wholly owned subsidiary, National Telephone & Com™unications, Inc., is engaged in thoprietary technology that allows retailers, opticians and optical laboratories to produce ophthalmic eyeglass lenses on demand in minutes and at a substantially lower cost than lenses produced by conventional methods.

INCOMNET, INC.

FOURTH QUARTER ENDED DECEMBER 31,

1996 1995

REVENUES ($ million) $29.6 $24.4

NET (LOSS) ($ million) ($29.1) ($2.1)

PER SHARE ($2.19) ($0.17)

YEAR ENDED DECEMBER 31,

1996 1995

REVENUES ($ million) $106.9 $86.6

NET INCOME (LOSS) ($ million) ($37.7) $1.4

PER SHARE ($2.84) $0.28

WEIGHTED AVERAGE COMMON

SHARES AND EQUIVALENTS 13,369,681 12,706,401

____________________________________________________________________________

Notice Regarding Forward Looking Statements In Press Release

To the extent that this press release contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of the Company and its subsidiaries, please be advised that the Company's and its subsidiaries' actual financial condition, operating results and business performance may differ materially from those projected by the Company in forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, adverse economic conditions, intense competition, including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the Company's products, technological problems with the Company's or its subsidiaries' products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the Company, including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the Company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors, and other specific risks that may be alluded to in this press release or in any reports made by the Company.

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INCOMNET

Fourth Quarter 1996 & Year End Earnings Results

Conference Call

Tuesday, April 15, 1997

Melvyn Reznick

Good afternoon Ladies and Gentlemen,


I would like to thank everyone for joining us today. I am speaking to all of you from Atlanta, GA, where I am attending a business conference.


With me telephonically on this call are Ed Jacobs, Chairman and CEO of National Telephone & Communications; James Quandt, the President of NTC; Stephen Caswell, the corporate secretary of Incomnet, Sam Wild, from our auditing firm of Stonefield Josephson and Sean Beers of Fi.Comm, our investor relations firm in Portland, OR.


Today, we issued a press release that presented our fourth quarter and year-end financial results. The purpose of this conference call is to provide you with a summary of our financial results, to discuss our projections for 1997, to update you on the anticipated public offering of our NTC subsidiary and to discuss other aspects of the Company's business, including regulatory and legal issues. This will be a rather lengthy dissertation, but I think it will answer most of the questions which many of you have at this time. On that note let us begin.


Quarter in Review


First I would like to briefly review with you some of the more significant events that occurred during the course of the fourth quarter.


To begin with, our NTC subsidiary has clearly shown that it is renewing its growth. NTC's revenues in the 4th quarter were $28.4 million, which is a 10% jump from the previous quarter and 23% increase from the same period of last year. This is an important point. In the 1st and 2nd quarters of 1996, NTC's quarter-to-quarter growth was virtually flat. In the last two quarters it has increased at a rate of about 10 percent per quarter. Since renewed growth at NTC is the lifeblood of this company, I am very pleased to report this result and will spend a great deal of time discussing its implications later in this report, particularly since I believe that renewed growth in revenues will translate to renewed growth in earnings as we move forward in 1997.


Second, in accordance with FASB rule #121, both Incomnet and Rapid Cast were able to write off the patent rights that were acquired with Incomnet's acquisition of Rapid Cast and Rapid Cast's acquisition of Q2100 in February of 1995. Together these write-offs enable us to more accurately represent the book value of our investment in RCI. I would also like to emphasize that the elimination of these amortization charges in the future will add approximately $2 million dollars annually to our bottom line.


Third, we are continuing to make good, steady progress on the legal front, toward resolving the lawsuits and regulatory issues that the Company faces.


As we announced on December 10, 1996, we settled the patent lawsuit with Dr. Ronald Blum and RCI now has full rights to the curing process involved in the casting of plastic lenses.


On February 6, 1997, we announced that we settled two separate shareholder lawsuits involving 32 current and or former shareholder plaintiffs. Though we felt these suits to be without merit, our Board came to the conclusion that settlement was the most prudent course of action for the company. We are very pleased to be out from under these lawsuits as we now have more time to focus on executing our business strategies.


We are on the verge of resolving the so-called 16b matter in which Sam Schwartz will return $4.25 million of short-swing profits to the Company.


We believe that we will resolve the SEC investigation in a very positive manner and we remain optimistic that we will see closure on this matter in the near future.


Finally, we also strongly believe that we will resolve the pending Class Action lawsuit in a fair manner without a lengthy and expensive court battle. While I cannot go into details on matters that have not been resolved, I can say that we are heading into the home stretch on this issue also.



Moving on, I would like to touch base on a number of other events that have occurred over the last few months.


On January 6, 1997, we announced that James Quandt had been named President of NTC. James is an excellent addition to our team and we are very pleased to have him on board. His background has prepared him well to direct day-to-day operations and oversee expansion plans at NTC.


On March 6, 1997, we announced the addition of Howard Silverman to our board of directors. Dr. Silvermans pioneering experience in opthamalic lens casting will be extremely helpful in guiding our RapidCast subsidiary and we consider his presence on the board a real coup.


On January 17, 1997, we announced that JP Morgan and affiliates of the Clipper group had acquired a substantial minority interest in our Rapid Cast subsidiary. This is important for two reasons: First, it has provided necessary funding so that RapidCast can now continue its full scale commercialization of its LenSystem in the worldwide opthamalic lens market. Second, having substantial investors of this nature bodes well for the future success of RCI and validates the success potential of this technology.


Finally, I also want to remind everyone that NTC will become its own public company this year. We anticipate that there will be a public offering of NTC shares later this year.


This summary covers most of the significant events which have occurred since we last reported to you. I will answer any further questions following the formal portion of this conference call.

Review of Financial Information


Now I would like to move into an analysis of the financial statements for both the fourth quarter and year end periods. I believe that most everyone has received a press release on the 4th quarter and year end numbers. Accordingly, I will not go into too much detail about the numbers. Instead, I will review what we believe are the most important financial results from the quarter.



NTC's revenues increased from $23 million in the 4th quarter last year to $28.4 million in the 4th quarter this year, which is growth of 23 percent. Rapid Cast had revenues of $900,000, which is about the same as it had a year ago. Our AutoNETWORK division had revenues of about $300,000, which is also about the same as a year ago. For the year, NTC had revenues of $100.8 million versus revenues of $83.1 million, which is a growth of 21%. Rapid Cast and AutoNETWORK contributed $4.7 million and $1.4 million respectively last year.


Incomnet itself had a net loss for the quarter of $29.1 million. This is not an operating loss. The loss was primarily due to writing off the patent rights associated with the acquisition of Rapid Cast. There were other losses, however, including a $500,000 operating loss at NTC for the fourth quarter as well as a loss at Incomnet of $2,320,000 associated with legal and regulatory affairs. For the year, Incomnet had a net loss of $37.7 million. Again the majority of these losses were a result of one-time non-cash write-offs and have helped to position this company for resumed growth on both the top and bottom lines.


In 1996, the Company's SG&A increased significantly from $19.8 million in 1995 to $36.9 million in 1996. A big piece of the increase is attributable to recording RCI's SG&A for four quarters, while in 1995 we only recorded two quarters. NTC's SG&A in 1996, however, was $24.6 million, which was up from $16.9 million a year earlier. This is an increase from 20.3% of sales in 1995 to 24.5% of sales in 1996. This is an area that NTC will be working on very closely in 1996 as it tries to balance the difficult task of controlling its costs while it continues to grow.



Finally, I would like to briefly review the balance sheet. The most conspicuous change is shareholder equity, which is down to a book value of $8.6 million at December 31, 1996 from $42.5 million a year earlier. This is primarily due to our write-off of the RCI patent rights. As far as assets are concerned, we now have current assets of $20.2 million and total assets of $40.6 million. This matches against current liabilities of $30.9 million and long-term liabilities of $1 million.



These are the key financial results for the quarter and the full year 1996. If anyone has not received the press release, it is available from our fax on demand service at 818-887-3400 or on the worldwide web at www.incomnet.com.


Forward Discussion

I now want to look beyond 1996 to 1997, which we believe is going to be a very different year. Before I do so, per the Private Investment Litigation Act of 1995, I would like to remind everyone that any statements made or to be made on this conference call by myself or any of the officers on this call with me, including those with respect to financial condition, operating results, business prospects or any other aspect of the Company and its subsidiaries, are necessarily subject to risk and uncertainty. Any statements made on this call regarding the Company and its subsidiaries' actual financial condition, operating results and business performance may differ materially from those projected by the Company in forward-looking statements. The differences may be caused by a variety of factors, including, but not limited to, adverse economic conditions, intense competition, including intensification of price competition and entry of new competitors and products, adverse federal, state and local government regulation, inadequate capital, unexpected costs and operating deficits, increases in general and administrative costs, lower sales and revenues than forecast, loss of customers, disadvantageous currency exchange rates, termination of contracts, loss of supplies, technological obsolescence of the Company's products, technological problems with the Company's or its subsidiaries products, price increases for supplies and components, inability to raise prices, failure to obtain new customers, litigation and administrative proceedings involving the Company, including the pending class action lawsuit and SEC investigation, adverse publicity and news coverage, inability to carry out marketing and sales plans, challenges to the Company's patents, loss or retirement of key executives, changes in interest rates, inflationary factors, and other specific risks that may be alluded to in this conference call. For more information about these factors that could cause future results to be different than those suggested by company personnel, please see the Company's form 10K statement, dated April 15, 1997, filed with the Securities and Exchange Commission. In particular, I refer you to the section entitled ``Risk Factors'' and ``Management's Discussion and Analysis of Financial Condition and the Result of Operations.''

With that said, I'd like to start my remarks by pointing out that it has been 16½ months since I became CEO of Incomnet. I can safely say that my time here has been filled with numerous surprises. Quite frankly, when I took over, the prevailing idea was that, with a few fixes, Incomnet would get back on track. It has not happened that way at all. First, we did not anticipate that it would take NTC nearly three quarters to get back on a growth track. Second, we simply did not know the depth of the legal problems that the Company faced. Third, we had no way of anticipating the problems which Rapid Cast faced, both technical and financial.

I'd like to state strongly that we have met every challenge that Incomnet has faced and, I believe, we have prevailed as well as could have been expected. NTC is now back on a growth track, which is the most critical element associated with the Company's success. RCI has also stabilized, thanks to a $12 million investment by affiliates of J. P. Morgan and the Clipper Group. We are also well along the path towards resolving the legal problems.

With this in mind, I would now like to make Management's estimates for 1997. I want to emphasize that what follows represents our best estimates about what we think is achievable in 1997. They are not a guarantee.

Overall, we plan to have revenues in 1997 of at least $140 million, which is growth of about 40 percent. We also expect to have net earnings of at least $7.5 million from operations. This figure includes an estimated $8 million in earnings from NTC and estimated losses associated with RCI's operation and legal expenses at Incomnet. These earnings do not include gains associated with the return of short swing profits by Mr. Schwartz nor do they include any anticipated settlement of the Class Action lawsuit or the Silva Run lawsuit. We expect these items will be resolved this year.

Summary: Before I open this conference to questions, I would like to make one further comment. Incomnet is now well along the path towards recovery from what has been one of the most trying periods in the Company's history. The good things that I have been telling have been accruing for several months and are now beginning to be realized. While I do not want to minimize the financial pain that we have gone through, I want to emphasize that we firmly believe that the pain is now substantially over. We look forward to a profitable first quarter and also expect that the legal and regulatory problems that have at times looked so black will also be resolved in a timely manner.

Thank you for attending our conference. I'd now like to open up the conference to questions.

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ICNT Conference Call

Anticipated Questions

April 15, 1997

QUESTION 01: Does the $31,335,000 R.C.I. write-down mean that Incomnet has to put additional cash into R.C.I.?

ANSWER: No! We have not put additional funds into R.C.I. Indeed, we received back the $2,600,000 that we had put into R.C.I., as bridge loans, in January of 1997, when the private placement with J.P. Morgan and the Clipper Group was completed. This $31,335,000 write-down is simply a non-cash bookkeeping entry that I decided to take for two significant reasons:

1. It is in accordance with the degradation of assets tests as dictated by FASB Rule 121.

2. The S.E.C. does not like to see large percentages of intangible assets on corporate balance sheets.

I did this to more accurately represent our balance sheet and financial condition to shareholders and analysts.

QUESTION 02: Why can't we just settle all the lawsuits immediately and get on with our life?

ANSWER: Because we can't. Plain, pure and simple we can't. These processes take time, defenses have to be planned, researched and executed, the plaintiffs have their discovery and due diligence to perform and the justice system, in general, moves according to its own time schedule. this process is slow, extremely time-consuming for me, personally, and expensive for our company. We have no choice. We all inherited this from Incomnet's past. It has to be dealt with. It will not go away on its own.

QUESTION 03: Can I elaborate more on the status of the pending S.E.C. investigation?

ANSWER: No. We are in discussions with the S.E.C. and hope to resolve this issue very soon. We are cooperating fully with the S.E.C. officials in the Pacific Region and are doing all that we can to finish up this investigation.

QUESTION 04: Can I elaborate more on the status of our talks with the Class Action plaintiffs attorneys?

ANSWER: No. Settlement discussions are in process.

QUESTION 05: Can I talk about the status of the legal relationship between Incomnet, today, and Mr. Schwartz, the past CEO and Chairman of Incomnet?

ANSWER: In general the answer to this question is no. You will be apprised of events and developments as they occur. Specifically, however, I can report on the status of the so called 16B case against Mr. Schwartz. My understanding is that the judge in New York is signing off on a final version of a preliminary approval as we speak. A notice will be sent out to all shareholders next week that will outline the preliminary approval and will give shareholders the opportunity to voice their opinion concerning the preliminary approval. We intend to put out a press release on this tomorrow, assuming that the preliminary approval is, indeed, signed and finalized by the judge today.

QUESTION 06: Why did it take so long to release these year-end results?

ANSWER: There are three (3) reasons:

1. The R.C.I. patent rights write-down involved Ernst & Young's New York office, our auditors here in Los Angeles, the Rapid Cast CFO and the Audit Committee of R.C.I. (of which I am chairman). This decision to write-down the patent rights at both the R.C.I. level and the Incomnet level was detailed and was very carefully considered.

2. We have a new CFO and a new controller and new auditors (Ernst & Young) at N.T.C. The consolidation process took more time than usual. And...

3. Ernst & Young did a very, very thorough audit of previous years at N.T.C. and used this year- end audit as a pre-cursor to their IPO audit for N.T.C.. Their pace was largely out of our control.

QUESTION 07: When will the first quarter numbers be out?

ANSWER: Probably around May 1st. By the way, we anticipate N.T.C.'s revenue to be in excess of $30 MM for this first quarter of 1997.

QUESTION 08: When will the 1996 Annual Report be completed and disseminated to all shareholders?

ANSWER: The Annual Report will be completed by mid-May and should be available on our Web Site @ Incomnet.com. It will take an additional three weeks to print and mail it to all of our shareholders and other interested parties. In the mail, with the Annual Report, will also be our Proxy Statement which will be filed at the end of May. The Proxy Statement will also be available on our Web Site.The 10-K will be on the Web Site by next week and printed copies will be available in a week or so.

QUESTION 09: Have we scheduled our Annual Meeting of shareholders?

ANSWER: Yes. Tentatively, we are planning on Monday, August 4th, as the Annual Meeting date.

QUESTION 10: Returning once again to our 1996 year-end numbers, can I give you a summary of non-recurring, one-time costs associated with Fiscal Year 1996?

ANSWER: Yes, and with a certain relief because, by doing this for myself, it helped me realize that our numbers are not as bad as they may seem at first look.

1996 NON-RECURRING EXPENSES

1. $31,335,000 Net non-recurring patent rights write-down. this translates to an approximate 12c/share average increase.

2. $ 2,000,000 Jacobs-Ballah settlement. See the 10-K for details.

3. $ 800,000 Atlanta I and II settlements. Paid $400,000 in January 1997 and will pay $400,000 additional in January 1998.

4. $ 500,000 Accrued reserve for legal fees. Now carrying $950,000 reserve on our books for legal costs.

5. $1,400,000 Non-recurring legal costs connected with the solution to our problems which we inherited from the past. This number is my estimate with an allowance for approximately $200,000/yr. in more normal fees for a company of our size.

6. $ 920,000 Non-recurring legal fees for various projects at N.T.C., including the stock option plan, registration in Delaware, new corporate by-laws and a host of items which re-configure N.T.C. and prepare it for the up-coming IPO.

$2,820,000 Total Legal non-recurring costs.

7. $200,000 Audit fees for Ernst & Young and others for IPO preparation.

$37,155,000 Total non-recurring costs for Incomnet for fiscal year 1996. This translates to $2.78/share.

QUESTION 11: How do you account for the sizable increase in SG&A expenses for the year and what will be done to control those costs in subsequent periods?

ANSWER: The increase in SG&A at the Incomnet level from 19.8 million to 36.9 million in 1996 is due to three separate factors. First, during 1995 we only recorded two quarters worth of SG&A expenses from our Rapid Cast subsidiary on the books of Incomnet as compared to a full years worth during 1996. Second, as we have discussed, Incomnet's legal expenses contributed greatly to the overall increase in SG&A for 1996. Most of the anticipated future expenses related to legal issues have been accrued at this point and we expect that in subsequent periods this component will be greatly reduced. Finally, SG&A expenses were up fairly dramatically at N.T.C. as a result of their increased investment in infrastructure at all levels which has helped position N.T.C. for accelerated future growth.

While the jump in SG&A during 1996 had a material impact on Incomnet's operating results for the period, we expect that with the investment that has been made at N.T.C., along with future reductions in legal expenditures, Incomnet's future SG&A expenses should begin trending down to their historical levels of roughly 23-25% of sales versus the 34.5% we reported in 1996.

QUESTION 12: What are Incomnet's net operating loss carry forwards for federal income tax purposes as of December 31, 1996?

ANSWER: $22,600,000 expiring in various years between 2000 and 2011. Incidentally, R.C.I. had a carry forward of approximately $6,028,000 expiring through 2012.

QUESTION 13: Can you give us an update on the status of the N.T.C. spin-off and the IPO?

ANSWER: To date we are finding that the spin-off process is taking a considerably longer time than we all had anticipated. The delay is for a number of reasons, chief among which is the time that it is taking to resolve the S.E.C. investigation of Incomnet. The IPO process, however, is moving forward very well. At this time, we are in a process of continuous evaluation of our exact course of action as various events occur and as factors arise.

QUESTION 14: After all of the legal and regulatory issues are resolved and all of the extraneous matters are behind us, do I have a vision, a strategic plan, a direction in which I want to take Incomnet for future growth?

ANSWER: Absolutely yes and this plan is being carried out as we speak today. this is one reason why I am in Atlanta today, along with our Vice President and Corporate Secretary, Stephen Caswell. We will talk more about this in the future. We cannot elaborate on this subject today.

One further note: Mr. Sean Beers of Fi.Comm will handle much of our public information flow in the future. His phone number is 503-844-8888, Ext. 105. Please direct requests for information regarding Incomnet to him. Also, for Web subscribers, we urge you to visit our Web Site where you will glean the most up-to-date information on our company. Again, our address is WWW incomnet.com.

My final comment to all of you is an apology and an explanation. I do my best to talk to all of you and to give each of you the time that you deserve. I understand fully your anxiety and your worry and concern about the future of Incomnet and our stock price. I know very well how all of you brokers and market makers in the audience feel when anxious and impatient clients call and demand instant information and instant results.

I know that I don't get back to all of you but, believe me, I do try. If I have missed you, it is only because I am busy with the details of running this company. I do my best to cover as many aspects of this company's business, legal and regulatory issues as I can before taking the time to return investor calls. Again I remind you to call Sean Beers at Fi.comm.

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NASDAQ: ICNT

THURSDAY

FEBRUARY 6, 1997

INCOMNET SETTLES TWO SHAREHOLDER LAWSUITS

Incomnet, Inc. (NASDAQ:ICNT) announced today that it has settled two lawsuits involving 32 current and/or former shareholder plaintiffs. The lawsuits are Herbert M. Schwartz et al. vs Incomnet, Sam D. Schwartz and Kaliber Management Corp. and Brent Abrahm et al. vs Incomnet, Sam D. Schwartz and Kaliber Management Corp., pending before the United States District Court for the Central District of California in Los Angeles. Herbert Schwartz, one of the lead plaintiffs, and Sam Schwartz, the Company's former President and CEO, are not related.

Incomnet settled the lawsuits for a total of $800,000, consisting of a payment of $400,000 in cash and a note for $400,000 plus interest, due and payable in one year and collateralized by a certificate of deposit. Under the settlement with the plaintiffs, the referenced lawsuits against Incomnet are being dismissed with prejudice. Incomnet understands from counsel for Mr. Schwartz that Mr. Schwartz and Kaliber Management Corp., a company owned by Mr. Schwartz, have also reached settlements with the plaintiffs that are in the process of being documented.

Melvyn Reznick, Chairman of the Board and Chief Executive Officer of Incomnet, said that Incomnet has always believed that the claims against the Company brought by the group of plaintiffs were without merit. Mr. Reznick said that Incomnet's Board of Directors concluded that in its judgment it was in the best interest of the Company's shareholders to resolve the allegations against the Company: 1) to avoid the costs and risks of litigation and 2) to allow management the time to focus on developing the Company's operations.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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NASDAQ: ICNT

FRIDAY

JANUARY 17, 1997

Incomnet's Rapid Cast Subsidiary Sells Minority Interest To J. P. Morgan Capital Corp. and The Clipper Group

WOODLAND HILLS, CA - Incomnet, Inc. (NASDAQ: ICNT) announced today that J. P. Morgan Capital Corp., the equity investment affiliate of J. P. Morgan, and affiliates of the Clipper Group (the "Investors") have acquired a substantial minority interest in the Company's subsidiary, Rapid Cast, Inc. (RCI) of Louisville, KY, for $12 million. The Investors also have an option to invest an additional $10 million over the next 18 months. These funds will be used principally to finance the continued growth and expansion of RCI's business operations.

RCI manufactures and markets the FastCast LenSystem, which is based on a proprietary technology that allows retailers, opticians and optical laboratories to produce ophthalmic eyeglass lenses on demand in minutes and for a substantially lower cost than lenses produced by conventional methods. RCI has been in operation since February 1995 and has sold more than 190 LenSystems worldwide.

Melvyn Reznick, Incomnet's President and CEO said, "This investment provides Rapid Cast with the financial ability to continue the full-scale commercialization of its LenSystem in the worldwide ophthalmic lens market."

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services provided by its AutoNETWORK division.

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NASDAQ: ICNT

MONDAY
JANUARY 6, 1997

INCOMNET'S NATIONAL TELEPHONE & COMMUNICATIONS (NTC) SUBSIDIARY NAMES JAMES R. QUANDT PRESIDENT

IRVINE, CA -- National Telephone & Communications Inc. (NTC), a wholly-owned subsidiary of Incomnet Inc. (Nasdaq: ICNT), Monday announced that James (Jim) R. Quandt has been named President of the long-distance telephone services reseller.

Quandt's experience adds significant depth to NTC's management, positioning the Company for continued growth.

Quandt joins NTC from Bridge Information Services where, as Chairman of the Board, he directed the Company's acquisition strategy including the 1996 acquisition of Knight-Ridder Financial Services. Bridge operates in 31 countries from a network of 47 offices.

Prior to Bridge, Quandt was President and CEO of Standard & Poor's Financial Information Group, a division of McGraw-Hill Companies. The Group consists of nine highly-recognized companies that operate globally with annual revenues exceeding $700 million.

According to Company officials, the move is the first step in Chairman Ed Jacobs' long-term succession plan. The addition of Quandt begins a team-based transition period where both executives will direct Company growth plans.

As President, Quandt will direct day-to-day operations and oversee expansion plans for new markets as well as manage key vendor relationships. Quandt will report to Jacobs.

"It's a great pleasure to have Jim on board. We're confident his exceptional skills will provide the right leadership to take NTC to the next level," Jacobs said.

Quandt is a graduate of St. Mary's College in Moraga, Calif., and serves as a member of the Board of Regents for the school.

Last November, Incomnet announced plans to partially spin-off and list NTC as a separate entity. NTC markets its residential and commercial discounted long-distance services through a nationwide network of more than 40,000 independent sales representatives. Founded in 1987, NTC has headquarters in Irvine.

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NASDAQ: ICNT

TUESDAY
DECEMBER 10, 1996

INCOMNET'S RAPID CAST SUBSIDIARY SETTLES PATENT LAWSUIT

Incomnet, Inc. (NASDAQ: ICNT) of Woodland Hills, CA announced today that on December 4, 1996, its 51%-owned subsidiary, Rapid Cast, Inc. (RCI) and Ronald Blum, O.D. reached a settlement on Dr. Blum's allegations that RCI and its customers infringe U.S. Patent No. 4,919,850 entitled "Method For Curing Plastic Lenses."

As a result of the settlement, the suit that Dr. Blum filed in the United States District Court for the Southern District of New York styled Blum v. Rapid Cast, Inc., No. 95 Civ. 5113 (LLS) shall be dismissed and RCI and its customers may freely continue to use the curing process as one step in RCI's otherwise patented method to cast plastic lenses from monomer to finished lens in approximately 30 minutes. In consideration for Dr. Blum granting RCI a license to his patent, RCI has paid $200,000 to Dr. Blum and has agreed to pay an additional $350,000 over the next four years.

Incomnet is a marketing-driven company that provides innovative cost-saving products in the telecommunications and optical lens industries. Incomnet's telecommunications services consist of telephone services provided by its wholly-owned subsidiary National Telephone & Communications, Inc. and networking services by its AutoNETWORK division. Incomnet's optical lens products are manufactured and marketed by its 51%-owned subsidiary, Rapid Cast, Inc., which is a development stage company with a proprietary technology that produces single-vision, flat-top bifocal and multifocal progressive lenses on demand in approximately 30 minutes.

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NASDAQ: ICNT

THURSDAY

FOR IMMEDIATE RELEASE

November 14, 1996

INCOMNET PLANS PARTIAL SPIN-OFF OF ITS NTC SUBSIDIARY IN FIRST QUARTER 1997

Incomnet (ICNT) of Woodland Hills, CA, today announced that it has formally approved a plan to partially spin-off its wholly-owned subsidiary, National Telephone & Communications, Inc. (NTC), in the first quarter of 1997, pending approval by the Securities and Exchange Commission (SEC).

The Company intends to spin off to its shareholders 10% of its 100% holdings in NTC. At that time, NTC intends to become a public corporation by listing its common stock separately from Incomnet. Upon such a spin off, there will be 10 million outstanding shares of NTC common stock, with 1 million shares held by Incomnet shareholders and 9 million shares held by Incomnet. As part of the spin-off agreement, the Company confirmed its prior announcement that NTC intends to make a public offering of NTC common stock at a later date in 1997.

As part of the spin-off agreement with Incomnet, NTC has been authorized to establish an incentive stock option program for its employees, key consultants and independent representatives that reserves 8,653,847 option shares, the majority of which are subject to NTC's achievement of certain financial goals.

As part of the spin-off, Incomnet has agreed not to sell or spin-off more than 20 percent of its remaining ownership in NTC until January 1, 1998 or until NTC's public offering, whichever occurs first, and has also agreed that it will not sell more than 1 million shares of NTC in 1997 and 1 million shares in 1998 after NTC's public offering. In addition, the Company has agreed not to sell more than 5 percent of its holdings in NTC in a single transaction without giving NTC the first right of refusal to purchase the stock.

While the Company intends to spin-off 10% of NTC's shares in the first quarter of 1997 and NTC intends to have a public offering sometime in 1997, there are no assurances as to if or when these transactions will occur.

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