CONVERGENCE COMMUNICATIONS INC
8-K/A, 1998-09-30
CABLE & OTHER PAY TELEVISION SERVICES
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8K-A


                                 CURRENT REPORT
     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934




         Date of Report (Date of earliest event reported): July 17, 1998




                        Convergence Communications, Inc.
             (Exact name of registrant as specified in its charter)




     Nevada                            00-21143                    87-0545056
(State or other jurisdiction of  (Commission File Number)       (IRS Employer
    incorporation)                                           Identification No.)




            102 West 500 South, Suite 320, Salt Lake City, Utah 84101
               (Address of principal executive offices)(Zip Code)


        Registrant's telephone number, including area code (801) 328-5618




                      Wireless Cable & Communications, Inc.
          (Former name or former address, if changed since last report)


<PAGE>


Amendment No. 1

     Convergence   Communications,   Inc.  (the  "Company")  hereby  amends  the
following items, financial statements, exhibits or other portions of its Current
Report on Form 8-K dated July 17, 1998 as follows:

Item 7.  Financial Statements and Exhibits.

Item 7(a).  Financial Statements of businesses acquired.

     Attached as Exhibit 7(a) are the  Cablevisa,  S.A. de C.V. and  Multicable,
S.A. de C.V.  audited  combined balance sheets as of June 30, 1998 and 1997, and
the related combined statements of operations,  stockholders' equity and of cash
flows for each of the two years in the period  ended June 30,  1998 and  related
notes to the combined financial statements and independent auditors' report.

Item 7(b).  Unaudited Pro forma financial information.

         Attached  as  Exhibit  7(b) are the  unaudited  pro forma  consolidated
balance  sheet  of the  Company  as of June 30,  1998  and unaudited  pro  forma
consolidated  statements of operations  for the year ended December 31, 1997 and
the six-month period ended June 30, 1998.

Item 7(c).  Exhibits.

Exhibit
No         Exhibit                                                  Page
- - --         -------                                                  ----
7(a)      Cablevisa,S.A.  de C.V.  and  Multicable,  S.A. de C.V.     3
          audited  combined  balance sheets as of June 30, 1998
          and  1997,  and  the  related  combined  statements  of
          operations,  stockholders' equity and of cash flows for
          each of the two years in the period ended June 30, 1998
          and related notes to the combined financial statements
          and independent auditors' report.

7(b)      Unaudited pro forma  consolidated  balance sheet of the     17
          Company  as of June 30,  1998 and  unaudited  pro forma
          consolidated  statements  of  operations  for the  year
          ended December 31, 1997 and the six-month  period ended

          June 30, 1998.

<PAGE>

                                   Signatures

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                        CONVERGENCE COMMUNICATIONS, INC.


                                        /s/Anthony Sansone
                      ----------------------------------------------------------
                      By:  Anthony Sansone, Treasurer (Chief Accounting Officer)
                      Dated:  September 30, 1998


<PAGE>



Exhibit 7(a):  Financial statements of businesses acquired

         Cablevisa,  S.A. de C.V. and Multicable,  S.A. de C.V. audited combined
balance sheets as of June 30, 1998 and 1997 and the related combined  statements
of operations,  stockholders' equity and of cash flows for each of the two years
in the  period  ended  June 30,  1998,  and the  related  notes to the  combined
financial statements and independent auditors' report.







                      [THIS SPACE INTENTIONALLY LEFT BLANK]



<PAGE>
    CABLEVISA, S.A. DE C.V. AND MULTICABLE EL SALVADOR, S.A. DE C.V.
    (Wholly-Owned Subsidiaries of Chispa Dos, Inc.)
    Combined Financial Statements for the Years Ended June 30, 1998 and 1997
    Independent Auditors' Report
<PAGE>



INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Cablevisa, S.A. de C.V.  and  Multicable El Salvador, S.A. de C.V.

     We have audited the accompanying combined balance sheets of Cablevisa, S.A.
de C.V. and Multicable El Salvador,  S.A. de C.V. (wholly-owned  subsidiaries of
Chispa Dos, Inc.) (collectively, the "Company") as of June 30, 1998 and 1997 and
the related combined  statements of operations,  stockholders'  equity, and cash
flows for the years then ended (all  expressed  in El  Salvador  Colons).  These
combined   financial   statements  are  the   responsibility  of  the  Company's
management.  Our  responsibility  is to express  an  opinion  on these  combined
financial statements based on our audits.

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

In our opinion,  such  combined  financial  statements  present  fairly,  in all
material respects, the financial position of the Company as of June 30, 1998 and
1997, and the combined results of their operations and their combined cash flows
for the years then ended in conformity with the accounting  principles generally
accepted in the United States of America.

     Our audits also  comprehended  the  translation  of the El  Salvador  Colon
amounts into U.S. dollar amounts and, in our opinion,  such translation has been
made in  conformity  with the  basis  stated in Note 1. The  translation  of the
combined  financial  statement  amounts into U.S. dollars and the translation of
the  combined  financial  statements  into English have been made solely for the
convenience of readers in the United States of America.

As  explained  in Note 12, the Company  was  acquired on July 17, 1998 by Chispa
Dos, Inc.




DELOITTE & TOUCHE LLP
August 31, 1998
San Salvador, El Salvador
<PAGE>
<TABLE>
<CAPTION>
CABLEVISA, S.A. DE C.V. AND
MULTICABLE EL SALVADOR, S. A. DE C.V.
(Wholly-Owned Subsidiaries of Chispa Dos, Inc.)

COMBINED BALANCE SHEETS, JUNE 30, 1998 AND 1997
(Expressed in U.S. Dollars)
- - --------------------------------------------------------------------------------

ASSETS                                                             1998            1997

CURRENT ASSETS:
<S>                                                            <C>            <C>
   Cash and cash equivalents (Note 1b) .....................   $   233,659    $    53,972
   Accounts receivable:
     Trade (less allowance for  doubtful accounts of $66,799       289,629        313,500
        and $23,192, respectively) (Notes 1c and 2)
     Due from affiliates (Notes 1d and 3) ..................       495,568        308,425
     Other .................................................        36,260         47,477
   Inventories - net (Notes 1e and 4) ......................       116,213        174,520
   Prepaid expenses ........................................         7,986         10,814
   Deferred income tax (Note 10) ...........................        84,249         67,747

             Total current assets ..........................     1,263,564        976,455

PROPERTY, EQUIPMENT AND FURNITURE - Net (Notes 1g and 5) ...     1,388,771      1,794,668
INVESTMENTS (Note 1f) ......................................          --            2,844
OTHER ASSETS (Note 1h) .....................................         3,050         47,726

TOTAL ......................................................   $ 2,655,385    $ 2,821,693

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable - trade (Note 6) .......................   $   185,558    $   147,490
   Short-term  debt (Note 7) ...............................          --           10,529
   Other accounts payable and accrued expenses (Note 8) ....       321,490        251,812
   Current portion of long-term debt (Note 9) ..............        69,209         61,750

              Total current liabilities ....................       576,257        471,581

LONG-TERM DEBT (Note 9) ....................................       360,716        452,364
SEVERANCE COMPENSATION (Note 1j) ...........................        19,666         20,536

             Total liabilities .............................       956,639        944,481

STOCKHOLDERS' EQUITY:
    Capital stock (Note 11) ................................     1,865,803      1,865,803
    Foreign currency translation adjustment ................       (20,443)       (22,290)
    Retained earnings (deficit) ............................      (146,614)        33,699

              Total stockholders'equity ...................     1,698,746      1,877,212

TOTAL ......................................................   $ 2,655,385    $ 2,821,693

See notes to combined financial statements.

</TABLE>
<PAGE>
CABLEVISA, S.A. DE C.V. AND
MULTICABLE EL SALVADOR, S. A. DE C.V.
(Wholly-Owned Subsidiaries of Chispa Dos, Inc.)

COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
(Expressed in  U.S. Dollars)
- - -------------------------------------------------------------------------------

                                                         1998              1997

REVENUES:
   Cable television service ......................   $ 3,169,055    $ 3,685,557
   Advertising and cable guide ...................       387,110        148,243

            Total revenues .......................     3,556,165      3,833,800

COSTS AND OPERATING EXPENSES:
   Operating costs ...............................     3,195,028      2,576,025
   Sales and administration expenses (Note 3) ....       154,266      1,059,489

            Total costs and operating expenses ...     3,349,294      3,635,514

INCOME  FROM  OPERATIONS .........................       206,871        198,286

OTHER EXPENSES (INCOME):
   Interest expense ..............................        79,802         81,160
   Other expenses ................................        19,029         30,573
   Other income ..................................        (5,376)       (23,719)

           Total other expenses, net .............        93,455         88,014

INCOME BEFORE TAXES ..............................       113,416        110,272

INCOME TAX EXPENSE (Notes 1k and 10) .............        28,887         27,810

NET INCOME .......................................   $    84,529    $    82,462


See notes to combined financial statements.
<PAGE>
<TABLE>
<CAPTION>
CABLEVISA, S.A. DE C.V. AND
MULTICABLE EL SALVADOR, S. A. DE C.V.
(Wholly-Owned Subsidiaries of Chispa Dos, Inc.)

COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
(Expressed in U.S. Dollars)
- - --------------------------------------------------------------------------------


                                       Common Stock            Foreign       Retained
                             -------------------------------   Currency
                                  Shares         Amount       Translation     Earnings
                                (Note 11)       (Note 11)     Adjustment      (Note 1n)         Total

BALANCES AS OF
<S>                            <C>           <C>           <C>             <C>            <C>
  JULY 1, 1996 .............       162,700   $ 1,865,803                   $   (48,763)   $ 1,817,040

   Net income ..............          --                                        82,462         82,462
   Foreign currency
      translation adjustment          --            --      $   (22,290)          --          (22,290)
                                   -------   ----------     ------------   ------------   ------------
BALANCES AS OF
   JUNE 30, 1997 ...........       162,700     1,865,803        (22,290)        33,699      1,877,212

   Dividends paid ..........          --                                      (264,842)      (264,842)
   Net income ..............          --                                        84,529         84,529
   Foreign currency
      translation adjustment          --            --            1,847           --            1,847
                                    -------- ----------     ------------   -----------    -----------
BALANCES AS OF
   JUNE 30, 1998 ...........       162,700   $ 1,865,803    $   (20,443)   $  (146,614)   $ 1,698,746


See notes to combined financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


CABLEVISA, S.A. DE C.V. AND
MULTICABLE EL SALVADOR, S. A. DE C.V.
(Wholly-Owned Subsidiaries of Chispa Dos, Inc.)

COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
(Expressed in U.S. Dollars)
- - --------------------------------------------------------------------------------

                                                                 1998            1997
OPERATING ACTIVITIES:
<S>                                                               <C>          <C>
    Net income ................................................   $  84,529    $  82,462
    Adjustments  to  reconcile  net  income  to net cash  provided  by (used in)
        operating activities:
        Depreciation and amortization .........................     561,980      540,279
        Increase in allowance for doubtful debts ..............      43,607       23,192
        Increase (decrease) in estimated severance compensation        (870)      20,422
        Increase for inventory obsolescence
        Deferred income taxes .................................     (16,502)     (67,747)
    Changes in operating assets and liabilities:
        Accounts receivable ...................................    (195,662)     (57,968)
        Inventories ...........................................      58,307       23,442
        Prepaid expenses ......................................       2,828       (8,479)
        Accounts payable - trade ..............................      38,068     (182,423)
        Other accounts payable and accrued expenses ...........      69,678       98,545
        Other assets ..........................................      44,676      (45,774)
    Net cash provided by  operating activities ................     690,639      425,951

INVESTING ACTIVITIES
   Acquisition of property, equipment and furniture ...........    (275,585)    (462,333)
   Proceeds from sale of property, equipment and furniture ....     119,502      162,545
   Proceeds from sale of investments ..........................       2,844       11,279
    Net cash used in investing activities .....................    (153,239)    (288,509)

FINANCING ACTIVITIES
   Proceeds from issuance of long term debt ...................      90,844       44,501
   Repayment of long term debt ................................    (185,562)    (169,833)
   Dividends paid .............................................    (264,842)
   Net cash  used in financing activities .....................    (359,560)    (125,332)

EFFECT OF EXCHANGE RATES ON CASH ..............................       1,847      (22,290)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ..............     179,687      (10,180)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ..................      53,972       64,152

CASH AND CASH EQUIVALENTS, END OF YEAR ........................   $ 233,659    $  53,972

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for:
       Income tax .............................................   $  41,780    $  53,256
       Interest ...............................................   $  79,802    $  81,160

See notes to combined financial statements.

</TABLE>
<PAGE>

CABLEVISA, S.A. DE C.V. AND
MULTICABLE EL SALVADOR, S. A. DE C. V.

(Wholly-Owned Subsidiaries of Chispa Dos, Inc.)


NOTES TO THE COMBINED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 1998 AND 1997
(Expressed in U.S. Dollars)
- - --------------------------------------------------------------------------------


1.    OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

      Operations - Cablevisa,  S.A. de C.V. and Multicable El Salvador,  S.A. de
      C.V.  (collectively,  the "Company") were  established on June 3, 1983 and
      September 28, 1990,  respectively,  as  corporations in accordance with El
      Salvadorian  law. The main  activity of the  Company is to provide cable
      television services.

      Significant  Accounting  Policies  - A summary of  significant  accounting
      policies used to prepare the financial statements follows:

       a.     Principles of Combination - The  accompanying  combined  financial
              statements   have  been  prepared  in  accordance  with  generally
              accepted  accounting  principles  in the United States of America.
              The financial  statements include the accounts of Cablevisa,  S.A.
              de C.V and  Multicable El Salvador,  S.A. de C.V.,  companies with
              common  control,  property  and  administration.  All  significant
              inter-company  balances and  transactions  have been eliminated in
              combination.

       b.     Cash  and  Cash  Equivalents  -  The  Company  considers  as  cash
              equivalents  all certified  deposits  with original  maturities of
              three  months or less at date of purchase.  These  deposits can be
              translated immediately into cash without any restriction.

       c.     Accounts Receivable - The allowance for doubtful accounts includes
              all balances that are more than ninety days overdue.

       d.     Accounts Due From  Affiliates - The accounts  receivable  due from
              affiliates  represents  the balance due from Unicable S.A. de C.V.
              (See Note 3).

       e.     Inventories  -  Inventories  of  spare  parts,   accessories   and
              installation  materials are stated at the lower of cost or market.
              Cost is determined on the average cost method.

       f.     Investments - The  investments in affiliated  companies are stated
              at cost.

       g.     Property,  Equipment  and  Furniture - These  assets are stated at
              acquisition or construction cost. The construction and improvement
              costs are recorded to in-process  accounts and are  capitalized to
              the respective  asset account when the  construction is completed.
              Gains or losses on sale or disposal of assets are recorded as they
              occur.  Expenditures  for  maintenance  and repairs are charged to
              expense as incurred,  whereas major  improvements are capitalized.
              The depreciation is computed on the straight-line  method over the
              estimated useful lives of the assets.
<PAGE>

       h.     Other Assets - Other assets principally consist of deposits in the
              ordinary course of business.

       i.     Recognition of Revenues,  Costs, and Expenses - Revenues for cable
              television  services are recognized in the period during which the
              services  are  provided.  Costs and  expenses  are recorded on the
              accrual basis.

       j.     Severance  Compensation  - According to the El Salvador Labor Law,
              companies are required to accrue a severance  compensation,  up to
              four  times of the  current  minimum  salary,  to those  employees
              dismissed without fair cause. The Company has recorded a provision
              to cover this liability.

       k.     Income Taxes - The Company uses the asset and liability  method to
              account for income taxes.  Deferred tax assets and liabilities are
              recognized  for  the  future  tax  consequences   attributable  to
              differences  between the financial  statement  carrying amounts of
              existing assets and liabilities and their existing tax bases.

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

       m.     Fair Value of Financial Instruments - The carrying amounts of cash
              and cash equivalents,  accounts  receivable,  accounts payable and
              debt are reasonable estimates of their fair value.

       n.     Legal  Reserve - In  accordance  with El Salvadorian Law, 7% of
              income before  provision for income taxes must be  transferred  to
              the legal  reserve  each year until the legal  reserve is equal to
              20% of the  capital.  The  legal  reserve  is  not  available  for
              dividends.  The legal  reserves  for the years ended June 30, 1998
              and 1997 are $73,719 and $47,588, respectively.

       o.     Translation  of El  Salvadorian  Colon  Statements to U.S.  Dollar
              Statements - The financial  statements  are stated in Colons,  the
              currency of the country in which the Company is  incorporated  and
              operates.  The  translation of El  Salvadorian  Colon amounts into
              U.S.  dollar  amounts are included  solely for the  convenience of
              readers in the United  States of America and have been made at the
              rate of 8.76  colons and 8.74 colons to $1 U.S.,  the  approximate
              free rate of  exchange  at June 30,  1998 and 1997,  respectively.
              Such translations should not be construed as representations  that
              the Colon  amounts  could be  converted  into U.S.  dollars at the
              above or any other rate.

2.    ACCOUNTS RECEIVABLE

                                                         1998            1997

Accounts receivable:
   Subscribers .................................      $ 165,032       $ 257,330
   Sundry debtors ..............................        185,783          76,670
   Credit cards ................................          5,613           2,692

                                                        356,428         336,692
Less allowance for doubtful accounts............        (66,799)        (23,192)

            Total accounts receivable ..........      $ 289,629       $ 313,500
<PAGE>

3.    AFFILIATED COMPANIES

      Balances between affiliated  companies as of June 30, 1998 and 1997 are as
follows:

                                                         1998            1997

Accounts receivable:
   Unicable, S.A. de C.V ......................       $ 495,568        $ 808,260
   Invercable, S.A. de C.V ....................                          162,116

          Total accounts receivable ...........         495,568          970,376

Accounts payable:
   Unicable, S.A. de C.V ......................                       (661,951)

          Total accounts payable ..............                       (661,951)

Net amount receivable .........................       $ 495,568        $ 308,425


      The  Company  provided  certain  administrative   services  to  affiliated
      companies  which  were  reimbursed  to  the  Company.   During  1998,  the
      reimbursement  exceeded the cost of services provided to affiliates in the
      amount  of  $340,919.  During  1997,  the  cost of  services  provided  to
      affiliates  exceeded the  reimbursement  by $534,761.  This  reimbursement
      activity is reflected in administration expenses.

4.    INVENTORIES

                                                       1998               1997

Spare parts and accessories ................        $   4,007         $ 294,783
Installation materials .....................          360,004           127,535

                                                      364,011           422,318
Less: obsolescence allowance ...............         (247,798)         (247,798)

Total inventories ..........................        $ 116,213         $ 174,520

<PAGE>
5.    PROPERTY, EQUIPMENT AND FURNITURE


<TABLE>
<CAPTION>

                                                   Estimated
                                                  Useful Life
                                                  (In Years)       1998            1997

Cost:
<S>                                                <C>           <C>          <C>        
   Land .....................................                    $ 178,047    $   141,229
   Buildings and improvements ...............            20      3,211,961      3,157,116
   Vehicles .................................       5 to 10        171,290        169,272
   Furniture and equipment ..................       2 to 10        257,653        261,964
   Tools and small equipment ................       5 to 10          5,201          5,201

                                                                 3,824,152      3,734,782
    Less accumulated depreciation ...........                    (2,435,381)    (1,940,114)

Total property, equipment and  furniture, net                   $ 1,388,771    $ 1,794,668

</TABLE>


6.    ACCOUNTS PAYABLE - TRADE

                                                         1998            1997

Suppliers:
    Local suppliers ......................           $ 16,282           $ 12,880
    Foreign suppliers ....................            169,276            134,610

Total accounts payable ...................           $185,558           $147,490


7.    SHORT TERM DEBT

      At June 30, 1997, the short-term debt is payable in El Salvadorian  colons
at an 18% interest rate.

8.    OTHER ACCOUNTS PAYABLE AND ACCRUED EXPENSES

                                                          1998            1997

Sundry creditors .............................         $ 74,923         $103,676
Withholdings payable .........................            8,579            3,918
Valued Added Tax - VAT .......................           41,849           28,262
Customer deposits ............................           71,329           73,655
Other taxes ..................................          124,810           42,301

Total other accounts payable .................         $321,490         $251,812
<PAGE>


8.    LONG-TERM DEBT

                                                           1998           1997

  Banco Agricola Comercial - Loan approved on August 11,
    1995,  for a five and a half  year  period  with an
    annual  interest  of 16.5%;  collateralized  with a
    first   mortgage   on  land  and   buildings,   and
    transmission equipment.  Loan payable in 66 monthly
    payments of $3,083 plus interest;  maturity date of
    loan March 7, 2001.                                    $338,834    $458,909

  Loan  approved  October  10,  1997,  for a three year
    period   with  an   annual   interest   of   16.5%;
    collateralized  with a first  mortgage  on land and
    buildings, and transmission equipment. Loan payable
    in 36 monthly  payments  of $1,154  plus  interest;
    maturity date of loan October 10, 2001.                  34,970

  Loan approved on February 26, 1997,  for a three year
    period,   with   an   annual   interest   of   22%;
    collateralized  by  the  vehicles  acquired  and  a
    promissory note signed by the Company. Loan payable
    in 36  monthly  payments  of $700  plus  interest;
    maturity date of loan February 26, 2000.                  14,000     21,787

  Savings bank  Atlacatl - Loan  approved  on March 14,
    1996  for a  three  year  period,  with  an  annual
    interest  of 24%;  collateralized  by the  vehicles
    acquired  by the  Company  and with the  cession of
    insurance  policy  benefits.  Loan  payable  in  36
    monthly  payments of $782 plus  interest;  maturity
    date of loan January 31, 1999.                                       18,022

  BANCASA - Loan  approved on January 31,  1996,  for a
    three year period,  with an annual interest of 24%;
    collateralized  by  the  vehicles  acquired  by the
    Company;  cession of insurance  policy benefits and
    personal  guarantees  of  the  shareholders.   Loan
    payable  in  36  monthly   payments  of  $386  plus
    interest; maturity date of loan January 30, 1999.         4,374       12,253

  Banco de Comercio  loan  approved  June 8, 1995 for a
     three year period with an annual  interest rate of
     22%; with personal guarantees supported by General
     Automotriz,  S.A. de C.V., an unrelated party. Loan
     payable in 36 monthly  payments of $195;  maturity
     date of loan June 8, 1998.                                            3,143

  BANCASA - Loan  approved  on August 22,  1997,  for a
    three year period,  with an annual interest of 18%;
    collateralized  by  the  vehicles  acquired  by the
    Company,  cession of insurance  policy benefits and
    personal  guarantees  of  the  shareholders.   Loan
    payable  in  36  monthly   payments  of  $796  plus
    interest; maturity date of loan August 22, 2000.           5,321
<PAGE>

  BANCASA - Loan  approved on November 14, 1997,  for a
    three year period,  with an annual interest of 18%;
    collateralized  by  the  vehicles  acquired  by the
    company,  cession of insurance  policy benefits and
    personal  guarantees  of  the  shareholders.   Loan
    payable  in  36  monthly   payments  of  $120  plus
    interest; maturity date of loan November 14, 2000.
                                                                4,337

  Banco Comercio - Loan approved February 28,1998 for a
     three year period with an annual  interest rate of
     18%; with personal guarantees supported by General
     Automotriz,  S.A. de C.V., an unrelated party.Loan
     payable in 36 monthly payments of $1,412; maturity
     date of loan February 28, 2001.                            19,069

  Financiera Cred-o-Matic - Loan approved April 1, 1998
     for a three year  period  with an annual  interest
     rate of 18%; with personal guarantees supported by
     General  Automotriz,  S.A. de C.V.,  an  unrelated
     party.  Loan  payable  in 36 monthly  payments  of
     $257; maturity date of loan April 1, 2001.                 9,020
                                                               -------------

        Total debt                                          429,925      514,114
        Current portion of long term debt                    69,209       61,750
                                                         -----------  ----------

        Total long-term debt                            $   360,716    $ 452,364
                                                         =========== ===========



10.   INCOME TAXES

     The  accompanying  combined  financial  statements  have been  prepared  in
     accordance  with  accounting  principles  generally  accepted in the United
     States;  however,  the  Company's  accounting  records  are  maintained  in
     accordance with accounting practices set by tax regulations in El Salvador.
 
      For June 1998 and 1997,  income  tax  expense  (benefit)  consists  of the
      following:


                                                    1998                1997

Current ............................             $ 45,389              $ 95,557
Deferred ...........................              (16,502)              (67,747)

Total ..............................             $ 28,887              $ 27,810

<PAGE>

      The income tax effects of temporary  differences that give rise to current
      deferred tax assets (liabilities) are as follows:


                                                            1998           1997

Allowance for  doubtful accounts .................       $ 16,700        $ 5,798
Inventory obsolescence reserve ...................         61,949         61,949
Other
                                                            5,600          --   

Total deferred income taxes.......................       $ 84,249        $67,747
                                                         ========        =======



     The Company's  effective  tax rate of 25.47% and 25.22% for the years ended
     June  30,  1998  and  1997,  respectively,  differs  from  the El  Salvador
     statutory tax rate of 25% due to the  nondeductibility  of certain business
     expenses.

11.   CAPITAL STOCK

      At June 30, 1998 and 1997 the capital stock is composed as follows:


 Detail:
Cablevisa S.A. de C.V. - 61,000 common shares authorized, issued,
   and outstanding with a nominal value of $11.47 each ............   $  699,530

Multicable, S.A. de C.V. - 101,700 common shares authorized,
  issued, and outstanding with a nominal value of  $11.47 each ....    1,166,273
                                                                       ---------

Total .............................................................   $1,865,803
                                                                      ==========


12.   SUBSEQUENT EVENT

      Effective July 17, 1998, all of the  outstanding  stock of the Company was
      acquired  by  Convergence   Communications,   Inc.  ("CCI")  and  FondElec
      Essential  Services Growth Fund, L.P.  ("FondElec")  from Star Industries,
      S.A. ("Star"), a Panamanian Corporation.

      The purchaser of the Company was Chispa Dos,  Inc., a company formed under
      the  laws  of  the  Cayman  Islands  ("Chispa").  CCI  and  FondElec  own,
      respectively,  49.5% and 50.5% of the outstanding capital stock of Chispa.
      Under the terms of the parties' agreements regarding Chispa, CCI will have
      operating  control  of  Chispa,  will  hold a  majority  of the  Board  of
      Directors' seats for Chispa, and will have the right to acquire FondElec's
      interest in Chispa under certain conditions.  The total purchase price for
      Cablevisa and Multicable was approximately  $16.91 million.  Approximately
      $4.77 million of the purchase  price was paid in cash at closing,  and the
      balance of the  purchase  price  (approximately  $12.14  million) was paid
      through Chispa's  delivery of three promissory notes. The first promissory
      note, in the original principal amount of approximately  $5.2 million,  is
      due on February 17, 1999. The second  promissory  note, in the approximate
      principal  amount  of $3.47  million,  is due on May 17,  1999.  The final
      promissory note, in the original principal amount of $3.47 million, is due
      on July  17,  2000.  The  amounts  payable  under  the  first  and  second
      promissory notes are non-interest  bearing (except in the event of default
      by Chispa,  in which case the notes will bear  interest  at the rate of 7%
      per annum from the date of  default),  but the amounts  payable  under the
      third promissory note bear interest at the rate of 7% per annum. If Chispa
      defaults on the  payment of any  amounts due under any of the notes,  Star
      may  accelerate  all  remaining  amounts  due under all of the  notes.  In
      connection with the closing, Chispa also paid $428,206 of outstanding debt
      of the Company to third party banks.

                                     ******
<PAGE>

Exhibit 7(b):  Unaudited Pro forma financial information

         The accompanying  unaudited pro forma consolidated  balance sheet as of
June 30, 1998 and  unaudited pro forma  statements  of  operations  for the year
ended  December  31,  1997 and the six  month  period  ended  June 30,  1998 are
presented to reflect the acquisition of all of the outstanding shares of capital
stock of  Cablevisa,  S.A. de C.V. and  Multicable,  S.A. de C.V. by Chispa Dos,
Inc.,  ("Chispa") a controlled  subsidiary of convergence  Communications,  Inc.
("CCI") (the "Acquisition") from Star Industries, S.A., a Panamanian Corporation
("Star"), for a purchase price of $16,909,930 in cash and notes payable, subject
to  adjustments  for  undisclosed  liabilities  and certain other changes to the
combined  financial  statements.  The Acquisition  was effected  pursuant to the
terms  of a Stock  Purchase  Agreement,  dated as of July 17,  1998,  among  the
Chispa, Star and other parties (the "Agreement").  The Acquisition was accounted
for under the purchase  method of  accounting.  The  accompanying  unaudited pro
forma  consolidated  financial  statements  reflect the effects of a preliminary
allocation of the purchase price.

         The accompanying  unaudited pro forma consolidated financial statements
should  be  read  in  conjunction  with  the  respective  companies'  historical
consolidated or combined financial  statements and notes thereto.  The unaudited
pro forma  consolidated  financial  statements  are presented for  informational
purposes  only and are not  necessarily  indicative  of actual  results  had the
foregoing  transaction occurred as described in the following paragraph,  nor do
they purport to represent results of future operations of the merged companies.

         The  unaudited  pro  forma  consolidated   balance  sheet  assumes  the
Acquisition  occurred on June 30, 1998.  The  unaudited  pro forma  consolidated
statements of operations present the CCI's historical consolidated statements of
operations  for the fiscal year ended December 31, 1997 and the six months ended
June 30,  1998,  along  with the CCI's  statements  of  operations  for the same
periods  adjusted to give effect to the  Acquisition as if the  Acquisition  had
occurred  on  January  1,  1997.  Unaudited  pro  forma  consolidated  financial
information   presented  herein  reflects  adjustments  for  (i)  the  estimated
allocation  of  purchase  price  to  the  fair  value  of  assets  acquired  and
liabilities  assumed,  (ii) the  effect  of  recurring  charges  related  to the
Acquisition,  primarily  the  amortization  of subscriber  rights,  and interest
expense  (iii) the  recording  of the  minority  interest  of the other  Chispa.
shareholder.   The  unaudited  pro  forma  consolidated   financial  information
presented herein do not reflect any adjustments for certain subscribers acquired
from Unicable,  S.A. de C.V. as of the  Acquisition.  Information  regarding the
service  revenues  and expenses  related to such  acquired  subscribers  was not
sufficient to develop reasonable estimates.

         The   preliminary   allocation  of  the  purchase   price  resulted  in
approximately   $15.6  million  of  subscriber  rights.  The  actual  amount  of
subscriber  rights  recorded  will  vary  based  upon the final  purchase  price
allocation  resulting  from  settlement of any financial  statement  adjustments
under the Agreement and completion of asset and technology valuations which will
occur  prior to  reporting  the  audited  financial  results  for the year ended
December 31, 1998.  Changes in  subscriber  rights and the related  amortization
expense resulting from these plans and assessments may be material.
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
- - ----------------------------------------------------------------------------------------------------------------
                                                                                                    Pro Forma
                                             Convergence       Multicable &        Purchase         Adjusted
                                            Communications     Cablevisa         Adjustments         Balance
                                         ------------------- --------------     ---------------   --------------
ASSETS                                                           (a)                                  (b)
CURRENT ASSETS:
<S>                                       <C>              <C>              <C>                 <C>         
  Cash and cash equivalents ............  $   8,770,012    $    233,659          --             $  9,003,671
  Accounts receivable - net ............            479         325,889          --                  326,368
  Due from affiliaties .................         39,071         495,568          --                  534,639
  Inventory ............................         24,395         116,213          --                  140,608
  Deferred income tax ..................           --            84,249          --                   84,249
  Prepaid license fees .................        201,751            --            --                  201,751
  Other current assets .................          9,170           7,986          --                   17,156
                                           ------------    ---------------   ------------        ------------
        Total current assets ...........      9,044,878       1,263,564          --               10,308,442

INVESTMENT IN CENTURION ................        845,955            --            --                  845,955
EQUIPMENT - net ........................      1,049,682       1,388,771          --                2,438,453
LICENSE RIGHTS - net ...................        749,167            --            --                  749,167
CONTRACT RIGHTS - net ..................      8,247,042            --            --                8,247,042
SUBSCRIBER RIGHTS - net ................           --      $       --      15,585,740(e),(f)      15,585,740
OTHER ASSETS ...........................        181,796           3,050          --                  184,846
                                            ============    ===============  ============       ============
TOTAL ASSETS ...........................   $ 20,118,520    $    2,655,385    $ 15,585,740       $ 38,359,645
                                            ============    ===============  ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and
     accrued liabilities ...............  $   1,058,707     $    507,048     $ 376,142          $  1,941,897
  Note payable .........................        350,000            --            --                  350,000
  Accrued license lease fees ...........        142,594            --            --                  142,594
  Accrued consulting fees
     (payable to related party) ........        100,000            --            --                  100,000
  Due to affiliates ....................        810,224            --            --                  810,224
  Customer deposits ....................         36,030            --            --                   36,030
  Current portion of long-term debt ....           --            69,209      (69,209)(g)               --
                                             ------------    ---------------   ------------       ------------
        Total current liabilities ......      2,497,555         576,257       306,933              3,380,745
LONG-TERM LIABILITIES:
  Long-term debt (owed to related party)      1,176,263            --                              1,176,263
  Long-term debt - acqusition ..........           --              --      12,136,788(c)          12,136,788
  Long-term debt .......................           --           360,716      (360,716)(g)              --
  Severance payable ....................           --            19,666         --                    19,666
MINORITY INTEREST IN SUBSIDIARIES ......          9,991            --       2,626,748(h)           2,636,739
                                            ------------    -------------  ------------           ------------
        Total liabilities ..............      3,683,809         956,639    14,709,753             19,350,201
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Series "A" Preferred stock ...........         32,575            --        --                      32,575
  Series "B" Preferred stock ...........          3,548            --        --                       3,548
  Common stock .........................         82,099       1,865,803    (1,865,803)               82,099
  Additional paid-in capital ...........     24,473,111            --      2,574,733(i)          27,047,844
  Translation loss .....................           --           (20,443)      20,443(d)               --
  Deficit accumulated during
    the development stage ..............     (8,156,622)       (146,614)     146,614(d)           (8,156,622)
                                            ------------    ---------------   ------------      ------------
         Total stockholders' equity ....     16,434,711       1,698,746        875,987            19,009,444
                                            ------------    ---------------   ------------      ------------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY ..................   $ 20,118,520    $ 2,655,385     $ 15,585,740         $ 38,359,645
                                          ============    ===============   ============        ============
</TABLE>

See notes to unaudited pro forma consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
- - ---------------------------------------------------------------------------------------------------

                                                                                          Pro Forma
                                           Convergence    Multicable &     Purchase        Adjusted
                                         Communications   Cablevisa        Adjustments      Balance
                                      ------------------ -------------  ----------------  ---------
REVENUES                                                     (a)                              (b)
<S>                                   <C>              <C>            <C>                <C>      
  Services ........................   $     44,911     $ 1,584,528    $       --         1,629,439
  Advertising .....................           --           193,555            --           193,555
                                        ------------    ------------    ------------    ------------
              Total ...............         44,911       1,778,083            --         1,822,994

COST OF SERVICE  ..................        197,553       1,597,514            --         1,795,067
                                       ------------    ------------    ------------    ------------

GROSS MARGIN ......................       (152,642)       180,569            --            27,927

OPERATING EXPENSES:
  Professional fees ...............        710,275            --              --           710,275
  Depreciation and amortization ...        865,555    $       --          778,616(j)     1,644,171
  Leased license expense ..........         83,037            --              --            83,037
  General and administrative ......      1,234,474          77,133            --         1,311,607
  Stock option compensation expense           --              --              --              --
                                         ------------    ------------    ------------  ------------
               Total ..............      2,893,341          77,133         778,616       3,749,090
                                        ------------    ------------    ------------    ------------
OPERATING INCOME (LOSS) ...........     (3,045,983)        103,436        (778,616)     (3,721,163)

OTHER INCOME AND(EXPENSES):
  Interest income .................        194,155           2,688            --           196,843
  Interest expense ................        (57,129)        (39,901)     (606,839)(k)       (703,869)
  Other expenses ..................           --            (9,515)           --            (9,515)
                                         ------------    ------------    ------------    ------------
               Total ..............        137,026         (46,728)      (606,839)        (516,541)
                                         ------------    ------------    ------------    ------------
INCOME (LOSS) BEFORE TAXES ........     (2,908,957)         56,708       (1,385,455)     (4,237,704)
INCOME TAX EXPENSE (BENEFIT) ......           --            14,443          --(l)           14,443
                                         ------------    ------------    ------------    ------------
NET INCOME (LOSS) BEFORE
  MINORITY INTEREST ...............     (2,908,957)         42,265        (1,385,455)     (4,252,147)
MINORITY INTEREST IN
  INCOME (LOSS) OF SUBSIDIARIES ...          8,076            --             678,311        686,387
                                         ============    ============    ============    ============
NET INCOME (LOSS) .................   $ (2,900,881)     $    42,265      $ (707,144)   $ (3,565,760)
                                         ============    ============    ============    ============

Net loss per basic common share ...   $      (0.07)                                    $      (0.32)
                                         ============                                   ============
Net loss per diluted common share .   $      (0.07)                                    $      (0.32)
                                        ============                                    ============

Weighted-average common shares
  Basic ...........................     11,286,279                                       11,286,279
                                       ============                                     ============
  Diluted .........................     12,019,649                                       12,019,649
                                       ============                                      ============
</TABLE>


See notes to unaudited pro forma consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
- - -------------------------------------------------------------------------------------------------

                                                                                          Pro Forma
                                          Convergence    Multicable &     Purchase         Adjusted
                                        Communications   Cablevisa        Adjustments      Balance
                                     -----------------  ---------------   -------------- ------------
REVENUES                                                     (a)                              (b)
<S>                                    <C>             <C>              <C>                <C>      
    Services ........................  $      40,186   $   3,369,091    $       --         3,409,277
    Advertising .....................           --           263,233            --           263,233
                                            ------------    ------------    ------------    ------------
                    Total ...........         40,186       3,632,324            --         3,672,510

COST OF SERVICE .....................           --         2,794,408            --         2,794,408
                                           ------------    ------------    ------------    ------------
GROSS MARGIN ........................         40,186         837,916            --           878,102

OPERATING EXPENSES:
    Professional fees ...............        873,052            --              --           873,052
    Depreciation and amortization ...        619,182            --        1,557,233(j)     2,176,415
    Leased license expense ..........        116,161            --              --           116,161
    General and administrative ......      1,220,474         778,378            --         1,998,852
    Stock option compensation expense        962,738            --              --           962,738
                                         ------------    ------------    ------------    ------------
                    Total ...........      3,791,607         778,378       1,557,233       6,127,218
                                          ------------    ------------    ------------    ------------
OPERATING INCOME (LOSS) .............     (3,751,421)         59,538      (1,557,233)     (5,249,116)
OTHER INCOME AND EXPENSE:
    Interest income .................        116,367           5,508            --           121,875
    Interest expense ................       (807,203)        (92,248)       (939,156)(k)   (1,838,607)
                                          ------------    ------------    ------------    ------------
                    Total ...........       (690,836)        (86,740)       (939,156)     (1,716,732)
                                          ------------    ------------    ------------    ------------
INCOME (LOSS) BEFORE TAXES ..........     (4,442,257)        (27,202)     (2,496,389)     (6,965,848)
INCOME TAX EXPENSE (BENEFIT) ........           --             6,800            --(l)          6,800
                                         ------------    ------------    ------------    ------------
NET INCOME (LOSS)
  BEFORE MINORITY INTEREST ..........     (4,442,257)         34,002      (2,496,389)     (6,972,648)
MINORITY INTEREST IN
 INCOME (LOSS) OF SUBSIDIARIES ......         13,011            --         1,231,210       1,244,221 
                                          ============    ============    ============    ============
NET INCOME (LOSS) ...................   $ (4,429,246)     $  34,002        $(1,265,179)   $(5,728,427)
                                          ============    ============    ============    ============

Net loss per basic common share .....   $      (0.16)                                     $      (0.72)
                                           ============                                    ============
Net loss per diluted common share ...   $      (0.16)                                     $      (0.72)
                                           ============                                    ============

Weighted-average common shares
    Basic ...........................      7,970,801                                      7,970,801
                                         ============                                    ============
    Diluted .........................      8,445,529                                      8,445,529
                                         ============                                    ============


See notes to unaudited pro-forma consolidated financial statements.
</TABLE>





<PAGE>

CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)


NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1997
AND THE SIX MONTHS ENDED JUNE 30, 1998


The unaudited pro forma consolidated  balance sheet as of June 30, 1998 reflects
the adjustments necessary to record the Acquisition as though it had occurred on
June 30, 1998.

The unaudited pro forma consolidated statements of operations for the year ended
December  31,  1997 and the six  month  period  ended  June 30,  1998  have been
prepared  assuming  the  Acquisition  had  occurred on January 1, 1997 and 1998,
respectively,  and reflect the effects of certain  adjustments to the historical
consolidated  financial  statements that result from the Acquisition between the
Company, Star Industries, Inc. and other parties. 

Based upon the terms of the  Acquisition,  the transaction is accounted for as a
purchase of Cablevisa, S.A. de C.V. and Multicable,  S.A. de C.V. (collectively,
the  "Acquired  Companies")  by  Chispa  a  controlled  subsidiary  of CCI,  for
financial reporting and accounting purposes.  Accordingly,  the CCI adjusted the
basis of the acquired assets and assumed liabilities to fair value. The purchase
price of  $16,909,930  is calculated  as the cash paid and notes payable  issued
plus the CCI's transaction  costs. The difference between the purchase price and
the fair value of the  identifiable  tangible  assets  acquired and  liabilities
assumed is recorded as subscriber rights and will be amortized up to a period of
10 years.  The  preliminary  allocation of the purchase  price is subject to the
settlement  of  any  financial  statement   adjustments  under  the  transaction
agreement  and the  completion  of  certain  asset  valuations.  Changes  to the
preliminary  purchase price  allocation  resulting from any financial  statement
adjustments  or  the  finalization  of  the  valuations  may  be  material.  The
preliminary  allocation  of the  purchase  price  to the fair  value  of  assets
acquired and liabilities assumed is as follows:

               Fair Value of assets acquired
                         Current assets            $  1,222,829
                         Non-current assets           1,391,821
                         Subscriber rights           15,585,740
               Fair value of liabilities assumed     (1,290,460)
                                                   ------------
                                                   $ 16,909,930


<PAGE>


THE  UNAUDITED  PRO FORMA  CONSOLIDATED  BALANCE  SHEET AS OF JUNE 30, 1998 GIVE
EFFECT TO THE FOLLOWING PRO FORMA ADJUSTMENTS:

         (a)   The historical combined financial  statements of the CCI have
               been adjusted to reflect the assets and  liabilities  and results
               of operations of the Company. The column "Multicable & Cablevisa"
               represents the historical combined financial position and results
               of operations that were acquired by CCI.
         (b)   The "Pro Forma Adjusted Balance" column represents the sum of the
               amounts   included  in  the   following   columns:   "Convergence
               Communications,  Inc.",  "Multicable & Cablevisa",  and "Purchase
               Adjustments".
         (c)   Represents  notes  to  Star  Industries,  S.A.,  to  finance  the
               Acquisition.
         (d)   Represents the elimination of the Company's common stock, foreign
               currency translation adjustment, and deficit.
         (e)   Represents the  capitalization  of $430,443 in acquisition  costs
               related to the  Acquisition,  less  liabilities  of  $54,301  not
               assumed by the Chispa.
         (f)   Represents the recording of estimated subscriber rights resulting
               from the  Acquisition  which will be amortized for a period up to
               10 years.
         (g)   Represents the payment of all the Company's  outstanding  debt at
               the time of the Acquisition. (h) Represents the minority interest
               that  FondElec  holds in Chispa  (i)  Represents  the  additional
               paid-in-capital   contributed   by  CCI  at  the   time   of  the
               Acquisition.
         (h)   Represents  the minority  interest that Fon dElec holds in Chispa
               Dos, Inc.
         (i)   Represents  the  additional  paid-in  capital  contributed by the
               Company at the time of the Acquisition.


THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED
DECEMBER  31,  1997 AND THE SIX MONTHS  ENDED JUNE 30,  1998 GIVE  EFFECT TO THE
FOLLOWING PRO FORMA ADJUSTMENTS:

         (j)   Represents subscriber rights amortization expense,  calculated as
               of January 1, 1997 over the estimated useful life of 10 years for
               both the year ended  December 31, 1997 and the  six-months  ended
               June 30, 1998.
         (k)   Represents the  adjustments to interest  expense related to notes
               to finance the Acquisition using an estimated  implicit borrowing
               rate of 10%.
         (l)   Represents  the  estimated  income tax  expense  of the  CCI,
               including pro forma effects of the  Acquisition,  at an estimated
               rate of 25%.

<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
- - ----------------------------------------------------------------------------------------------------------------
                                                                                                    Pro Forma
                                             Convergence       Multicable &        Purchase         Adjusted
                                            Communications     Cablevisa         Adjustments         Balance
                                         ------------------- --------------     ---------------   --------------
ASSETS                                                           (a)                                  (b)
CURRENT ASSETS:
<S>                                       <C>              <C>              <C>                 <C>         
  Cash and cash equivalents ............  $   8,770,012    $    233,659          --             $  9,003,671
  Accounts receivable - net ............            479         325,889          --                  326,368
  Due from affiliaties .................         39,071         495,568          --                  534,639
  Inventory ............................         24,395         116,213          --                  140,608
  Deferred income tax ..................           --            84,249          --                   84,249
  Prepaid license fees .................        201,751            --            --                  201,751
  Other current assets .................          9,170           7,986          --                   17,156
                                           ------------    ---------------   ------------        ------------
        Total current assets ...........      9,044,878       1,263,564          --               10,308,442

INVESTMENT IN CENTURION ................        845,955            --            --                  845,955
EQUIPMENT - net ........................      1,049,682       1,388,771          --                2,438,453
LICENSE RIGHTS - net ...................        749,167            --            --                  749,167
CONTRACT RIGHTS - net ..................      8,247,042            --            --                8,247,042
SUBSCRIBER RIGHTS - net ................           --      $       --      15,585,740(e),(f)      15,585,740
OTHER ASSETS ...........................        181,796           3,050          --                  184,846
                                            ============    ===============  ============       ============
TOTAL ASSETS ...........................   $ 20,118,520    $    2,655,385    $ 15,585,740       $ 38,359,645
                                            ============    ===============  ============       ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and
     accrued liabilities ...............  $   1,058,707     $    507,048     $ 376,142          $  1,901,162
  Note payable .........................        350,000            --            --                  350,000
  Accrued license lease fees ...........        142,594            --            --                  142,594
  Accrued consulting fees
     (payable to related party) ........        100,000            --            --                  100,000
  Due to affiliates ....................        810,224            --            --                  810,224
  Customer deposits ....................         36,030            --            --                   36,030
  Current portion of long-term debt ....           --            69,209      (69,209)(g)               --
                                             ------------    ---------------   ------------       ------------
        Total current liabilities ......      2,497,555         576,257       306,933              3,380,745
LONG-TERM LIABILITIES:
  Long-term debt (owed to related party)      1,176,263            --                              1,176,263
  Long-term debt - acqusition ..........           --              --      12,136,788(c)          12,136,788
  Long-term debt .......................           --           360,716      (360,716)(g)              --
  Severance payable ....................           --            19,666         --                    19,666
MINORITY INTEREST IN SUBSIDIARIES ......          9,991            --       2,626,748(h)           2,636,739
                                            ------------    -------------  ------------           ------------
        Total liabilities ..............      3,683,809         956,639    14,709,753             19,350,201
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Series "A" Preferred stock ...........         32,575            --        --                      32,575
  Series "B" Preferred stock ...........          3,548            --        --                       3,548
  Common stock .........................         82,099       1,865,803    (1,865,803)               82,099
  Additional paid-in capital ...........     24,473,111            --      2,574,733(i)          27,047,844
  Translation loss .....................           --           (20,443)      20,443(d)               --
  Deficit accumulated during
    the development stage ..............     (8,156,622)       (146,614)     146,614(d)           (8,156,622)
                                            ------------    ---------------   ------------      ------------
         Total stockholders' equity ....     16,434,711       1,698,746        875,987            19,009,444
                                            ------------    ---------------   ------------      ------------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY ..................   $ 20,118,520    $ 2,655,385     $ 15,585,740         $ 38,359,645
                                          ============    ===============   ============        ============
</TABLE>

See notes to unaudited pro forma consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
- - ---------------------------------------------------------------------------------------------------

                                                                                          Pro Forma
                                           Convergence    Multicable &     Purchase        Adjusted
                                         Communications   Cablevisa        Adjustments      Balance
                                      ------------------ -------------  ----------------  ---------
REVENUES                                                     (a)                              (b)
<S>                                   <C>              <C>            <C>                <C>      
  Services ........................   $     44,911     $ 1,584,528    $       --         1,629,439
  Advertising .....................           --           193,555            --           193,555
                                        ------------    ------------    ------------    ------------
              Total ...............         44,911       1,778,083            --         1,822,994

COST OF SERVICE  ..................        197,553       1,597,514            --         1,795,067
                                       ------------    ------------    ------------    ------------

GROSS MARGIN ......................       (152,642)       180,569            --            27,927

OPERATING EXPENSES:
  Professional fees ...............        710,275            --              --           710,275
  Depreciation and amortization ...        865,555    $       --          778,616(j)     1,644,171
  Leased license expense ..........         83,037            --              --            83,037
  General and administrative ......      1,234,474          77,133            --         1,311,607
  Stock option compensation expense           --              --              --              --
                                         ------------    ------------    ------------  ------------
               Total ..............      2,893,341          77,133         778,616       3,749,090
                                        ------------    ------------    ------------    ------------
OPERATING INCOME (LOSS) ...........     (3,045,983)        103,436        (778,616)     (3,721,163)

OTHER INCOME AND(EXPENSES):
  Interest income .................        194,155           2,688            --           196,843
  Interest expense ................        (57,129)        (39,901)     (606,839)(k)       (703,869)
  Other expenses ..................           --            (9,515)           --            (9,515)
                                         ------------    ------------    ------------    ------------
               Total ..............        137,026         (46,728)      (606,839)        (516,541)
                                         ------------    ------------    ------------    ------------
INCOME (LOSS) BEFORE TAXES ........     (2,908,957)         56,708       (1,385,455)     (4,237,704)
INCOME TAX EXPENSE (BENEFIT) ......           --            14,443          --(l)           14,443
                                         ------------    ------------    ------------    ------------
NET INCOME (LOSS) BEFORE
  MINORITY INTEREST ...............     (2,908,957)         42,265        (1,385,455)     (4,252,147)
MINORITY INTEREST IN
  INCOME (LOSS) OF SUBSIDIARIES ...          8,076            --             678,311        686,387
                                         ============    ============    ============    ============
NET INCOME (LOSS) .................   $ (2,900,881)     $    42,265      $ (707,144)   $ (3,565,760)
                                         ============    ============    ============    ============

Net loss per basic common share ...   $      (0.07)                                    $      (0.32)
                                         ============                                   ============
Net loss per diluted common share .   $      (0.07)                                    $      (0.32)
                                        ============                                    ============

Weighted-average common shares
  Basic ...........................     11,286,279                                       11,286,279
                                       ============                                     ============
  Diluted .........................     12,019,649                                       12,019,649
                                       ============                                      ============
</TABLE>


See notes to unaudited pro forma consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONVERGENCE COMMUNICATIONS, INC.
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)

UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
- - -------------------------------------------------------------------------------------------------

                                                                                          Pro Forma
                                          Convergence    Multicable &     Purchase         Adjusted
                                        Communications   Cablevisa        Adjustments      Balance
                                     -----------------  ---------------   -------------- ------------
REVENUES                                                     (a)                              (b)
<S>                                    <C>             <C>              <C>                <C>      
    Services ........................  $      40,186   $   3,369,091    $       --         3,409,277
    Advertising .....................           --           263,233            --           263,233
                                            ------------    ------------    ------------    ------------
                    Total ...........         40,186       3,632,324            --         3,672,510

COST OF SERVICE .....................           --         2,794,408            --         2,794,408
                                           ------------    ------------    ------------    ------------
GROSS MARGIN ........................         40,186         837,916            --           878,102

OPERATING EXPENSES:
    Professional fees ...............        873,052            --              --           873,052
    Depreciation and amortization ...        619,182            --        1,557,233(j)     2,176,415
    Leased license expense ..........        116,161            --              --           116,161
    General and administrative ......      1,220,474         778,378            --         1,998,852
    Stock option compensation expense        962,738            --              --           962,738
                                         ------------    ------------    ------------    ------------
                    Total ...........      3,791,607         778,378       1,557,233       6,127,218
                                          ------------    ------------    ------------    ------------
OPERATING INCOME (LOSS) .............     (3,751,421)         59,538      (1,557,233)     (5,249,116)
OTHER INCOME AND EXPENSE:
    Interest income .................        116,367           5,508            --           121,875
    Interest expense ................       (807,203)        (92,248)       (939,156)(k)   (1,838,607)
                                          ------------    ------------    ------------    ------------
                    Total ...........       (690,836)        (86,740)       (939,156)     (1,716,732)
                                          ------------    ------------    ------------    ------------
INCOME (LOSS) BEFORE TAXES ..........     (4,442,257)        (27,202)     (2,496,389)     (6,972,648)
INCOME TAX EXPENSE (BENEFIT) ........           --             6,800            --(l)         85,551
                                         ------------    ------------    ------------    ------------
NET INCOME (LOSS)
  BEFORE MINORITY INTEREST ..........     (4,442,257)         34,002      (2,496,389)     (6,972,648)
MINORITY INTEREST IN
 INCOME (LOSS) OF SUBSIDIARIES ......         13,011            --           (29,466)        (16,455)
                                          ============    ============    ============    ============
NET INCOME (LOSS) ...................   $ (4,429,246)     $  34,002        $(1,265,179)   $(5,728,427)
                                          ============    ============    ============    ============

Net loss per basic common share .....   $      (0.16)                                     $      (0.72)
                                           ============                                    ============
Net loss per diluted common share ...   $      (0.16)                                     $      (0.72)
                                           ============                                    ============

Weighted-average common shares
    Basic ...........................      7,970,801                                      7,970,801
                                         ============                                    ============
    Diluted .........................      8,445,529                                      8,445,529
                                         ============                                    ============
</TABLE>


See notes to unaudited pro-forma consolidated financial statements.



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