SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 28, 1999
------------------------------
Grace Development, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 0-25582 84-1110469
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(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) Number)
1690 Chantilly Drive, Atlanta, Georgia 30324
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 633-3831
-----------------------------
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<PAGE>
Item 1. Changes in Control of Registrant.
A change in control of the Registrant occurred on September 28, 1999 (the
"Effective Time") pursuant to the terms and conditions of an Agreement and Plan
of Merger (the "Merger Agreement") dated as of August 20, 1999 between the
Registrant, New Millennium Multimedia, Inc., a Georgia corporation ("NM"), Grace
Newco, Inc., a Georgia corporation and wholly-owned subsidiary of the Registrant
("Merger Sub") and Signal Compression, Inc., a Nevada corporation ("Signal").
The Merger Agreement provided for the merger (the "Merger) of Merger Sub with
and into NM, with NM as the surviving corporation. As a result of the Merger, NM
became a wholly-owned subsidiary of the Registrant and the former shareholders
of NM received an aggregate of 66,223,329 or 89.70% of the outstanding shares of
the common stock, no par value, of the Registrant (the "Common Stock").
Effective as of the Effective Time, the Board of Directors of the Registrant
(the "Board"), which, prior to the Effective Time, was composed of Jacob
Barrocas as sole director, increased the size of the Board from one to six
members and the following persons were elected to the Board: Louis Friedman,
Richard S. Granville, III, Ronald McCallum, Dr. Lee Silverstein and Peter
Tierney (the "NM Designees"). Information with respect to the NM Designees,
including beneficial ownership of the Common Stock by such NM Designees, is
included in the Registrant's Information Statement pursuant to Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
14f-1 thereunder, filed by the Registrant on August 27, 1999, as amended on
September 24, 1999 and October 7, 1999 (the "Information Statement"), which is
incorporated herein by this reference. All references to the terms of the Merger
Agreement are qualified in their entirety by reference to the Merger Agreement,
which is attached as Exhibit 2.1 hereto and incorporated herein by this
reference.
At a meeting of the Board held on September 30, 1999, the Board voted to
increase the size of the Board to seven persons and elected James Blanchard to
the Board. The Board also elected the following persons to the offices set forth
opposite their names:
Louis Friedman Chairman of the Board
Richard S. Granville, III Chief Executive Officer
Ronald McCallum Chief Financial Officer and Secretary
Sean T. Duffy Chief Sales and Marketing Officer
Pursuant to the Merger Agreement, certain shares of Common Stock held by
Signal, which prior to the Merger held approximately 66% of the Common Stock and
following the Merger holds approximately 6.77% of the Common Stock, were pledged
to NM (the "Pledge Agreement") to secure certain indemnification obligations of
the Issuer to NM and the former shareholders of NM (the "Indemnitees"). The
terms of the Pledge Agreement provide for the release of a number of pledged
shares equal to one percent (1%) of the outstanding Common Stock on the Initial
Release Date and on each subsequent Release Date (each as defined in the Pledge
Agreement); provided that (a) no default has occurred and is continuing under
the Pledge Agreement); (b) the pledged shares remaining as collateral are
sufficient to satisfy the aggregate of claims made as of the Initial Release
Date or the Release Date, as the case may be; or (c) the pledgees shall not have
determined that a release of pledged shares would have an adverse impact on the
market or trading activity for the Common Stock. Under the Pledge Agreement, the
Initial Release Date occurs thirty (30) days following the effective date of the
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<PAGE>
Merger and Release Dates occur at quarterly intervals thereafter until the
termination of the Pledge Agreement. The Pledge Agreement terminates on the
later of (i) eighteen months following the effective time of the Merger and (ii)
the resolutions of all indemnification claims made by the Indemnitees under the
Merger Agreement. All references to the terms of the Pledge Agreement are
qualified in their entirety by reference to the Pledge Agreement, which is
attached as an exhibit to the Merger Agreement, filed as Exhibit 2.1 hereto and
incorporated herein by this reference.
Because the shares of Common Stock received by the former shareholders of
NM were not registered under the Securities Act of 1933, as amended (the "Act"),
such shares are "restricted securities" (as defined in Rule 144 promulgated
under the Act) and accordingly, may not be sold or transferred by the holders
thereof unless such shares are registered under the Act or are sold or
transferred pursuant to an exemption therefrom.
Item 2. Acquisition or Disposition of Assets.
On September 28, 1999, the Merger was consummated in accordance with the
terms and conditions of the Merger Agreement. Pursuant thereto, Merger Sub, a
wholly-owned subsidiary of Registrant, was merged with and into NM, with NM as
the surviving corporation. Following the Merger, NM became a wholly-owned
subsidiary of the Registrant. In consideration for the Merger, the former
shareholders of NM received 66.3013 shares of Common Stock for each share of NM
Common Stock (the "Merger Consideration"). As a result thereof, the former
shareholders of NM now beneficially own an aggregate of 66,223,329
(approximately 89.70%) of the outstanding Common Stock. The Merger Consideration
was determined in arms' length negotiations between the parties to the Merger
Agreement. Prior to the consummation of the Merger, there were no material
relationships between NM and its former officers, directors, affiliates,
associates or shareholders and the officers, directors, affiliates, associates
or shareholders of the Registrant. As described in Item 1 of this Report, upon
consummation of the Merger, the NM Designees were elected to the Board and
certain officers of NM were elected officers of the Registrant. The response to
Item 1 of this Report is incorporated herein by this reference.
The foregoing description of the Merger and the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement, which is being
filed as an exhibit to this report. In addition, the Registrant's Information
Statement and Report on Form 8-K dated August 20, 1999, which reported the
announcement of the execution of the Merger Agreement, is incorporated herein
and made a part hereof by this reference.
As a result of the Merger, the Registrant is a holding company for NM. NM,
doing business as Avana (www.avana.net), is a communications company based in
Atlanta, Georgia. In addition to providing internet services to approximately
5,400 subscribers, Avana is developing a wireless voice, data and video network
to enable customers to bypass incumbent regional Bell operating companies for
telecommunications services. Avana has applied for competitive local exchange
carrier status in nine southeastern states and currently has service offerings
in Georgia, North Carolina, Tennessee and Alabama. Over the next several months,
Avana, together with network facilities providers, will begin to deploy a
radio/microwave telephony network, which, when implemented, will provide
residential and
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<PAGE>
commercial customers with local, long distance, high-speed Internet access and
cellular/paging services. Avana utilizes several network facilities providers,
including ICG Communications, for asynchronous transfer mode ("ATM"), frame
relay and primary relay interface ("PRI") service for interconnection, and Qwest
Communications for long-distance and voice-over-internet- protocol ("VOIP")
services. Avana also has an ongoing relationship with Lucent Technologies for
network solutions and implementation services.
THIS REPORT INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION
27A OF THE ACT AND SECTION 21E OF THE EXCHANGE ACT. ALL STATEMENTS, OTHER THAN
STATEMENTS OF HISTORICAL FACTS INCLUDED IN THIS REPORT, INCLUDING, WITHOUT
LIMITATION, THOSE REGARDING THE REGISTRANT'S FINANCIAL POSITION, BUSINESS,
MARKETING AND PRODUCT DEVELOPMENT PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE
OPERATIONS, ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE REGISTRANT BELIEVES
THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, IT CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE
BEEN CORRECT.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired: Filed with this report.
(b) Pro Forma Financial Information. All required pro forma financial
information will be filed by amendment to this Report not later than
60 days from September 28, 1999.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated as August 20, 1999 (filed with the
Commission with the Registrant's Current Report on Form 8-K dated September 28,
1999 and incorporated herein by reference).
20.1 Registrant's Information Statement pursuant to Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder, filed by the Registrant on August 27,
1999, as amended on September 24, 1999 and October 7, 1999 (filed with the
Commission on August 27, 1999, September 24, 1999 and October 7, 1999, and
incorporated herein by reference).
23 Consent of Smith & Radigan
27 Financial Data Schedule
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GRACE DEVELOPMENT, INC.
By: /s/ Ronald McCallum
---------------------------------------
Ronald McCallum
Chief Financial Officer & Secretary
Dated as of November 15, 1999
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<PAGE>
INDEX TO FINANCIAL STATEMENTS
OF BUSINESSES ACQUIRED
Financial Statements of Avana Communications Corporation
For the Years Ended December 31, 1998 and 1997
Independent Auditor's Report
Balance Sheet
Statement of Operations and Retained Earnings (Deficit)
Statement of Cash Flows
Notes to Financial Statements
Financial Statements of New Millennium Multimedia, Inc.
For the Year Ended December 31, 1998
Independent Auditor's Report
Balance Sheet
Statement of Operations and Retained Earnings (Deficit)
Statement of Cash Flows
Notes to Financial Statements
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<PAGE>
INDEPENDENT AUDITORS REPORT
To the Board of Directors
Avana Communications Corporation
We have audited the accompanying balance sheet of Avana Communications
Corporation (a Georgia corporation) as of December 31, 1998 and 1997, and the
related statements of operations and accumulated deficit and cash flows for each
of the two years ended December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Avana Communications
Corporation as of December 31, 1998, and the results of its operations and its
cash flows for each of the two years ended December 31, 1998 and 1997 in
conformity with generally accepted accounting principles.
/s/ Smith & Radigan
Atlanta, Georgia
June 15, 1999
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<PAGE>
Balance Sheet
AVANA COMMUNICATIONS CORPORATION
December 31, 1998
ASSETS
CURRENT ASSETS
Cash $ 14,426
Accounts receivable 3,000
Advance to stockholder 483
--------
TOTAL CURRENT ASSETS 17,909
PROPERTY AND EQUIPMENT, at cost
Net of accumulated depreciation
of $60,644 in 1998 118,265
OTHER ASSETS
Deposits 6,947
Organization costs 862
--------
7,809
--------
$143,983
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 37,942
Unearned revenue 153,126
--------
TOTAL CURRENT LIABILITIES 191,068
STOCKHOLDERS' DEFICIT Common stock no par value:
Authorized 100,000 shares
Issued and outstanding
68,173 shares in 1998 171,260
Accumulated deficit (218,345)
--------
(47,085)
--------
$143,983
========
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Statements of Operations and Accumulated Deficit
AVANA COMMUNICATIONS CORPORATION
December 31,
------------
1998 1997
---- ----
REVENUES
Net Sales Revenue $ 833,509 $ 771,674
OPERATING EXPENSES
Wages and Benefits 305,191 321,168
Communications 287,845 154,651
Office Space 54,441 53,274
Equipment Rental 97,193 57,789
General and Administrative 63,775 62,070
Marketing 54,598 43,357
Interest -0- 1,585
Depreciation and amortization expense 29,114 22,145
--------- ---------
892,157 716,039
--------- ---------
LOSS FROM OPERATIONS (58,648) 55,635
INTEREST INCOME 120 -0-
--------- ---------
NET INCOME [LOSS] (58,528) 55,635
ACCUMULATED DEFICIT, BEGINNING OF YEAR (159,817) (205,454)
DIVIDEND DECLARED -0- (9,998)
--------- ---------
ACCUMULATED DEFICIT, END OF YEAR $(218,345) $(159,817)
========= =========
The Notes to Financial Statements are an integral part of these Statements.
-9-
<PAGE>
Statements of Cash Flows
AVANA COMMUNICATIONS CORPORATION
December 31,
------------
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income [loss] $ (58,528) $ 55,635
Adjustments to reconcile net income loss
to net cash provided (used) by
operating activities:
Depreciation and amortization 29,114 22,145
Decrease (increase) in:
Accounts receivable 3,275 (6,275)
Other assets 12,893 (12,893)
Increase (decrease) in:
Accounts payable and accrued
expenses (8,271) (37,969)
Other liabilities 12,513 87,693
--------- ---------
Total adjustments 49,524 52,701
--------- ---------
Net cash provided
(used) by operating
activities (9,004) 108,336
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (26,978) (64,653)
--------- ---------
Net cash used by investing
activities (26,978) (64,653)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (7,658) (2,340)
--------- ---------
Net cash provided (used) by
financing activities (7,658) (2,340)
--------- ---------
NET INCREASE (DECREASE) IN CASH (43,640) 41,343
CASH BALANCE AT BEGINNING OF YEAR 58,066 16,723
--------- ---------
CASH BALANCE AT END OF YEAR $ 14,426 $ 58,066
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ -0- $ 1,585
========= =========
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Notes to Financial Statements
Avana Communications Corporation
December 31, 1998
Note A Summary of Significant Accounting Policies
Organization
Avana Communications Corporation ("the Company") was incorporated on July 11,
1995, in the state of Georgia. The Company was formed to provide internet
access, training, web site development and support to individuals and
businesses.
Property and Equipment
Property and equipment are stated at cost and include expenditures for new
facilities and replacements or betterments of existing facilities. Expenditures
for normal maintenance and repairs are charged to expense as incurred.
Depreciation is computed using the straight-line method over the useful lives of
the assets, which range from three to seven years for furniture and equipment.
Depreciation expense was $28,529 for the year ended December 31, 1998 and
$21,560 for the year ended December 31, 1997.
Organizational Costs
Organization costs represent the costs to incorporate the Company. The costs are
being amortized over five years on a straight-line basis. Amortization for the
years ended December 31, 1998 and 1997 was $585.
Sales
Revenue is recognized as it is earned, not when it is collected from the
customer. An adjustment made to record the deferred income which has been
collected from the customer but not yet earned.
Income Taxes
The Company accounts for income taxes under the liability method. Under this
method, deferred income taxes are recorded to reflect the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income taxes.
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE>
Statement of Cash Flows
The Company's policy is to report all short-term investments with maturities of
three months or less at the time of their acquisition by the Company as cash
equivalents.
Note B -- Commitments and Contingencies
The Company's future lease obligations for building and equipment rentals under
noncancelable operating leases are as follows:
Amount
----------------------------------
Related
Year Ending Party
December 31, Building Equipment Total
------------ -------- --------- -----
1999 $ 41,528 $ 85,337 $126,865
2000 -0- 25,550 25,550
-------- -------- --------
Total $ 41,528 $110,887 $152,415
======== ======== ========
Rental expense was $151,634 for the year ending December 31, 1998 and $111,063
for 1997.
The Company rents computer equipment from a company owned by a major
stockholder. Payments for equipment rental to the stockholder were $87,664 in
1998 and $56,489 in 1997.
Note C -- Income Taxes
No provision for income taxes has been recorded due to net operating loss (NOL)
carryforward of $80,953 that will be offset against future taxable income. The
NOL carryforward will expire in the year 2018. No tax benefit has been recorded
in the financial statements due to the uncertainty of predicting the Company's
future taxable income.
The Company's deferred tax assets at December 31, 1998 are as follows:
Deferred tax assets -- net operating loss
carryforwards $ 28,000
Cash basis of accounting 66,000
Valuation allowance (94,000)
--------
Total $ -0-
========
Note D -- Subsequent Events
On May 5, 1999, the stockholders of the Company sold all of the issued and
outstanding shares of stock in the Company to an independent third party.
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<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
New Millennium Multimedia, Inc.
We have audited the accompanying balance sheet of New Millennium Multimedia,
Inc. (a Georgia corporation) as of December 31, 1998, and the related statements
of operations and accumulated deficit, and cash flows for the period from
October 6, 1998 (date of inception) through December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of New Millennium Multimedia, Inc.
as of December 31, 1998, and the results of its operations and its cash flows
for the period from October 6, 1998 (date of inception) through December 31,
1998, in conformity with generally accepted accounting principles.
Smith & Radigan
/s/ Smith & Radigan
Atlanta, Georgia
June 24, 1999
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<PAGE>
Balance Sheet
NEW MILLENNIUM MULTIMEDIA, INC.
December 31, 1998
ASSETS
CURRENT ASSETS
Cash $ 3,719
Advances to stockholder 820
--------
TOTAL CURRENT ASSETS 4,539
PROPERTY AND EQUIPMENT, at cost
Net of accumulated depreciation of $506 12,611
--------
$ 17,150
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 5,391
STOCKHOLDERS' EQUITY
Common stock par value $1 per share:
Authorized 1,000,000 shares
Issued and outstanding 32,500 shares 32,500
Accumulated Deficit (20,741)
--------
11,759
--------
$ 17,150
========
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Statement of Operations and Accumulated Deficit
NEW MILLENNIUM MULTIMEDIA, INC.
For the period from October 6, 1998 (Date of Inception) through December 31,
1998
OPERATING EXPENSES
General and administrative $ 7,146
Marketing 13,203
Depreciation 506
--------
20,855
--------
LOSS FROM OPERATIONS (20,855)
INTEREST INCOME 114
--------
NET LOSS AND ACCUMULATED DEFICIT (20,741)
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Statement of Cash Flows
NEW MILLENNIUM MULTIMEDIA, INC.
For the period from October 6, 1998 (Date of Inception) through December 31,
1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(20,741)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 506
Increase in accounts payable and accrued expenses 5,391
--------
Total adjustments 5,897
--------
Net cash used by operating activities (14,844)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (13,117)
Increase in advances to officers (820)
--------
Net cash used by investing activities (13,937)
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions 32,500
--------
Net cash provided by financing activities 32,500
--------
NET INCREASE IN CASH 3,719
CASH BALANCE AT BEGINNING OF PERIOD -0-
--------
CASH BALANCE AT END OF PERIOD $ 3,719
========
The Notes to Financial Statements are an integral part of these Statements.
-6-
<PAGE>
Notes to Financial Statements
New Millennium Multimedia, Inc.
December 31, 1999
Note A Summary of Significant Accounting Policies
Organization
New Millennium Multimedia, Inc. ("the Company") was incorporated on October 6,
1998, in the state of Georgia. The Company was formed to provide
telecommunications services to businesses and individuals.
Property and Equipment
Property and equipment are stated at cost and include expenditures for new
facilities and replacements or betterments of existing facilities. Expenditures
for normal maintenance and repairs are charged to expense as incurred.
Depreciation is computed using the straight-line method over the useful lives of
the assets, which range from five to seven years for furniture and equipment.
Depreciation expense was $506 for the year ended December 31, 1998.
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Income Taxes
The Company accounts for income taxes under the liability method. Under this
method, deferred income taxes are recorded to reflect the net tax effects of
temporary differences between the carrying amounts of assets and liabilities for
financial reporting and the amounts used for income taxes.
Statement of Cash Flows
The Company's policy is to report all short-term investments with maturities of
three months or less at the time of their acquisition by the Company as cash
equivalents.
Note B Income Taxes
No provision for income taxes has been recorded due to net operating loss (NOL)
carryforward of $20,000 that will be offset against future taxable income. The
NOL carryforward will expire in the year 2018. No tax benefit has been recorded
in the financial statements due to the uncertainty of predicting the Company's
future taxable income.
The Company's deferred tax asset at December 31, 1998 is as follows:
Deferred tax assets-- net operating loss carry forwards $ 7,000
Valuation allowance (7,000)
-------
Total $ -0-
=======
Note C -- Subsequent Events
Capitalization
Subsequent to the balance sheet date, the Company increased the number of
authorized shares of common stock to 1,000,000.
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<PAGE>
Acquisitions
On May 5, 1999, the Company purchased all of the issued and outstanding stock of
a company that provides Internet access, training, web site development and
support to both businesses and individuals. The Company purchased the stock of
the Company in exchange for $350,000 in cash, $100,000 note payable to the
stockholders of the entity and 97,824 shares of New Millennium Multimedia, Inc.
common stock.
-8-
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in Amendment No. 1 to the Current Report on
Form 8-K dated September 28, 1999 of Grace Development, Inc. our reports dated
June 24, 1999 relating to the financial statements of New Millennium Multimedia,
Inc. and June 15, 1999 relating to the financial statement of Avana
Communications Corporation, which are contained therein.
Atlanta, Georgia
November 15, 1999 Smith & Radigan, Certified Public
Accountants, LLC
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from New
Millenium Multimedia Inc. and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> OCT-06-1998
<PERIOD-END> DEC-31-1998
<CASH> 3,719
<SECURITIES> 0
<RECEIVABLES> 820
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,539
<PP&E> 12,105
<DEPRECIATION> 506
<TOTAL-ASSETS> 17,150
<CURRENT-LIABILITIES> 5,391
<BONDS> 0
0
0
<COMMON> 32,500
<OTHER-SE> (20,741)
<TOTAL-LIABILITY-AND-EQUITY> 17,150
<SALES> 0
<TOTAL-REVENUES> 114
<CGS> 20,349
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 506
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (20,741)
<INCOME-TAX> 0
<INCOME-CONTINUING> (20,855)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20,741)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Avana
Communications Corporation and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 14,426
<SECURITIES> 0
<RECEIVABLES> 3,483
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,909
<PP&E> 57,621
<DEPRECIATION> 60,644
<TOTAL-ASSETS> 143,983
<CURRENT-LIABILITIES> 191,068
<BONDS> 0
0
0
<COMMON> 171,260
<OTHER-SE> (218,345)
<TOTAL-LIABILITY-AND-EQUITY> 143,983
<SALES> 1,605,183
<TOTAL-REVENUES> 120
<CGS> 3,956
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 51,259
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,585
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,013
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,013
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
