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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 24, 2000
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GRACE DEVELOPMENT, INC.
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(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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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 24, 2000, a wholly-owned subsidiary of the Registrant
acquired all of the capital stock (the "Acquisition") of P.V. Tel. Inc., a
South Carolina corporation ("PV Tel"). The Acquisition was consummated in
accordance with the terms and conditions of a Stock Exchange Agreement dated
February 15, 2000 (the "Exchange Agreement") among the Registrant, Avana
Telecommunications Group, Inc., a Georgia corporation ("Avana"), PV Tel, and
the shareholders of PV Tel (the "Shareholders"). Pursuant thereto, Avana, a
wholly-owned subsidiary of Registrant, acquired all of the capital stock of PV
Tel from the Shareholders, and PV Tel became a wholly-owned subsidiary of
Avana. The Shareholders received an aggregate of 2,030,000 shares of the common
stock, no par value, of the Registrant (the "Common Stock") (the "Share
Consideration"). The Share Consideration was paid entirely in the Registrant's
Common Stock. The Share Consideration was determined in arms' length
negotiations between the parties to the Exchange Agreement. Prior to the
consummation of the Acquisition, the Registrant had advanced to PV Tel
approximately $450,000.00 for working capital purposes (the "Working Capital
Advances"), which advances were evidenced by a promissory note given by PV Tel
to the Registrant. At the closing of the Acquisition, the promissory note
evidencing the Working Capital Advances was cancelled and two shareholders of
PV Tel delivered to the Registrant their promissory notes in substitution
therefor. Forms of such shareholder notes are exhibits to the Exchange
Agreement, which is being filed as an exhibit to this report. Except for the
Working Capital Advances, there were no material relationships between PV Tel,
and its former officers, directors, affiliates, associates or shareholders, and
the Registrant, and its officers, directors, affiliates, associates or
shareholders.
The foregoing description of the Acquisition and the Exchange
Agreement is qualified in its entirety by reference to the Exchange Agreement,
which is being filed as an exhibit to this report.
As a result of the Acquisition, PV Tel is an operating subsidiary of
the Registrant. PV Tel is a tier 3/4 competitive local exchange carrier
("CLEC") currently approved to serve nine states in the South and Midwest. PV
Tel's customer base is composed primarily of small and medium-sized businesses
and residential customers. Its service offerings include traditional local
telephone products, long distance voice and data services, operator services
and prepaid calling cards. It is licensed to provide services in Illinois
Virginia, Kentucky, Tennessee, North and South Carolina, Alabama, Mississippi
and Florida, and currently serves approximately 1,100 customers in South
Carolina and Tennessee. PV Tel's assets include approximately $500,000 in
switching equipment and related computer hardware and software, which is used
to support its service offerings. The Registrant intends to continue such use
in support of PV Tel's activities.
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
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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) - (b). Financial Statements and Pro Forma Financial Information.
All required financial statements and pro forma financial information will be
filed by amendment to this Report not later than 60 days from March 9, 2000.
(c) Exhibits.
2.2 Stock Exchange Agreement dated February 15, 2000.
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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/ James Blanchard
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James Blanchard
President & Chief Operating Officer
Dated as of March 9, 2000
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