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SEC Filings

S-4/A
AVALON CABLE OF MICHIGAN INC/ filed this Form S-4/A on 05/28/1999
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                       AVALON CABLE LLC AND SUBSIDIARIES

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands)--(Continued)

                                 March 31, 1999

   Avalon Holdings Finance was formed for the sole purpose of facilitating
financings associated with the acquisitions of various cable operating
companies. Avalon Holdings Finance conducts no other activities.

2. Basis of Presentation

   Pursuant to the rules and regulations of the Securities and Exchange
Commission, certain financial information has been condensed and certain
footnote disclosures have been omitted. Such information and disclosures are
normally included in financial statements prepared in accordance with generally
accepted accounting principles.

   The consolidated financial statements herein include the accounts of the
Company and its wholly-owned subsidiaries.

   These condensed financial statements should be read in conjunction with the
Company's audited financial statements as of December 31, 1998 and notes
thereto included elsewhere herein.

   The financial statements as of March 31, 1999 and for the three month period
then ended are unaudited; however, in the opinion of management, such
statements include all adjustments necessary to present fairly the financial
information included therein.

3. Pending Acquisition

   The Company has a definitive agreement to purchase all of the cable systems
of Taconic Technology Corporation for approximately $8,525 (excluding
transaction fees). The merger is expected to close in the second quarter of
1999.

4. Commitments and Contingencies

 Legal matters

   The Company is subject to the provisions of the Cable Television Consumer
Protection and Competition Act of 1992, as amended, and the Telecommunications
Act of 1996. The Company has either settled challenges or accrued for
anticipated exposures related to rate regulation; however, there is no
assurance that there will not be further additional challenges to its rates.

   In the normal course of business, there are various legal proceedings
outstanding. In the opinion of management, these proceedings will not have a
material adverse effect on the financial condition or results of operations of
the Company.

Mercom Acquisition

   In connection with the acquisition of Mercom, former shareholders of Mercom
constituting approximately 16.5% of all outstanding Mercom common shares gave
notice of their election to exercise appraisal rights as provided by Delaware
law. The Company cannot predict at this time the effect of these elections on
the Company or the extent to which these former shareholders will continue to
pursue appraisal rights and seek an appraisal proceeding under Delaware law or
choose to abandon these efforts and accept the consideration payable in the
Mercom merger. If these former shareholders continue to pursue their appraisal
rights, the Company makes no assurance that a Delaware court would not find
that the fair value of these shares for such

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