Avalon Group Signs Merger Agreement with Appropriate Health,   
                       (Business Wire; 01/29/99)                       

CEDAR RAPIDS, IOWA (Jan. 29) BUSINESS WIRE -Jan. 29, 1999--Following approval 
by the Board of Directors, Avalon Group, Inc. has signed an Agreement and Plan 
of Merger with Appropriate Health, Inc., a privately held 
corporation with offices in Sierra Madre, Calif.

Although full details of the merger are not yet available, Appropriate Health (AHS) has offered a combination of AHS common shares, the 
provision of cash and the assumption of certain debts and liabilities, in 
return for the purchase of all of the outstanding shares of Avalon.

To date, AHS has invested approximately $500,000 in Avalon Group, Inc. and will 
continue to provide funds as necessary in the forthcoming weeks until the 
merger is completed.

The merger will be concluded after a Fairness Hearing before the State of 
California Commissioner of Corporations, due in February or March, 1999. The 
merger also will require approval by majority vote. Shareholders will soon 
receive further details, including a proxy statement regarding the merger 

Ron Green, president and chief executive officer of Avalon Group, Inc. said 
"This announcement represents the culmination of many years of hard work and 
careful planning. The team at Avalon is very proud of its successes. Successes 
that include a burgeoning Internet site at, a state-of-the-
art X-po!(TM) Internet terminal that was completely designed in-house, and new 
biosensor technologies that have been developed for introduction in 1999.

"As a result of its efforts, Avalon has attracted the attention of AHS and its 
investment banking partners, who are expected to provide the major investments 
and additional resources that are required to bring these and other related 
products to market and to profitable returns. I am grateful for the support of 
our past and current shareholders and am pleased to recommend this merger as 
representing the best interests of all of the shareholders of Avalon. I look 
forward to continuing to build shareholder value for those who will become AHS 
shareholders as I join the management team at AHS, once this acquisition is 
completed. There are some very exciting and aggressive plans for 1999 and 
beyond. The new arrangements will help us to achieve the demanding goals and 
objectives we have set for ourselves in these plans."

Appropriate Health, Inc. is in the business of acquiring health 
and health care-related businesses.

This release contains forward-looking statements that involve risks and 
uncertainties and actual results may be materially different. Investors are 
encouraged to perform comprehensive due diligence before making investment 

Avalon Group, Inc. stock symbol: OTC Bulletin Board(R): AVAL.

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