U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ending December 31, 2002
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
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Commission file number 33-58972
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URBAN TELEVISION NETWORK CORPORATION
---------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 22-2800078
--------------------------------- ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
18505 Highway 377 South, Fort Worth, TX 76126
-------------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number,( 817 ) 512 - 3033
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Check whether the issuer (1)filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No
--- ---
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date: December 31, 2002, 1,416,636
shares of common stock, $.0001 par value.
Transitional Small Business Disclosure Format
(Check One)
Yes No X
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.................................................3
Independent Accountants Review Letter................................4
Balance Sheet (unaudited)............................................5
Statements of Operations (unaudited).................................6
Statements of Stockholders' Equity(unaudited)........................7
Statements of Cash Flows (unaudited).................................8
Notes to Financial Statements........................................9
Item 2. Management's Discussion and Analysis of Plan
of Operation.......................................................13
Item 3. Controls and Procedures..............................................13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................14
Item 2. Changes in Securities and Use of Proceeds...........................14
Item 3. Defaults upon Senior Securities.....................................14
Item 4. Submission of Matters to a Vote
of Security Holders.................................................14
Item 5. Other Information...................................................14
Item 6. Exhibits and Reports on Form 8-K....................................14
Signatures....................................................................14
URBAN TELEVISION NETWORK CORPORATION
FORM 10-QSB
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements. (Unaudited)
As prescribed by Item 310 of Regulation S-B, the independent auditor has
reviewed these unaudited interim financial statements of the registrant for the
three months ended December 31, 2002. The financial statements reflect all
adjustments that are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented. The unaudited
financial statements of registrant for the three months ended December 31, 2002,
follow.
3
Jack F. Burke, Jr.
Certified Public Accountant
P.O. Box 15728
Hattiesburg, Mississippi 39404
Independent Auditor's Letter
Urban Television Network Corporation
18505 S. Hwy 377
Fort Worth, Texas 76126
I have reviewed the accompanying balance sheet, statement of operations,
statement of stockholders equity and statement of cash flows of Urban Television
Network Corporation and consolidated subsidiaries as of December 31, 2002, and
for the three-month period then ended. These financial statements are the
responsibility of the company's management.
I conducted my review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements for them to be in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 12 to the
financial statements, the company has suffered losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 12.The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Jack F. Burke, Jr.
-----------------------
Jack F. Burke, Jr.
February 13, 2003
4
PART I - FINANCIAL STATEMENTS
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Consolidated Balance Sheet
December 31, September 30,
Assets 2002 2002
------------- -------------
(Unaudited) (Audited)
Currents assets
Cash and cash equivalents $ 2,126 $ --
Accounts receivable 14,462 5,766
Prepaid expenses 18,043 --
------------- -------------
Total current assets 34,631 5,766
------------- -------------
Furniture, fixtures and equipment, net 9,815 6,122
------------- -------------
Other assets
Network assets 484,466 512,416
------------- -------------
Total assets 528,912 $ 524,304
------------- -------------
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 133,175 $ 58,957
Bridge loan payable 154,296 --
Notes payable to stockholder 189,405 188,929
Accrued interest expense 10,642 3,415
Accrued payroll 62,500 --
Accrued payroll taxes payable 4,781 --
------------- -------------
Total current liabilities 554,799 251,301
------------- -------------
Stockholders' equity
Preferred stock, $1 par value, 500,000 shares authorized, none issued -- --
Common stock, $0.0001 par value, 200,000,000 shares authorized;
1,416,636 shares outstanding at December 31, 2002 142 --
Common stock, $0.01 par value, 50,000,000 shares authorized;
22,331,667 shares outstanding at September 30, 2002 -- 223,316
Additional paid-in capital 5,668,236 5,362,562
Retained earnings (deficit) (5,694,265) (5,312,875)
------------- -------------
Total stockholders' equity (25,887) 273,003
------------- -------------
Total liabilities and stockholders' equity $ 528,912 $ 524,304
------------- -------------
See notes to financial statements.
See accountants rewireportort
5
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Consolidated Statement of Operations
For the three months ended December 31, 2002 and 2001
(UNAUDITED)
2002 2001
----------- -----------
Revenues $ 50,018 $ --
----------- -----------
Expenses:
Satellite and uplink services 85,450 --
Production expenses 75,116 --
Technology expenses 71,500 --
Administration 163,915 (2,700)
Depreciation and amortization 28,200 --
----------- -----------
Total expenses 424,181 (2,700)
----------- -----------
Income (loss) from operations (374,163) 2,700
Other (income) expense
Interest income (expense) (7,227) --
Gain on extinquishment of debt -- 424,665
----------- -----------
Net loss $ (381,390) $ 427,365
----------- -----------
Earnings per share:
Net income (loss) $ (0.31) $ 1.37
Weighted average number of common
shares outstanding 1,216,636 311,583
See notes to financial statements.
See accountants review report
6
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Consolidated Statement of Stockholders' Equity
(UNAUDITED)
Common Stock Additional Retained
-------------------------- Paid-In Earnings
Shares Amount Capital (Deficit) Total
----------- ----------- ----------- ----------- -----------
Balance at September 30, 2000 6,207,236 $ 62,072 $ 4,879,134 $(5,361,824) $ (420,618)
Net loss for year ended
September 30, 2001 -- -- -- (82,774) $ 82,774)
----------- ----------- ----------- ----------- -----------
Balance at September 30, 2001 6,207,236 62,072 4,879,134 (5,444,598) $ (503,392)
Contributed capital
85,428 85,428
Stock issued for asset
Acquisition 16,000,000 160,000 389,000 549,000
Stock issued to Hispanic
Television Network 100,000 1,000 9,000 10,000
Stock issued for prior
year agreements 24,431 244 244
Net income for year ended
September 30, 2002 -- -- -- 131,723 131,723
----------- ----------- ----------- ----------- -----------
Balance September 30, 2002 22,331,667 223,316 5,362,562 (5,312,875) 273,003
Adjust outstanding shares to
reflect reverse stock split (21,215,031) (212,150) 212,150 --
Adjustment to reflect the
restated par value (11,054) 11,054 --
Issuance of shares for services 300,000 30 82,470 82,500
Net loss for three months ended
December 31, 2002 -- -- -- (381,390) (381,390)
----------- ----------- ----------- ----------- -----------
Balance December 31, 2002 1,416,636 $ 142 $ 5,668,236 $(5,694,265) $ (25,887)
----------- ----------- ----------- ----------- -----------
See notes to financial statements.
See accountants review report
7
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Consolidated Statement of Cash
Flows For the three months ended December 31, 2002 and 2001
(UNAUDITED)
2002 2001
--------- ---------
Operating Activities
Net income (loss) $(381,390) $ 427,365
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
28,200 --
Changes in operating assets and liabilities:
Accounts receivable (8,696) --
Prepaid expenses (18,043) --
Accounts payable 74,218 (67,428)
Accrued interest expense 7,227 (218,261)
Accrued payroll expense 62,500 --
Accrued payroll tax expense 4,781 --
Bridge loan payable 154,296 --
Notes payable 476 (210,348)
--------- ---------
Net cash provided by operating activities (76,431) (68,672)
--------- ---------
Investing Activities
Capital expenditures (3,943) --
--------- ---------
Net cash (used in) investing activities (3,943) --
--------- ---------
Financing Activities
Issuance of stock for debt extinquishment 82,500 2,944
Contributed capital -- 68,428
Cancellation of shares -- (2,700)
--------- ---------
Net cash provided by financing activities 82,500 68,672
--------- ---------
Increase (decrease) in cash 2,126 --
Cash at beginning of period -- --
--------- ---------
Cash at end of period $ 2,126 $ --
--------- ---------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ -- $ --
Income taxes $ -- $ --
Non-cash transactions:
Extinquishment of debt $ -- $ 424,665
Cancellation of shares $ -- $ 2,700
See notes to financial statements.
See accountants review report
8
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Notes to Financial Statements
December 31, 2002
(UNAUDITED)
1. BASIS OF PRESENTATION:
The unaudited financial statements have been prepared by the Company,
pursuant to the rules and regulations of the Securities and Exchange
Commission. These financial statements and the notes hereto should be read
in conjunction with the financial statements and notes thereto included in
the Company's Form 10-KSB for the year ended September 30, 2002, which was
filed December 31, 2002. In the opinion of the Company, all adjustments,
including normal recurring adjustments necessary to present fairly the
financial position of Urban Television Network Corporation as of December
31, 2002 and the results of its Operations and cash flows for the quarter
then ended, have been included. The results of operations for the interim
period are not necessarily indicative of the results for the full year.
ACCOUNTING POLICIES:
There have been no changes in accounting policies used by the Company
during the quarter ended December 31, 2002.
2. Significant Accounting Policies
Organization and Business
Waste Conversion Systems, Inc. was incorporated under the laws of the state
of Nevada on October 21, 1986. On June 10, 2002 the company changed its
name to Urban Television Network Corporation. The name change coincided the
company's acquisition of assets from the Urban Television Network
Corporation, a Texas corporation. Urban Television Network Corporation
("UTVN") and its subsidiaries, together, the "Company") are engaged in the
business of supplying programming to broadcast television stations and
cable systems. Formerly the company's business had been the marketing of
thermal burner systems that utilize industrial and agricultural waste
products as fuel to produce steam, which generates electricity,
air-conditioning or heat.
Principles of Consolidation
The consolidated financial statements include the account of Urban
Television Network Corporation and its subsidiary. All material
intercompany accounts and transactions are eliminated. The Company owns
100% of Waste Conversion Systems Of Virginia, Inc. which had no assets or
liabilities at September 30, 2002 and December 31, 2002 and no revenues or
expenses for the years ended September 30, 2002 and the three months ended
December 31, 2002.
Non Goodwill Intangible Assets
Intangible assets other than goodwill consist of network assets acquired by
purchase. They are being amortized over their expected lives of 5 years and
are reviewed for potential impairment whenever events or circumstances
indicate that carrying amounts may not be recoverable. No impairment loss
was recognized during the reporting period. On January 1, 2002, the Company
adopted Statement of Financial Accounting Standards No. 142, Goodwill and
Intangible Assets. This provides that a recognized intangible shall be
amortized over its useful life to the reporting entity unless that life is
determined to be indefinite. The amount of an intangible asset to be
amortized shall be the amount initially assigned to that asset less any
residual value.
Income (Loss) Per Share
Income (loss) per common share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding. Stock options and
warrants are anti-dilutive, and accordingly, are not included in the
calculation of income (loss) per share.
Cash
For purposes of the statement of cash flows, the Company considers
unrestricted cash and all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash. The Company has no
cash equivalents.
9
URBAN TELEVISION NETWORK CORPORATION
And Subsidiaries
Notes to Financial Statements, Continued
December 31, 2002
(UNAUDITED)
2. Significant Accounting Policies (Continued)
Advertising Costs
The Company expenses non-direct advertising costs as incurred. The Company
did not incur any direct response advertising costs for the fiscal year
ended September 30, 2002 and the three months ended December 31, 2002.
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.
Recent Accounting Standards
The FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The Statement
provides guidance for determining whether a transfer of financial assets
should be accounted for as a sale or a secured borrowing, and whether a
liability has been extinguished. The Statement is effective for recognition
and reclassification of collateral and for disclosures ending after
December 15, The Statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March
31, 2001. The initial application of SFAS No. 140 will have no impact to
the Company's results of operations and financial position.
In June, 2001 the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, "Business Combinations" and No. 142
"Goodwill and Other Intangible Assets." These statements prohibit
pooling-of-interest accounting for Transactions initiated after June 30,
2001, require the use of the purchase method of accounting for all
combinations after June 30, 2001, and establish new standards for
accounting for goodwill and other intangibles acquired in business
combinations. The Company does not expect these pronouncements to have a
material affect on its financial statements.
Stock Options
The Company accounts for non-employee stock options under SFAS 123, whereby
option costs are recorded at the fair value of the consideration received
or the fair value of the equity instrument issued, whichever is more
reliable measurement, in accordance with EITF 96-18 "Accounting for Equity"
instruments that are issued to other than employees for acquiring or in
conjunction with selling Goods or Services.
The Company adopted in February 1993 an employee stock option plan. There
are no options outstanding under this plan. This plan will be accounted for
under FAS 123 as described above.
3. Network Assets - Amortization
On May 1, 2002, the Company entered into an agreement with Urban Television
Network Corporation, a Texas corporation, (UTVN-Texas) to acquire the
rights to the UATV Network signal space which included the assignment of
the UATV affiliates for 16,000,0000 shares of common stock with an
estimated fair market value of $559,000. These assets purchased are
referred to as network asset.
Network assets consist of intangibles other than Goodwill. These assets
automatically renew every year unless either party terminates the agreement
by such notification to the other party. A useful life of five (5) years is
estimated for the assets. These agreements are not expected to be
terminated by either party prior to its useful life period. Total
amortization of these assets has been $74,534 and the amortization for the
period ended September 30, 2002 was $46,584 and for the three months ended
December 31, 2002 was $27,950.
Future amortization of the Network assets at December 31, 2002 will be
$484,466 and on an annual basis be as follows:
Year ended September 30, 2003 $ 83,854
Year ended September 30, 2004 $111,804
Year ended September 30, 2005 $111,804
Year ended September 30, 2006 $111,804
Year ended September 30, 2007 $ 65,200
10
URBAN TELEVISION NETWORK CORPORATION
And Subsidiaries
Notes to Financial Statements, Continued
December 31, 2002
(UNAUDITED)
4. Property, Plant and Equipment
The Company acquired equipment totaling $6,905. This was recorded at cost
and depreciation on a straight-line basis over five (5) years. Depreciation
for fiscal year and accumulated at September 30, 2002 was $783.00.
Depreciation for the three months ended December 31, 2002 was $250 and the
accumulated at December 31, 2002 was $1,033.
5. Other Income
Extinguishment of Debt
Since Waste Conversion Systems, Inc. ceased operations in 1996, it did not
pay any of its obligations, related to previous operations. For those trade
creditors and note holders that did not extend the statute of limitations
on collection of their accounts through legal actions, the Company has been
taking the write off of the payables into income as the statutory period
for collection expires. The income was $424,665 ($0.014 per share) and
$8,880 (less than $0.01 per share) for fiscal 2002 and 2001, respectively.
6. Related Party Transactions
In May 2002, the Company issued 16,000,000 shares to Urban Television
Network Corporation for asset purchase of network assets. (See Note 3,
Network Assets)
The Company leases office space from one its shareholders and director for
$2,000 per month. The total rental expense for year ended September 30,
2002 was $12,000 and for the three months ended December 31, 2002 was
$6,000.
7. Notes Payable
Notes payable consist of:
December 31, September 30,
2002 2002
------------- -------------
Notes payable to stockholders at 10%
interest payable on September 30, 2004 $ 189,405 $ 188,929
Bridge loan payable at 10% interest
Payable on September 30, 2003 $ 154,296
------------- -------------
$ 343,701 $ 188,929
------------- -------------
8. Income Tax
The Company has, for income tax purposes, approximately $4,950,000 in net
operating loss carryforwards at September 30, 2002, available to offset
future years' taxable income and expiring in varying amounts through the
year 2015. A deferred tax asset of approximately $2,032,000 has been offset
by a 100% valuation allowance. The annual utilization of the loss
carryforward will be limited under Internal Revenue Code Section 382
provisions due to the recent stock issuances. The Company accounts for
income taxes pursuant to the Statement of Financial Accounting Standards
No.109. The Company has no current or deferred income tax component.
9. Capital Stock
In May 2002, the Company issued 16,000,000 shares to Urban Television
Network Corporation for asset purchase of network assets. (See Note 3
Network Assets)
In September 2002, the Company issued 100,000 shares to Hispanic Television
Network, Inc. as part of the mutual settlement agreement between the two
companies to cancel the Satellite Transponder Service Agreement and notes
payable/receivable.
On November 21, 2002 the Company completed a 1:20 reverse stock split and
amended its Articles of Incorporation to increase its authorized common
shares to 200,000,000 and adjust its par value to $0.0001 per share.
In December 2002, the Company issued 300,000 shares of its common stock for
consulting and legal Services.
11
URBAN TELEVISION NETWORK CORPORATION
and Subsidiaries
Notes to Financial Statements, Continued
December 31, 2002
(UNAUDITED)
10. Preferred Stock
The Articles of Incorporation of the Company authorize issuance of a
maximum of 500,000 shares of nonvoting preferred stock with a par value of
$1.00 per share. The Articles of Incorporation grant the Board of Directors
of the Company authority to determine the designations, preferences, and
relative participating, optional or other special rights of any preferred
stock issued.
No preferred shares had been issued as of December 31, 2002.
11. Commitments
Satellite Transponder Lease
The Company entered into a Satellite space segment service agreement with
Loral Skynet on November 20, 2002 for 6 MHz of satellite bandwidth on
Telstar 5 for a period of three year ending on November 21, 2005. For the
three months ended December 31, 2002, the amount expensed was $18,043.
Future lease payments due during the term of the lease ending on November
21, 2005 will equal $649,548 and be due as follows:
Year ended September 30, 2003 $198,473
Year ended September 30, 2004 $216,516
Year ended September 30, 2005 $216,516
Year ended September 30, 2006 $ 18,043
The Company entered into a Full Time Broadcast Agreement with Verestar,
Inc. on November 21, 2002 for a full time redundant 6 MHz digital C-band
uplink service for a period of three years ending on November 21, 2005. For
the three months ended December 31, 2002, the amount expensed was $8,000.
Future lease payments due during the term of the lease ending on November
21, 2005 will equal $288,000 and be due as follows:
Year ended September 30, 2003 $88,000
Year ended September 30, 2004 $96,000
Year ended September 30, 2005 $96,000
Year ended September 30, 2006 $ 8,000
12. Going Concern
The Company has suffered recurring losses from operations. In order for the
Company to sustain operations and execute its television broadcast and
programming business plan , capital will need to be raised to support
operations as the company executes its business plan. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern.
The Company may raise additional capital through the sale of its equity
securities, or debt securities.
13. Subsequent Event
On February 7, 2003, the Company entered into an Exchange Agreement with
the majority shareholders of Urban Television Network Corporation, a Texas
corporation (UTNC). The Company acquired 90% of the issued and outstanding
capital stock of UTNC in return for 13,248,000 shares of the Company's
common stock.
12
Item 2. Management's Discussion and Analysis or Plan of Operation.
OPERATIONS. The Company had no revenues for the three months ended December 31,
2001 and $50,018 for the three months ended December 31, 2002. The year 2002
revenues are related to the UATV Television Network acquired by the Company in
May of 2002. The operations are still in the growth stages and the Company is
dependent upon management and/or significant shareholders to provide sufficient
working capital. It is the intent of management and/or significant shareholders
to provide sufficient working capital to provide for the Company's operations.
There is no assurance, however, that management and/or significant shareholders
will be able to supply such working capital needs.
OPERATING RESULTS. The Company had no operations for the three months ended
December 31, 2001. For the three months ended December 31, 2002, the Company had
an operating loss of $374,163 related to the continued growth of the UATV
Television Network acquired by the Company in May of 2002. During the three
months ended December 31, 2001, the Company did have $427,365 of income derived
from $424,665 in gains resulting from the extinguishment of liabilities and
$2,700 of income derived from the cancellation of shares previously issued for
consulting services that were never performed.
EARNINGS PER SHARE OF COMMON STOCK. The net income or loss per common share is
based upon the weighted average of outstanding common stock during the period.
The net loss per share of common stock was $0.31 for the three months ended
December 31, 2002 compared to an income of $1.37 for the three months ended
December 31, 2001, as adjusted for the 1:20 reverse stock split in November of
2002.
LIQUIDITY AND CAPITAL RESOURCES
Waste Conversion Systems, Inc., now known as Urban Television Network
Corporation, ceased operations in August 1996 and had no operations until May of
2002 when the Company acquired the UATV Television Network.
During the three months December 31, 2001, the Company settled lawsuits,
judgments and liabilities totaling $428,609 for $21,000 and 224,420 shares of
its common stock.
As of December 31, 2002, the Company's outstanding liabilities were $554,799,
which exceeds assets by $25,887.
Financing activities for the three months ended December 31, 2002 include
contributed capital of $154,772 from management and/or significant shareholders.
These funds were used to fund the operations of the Company.
This Form 10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar terms.
These statements appear in a number of places in this report and include
statements regarding the intent, belief or current expectations of the Company,
its directors or its officers with respect to, among other things: (i) trends
affecting the Company's financial condition or results of operations for its
limited history; (ii) the Company's business and growth strategies; (iii) the
Internet and Internet commerce; and, (iv) the Company's financing plans.
Investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may differ materially from those
projected in the forward- looking statements as a result of various factors.
Factors that could adversely affect actual results and performance include,
among others, the Company's limited operating history, dependence on key
management, financing requirements, government regulation, technological change
and competition. Consequently, all of the forward-looking statements made in
this Form 10-QSB are qualified by these cautionary statements and there can be
no assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
The Company assumes no obligations to update any such forward-looking
statements.
Item 3. Controls and Procedures.
(a) During December 2002, we made an evaluation of our disclosure controls and
procedures. In our opinion, the disclosure controls and procedures are adequate
because the systems of control and procedures are designed to assure, among
other items, that 1) recorded transactions are valid; 2) valid transactions are
recorded; and 3) transactions are recorded in the proper period in a timely
manner to produce financial statements which present fairly the financial
condition, results of operations and cash flows for the respective periods
presented. Moreover, the evaluation did not reveal any significant deficiencies
or material weaknesses in our disclosure controls and procedures.
(b) There have been no significant changes in our internal controls or in other
factors that could significantly affect these controls since the last
evaluation.
13
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities and Use of Proceeds
Recent Sales of Securities
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
The Company acted on matters authorized by a vote of the majority
shareholder holding 71.9% of the voting stock, in lieu of a special meeting of
the shareholders. The effective date of the action taken by the Company was
November 28, 2002. The Company filed an amendment to its Articles of
Incorporation implementing a change in its capital. Additionally, the Company
was authorized to acquire Urban Television Network Corporation, a Texas
corporation, from its shareholders in a share exchange transaction. The Company
provided its shareholders with an information Statement on Schedule 14C. These
actions were disclosed in a Current Report filed on Form 8-K on December 2,
2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description and Method of Filing
---------- --------------------------------
99.1 Certification by Chief Executive Officer, pursuant to 18 USC
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification by Chief Financial Officer, pursuant to 18 USC
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K.
On December 2, 2002, the Company filed an 8K Report detailing Item 5, titled,
"Other Events".
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: February 20, 2003
Urban Television Network Corporation
By: /s/ Randy Moseley By: /s/ Stanley Woods
------------------ ------------------
Randy Moseley Stanley Woods
Title: President Title: Secretary
14