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, 2003
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, Cresson, TX 76035
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(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:
Transitional Small Business Disclosure Format
(Check One) Yes No X
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.................................................3
Balance Sheet (unaudited)............................................4
Statements of Operations (unaudited).................................5
Statements of Cash Flows (unaudited).................................6
Notes to Financial Statements........................................8
Item 2. Management's Discussion and Analysis of Plan
of Operation.......................................................17
Item 3. Controls and Procedures..............................................20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................21
Item 2. Changes in Securities and Use of Proceeds...........................21
Item 3. Defaults upon Senior Securities.....................................22
Item 4. Submission of Matters to a Vote
of Security Holders.................................................22
Item 5. Other Information...................................................22
Item 6. Exhibits and Reports on Form 8-K....................................23
Signatures....................................................................23
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, 2003. The financial statements reflect all
adjustments which 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, 2003,
follow.
3
PART I - FINANCIAL STATEMENTS
URBAN TELEVISION NETWORK CORPORATION
Consolidated Balance Sheet
December 31, September 30,
2003 2003
Assets (Unaudited) (Audited)
Currents assets
Cash and cash equivalents $ 629,537 $ 235,408
Accounts receivable 6,746 4,241
------------ ------------
Total current assets 636,283 239,649
------------ ------------
Furniture, fixtures and equipment, net 83,377 29,938
------------ ------------
Other assets
Prepaid management services 2,000,000 --
Network assets, net 127,684 137,465
Organizational costs 360 360
------------ ------------
Total other assets 2,128,044 $ 137,825
------------ ------------
Total assets $ 2,847,704 $ 407,412
------------ ------------
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 69,490 $ 96,678
Due to stockholders -- 198,515
Notes payable to stockholder 132,200 132,200
Bridge loans payable 21,000 37,000
Note payable 17,500 --
Accrued compensation 45,000 --
Accrued interest payable 5,048 4,550
------------ ------------
Total current liabilities 290,238 468,943
------------ ------------
Stockholders' equity
Preferred stock, $1 par value, 500,000 shares authorized, none issued -- --
Common stock, $0.0001 par value, 200,000,000 shares authorized;
43,345,888 and 23,711,736 outstanding at December 31, 2003 and
September 30,2 003, respectively 4,334 2,371
Additional paid-in capital 17,793,424 8,058,311
Stock subscriptions receivable (6,577,200) (57,400)
Retained earnings (deficit) (8,663,092) (8,064,813)
------------ ------------
Total stockholders' equity 2,557,466 (61,531)
------------ ------------
Total liabilities and stockholders' equity $ 2,847,704 $ 407,412
------------ ------------
See notes to financial statements.
4
URBAN TELEVISION NETWORK CORPORATION
Consolidated Statement of Operations
For the three months ended December 31, 2003 and 2002
(UNAUDITED)
2003 2002
------------ ------------
Revenues $ 25,971 $ 41,577
------------ ------------
Expenses:
Satellite and uplink services 78,129 117,543
Master control and production 129,553 6,695
Station operating costs 80,294 1,950
Technology expenses 28,977 70,025
Administration 288,373 97,992
Depreciation and amortization 17,042 8,416
------------ ------------
Total expenses 622,368 302,621
------------ ------------
Income (loss) from operations (596,397) (261,044)
Other (income) expense
Interest income 101 --
Interest (expense) (1,983) (2,952)
------------ ------------
Net loss $ (598,279) $ (263,996)
------------ ------------
Earnings per share: $ (0.02) $ (0.22)
Net income (loss)
Weighted average number of common
shares outstanding 36,644,020 1,216,583
See notes to financial statements.
5
URBAN TELEVISION NETWORK CORPORATION
Consolidated Statement of Stockholders' Equity
(UNAUDITED)
Common Stock Additional Stock Total
------------------------- Paid-In Subscription Capital
Shares Amount Capital Receivable Deficit Deficit
----------- ----------- ----------- ----------- ----------- -----------
Balance at September 30, 2001 311,636 $ 31 $ 5,444,567 $ 0.00 $(5,444,598) $ 0.00
Recapitalization of
private company 800,000 80 518,785 -- -- $ 518,865
Stock issued to Hispanic
Television Network 5,000 1 9,999 -- -- 10,000
Net income for year ended
September 30, 2002 -- -- -- -- (581,106) (581,106)
----------- ----------- ----------- ----------- ----------- -----------
Balance September 30, 2002 1,116,636 112 5,973,351 0.00 (6,025,704) (52,241)
Recapitalization of
private company 13,248,000 1,325 238,594 -- -- 239,919
Stock issued for services 7,275,000 727 810,523 -- -- 811,250
Stock issued for bridge
loan conversions 1,957,300 196 978,454 -- -- 978,650
Stock subscriptions 114,800 11 57,389 $ (57,400) 0.00 0.00
Net loss for year ended
September 30, 2003 -- -- -- -- (2,039,109) (2,039,109)
----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30, 2003 23,711,736 2,371 8,058,311 (57,400) (8,064,813) (61,531)
Stock issued for services 200,000 20 49,980 -- -- 50,000
Stock subscription 14,040,000 1,404 7,018,596 (6,520,000) -- 500,000
Stock issued for management services 4,000,000 400 1,999,600 -- -- 2,000,000
Stock subscriptions received -- -- -- 200 -- 200
Stock issued for bridge loan 1,274,152 127 636,949 -- -- 637,076
conversions
Stock issued for equipment 120,000 12 29,988 -- -- 30,000
Net loss for three months ended
December 31, 2003 -- -- -- -- (598,279) (598,279)
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 2003 43,345,888 $ 4,334 $17,793,424 $(6,577,200) $(8,663,092) $ 2,557,466
----------- ----------- ----------- ----------- ----------- -----------
See notes to financial statements.
6
URBAN TELEVISION NETWORK CORPORATION
Consolidated Statement of Cash Flows
For the three months ended December 31, 2003 and 2002
(UNAUDITED)
2003 2002
----------- -----------
Operating Activities
Net (loss) $ (598,279) $ (263,996)
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 17,042 8,416
Common stock issued for services 50,000 82,500
Changes in operating assets and liabilities:
Accounts receivable (2,505) --
Accounts payable (27,188) --
Accrued interest expense 1,983 2,953
Accrued compensation 45,000 --
----------- -----------
Net cash provided by operating activities (513,947) (170,127)
----------- -----------
Investing Activities
Capital expenditures (30,700) --
----------- -----------
Net cash (used in) investing activities (30,700) --
----------- -----------
Financing Activities
Proceeds from shareholder advances -- 180,892
Proceeds from common stock sales 300,000 --
Proceeds from bridge loans 621,076 --
Proceeds from notes payable 17,500 --
Collection on subscription receivable 200 --
----------- -----------
Net cash provided by financing activities 938,776 180,892
----------- -----------
Increase (decrease) in cash 394,129 10,765
Cash at beginning of period 235,408 802
----------- -----------
Cash at end of period $ 629,537 $ 11,567
----------- -----------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ -- $ --
Income taxes $ -- $ --
Non-cash transactions:
Common stock issued for services 2,050,000 82,500
See notes to financial statements.
7
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(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. Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been omitted pursuant to such SEC rules and
regulations; nevertheless, the Company believes that the disclosures are
adequate to make the information presented not misleading. 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, 2003, which was filed January 14,
2004. 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, 2003 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, 2003.
2. Significant Accounting Policies
Description of Business
Urban Television Network Corporation (the "Company") formerly known as
Waste Conversion Systems, Inc. was incorporated under the laws of the state
of Nevada on October 21, 1986. The principal office of the corporation is
18505 Highway 377 South, Cresson, Texas 76035.
In January 2002, the Company underwent a change of control in connection
with Urban Television Network Corporation, a Texas corporation,
(Urban-Texas). The directors of the Company appointed Urban-Texas officers
as new officers of the Company, and at the same time resigned their board
positions and appointed the directors of Urban-Texas as the Company's new
board of directors.
On May 1, 2002, the Company entered into an agreement with Urban-Texas to
acquire the rights to the Urban-Texas affiliate network signal space which
included the assignment of the Urban-Texas broadcast television station
affiliates for 16,000,0000 shares of common stock, which became 800,000
after a 1 for 20 reverse stock split.
On February 7, 2003, the Company entered into a Stock Exchange Agreement
with the majority shareholders of Urban-Texas. Among other things, the
Agreement provided for the Company's purchase of approximately 90% of the
issued and outstanding capital stock of Urban-Texas (13,248,000 of
14,759,000 shares) in exchange for the Company's issuance of 13,248,000
shares of its authorized but unissued common stock, $.0001 par value (the
"Exchange Shares"), to the majority shareholders of Urban-Texas. In June
2003, the remaining 10% of Urban-Texas common stock was contributed to the
Company.
Urban-Texas is considered the accounting acquirer, and the accompanying
financial statements include the operations of Urban-Texas from the
earliest period presented. The Company operated from May 1, 2002 to
February 7, 2003 as a 71% subsidiary of Urban-Texas, a predecessor entity
to the existing business. The transaction with the Company is presented as
a recapitalization of Urban-Texas.
The Company is authorized to issue 200,000,000 shares of $.0001 par value
stock and 500,000 shares of $1.00 par value preferred stock.
The Company is 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.
8
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
2. Significant Accounting Policies - continued
Accounting Method
The Company records income and expenses on the accrual method.
Revenue Recognition
Revenue is recognized at the time services are performed for airing of
programs and insertions of advertising spot.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiary. All material intercompany accounts and transactions are
eliminated. The Company owns 100% of Urban Television Network Corporation,
a Texas corporation and 100% of Waste Conversion Systems Of Virginia, Inc.
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 periods. 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 calculated in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share".
Basic Income (loss) per share is computed by dividing net income (loss) by
the weighted average number of common shares outstanding. Diluted net
income (loss) per share is computed similar to basic net income (loss) per
share, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were
dilutive. Stock options and warrants are anti-dilutive, and accordingly,
are not included in the calculation of income (loss) per share.
Comprehensive Income
Comprehensive income (loss) and net income (loss) are the same for the
Company.
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.
Concentration of Credit Risk
The Company maintains cash in excess of federally insured limits. The
amount in excess at December 31, 2003 was approximately $515,000.
Advertising Costs
The Company expenses non-direct advertising costs as incurred. The Company
did not incur any direct response advertising costs for the three months
ended December 31, 2003 and 2002.
9
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
2. Significant Accounting Policies - continued
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, 2001. 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.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity".
This Statement establishes standards for classifying and measuring as
liabilities certain financial instruments that embody obligations of the
issuer and have characteristics of both liabilities and equity. SFAS No.
150 is effective at the beginning of the first interim period beginning
after June 15, 2003; including all financial instruments created or
modified after May 31, 2003. SFAS No. 150 currently has no impact on the
Company.
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. Accounts receivable
Accounts receivable consists of normal trade receivables. The Company
assesses the collectibility of its accounts receivable regularly. Based on
this assessment, an allowance for doubtful accounts is recorded. At
December 31, 2003 and 2002 an allowance for doubtful accounts was not
considered necessary.
10
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
4. Network Assets - Amortization
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 $77,944 and the amortization for the
three months ended December 31, 2003 and 2002 was $9,781 and $7,260,
respectively.
Future amortization of the Network assets at December 31, 2003 will be
$127,684 and on an annual basis be as follows:
Year ended September 30, 2004 $29,344
Year ended September 30, 2005 $39,125
Year ended September 30, 2006 $39,125
Year ended September 30, 2007 $20,090
5. Property, Plant and Equipment
The Company acquired equipment totaling $5,084 during the year ended
September 30, 2003 and $37,708 during the year ended September 30, 2002 and
$60,700 during the three months ended December 31, 2003, which included the
issuance of 120,000 shares of the Company's common stock valued at $30,000.
Equipment is recorded at cost and depreciation is calculated on a
straight-line basis over three (3) to five (5) years. Total depreciation of
the equipment has been $24,332 and depreciation for the three months ended
December 31, 2003 and 2002 was $11,478 and $1,156, respectively.
6 Related Party Transactions
In May 2002, the Company issued 16,000,000 (800,000 after the 1 for 20
Reverse) shares to Urban Television Network Corporation, a Texas
corporation for asset purchase of network assets - See footnote 1.
The Company leases office space from one its shareholders and director for
$2,000 per month. The total rental expense for the year three months ended
December 31, 2003 and 2002 was $6,000 and $6,000, respectively. Amounts
payable were $18,000 and $8,000, respectively.
In year 2003, the Company began using the services of a company owned by
shareholders, one being a director of the Company, that provides the
Company with the equipment and master control services to put the Company's
programming on the satellite for the broadcast affiliates to receive and
rebroadcast to their local markets. During the three months ended December
31, 2003 the total expense paid out was $110,146.
The Company uses the services of a company owned by shareholders to provide
it with technology services including Internet and affiliate relations.
During the three months ended December 31, 2003 and 2002, the total expense
paid out for these services was $28,977 and $70,025, respectively.
During the periods ended September 30, 2003 and 2002, the Company executed
interest bearing notes with shareholders. The Company borrowed $298,127 and
$263,165 from the shareholders and made repayments of $164,177 and $66,400
during the years ended September 30, 2003 and 2002, respectively. At
September 30, 2003, $168,765 of the notes plus accrued interest of $29,750
were converted to a non-interest payable to the shareholder. In October
2003, a shareholder agreed to reduce the Company payable by $198,515 to
apply towards the purchase of common stock by Wright Entertainment LLC.
The Company executed an interest bearing note with a shareholder of the
Company during the period ended September 30, 2003 to pay operating
expenses. During the period ended September 30, 2003 the amounts loaned
totaled $132,200. The balance on this loan was $132,200 at December 31,
2003.
11
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
6 Related Party Transactions - continued
On October 30, 2003, the Company completed a stock subscription agreement
with Wright Entertainment, LLC, a Nevada limited liability company, whose
owner and managing director is Lonnie G. Wright, President and Chief
Executive Officer of the Company. Wright Entertainment, LLC entered into
the stock Subscription agreement for Fourteen Million (14,000,000) common
shares for Seven Million ($7,000,000) Dollars or Fifty ($0.50) Cents per
share. The stock sale was structured as an installment stock sale. The
terms of the stock sale are as follows: $500,000 down, the $6,500,000
balance payable on a promissory note at $875,000 Dollars quarterly,
including 6% interest on the declining balance. A portion ($200,000) of the
$500,000 down payment was achieved by one of the Company's lenders
forgiving $198,515 of advances due the lender and $1,485 of accrued
interest on a note payable to the lender. Subsequent to December 31, 2003,
the subscription agreement has been amended to set the first four quarterly
installments at $437,500 each beginning April 30, 2004 and the remaining
quarterly installments remaining at $875,000 each until the total
subscription amounts has been paid including accrued interest. All of the
shares have been pledged as security for the promissory note and will be
physically held by the Company. Additionally, the board of directors
authorized the issuance of Four Million (4,000,000) common shares to Wright
Entertainment for executive management services to be valued at $2,000,000.
These shares will be held by the Company and accounted for as prepaid
management services until the total subscription price has been paid by
Wright Entertainment. When the shares have been forwarded to Wright
Entertainment, the $2,000,000 will be amortized over four years.
7. Notes Payable
Notes payable consist of:
December 31, September 30,
2003 2003
------------- -------------
Notes payable to stockholders at 6%
interest payable on September 30, 2004 $ 132,200 $ 132,200
Note payable to individual at 0% interest
Payable on January 2, 2004 17,500 --
------------- -------------
$ 149,700 $ 132,200
------------- -------------
8. Convertible Bridge Loan
Convertible bridge loans consist of:
December 31, September 30,
2003 2003
------------- -------------
Convertible bridge loan payable to
individuals at 6% interest payable
on February 14, 2004 $ 21,000 $ 37,000
------------- -------------
The convertible bridge loans are convertible at any time before the
maturity date into the Company's common stock at the rate of two shares of
common stock for each dollar of convertible bridge loan plus accrued
interest through the date of conversion.
9. Income Tax
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". This
standard requires, among other things, recognition of future tax
consequences, measured by enacted tax rates attributable to taxable and
deductible temporary differences between financial statement and income tax
bases of assets and liabilities. Valuation allowances are established, when
necessary, to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable for the period and the
change during the period in the deferred tax asset and liability.
12
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
9. Income Tax - continued
Temporary differences between the financial statement carrying amounts and
tax basis of assets and liabilities did not give rise to significant
portions of deferred taxes at December 31, 2003 and 2002.
The (provision) benefit for income tax consist of the following:
December 31, December 31,
2003 2002
------------ ------------
Current $ 0 $ 0
Deferred 0 0
------------ ------------
$ 0 $ 0
============ ============
The Company's utilization of any tax loss carryforward available to it will
be significantly limited under Internal Revenue Code Section 382, if not
totally, by recent stock issuances and changes in control. The Company has
established a 100% valuation allowance until such time as it is decided
that any tax loss carryforwards might be available to it. 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.
10. Capital Stock
In May 2002, the Company issued 16,000,000 (800,000 after the 1 for 20
reverse) shares to Urban Television Network Corporation, a Texas
corporation for asset purchase of network assets -See footnote 1.
In September 2002, the Company issued 100,000 (5,000 after the 1 for 20
reverse) 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, which the Company valued at $82,500.
On February 7, 2003, the Company entered into an Exchange Agreement with
the majority shareholders of Urban Television Network Corporation, a Texas
corporation (Urban-Texas). The Company acquired 90% of the issued and
outstanding capital stock of Urban-Texas in return for 13,248,000 shares of
the Company's common stock - See footnote 1.
In May 2003, the Company issued 5,075,000 shares of its common stock for
consulting Services, which the Company valued at $253,750.
In June 2003, the Company issued 1,900,000 of its common stock for employee
compensation, consulting services and legal services, which the Company
valued at $475,000 under the Plan.
During the period ended September 30, 2003, the Company issued 1,957,300
shares of its common stock to Bridge Loan Lenders who elected to convert
$978,650 of bridge loans to common stock at the rate of 2 shares for each
dollar of bridge loan converted.
13
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
10. Capital Stock - continued
On October 30, 2003, the Company completed a stock subscription agreement
with Wright Entertainment, LLC, a Nevada limited liability company. The
Company sold Fourteen Million (14,000,000) common shares for Seven Million
($7,000,000) Dollars or Fifty ($0.50) Cents per share. The stock sale was
structured as an installment stock sale. The terms of the stock sale are as
follows: $500,000 down, the $6,500,000 balance payable on a promissory note
at $875,000 Dollars quarterly, including 6% interest on the declining
balance. A portion ($200,000) of the $500,000 down payment was achieved by
one of the Company's lenders forgiving $198,515 of advances due the lender
and $1,485 of accrued on a note payable to the lender. Subsequent to
December 31, 2003, the subscription agreement has been amended to set the
first four quarterly installments at $437,500 each beginning April 30, 2004
and the remaining quarterly installments remaining at $875,000 each until
the total subscription amounts has been paid including accrued interest.
All of the shares have been pledged as security for the promissory note and
will be physically held by the Company. Additionally, the board of
directors authorized the issuance of Four Million (4,000,000) common shares
to Wright Entertainment for executive management services to be valued at
$2,000,000. These shares will be held and accounted for as prepaid
management services by the Company until the total subscription price has
been paid by Wright Entertainment. When the shares have been forwarded to
Wright Entertainment, the $2,000,000 will be amortized over four years.
Wright Entertainment has given Randy Moseley an irrevocable common stock
proxy to vote all of our company shares acquired by Wright until Wright has
satisfied its purchase obligations. The Company anticipates that it will
release Wright's pledged company shares and voting proxies, on a pro-rata
basis, as Wright makes its quarterly payments on the note.
In October 2003, the Company issued 100,000 shares of its common stock for
services rendered, which the Company valued at $25,000.
In October 2003, the Company issued 120,000 shares of its common stock as
Part of the purchase of videoing and production equipment. The shares were
Valued at $30,000 in the purchase.
During the three months ended December 31, 2003, the Company issued
1,274,152 shares of its common stock to Bridge Loan Lenders who elected to
convert $637,076 of bridge loans to common stock at the rate of 2 shares
for each dollar of bridge loan converted.
Non-Qualified Stock Grant and Option Plan
The Company is authorized to issue up to 2,000,000 shares of common stock
under its 2003 Non-Qualified Stock Grant and Option Plan (the "Plan")
through an S-8 registration. This Plan is intended to serve as an incentive
to and to encourage stock ownership by certain directors, officers,
employees of and certain persons rendering service to the Company, so that
they may acquire or increase their proprietary interest in the success of
the Company, and to encourage them to remain in the Company's service.
During the period ended September 30, 2003, the Company had distributed
1,900,000 of the shares through grants. The remaining 100,000 shares were
issued in October 2003 as a stock grant.
11. 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 September 30, 2003 and 2002.
14
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
12. Commitments and Contingencies
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, 2003 and 2002, the amount expensed were
$54,129 and $101,543, respectively.
Future lease payments due during the term of the lease ending on November
21, 2005 will equal $414,989 and be due as follows:
Year ended September 30, 2004 $162,387
Year ended September 30, 2005 $216,516
Year ended September 30, 2006 $ 36,086
Signal Uplink Lease
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, 2003 and 2002, the amount expensed for
Uplink services was $24,000 and $16,000, respectively.
Future lease payments due during the term of the lease ending on November
21, 2005 will equal $184,000 and be due as follows:
Year ended September 30, 2004 $72,000
Year ended September 30, 2005 $96,000
Year ended September 30, 2006 $16,000
Facilities Space Lease
The Company entered into a lease for office space on March 15, 2002 for a
period of three years ending on March 31, 2005. For periods ended September
30, 2003 and 2002, the amount expensed for office space lease was $14,000
and $24,000. For the three months ended December 31, 2003 and 2002, the
amount expensed for office space was $6,000, respectively.
Future lease payments due during the term of the lease ending on March 31,
2005 Will be equal $28,000 and be due as follows:
Year ended September 30, 2004 $18,000
Year ended September 30, 2005 $10,000
Employment Agreements
Mr. Randy Moseley is employed pursuant to a five-year employment agreement
that commenced on October 2, 2002. The agreement provides for a base annual
salary equal to $200,000 and a possible annual cash bonus as determined by
the Board of Directors and/or the Compensation Committee.
In October 2003, the employment agreement of Randy Moseley was amended to
allow for the naming of a new President and Chief Executive Officer for the
Company. Mr. Moseley accepted the Officer Position of Executive Vice
President and Chief Financial Officer and agreed to defer the payment of
salary for the period from October 2, 2002 to September 30, 2003 with this
deferred year being added to the end of the original term to make the term
of the contract end on September 30, 2008. During the three months ended
December 31, 2003, $45,000 of Mr. Moseley's compensation was accrued as a
payable.
15
Urban Television Network Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003
(UNAUDITED)
12. Commitments and Contingencies - continued
Mr. Stanley Woods is employed pursuant to a three-year employment Agreement
that commenced on October 2, 2002. The agreement provides for a base annual
salary equal to $50,000 and a possible annual cash bonus as determined by
the Board of Directors and/or the Compensation Committee. Mr. Woods was
issued 200,000 shares of common stock in 2003 in lieu of his annual salary
for the period ended September 30, 2003.
Contingencies
The Company is involved in various legal actions arising in the normal
course of business. Management is of the opinion that any judgment or
settlement resulting from pending or threatened litigation would not have a
material adverse effect on the financial position or results of operations
of the Company.
13. 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. Subsequent to year end the Company has
raised additional capital of approximately $921,076 from $621,076 in bridge
loans and $300,000 in cash from the Wright Entertainment LLC subscription
agreement.
14. Subsequent Events
On February 9, 2004 the Company's Board of Directors approved to amend the
Stock subscription agreement with Wright Entertainment. The amendment
amends the first four quarterly installments to $437,500 each beginning
April 30, 2004 and the remaining quarterly installments remaining at
$875,000 each until the total subscription amount has been paid including
accrued interest.
16
Item 2. Management's Discussion and Analysis or Plan of Operation.
Background
Urban Television Network Corporation (the "Company") formerly known as Waste
Conversion Systems, Inc. was incorporated under the laws of the state of Nevada
On October 21, 1986. The principal office of the corporation is 18505 Highway
377 South, Cresson, Texas 76035.
In January 2002, the Company underwent a change of control with the directors of
the Company appointing the directors and officers of Urban Television Network
Corporation, a Texas corporation, (Urban-Texas) as the new directors and
officers of the Company, and at the same time resigning their board positions.
On May 1, 2002, the Company entered into an agreement with Urban-Texas to
acquire the rights to the Urban-Texas affiliate network signal space which
included the assignment of the Urban-Texas broadcast television station
affiliates for 16,000,0000 shares of common stock, which became 800,000 shares
after the 1 for 20 reverse split in November 2002.
On February 7, 2003, the Company entered into a Stock Exchange Agreement with
the majority shareholders of Urban-Texas to acquire approximately 90% of the
issued and outstanding capital stock of Urban-Texas (13,248,000 of 14,759,000
shares) in exchange for the Company's issuance of 13,248,000 shares of its
authorized but unissued common stock, $.0001 par value (the "Exchange Shares"),
to the majority shareholders of Urban-Texas. In June 2003, the remaining 10% of
the Urban-Texas common stock was contributed to the Company.
Urban-Texas is considered the accounting acquirer, and the accompanying
financial statements include the operations of Urban-Texas from the earliest
period presented. The transaction with the Company is presented as a
recapitalization of Urban-Texas.
The consideration exchanged in Stock Exchange Agreement was negotiated between
the Company and Urban-Texas in a transaction with management. The management of
the Company and Urban- Texas, were the same individuals. The transaction does
not represent an arms-length transaction.
The Company is engaged in the business of supplying programming to independent
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.
The Company acquired a television network affiliate base from Hispanic
Television Network, Inc. (HTVN). This television network provides television
programming serving ethnic minority programming interests of the
African-American population across the United States. The network presently
includes approximately 72 broadcast television station affiliates in various
parts of the country.
We are targeting the African American market primarily because we believe that
it presents vast marketing opportunities and that it is currently under-served
by our competition. With few competitors in this rapidly growing market, we feel
that there are unlimited opportunities to provide a quality broadcasting service
to the African-American population that is experiencing an explosive growth
rate.
Our financial results depend on a number of factors, including the strength of
the national economy and the local economies served by our stations, total
advertising dollars dedicated to the markets served by our stations, advertising
dollars dedicated to the African-American consumers in the markets served by our
stations, our stations' audience ratings, our ability to provide interesting
programming, local market competition from other television stations and other
media, and government regulations and policies, such as the multiple ownership
rules, the ability of Class A stations to be considered must carry for cable
systems and the deadlines for television stations converting to digital signals.
Management is implementing a revenue generation plan that includes local
advertising sales, for company operated stations, securing network advertising
at the best available rate, plus implementing a Technology plan to assist its
affiliates with sale of their local advertising time. Management intends to
increase rates as affiliate stations are added to the network. The
implementation of this comprehensive plan is expected to have a significant
positive affect upon sales revenues. In addition, the Company has added a focus
to secure carriage agreements with cable and digital distribution companies.
17
OPERATIONS. The Company had revenues of $25,971 and $41,577 for the three months
ended December 31, 2003 and 20002, respectively. Currently most of our network
advertising has been sold to direct response and per inquiry advertisers. The
decrease in the first quarter of 2003 compared to 2002 is due to the Company
continuing to be in the growth stages and not having an established advertising
client base. Going forward, we plan to deploy a network advertising team
consisting of account executives that will solicit advertising directly from
national advertisers as well as soliciting advertising from national advertising
agencies. Locally managed stations will also have account executives that will
solicit local and national advertising directly from advertisers and from
advertising agencies in the local markets.
The operations are still in the growth stages and the Company is dependent upon
Working capital derived from management, significant shareholders and private
investors to provide sufficient working capital. There is no assurance, however,
that the Company will be able to generate the necessary working capital needs
from these sources.
OPERATING RESULTS. For the three months ended December 31, 2003 and 2002 the
Company had operating cost of $323,548 and $196,213, respectively. The major
components of cost of operations for the three months ended December 31, 2003
and 2002 were as follows:
2003 2002
-------- --------
Satellite and uplink services $ 84,724 $117,543
Master control and production 129,553 6,695
Operations of stations 80,294 1,950
Technology expenses 28,977 70,025
-------- --------
Total $323,548 $196,213
-------- --------
In November of 2002, the Company terminated an arrangement with a company in
Florida that provided satellite space, uplinking of the satellite signal to the
satellite, master control, and tape editing/formatting. At that time the Company
secured its own satellite space on Telstar 5 from Loral Skynet and uplinking
services from Verestar, Inc. in Dallas, Texas and is working with a group of the
Company's shareholders who are providing digital compression equipment, tape
editing and master control tape playback 24 hours per day, 7 days per week. The
Company expects this new arrangement to save it approximately $10,000 per month
and give it more flexibility in taking live feeds and changing programming and
advertising insertions.
The costs of operations for stations increased by $78,344 in three months ended
December 31, 2003 as compared to 2002 primarily as the result operating a
station in Dallas, Texas at a cost of $70,365 that the Company did not have in
2002.
The technology expenses decreased by $41,048 for the three months ended December
31, 2003 as compared to 2002 due primarily to a decrease in system software
development.
Administration expenses of $288,373 for the three months ended December 31, 2003
increased by $190,381 or 1945 over the administrative expenses of $97,992 for
the three months ended December 31, 2002. This increase was attributable
primarily to increases in 2003 in the following expense categories:
Administration cost $ 70,000
Travel cost 39,984
Legal fees 32,500
Accounting fees 10,000
Public relations costs 9,730
Licenses and permit fees 8,005
Rent expenses 3,529
Internet costs 6,665
The Company had operating losses for the three months ended December 31, 2003
and 2002 of $596,397 and $261,044, respectively. The increase of $335,353 from
2003 to 2002 is due primarily to the $15,606 decrease in revenues and the
$281,537 increase of expenses of $70,632 in satellite and uplink expenses,
$78,344 in operations of stations, $190,381 in administration expenses and a
decrease of $41,048 in technology expenses.
18
EARNINGS PER SHARE OF COMMON STOCK. Income (loss) per common share is calculated
in accordance with Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share." Basic Income (loss) per share is computed by dividing the
net income (loss) by the weighted average number of common shares outstanding.
Diluted net income (loss) per share is computed similar to basic net income
(loss) per share, except that the denominator is increased to include the number
of additional common shares that would have outstanding if the potential common
shares had been issued and if the additional common shares were dilutive. Stock
options and warrants are anti-dilutive, and accordingly, are not included in the
calculation of income (loss) per share. The basic and diluted net loss per share
of common stock was $0.02 and $.022 for the three months December 31, 2003 and
2002, respectively. The 2002 weighted average of outstanding common shares has
been adjusted for the 1:20 reverse stock split in November of 2002.
LIQUIDITY AND CAPITAL RESOURCES
We have financed our operations through a combination of loans from
stockholders, proceeds from convertible promissory notes and revenues generated
from operations. The Company has incurred cumulative losses of $8,667,309 from
the inception of te Company through December 31, 2003.
Current assets at December 31, 2003 were $636,283 which exceeded current
liabilities of $290,238 by $346,045.
Our continued growth, will require additional funds that may come from a variety
of sources, including shareholder loans, equity or debt issuances, bank
borrowings and capital lease financings. We currently intend to use any funds
raised through these sources to fund various aspects of our continued growth,
including funding our working capital needs, performing digital upgrades,
funding key programming acquisitions, performing station capital upgrades,
securing cable connections, funding master control/ network equipment upgrades,
acquisition of new stations and making strategic investments.
We had net losses $602,496 and $263,996 for the three months ended December 31,
2003 and 2002, respectively. We expect these losses to continue as we incur
operating expenses in the growth of the Company's television network and its
affiliate base and convert them to an African-American format. We currently
anticipate that our revenues as well as cash from financings and equity sales
will be sufficient to satisfy operating expenses by the end of fiscal 2004. We
may need to raise additional funds, however. If adequate funds are not available
on acceptable terms, our business, results of operations and financial condition
could be materially adversely affected.
Financing activities for the three months ended December 31, 2003 include:
1) Issuance of common stock in lieu of cash payments totaling $50,000 for
consulting services.
2) Bridge loan subscriptions of $621,076 for the $1,500,000 convertible
Bridge loan agreement with interest at the rate of six percent (6%) per annum
with a consortium of private investors. The bridge loan lenders have the option
to convert their loans before the maturity date of February 14, 2004 into common
stock of the Company at the rate of two shares of common stock for every dollar
invested. During the three months ended December 31, 2003, bridge loan lenders
of $637,076 had elected to convert their bridge loan to 1,274,152 shares of
common stock.
3) The Company received $300,000 cash as part of the downpayment on a
common Stock purchase by Wright Entertainment, LLC as described in Item 2 of
this Quarterly Report
In addition common stock may also be issued for conversion or settlement of debt
and/or payables for equity, future obligations which may be satisfied by the
issuance of common shares, and other transactions and agreements which may in
the future result in the issuance of additional common shares. The common shares
that the Company may issue in the future could significantly increase the number
of shares outstanding and could be extremely dilutive.
19
Impact of Inflation
Management does not believe that general inflation has had or will have a
material effect on operations.
Other Events
On February 9, 2004 the Company's Board of Directors approved to amend the stock
subscription agreement(See Exhibit 10.1) with Wright Entertainment. The
amendment amends the first four quarterly installments to $437,500 each
beginning April 30, 2004 the remaining quarterly installments remaining at
$875,000 each until the total subscription amount has been paid including
accrued interest
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) Evaluation of Disclosure Controls and Procedures.
Within the 90 days prior to the date of this Quarterly Report for the quarter
ended December 31, 2003, we carried out an evaluation, under the supervision and
with the participation of our management, including the Company's Chairman and
Chief Executive Officer and the Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures pursuant to
Rule 13a-4 of the Securities Exchange Act of 1934 (the "Exchange Act"), which
disclosure controls and procedures are designed to insure that information
required to be disclosed by a company in the reports that it files under the
Exchange Act is recorded, processed, summarized and reported within required
time periods specified by the SEC's rules and forms. Based upon the evaluation,
the Chairman and the Chief Financial Officer concluded that our disclosure
controls and procedures are effective in timely alerting them to material
information relating to the Company required to be included in the Company's
periodical SEC filings.
(b) Changes in Internal Control.
Subsequent to the date of such evaluation as described in subparagraph (a)
above, there were no significant changes in our internal controls or other
factors that could significantly affect these controls, including any corrective
action with regard to significant deficiencies and material weaknesses.
20
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is a party to various legal actions and claims arising in the
ordinary course of its business. In the Company's opinion, the Company has
adequate legal defenses for each of the actions and claims, and believes that
their ultimate disposition will not have a material adverse effect on the
Company's consolidated financial position, results of operations and liquidity.
Item 2. Changes in Securities
Recent Sales of Unregistered Securities
During the first quarter of 2003, the Company offered and sold the following
securities pursuant to securities transaction exemption from the registration
requirements of the Securities Act of 1933, as amended.
On October 7, 2003, we issued Jacob R. Miles III, 100,000 shares for business
consulting services relating to the growth of the company's affiliate base and
addition of programming to the company's program schedule. The shares were
valued at $25,000 by the Company.
On October 19, 2003, the Company issued 120,000 shares of its common stock as
Part of the purchase of videoing and production equipment. The shares were
Valued at $30,000 in the purchase.
We believe shares issued above were issued in a private transactions pursuant to
Section 4(2) of the Securities Act of 1933, as amended, (the "Securities Act").
These shares are considered restricted securities and may not be publicly resold
unless registered for resale with appropriate governmental agencies or unless
exempt from any applicable registration requirements.
On February 14, 2003, we entered into a $1,500,000 Loan Agreement between
certain lenders and our Company. The Loan Agreement provides for the periodic
advance of monies with interest payable at the rate of six (6%) percent per
annum. During the quarter ended December 31, 2003, a total of $621,076 was
advanced on the agreement. The lenders may convert their loans, including
accrued interest, to our common stock at the rate of two (2) shares for each
dollar loaned, at any time prior to maturity on February 14, 2004. During the
quarter ended December 31, 2003, a total of $637,076 in bridge loans were
converted to 1,274,152 shares of the Company's common stock.
These securities that have been and will be issued above were issued in a
private transaction pursuant to Section 4(2) of the Securities Act of 1933, as
amended, (the "Securities Act"). These convertible securities are considered
restricted securities and may not be publicly resold unless registered for
resale with appropriate governmental agencies or unless exempt from any
applicable registration requirements.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders, through the
solicitation of proxies or Otherwise, during the first quarter of the fiscal
year covered by this report.
Item 5. Other Information
On October 30, 2003, the Board of Directors nominated Lonnie G. Wright, as
the Chairman of the Board of Directors and President, Chief Executive Officer
replacing Randy Moseley. Mr. Moseley will continue to serve the company as a
board director, Executive Vice President and Chief Financial Officer. In
connection with Wright Entertainment's stock purchase, our board of directors
amended the By-Laws increasing the number of board seats. The board nominated
four new board members and officer positions. Justin Nemec resigned his board
seat creating a vacancy. Conrad Bullard was named board director and Executive
Vice President of Development and Productions. Anthony K. Campbell was named
board director and Executive Vice President of Programming. C. Bruno Olivier was
named board director and Executive Vice President of Marketing and Corporate
Operations. Joseph R. Miles III was named board director and Executive Vice
President of Network Operations.
21
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description and Method of Filing
---------- --------------------------------
10.1 Amended Subscription Agreement with Wright Entertainment, LLC.
31.1 Certification by Chief Executive Officer, pursuant to 18 USC
Section 1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
31.2 Certification by Chief Financial Officer, pursuant to 18 USC
Section 1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification by Chief Executive Officer, pursuant to 18 USC
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 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 October 10, 2003, the Company filed an 8K Report detailing Item 4, titled,
"Changes in Registrant's Certifying Accountant" and Item 7, titled, "Financial
Statements and Exhibits".
On October 30, 2003, the Company filed an 8K Report detailing Item 1, titled,
"Change in Control of Registrant".
On December 2, 2003, the Company filed an 8K Report detailing Item 4, titled,
"Change in Registrant's Certifying Accountant".
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 16, 2004
Urban Television Network Corporation
By: /s/ Lonnie G. Wright By: /s/ Randy Moseley
------------------ ------------------
Lonnie G. Wright Randy Moseley
Title: President Title: Executive Vice President/CFO
22