Mr. John Farlinger reports

URBAN COMMUNICATIONS INC. ANNOUNCES COMMENCEMENT OF ACTION AGAINST A SUPPLIER IN B.C. SUPREME COURT

Urban Communications Inc. has commenced a civil action in the Supreme Court of British Columbia against a supplier owned and controlled by its former chief operating officer.

The action claims that the supplier did not provide services for which it billed the company, or those billings were inflated or unauthorized. The engagements to provide services were made while the supplier's owner was acting in his capacity as COO or de facto COO of Urban, and without him having sought competitive bids.

Further, the company claims that the supplier represented that it was owed no more than $175,967 as of Dec. 31, 2013, and that it would be rendering invoices for an additional $280,000 as of June 30, 2014, for work previously performed. The supplier then rendered additional invoices for $738,524, many of which were paid on the basis of the earlier representations, and that these payments were facilitated by the former COO. The company alleges that the supplier purposely did not provide full disclosure and concealed the true facts from Urban and its accounting personnel, that the company relied on these representations in its financial reporting and in raising capital, and that it has suffered damages as a result.

The company is claiming general damages, specific, punitive and exemplary damages, costs, and interest. The time limitation for the supplier to file a response to the notice of civil claim has not yet expired.