Mr. John Farlinger reports

URBAN COMMUNICATIONS INC. ANNOUNCES SETTLEMENT OF LITIGATION

Urban Communications Inc., and three of its current directors and officers, have settled three separate lawsuits with a former director and chief operating officer of the company, and companies that he controls. These lawsuits included:

• Claims by the former director and officer of alleged misconduct, and alleged fraudulent activity against the company, and three of its current directors and officers;
• A claim by Urban against a company owned by the former director and officer that was also a supplier to the company claiming that the supplier did not provide services for which it billed the company, or those billings were inflated or unauthorized, and that it made misrepresentations concerning the amounts owing;
• A claim by companies owned by the former director and officer against a current director and officer for repayment of loans.

All of those actions were dismissed by consent without costs as if dismissed on their merits after a trial and mutual releases have been signed by all parties.

Due to the timing of the settlement, its effect has not been reflected in the company's third quarter statements filed on Nov. 30, 2015, however, after provision for legal costs, the company expects a net gain on its income statement and a positive effect on its balance sheet of close to $150,000. In addition, the company avoids substantial legal costs of separate trials and the disruption to operations that those proceedings would cause.