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 ended September 30, 2002

[ ]		Transition Report under Section 13 or 15(d) of the Exchange Act

For the transition period from _________ to _________

Commission File Number 0-32497

UDATE.COM, INC.

(Exact Name of Small Business Issuer as Specified in Its Charter)


Delaware (State or Other Jurisdiction of Incorporation or Organization)		33-0835561 (I.R.S. Employer Identification No.)

New Enterprise House, St Helens Street,
Derby, England DE1 3GY
(Address of Principal Executive Offices)

+44 (0) 1332 268700
(Issuer’s Telephone Number, Including Area Code)

As of October 22, 2002, there were 25,251,163 shares of Registrant’s Common Stock, $0.001 par value, outstanding.

Transitional Small Business Disclosure Format: Yes [ ] No [X]

TABLE OF CONTENTS


PART I
	Condensed Consolidated Balance Sheets
	Condensed Consolidated Statements of Operations (unaudited)
	Condensed Consolidated Statements of Cash Flows (unaudited)
	Notes to the Condensed Consolidated Financial Statements, September 30, 2002 (unaudited)
	Item 2. Management’s Discussion and Analysis or Plan of Operations.
	Item 3. Controls and Procedures
	PART II.
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
CERTIFICATIONS
EXHIBITS INDEX
Employment Contract dated August 13, 2002
Agreement for Lease dated October 14, 2002
Certification of CEO
Certification of CFO

UDATE.COM, INC. AND SUBSIDIARIES
INDEX


		Page No.


PART I.	FINANCIAL INFORMATION

Item 1.		Financial Statements

		Condensed Consolidated Balance Sheets September 30, 2002 (unaudited) and December 31, 2001.	3

		Condensed Consolidated Statements of Operations - Three and Nine Months ended September 30, 2002 and 2001 (unaudited)	5

		Condensed Consolidated Statements of Cash Flows - Three and Nine Months ended September 30, 2002 and 2001 (unaudited)	6

		Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.		Management’s Discussion and Analysis or Plan of Operation	16

Item 3.		Controls and Procedures	36

PART II.	OTHER INFORMATION

Item 1.		Legal Proceedings	37

Item 2.		Changes in Securities and Use of Proceeds	37

Item 3.		Defaults upon Senior Securities	37

Item 4.		Submission of Matters to a Vote of Security Holders	37

Item 5.		Other Information	37

Item 6.		Exhibits and Reports on Form 8-K	37

		Signatures	38

		Exhibit Index	41

PART I
Financial Information

UDATE.COM, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets


				(unaudited)
				September 30,		December 31,
				2002		2001

ASSETS
Current assets:
	Cash and cash equivalents			$	6,330,782	$	4,325,580
	Trade accounts receivable				702,585		492,303
	Due from officers and employees				87,899		79,170
	Prepaid expenses				312,864		229,247
	Deferred tax asset				764,406		1,309,168

		Total current assets			8,198,536		6,435,468

Restricted cash					3,359,139		—
Tangible fixed assets:
	Computer and office equipment				3,809,192		2,665,177
	Software development costs				744,818		—
	Less: accumulated depreciation
	Computer and office equipment				1,818,420		1,457,172
	Software development costs				—		—

	Net tangible fixed assets				2,735,590		1,208,005

Intangible assets:
	Goodwill				10,995,499		10,995,499
	Kiss.com trade name				11,143,000		11,143,000
	Less: accumulated amortization
	Goodwill				824,662		824,662
	Kiss.com trade name				1,671,447		835,725

			Total intangible assets		19,642,390		20,478,112

			Total assets		33,935,655		28,121,585

LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
	Current portion of obligations under capital leases			$	—	$	72,002
	Accounts payable and accrued liabilities				4,219,411		2,013,209
	Provision for restructuring costs				248,088		929,614
	Deferred revenue				3,588,105		2,942,462
	Note payable				—		2,606,326
	Income tax payable				1,739,412		—
	Other current liabilities				161,169		805,346

			Total current liabilities		9,956,185		9,368,959


Long term liabilities:
	Obligations under capital leases, excluding current portion			—			27,246
	Deferred revenue			—			54,340
	Deferred tax liability			2,816,563			2,954,781
	Provision for restructuring costs			20,328			186,037

				2,836,891			3,222,404

		Total liabilities	$	12,793,076		$	12,591,363

Stockholders’ equity (deficit):
	Common stock $0.001 par value; authorized 150,000,000 and 50,000,000 at September 30, 2002 and December 31, 2001, respectively; issued and outstanding 25,251,163 and 24,771,202 at September 30, 2002 and December 31, 2001, respectively		$	25,252		$	24,771
	Additional paid-in capital			23,492,090			22,533,534
	Retained deficit			(2,416,356	)		(7,069,676	)
	Accumulated other comprehensive income — cumulative translation adjustment			41,593			41,593

		Total stockholders’ equity		21,142,579			15,530,222

		Total liabilities and stockholders’ equity	$	33,935,655		$	28,121,585

The accompanying notes are an integral part of these condensed consolidated financial statements.

UDATE.COM, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (unaudited)


			Three months ended September 30,				Nine months ended September 30,

			2002		2001		2002		2001

Revenues			$	10,643,837	$	6,620,863	$	29,164,319	$	12,376,423
Operating expenses:
	Selling, general and administrative expenses			2,566,514		2,414,863		7,999,277		5,675,492
	Advertising expense			4,088,190		2,172,926		11,650,063		4,696,385
	Depreciation			300,322		194,041		803,974		536,475
	Amortization of goodwill and intangible assets			278,575		1,039,068		835,725		2,076,606

		Total operating expenses		7,233,600		5,820,898		21,289,038		12,984,958

Net income (loss) before interest and income taxes				3,410,237		799,965		7,875,281		(608,535	)
Interest income				18,690		3,565		43,997		12,635
Interest expense				1,381		279,581		121,296		290,968

Net income (loss) before income taxes				3,427,546		523,949		7,797,982		(886,868	)
Income taxes				1,533,344		—		3,144,662		—

Net income (loss)			$	1,894,202	$	523,949	$	4,653,320	$	(886,868	)

Basic earnings per share				0.08		0.02		0.19		(0.04	)
Diluted earnings per share				0.07		0.02		0.17		(0.04	)
Weighted average number of shares used in calculation of basic earnings per share				25,225,821		24,590,012		25,142,843		22,518,996
Weighted average number of shares used in calculation of diluted earnings per share				26,708,000		24,590,012		27,100,575		22,518,996

The accompanying notes are an integral part of these condensed consolidated financial statements.

UDATE.COM, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited)


		Three months ended September 30,						Nine months ended September 30,

		2002			2001			2002			2001

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net income (loss)	$	1,894,202		$	523,949		$	4,653,320		$	(886,868	)
	Restricted cash		(556,490	)		—			(3,359,139	)		—
	Depreciation of plant and equipment		300,322			194,041			803,974			536,475
	Amortization of goodwill and intangible assets		278,575			1,039,068			835,725			2,076,606
	Stock compensation expense		—			10,641			—			24,829
	Interest paid via issuance of stock		—			186,137			82,966			186,137
	Decrease (increase) in trade accounts receivable, amounts due from officers and employees and prepaid expenses and deferred tax		(496,611	)		(177,299	)		242,134			(145,417	)
	Increase in accounts payable and accrued liabilities, deferred revenue, amounts due to officers and directors, other current liabilities and deferred tax		445,822			141,543			2,907,283			533,272

Net cash provided by operating activities			1,865,820			1,918,080			6,166,263			2,325,034

CASH FLOWS USED IN INVESTING ACTIVITIES:
	Cash acquired with Kiss.com, Inc		—			—			—			49,483
	Costs associated with the acquisition of Kiss.com		—			(25,334	)		—			(520,216	)
	Software development costs		(415,674	)		—			(744,818	)		(128,285	)
	Capital expenditure		(46,468	)		(46,383	)		(1,586,740	)		(224,366	)

Net cash used in investing activities			(462,142	)		(71,717	)		(2,331,558	)		(823,384	)


CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
	Repayment of capital lease obligations		(12,745	)		(32,538	)		(99,248	)		(80,509	)
	Loan note repayment		—			(796,305	)		(2,606,326	)		(896,305	)
	Proceeds from issuance of common stock		149,471			—			876,071			—

Net cash provided by (used in) financing activities			136,726			(828,843	)		(1,829,503	)		(976,814	)

Net increase in cash and cash equivalents			1,540,404			1,017,520			2,005,202			524,836
Cash and cash equivalents at beginning of period			4,790,378			957,682			4,325,580			1,450,366

Cash and cash equivalents at end of period		$	6,330,782		$	1,975,202		$	6,330,782		$	1,975,202

Cash paid for interest during the period was $1,381 (2001: $87,071) and cash paid for income taxes during the period was $998,707 (2001: $nil)

The accompanying notes are an integral part of these condensed consolidated financial statements.

uDate.com, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements, September 30, 2002 (unaudited)

Note 1. Basis of Presentation

The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the accompanying interim unaudited condensed consolidated financial statements contain all material adjustments consisting only of normal recurring adjustments necessary to present fairly the consolidated financial position, the consolidated results of operations, the changes in stockholders’ equity and cash flows of uDate.com, Inc., a Delaware corporation (the “Company”), and subsidiaries for the interim periods presented.

The results of the three months ended September 30, 2002 and nine months ended September 30, 2002 are not necessarily indicative of the results of operations for the full year. These interim unaudited condensed consolidated financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Form 10-KSB filed with the Securities and Exchange Commission (the “Commission”) on March 28, 2002 and the Company’s Forms 10-QSB filed with the Commission on May 15, 2002 and August 14, 2002.

Effective January 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Statement 142 requires that any goodwill and any intangible asset determined to have an indefinite life should not be amortized, but should be evaluated for impairment on at least an annual basis in accordance with the provisions of Statement 142. Statement 142 also requires that intangible assets with definite useful lives be amortized over their estimated useful lives to their estimated residual values and be reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Excluding the impact of amortization of goodwill, net income for the periods would have been as follows:


	Three months ended September 30,				Nine months ended September 30,

	2002		2001		2002		2001

Reported net income (loss)	$	1,894,202	$	523,949	$	4,653,320	$	(886,868	)
Add back amortization of goodwill		—		1,039,068		—		2,076,606

Net income before amortization of goodwill	$	1,894,202	$	1,563,017	$	4,653,320	$	1,189,738

Reported basic earnings per share		0.08		0.02		0.19		(0.04	)
Reported diluted earnings per share		0.07		0.02		0.17		(0.04	)
Goodwill amortization per basic share		—		0.04		—		0.09
Goodwill amortization per diluted share		—		0.04		—		0.09
Basic earnings per share before amortization of goodwill		0.08		0.06		0.19		0.05
Diluted earnings per share before amortization of goodwill		0.07		0.06		0.17		0.05

For the three months ended September 30, 2001 and nine months ended September 30, 2001, no distinction was made between amortization of intangibles and amortization of goodwill, as the Company had yet to finalize its valuation analysis of the assets acquired in the acquisition of Kiss.com. For those periods all amortization was classified as goodwill.

The Company capitalizes certain software development costs after technological feasibility has been established. These costs will be amortized over the economic life of the software application. During the three months ended September 30, 2002, the Company continued capitalizing software development costs related to the Company’s next generation application, the development of which commenced during the three months ended June 30, 2002. Costs capitalized in the three months ended September 30, 2002 amounted to $415,674 (year to date: $744,818), which comprised a proportion of the total employment costs of employees involved in the development work as well as other costs directly incurred in the development.

Note 2. Nature of Business

The Company’s operations, which are all within the Internet dating segment, are split across two Web properties:

	•		uDate.com Limited (“uDate-UK”), a United Kingdom (“UK”) based company providing Internet dating services on a global basis.

	•		Kiss.com, Inc. (“Kiss.com”), a Delaware corporation, also providing Internet dating services on a global basis.

Revenues are derived principally from the sale of membership subscriptions that allow a paying member to contact and communicate with other members using the Web sites’ private e-mail and messaging services.

For the three months ended September 30, 2002, revenue and net income before income taxes are derived as follows:


	For the three months ended September 30, 2002

	uDate.com
	Limited		Kiss.com, Inc.		Total

Revenues	$	4,878,591	$	5,765,246	$	10,643,837
Net income before interest, amortization, depreciation, non-allocated costs and income taxes	$	3,706,540	$	1,096,899	$	4,803,439
Amortization and depreciation					$	(578,897	)
Non-allocated costs and interest					$	(796,996	)

Net income before income taxes					$	3,427,546

For the nine months ended September 30, 2002, revenue and net income before income taxes are derived as follows:


	For the nine months ended September 30, 2002

	uDate.com
	Limited		Kiss.com, Inc.		Total

Revenues	$	13,368,569	$	15,795,750	$	29,164,319
Net income before interest, amortization, depreciation, non-allocated costs and income taxes	$	9,745,308	$	3,061,146	$	12,806,454
Amortization and depreciation					$	(1,639,699	)
Non-allocated costs and interest					$	(3,368,773	)

Net income before income taxes					$	7,797,982

Note 3. Acquisitions

On March 29, 2001, the Company completed the acquisition of Kiss.com, a privately held Washington corporation. Kiss.com operated a picture personals service. As a result of the acquisition, Kiss.com became a wholly-owned subsidiary of uDate.com, Inc. and uDate.com, Inc. issued 6,249,998 shares of its common stock, along with notes payable for an aggregate principal amount of $5,000,000 (the “Kiss.com Notes”), in exchange for all of the outstanding shares of Kiss.com. The acquisition was accounted for under the purchase method of accounting, and was valued at approximately $19.6 million, including transaction costs.

A summary of the purchase price for the acquisition is as follows:


Fair value of common stock issued	$	14,107,138
Notes payable	$	5,000,000

	$	19,107,138
Direct acquisition costs	$	528,384

Total purchase price	$	19,635,522

The purchase price has been allocated as follows:


Current assets acquired	$	29,095
Cash	$	49,483
Equipment	$	206,492
Non-current assets acquired	$	41,342
Liabilities	$	(1,456,289	)
Deferred tax liability	$	(4,187,100	)
Goodwill	$	10,995,499
Customer base	$	2,814,000
Kiss.com trade name	$	11,143,000

Total	$	19,635,522

The amount shown above as goodwill represents the excess of purchase price over the value of the identifiable net assets acquired, including identified intangible assets.

Goodwill was amortized on a straight-line basis over its estimated useful life of ten years until December 31, 2001. From January 1, 2002, goodwill is not being amortized, but instead is reviewed annually for impairment in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

The customer base was amortized over its estimated useful life of nine months.

The Kiss.com trade name is being amortized on a straight-line basis over its estimated useful life of ten years.

Note 4. Liquidity

As of September 30, 2002, the Company had unrestricted cash and cash equivalents of $6,330,782 and restricted cash of $3,359,139. The Company believes that its current unrestricted cash balance, together with its projected operating results and cash flows, will be sufficient to meet its liquidity needs for the next 12 months and, accordingly, has prepared its financial statements assuming that the Company will continue as a going concern.

The Company does not currently have a line of credit with a commercial bank. Such a credit facility may be difficult to obtain in the short-term with the Company’s historical operating results.

In order to obtain additional funds in the future, the Company may need to seek additional equity capital, which would be dilutive to current stockholders.

On the basis of its actual position as at September 30, 2002 and forecasts for the remainder of 2002, the Company anticipates that it will be able to fund its operating expenses in 2002 with the cash flow from its operations.

Restricted cash of $3,359,139 on the accompanying balance sheet consists of funds held on deposit with financial institutions in connection with credit card merchant services agreements. Restricted cash is presented separately from cash and cash equivalents in the consolidated statements of cash flows.

Note 5. Earnings Per Share

Basic earnings (loss) per share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period, excluding the effect of any dilutive potential common stock. Diluted EPS reflects the potential dilution in the earnings of an entity that could occur as a result of any potential common stock outstanding during the period.

For the periods presented herein, basic EPS differs from diluted EPS due to the inclusion in the calculation of diluted EPS of 1,482,179 and 1,957,732 potential common shares related to employee stock options and other options and warrants for the three months ended September 30, 2002 and the nine months ended September 30, 2002, respectively.

For the three months ended September 30, 2001 and nine months ended September 30, 2001, basic EPS is the same as diluted EPS as the effect of the potential common shares was anti-dilutive.

Note 6. Stock Option Agreements

During the quarter ended September 30, 2002, the Company granted to certain officers and employees an aggregate of 495,000 options to purchase common stock of the Company at a weighted average exercise price of $2.08 per share.

Stock option activity during the periods indicated is as follows:


	Number of			Weighted average
	Shares			exercise price

Balance at December 31, 2000		1,200,000		$	7.50
Granted		5,470,000		$	1.70
Exercised		(40,000	)	$	1.94

Balance at December 31, 2001		6,630,000		$	2.74
Granted		100,000		$	3.25
Exercised		(310,000	)	$	1.94
Expired		(70,000	)	$	1.94

Balance at March 31, 2002		6,350,000		$	2.80
Granted		—			—
Exercised		(65,000	)	$	1.93

Balance at June 30, 2002		6,285,000		$	2.81
Granted		495,000		$	2.08
Exercised		(79,500	)	$	1.88

Balance at September 30, 2002		6,700,500		$	2.77

Note 7. Income Taxes

Income tax for the three-month periods ended September 30, 2002 and 2001, and for the nine-month periods ended September 30, 2002 and 2001 differed from amounts computed by applying the UK income tax rate of 30% to pretax income from continuing operations as a result of the following:


		Three months to September 30,					Nine months to September 30,

		2002		2001			2002		2001

Expected tax expense (credit)		$	1,028,262	$	157,185		$	2,339,394	$	(266,060	)
Increase (reduction) in income taxes resulting from:
	Change in the valuation allowance		—		(157,185	)		—		266,060
	State taxes (less Federal tax benefit)		484,975		—			484,975		—
	Non-deductible legal expenses relating to a transaction the Company elected not to pursue		—		—			249,797		—
Other			20,107		—			70,497		—

Total		$	1,533,344	$	—		$	3,144,662	$	—

The significant components of deferred tax assets and deferred tax liabilities at September 30, 2002 and December 31, 2001 are as follows:


		September 30,			December 31,
		2002			2001

Deferred tax assets
	Net operating loss carryforwards	$	764,406		$	1,309,168
	Non-compete payment		—			112,500
	Other		6,000			6,000
	Plant and equipment		18,902			18,902

	Net deferred tax assets		789,308			1,446,570

Deferred tax liabilities Trade names			(2,841,465	)		(3,092,183	)

Total gross deferred tax liabilities			(2,841,465	)		(3,092,183	)

Net deferred tax liabilities			(2,052,157	)		(1,645,613	)

The deferred tax assets and liabilities are considered to be current unless otherwise stated.

As of September 30, 2002, tax losses in the amount of $2,259,597 are carried forward. These tax losses arise in the USA and are available to offset future federal taxable income, if any, through 2021.

As of September 30, 2002, a balance sheet liability of $1,739,412 was held in relation to income taxes payable.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred tax asset, the Company will need to generate future taxable income of approximately $2.3 million prior to the expiration of the net operating loss carryforwards in 2021. Taxable income for the years ended December 31, 2001 and 2000 was $nil and $nil, respectively. Based on the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of those deductible differences. The amount of the deferred tax asset considered realizable, however, could be reduced if estimates of future taxable income during the carryforward period are reduced.

Note 8. Recent Accounting Pronouncements

Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs, will be effective for the Company for the year commencing January 1, 2003. The Company does not expect the standard to have a material effect on its financial statements.

Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets, is effective for the Company for the year commencing January 1, 2002. The standard did not have a material effect on the Company’s financial statements.

Statement of Financial Accounting Standards No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Correction, will be effective for the Company for the year commencing January 1, 2003. The standard rescinds Statement of Financial Accounting Standards No. 4, Reporting Gains and Losses from Extinguishment of Debt; Statement of Financial Accounting Standards No. 64, Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements; Statement of Financial Accounting Standards No. 44, Accounting for Intangible Assets of Motor Carriers; and amends Statement of Financial Accounting Standards No. 13, Accounting for Leases. The Company does not expect the standard to have a material effect on its financial statements.

Note 9. Shareholders’ Equity

UDATE.COM, INC. AND SUBSIDIARIES
Statement of Shareholders’ Equity and Other Comprehensive Income
Year ended December 31, 2001, the three month periods ended March 31, 2002, June 30, 2002 and
September 30, 2002


											Accumulated
											other		Total
		Number		Common		Additional		Retained			comprehensive		stockholders'
		of shares		stock		capital		earnings			income		equity

Balances at December 31, 2000			18,255,000	$	18,255	$	7,963,157	$	(6,708,779	)	$	41,593	$	1,314,226
Net loss for the year			—		—		—		(360,897	)		—		(360,897	)
Warrants and options granted to non-employees for services			—		—		42,564		—			—		42,564
Shares issued in connection with:
	Acquisition of Kiss.com		6,249,998		6,250		14,100,888		—			—		14,107,138
	Loan note interest following the acquisition of Kiss.com		226,204		226		349,365		—			—		349,591
	Exercise of stock options		40,000		40		77,560		—			—		77,600

Balances at December 31, 2001			24,771,202		24,771		22,533,534		(7,069,676	)		41,593		15,530,222
Net profit for the 3 month period			—		—		—		734,121			—		734,121
Shares issued in connection with:
	Loan note interest following the acquisition of Kiss.com		25,461		26		82,940		—			—		82,966
	Exercise of stock options		310,000		310		601,090		—			—		601,400

Balances at March 31, 2002			25,106,663		25,107		23,217,564		(6,335,555	)		41,593		16,948,709
Net profit for the 3 month period			—		—		—		2,024,997			—		2,024,997
Shares issued in connection with:
Exercise of stock options			65,000		65		125,135		—			—		125,200

Balances at June 30, 2002			25,171,663	$	25,172	$	23,342,699	$	(4,310,558	)	$	41,593	$	19,098,906
Net profit for the 3 month period			—		—		—		1,894,202			—		1,894,202
Shares issued in connection with:
Exercise of stock options			79,500		80		149,391		—			—		149,471

Balances at September 30, 2002			25,251,163	$	25,252	$	23,492,090	$	(2,416,356	)	$	41,593	$	21,142,579

Special Note Regarding References

References in this Quarterly Report on Form 10-QSB to www.udate.com, www.kiss.com, any variations of the foregoing, or any other uniform resource locator, or URL, are inactive textual references only. The information on uDate’s Web site, Kiss’ Web site and any other Web site is not incorporated by reference into this Quarterly Report on Form 10-QSB and should not be considered to be a part of this document.

Item 2. Management’s Discussion and Analysis or Plan of Operation.

This report includes forward-looking statements. Any statement in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of those words or other comparable terminology. Forward-looking statements in this report include:

	•		forecasts of the growth of our market, and our ability to capitalize on such growth;

	•		statements regarding our profitability and growth strategy; and

	•		statements regarding our future revenues, our expense levels and our liquidity and capital resources.

Forward-looking statements involve risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. For a discussion of factors that could cause actual results to differ, please see the discussion under “Risk Factors” contained in this report. Any forward-looking statements in this report represent our views as of the date of this report, and we disclaim any duty to update these statements, even if subsequent events cause our views to change.

Any of such statements and this discussion should be read in conjunction with the Company’s unaudited consolidated financial statements included herein, the Company’s Form 10-KSB filed with the Securities and Exchange Commission (the “Commission”) on March 28, 2002 and the Company’s Forms 10-QSB filed with the Commission on May 15, 2002 and August 14, 2002.

In this report, the “Company”, “we”, “us” and “our” refer to uDate.com, Inc., a Delaware corporation.

Overview

uDate.com, Inc. is an online personals business that provides adults with a secure, effective environment for meeting other adults. The Company provides a global service through two leading Web properties: uDate.com (“uDate”) and Kiss.com (“Kiss”). The Company is a “pure play” Internet business and derives substantially all of its revenues from the sale of paying memberships.

The Company’s main office is located in Derby, England. The Company’s Web infrastructure, including its server hardware and software application, is housed with IBM in Secaucus, New Jersey. The uDate and Kiss Web sites are available globally under the uniform resource locators (URLs) www.udate.com and www.kiss.com, respectively. As of September 30, 2002, the Company had approximately 13 million members in more than 50 countries world-wide. The Company had 237,000 paying members during September 2002; this figure represents the total number of paying members who had a subscription at any point during that month. The Company’s principal markets are the US, UK and continental Europe.

The US online personals market has evolved over the last 6 years. Until recently, the market was fragmented but is now consolidating as the main competitors make acquisitions and tie up the major available routes for online personals services to reach large numbers of potential customers by establishing relationships with the major Internet portals, search engines and Internet service providers (or ISPs). The recognised industry leader is Match.com, a subsidiary of Ticketmaster. Other companies competing in the online personals market include Yahoo! Personals, Lavalife.com, Matchmaker.com, Cupidjunction.com, Datingclub.com, Date.com and Americansingles.com.

The Company attracts customers to its Web sites through its affiliate program and its “integrated content” relationships and by purchasing targeted advertising on select Web sites. Based on an analysis of the sources of traffic to its Web sites, the Company believes that it is attracting a growing proportion of its visitors by reference or word-of-mouth.

uDate and Kiss members access the Company’s Web sites by Web browsers such as Microsoft’s Internet Explorer and Netscape Navigator. Members interface with the Company’s server hardware and software application, including both Web and database servers, which share information among members and enable instantaneous interaction between members.

The uDate and Kiss Web sites allow members to register free of charge. Free membership entitles a member to build a personal profile that is visible to other members and to send up to three free emails to other members. The personal profile includes detailed demographic data, photographs and a personal description. Members are able to visit the Web sites at any time and identify other members whom they might like to meet. Other than the three free emails, the Company operates a “pay to communicate” business model. The principal difference between membership generally and paying membership is that paying members may contact numerous other paying members through the uDate and Kiss Web sites and may initiate contact with non-paying members. Non-paying members may not read messages from other members or reply to messages. This Quarterly Report uses the term “paying member” or “subscriber” to denote a person who has purchased a subscription from the Company and the term “registered member” or “non-paying member” to denote a person who has not agreed to pay the Company but who has registered with the Company and created a personal profile.

The Company’s operations are supported by 24-hour customer service. The customer service team receives and responds to members’ general inquiries by e-mail and billing inquiries by telephone.

Services

The uDate and Kiss Web sites provide a wide range of product features that enable members to find potential friends. These include:

	•		Who’s On — a list of members who are logged on and active on the Web site at that moment in time;

	•		Match — a user-driven tool that enables members to search the entire membership database using up to 33 elements of demographic and psychographic criteria. A range of Matches are supported, including 1-Way, 2-Way, Online Users and New Users;

	•		Encounters — a list of members who have shown an interest in the user’s profile, along with the type of interest shown;

	•		My uDate/Kiss — a summary of the member’s profile with hints and tips on how to get noticed. This feature also provides a number of lists of other members who may be of interest to the user;

	•		Gallery — a summary of members with new or revised photographs; and

	•		E-mail prompts — all members are provided with system-generated e-mail prompts and alerts about new or matching members who may be of interest.

Paying members have access to two additional product features that enable them to communicate with other members:

	•		Whispers - an integrated instant-messaging product which enables paying members to hold up to 30 real-time, discreet one-on-one conversations with other paying members; and

	•		Private E-mail - an HTML-based private e-mail system.

The Company derives substantially all of its revenues from the sale of paying memberships. Members may subscribe to enable unlimited communication with other paying members and to initiate contact with non-paying members. Subscription plans are currently available for periods of one month, three months and six months. Subscription plans generally renew automatically on a monthly basis upon the expiration of the subscription period. A one-month subscription currently costs $24.95. Free memberships do not have a fixed duration or term and may be cancelled by the member at any time.

The Company is currently developing a next generation application, which is expected to support multiple Web properties, each having different look, feel and functionality. In addition, the application is expected to support different languages and have enhanced introduction and matching capabilities.

Critical Accounting Policies

The Company has identified the following as critical accounting policies to the Company: valuation and impairment of acquired intangible assets and goodwill and realization of deferred tax assets. Critical accounting policies are those accounting policies that are both most important to the portrayal of a company’s financial condition and results, and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Valuation and Impairment of Acquired Intangible Assets and Goodwill

The Company recognized intangible assets of $13,957,000 and goodwill of $10,995,499 in connection with its acquisition of Kiss.com on March 29, 2001. At that time the intangible assets consisted of Kiss.com’s customer base and the Kiss.com trade name. Goodwill consisted of the excess of the purchase price for Kiss.com over the value of the identifiable net assets acquired, including identified intangible assets. The Company fully amortized the customer base in 2001 over its estimated useful life of nine months. The Company is amortizing the Kiss.com trade name on a straight-line basis over its estimated useful life of ten years. Until December 31, 2001, the Company amortized goodwill on a straight-line basis over its estimated useful life of ten years. Beginning on January 1, 2002, the Company is not amortizing goodwill but instead is reviewing it annually for impairment in accordance with Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. The Company used a third-party appraiser to determine the fair value and useful economic life of the intangible assets and goodwill acquired pursuant to the acquisition of Kiss.com. The determination of the fair value and useful economic life of the intangible assets is subjective and requires estimates about

future cash flows of the Kiss.com business and other factors. If the Company is required to revise these estimates, the amount of amortization expense and possible impairment expense that the Company will recognize in future periods could be materially increased or decreased.

In assessing the recoverability of the Company’s intangible assets and goodwill, the Company must make assumptions regarding estimated future cash flows related to these assets and other factors to determine the fair value of these assets. If these estimates or their related assumptions change in the future, the Company may be required to record substantial impairment charges for these assets.

Realization of Deferred Tax Assets

Capitalization of Software Development Costs

The Company capitalizes certain software development costs after technological feasibility of the software application has been established. The Company will then amortize these costs over the expected economic life of the software application. Software development costs capitalized in the three and nine months ended September 30, 2002 amounted to $415,674 and $744,818 respectively, which related to a proportion of the wages and salaries of employees involved in the development work and other direct development costs. Costs will be amortized from the point at which the application is made available to third parties for sale. In assessing the value of the software development costs the Company must make certain assumptions about the technical feasibility of the software application and the expected economic life of the application. If the Company changes these assumptions in the future, the amount of amortization expense that the Company will recognize in future periods could be materially increased or decreased.

Results of Operations for the Three and Nine Months Ended September 30, 2002 and 2001

The acquisition of Kiss.com was completed on March 29, 2001. Accordingly, the results of operations for the nine months ended September 30, 2001 include six months of operating results of Kiss.com.

Unless specifically discussed below, there were no material changes from period to period in line items of the financial statements. In addition, unless specifically discussed below, there are no seasonal aspects that had a material effect on the Company's financial conditions or results of operations.

Revenues

Total revenues for the three months ended September 30, 2002 were $10,643,837 compared to $6,620,863 for the three months ended September 30, 2001, an increase of 61%. The growth in membership revenues continues to be primarily due to the continued greater awareness of the uDate and Kiss Web sites as a consequence of targeted marketing activities and the impact of automatic renewal of the members’ subscriptions upon the expiration of the subscription period. The automatic renewal process was introduced on the uDate Web site on May 23, 2001 and was in effect on the Kiss Web site prior to the Company’s March 2001 acquisition of Kiss.com.

Total revenues for the nine months ended September 30, 2002 were $29,164,319 compared to $12,376,423 for the nine months ended September 30, 2001, an increase of 136%. The growth in membership revenues was due to the acquisition of Kiss.com on March 29, 2001 as well as the continued greater awareness of the uDate and Kiss Web sites as a consequence of targeted marketing activities and the impact of automatic renewal of the members’ subscriptions upon the expiration of the subscription period.

Membership revenues for the three and nine months ended September 30, 2002 comprised 99.9% of total revenues returned in the periods.

During the three months ended September 30, 2002 approximately 2 million barter advertisements were displayed on the uDate Web site, and consequently for each advertisement displayed, an advertisement for uDate appeared on a third party’s web site. Advertising revenue and advertising costs in respect of this arrangement have not been recognized on the basis that it is not possible to determine a fair

value for the advertising exchanged in the transaction. The Company bartered advertisements with only one third party site, and the number of advertisements exchanged is not material within the overall context of advertising purchased during the period.

Selling, General and Administrative Expense

Total selling, general and administrative expenses for the three months ended September 30, 2002 were $2,566,514 compared to $2,414,863 for the three months ended September 30, 2001, an increase of 6%. The overall increase in expenses is comprised of increased operating expenses of the business associated with the 61% increase in revenues over the period, offset by the capitalization of software development costs during the period.

Total selling, general and administrative expenses for the nine months ended September 30, 2002 were $7,999,277 compared to $5,675,492 for the nine months ended September 30, 2001, an increase of 41%. Significant components of the increase include a) one-time costs associated with a transaction the Company chose not to pursue of $973,452, b) operating expenses in relation to Kiss.com which was acquired on March 29, 2001 and c) an increase in the operating costs of the business associated with the 136% increase in revenues over the period.

Significant components of selling, general and administrative expense in the nine months ended September 30, 2002 include a) wages and salaries of $2,835,180, b) legal, professional, accounting and consultancy fees of $2,052,462, c) bank and transaction charges of $1,277,753, and d) Internet Service Provider charges of $864,295. Software development costs capitalized during the period amounted to $744,818, of which $639,122 related to wages and salaries and the remainder of which were direct development costs. These wages and salaries reflect a proportion of the total employment costs of employees involved in the development work based upon each employee’s percentage of time spent on the project.

Advertising Expense

Advertising expense for the three months ended September 30, 2002 was $4,088,190 compared to $2,172,926 for the three months ended September 30, 2001, an increase of 88%. The Company invested in marketing activities in order to grow its subscription revenues by attracting more potential paying members to its sites, and the increase in advertising expense is consistent with the increase in revenues over the same period.

Advertising through on-line media contributed to the majority of the 1,529,039 new registered members who joined in the three months ended September 30, 2002.

Although the Company also invested $400,000 in offline advertising throughout the period, advertising expense continues to be predominantly for online media. The Company has a number of “integrated content” relationships with portals, ISPs and online newspapers, and purchases targeted advertising on key Web properties, including portals, Web sites dedicated to alumni networks, search engines and ISPs. The Company also has an affiliate program.

Advertising expense for the nine months ended September 30, 2002 was $11,650,063 compared to $4,696,385 for the nine months ended September 30, 2001, an increase of 148%. This increase was due to advertising expenses in relation to Kiss.com which was acquired on March 29, 2001 and the Company’s continued investment in marketing activities, both online and offline, in order to grow its subscription revenues.

The Company plans to increase its advertising expenses in fiscal 2003, both on line and offline, to grow its subscription revenues and increase brand awareness.

Depreciation

Depreciation during the three months ended September 30, 2002 was $300,322, compared to $194,041 for the three months ended September 30, 2001, an increase of 55%. This increase was due to the continued capital expenditure by the Company to expand its server hardware which is housed in Secaucus, New Jersey.

Depreciation during the nine months ended September 30, 2002 was $803,974, compared to $536,475 for the nine months ended September 30, 2001, an increase of 50%.

Amortization of Goodwill and Intangible Assets

Amortization of goodwill and intangible assets relating to the acquisition of Kiss.com amounts to $278,575 for the three months ended September 30, 2002 compared to $1,039,068 for the three months ended September 30, 2001. This reduction reflects the Company’s adoption of accounting policies effective January 1, 2002, which no longer require goodwill to be amortized, but rather be subject to an annual impairment review.

Amortization of goodwill and intangible assets for the nine months ended September 30, 2002 was $835,725 compared to $2,076,606 for the nine months ended September 30, 2001. This reduction reflects the Company’s adoption of accounting policies effective January 1, 2002, which no longer require goodwill to be amortized, but rather be subject to an annual impairment review.

The purchase price for the Kiss.com acquisition, including transaction costs, was approximately $19.6 million along with the assumption of liabilities of $5.3 million. Of this, approximately $11.0 million was allocated to goodwill, $2.8 million was allocated to Kiss.com’s customer base and $11.1 million was allocated to the Kiss.com trade name. Goodwill has been amortized in the results for 2001 on a straight-line basis over its estimated useful life of ten years. The Company has adopted Statement of Financial Accounting Standards No. 142, effective January 1, 2002, which requires that, beginning January 1, 2002, goodwill will no longer be amortized but will be reviewed for impairment on an annual basis. Unamortized goodwill in the amount of $10,170,837 is subject to this annual impairment review. The Company fully amortized the customer base in 2001 over its estimated useful life of nine months. The Company is amortizing the Kiss.com trade name on a straight-line basis over its estimated useful life of ten years.

The Company has adopted the provisions of Statement of Financial Accounting Standards No.141, Business Combinations. Statement 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, as well as all purchase method business combinations completed after June 30, 2001. Statement 141 also specifies criteria which intangible assets acquired in a purchase method business combination must meet in order to be recognized and reported apart from goodwill, noting that any purchase price allocable to an assembled workforce may not be accounted for separately.

Effective January 1, 2002, the Company also adopted the provisions of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Statement 142 requires that any goodwill and any intangible asset determined to have an indefinite life should not be amortized, but should be evaluated for impairment on at least an annual basis in accordance with the provisions of Statement 142. Statement 142 also requires that intangible assets with definite useful lives be amortized over their estimated useful lives to their estimated residual values and be reviewed for impairment in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment of Disposal of Long-Lived Assets.

The Company has completed the purchase accounting analysis to allocate acquisition costs to the acquired net assets. Unamortized goodwill in the amount of $10,170,837 is subject to the transition provisions of Statements 141 and 142, including the annual impairment review.

Interest

Interest expense for the three months ended September 30, 2002 was $1,381 compared to $279,581 for the three months ended September 30, 2001. The reduction in interest expense is due to the repayment in full of the promissory notes in the aggregate principal amount of $5,000,000 issued by the Company in connection with the acquisition of Kiss.com (the “Kiss.com Notes”), on which interest charges commenced in the three months ended September 30, 2001.

Interest expense for the nine months ended September 30, 2002 was $121,296 compared to $290,968 for the nine months ended September 30, 2001. The reduction in interest expense is due to the repayment in full of the Kiss.com Notes.

Interest income for the three months ended September 30, 2002 was $18,690 compared to $3,565 for the three months ended September 30, 2001.

Interest income for the nine months ended September 30, 2002 was $43,997 compared to $12,635 for the nine months ended September 30, 2001.

Income Taxes

The income tax charge for the three months ended September 30, 2002 is $1,533,344 compared to $nil for the three months ended September 30, 2001. Income taxes for the three months ended September 30, 2002 reflect the generation of a net income in the period, as opposed to a cumulative net loss as at September 30, 2001, and the provision of to-date charges for state income taxes, in the amount of $571,502.

The income tax charge for the nine months ended September 30, 2002 is $3,144,662 compared to $nil for the nine months ended September 30, 2001. Income taxes for the nine months ended September 30, 2002 reflect the generation of a net income in the period, as opposed to a cumulative net loss during the nine months ended September 30, 2001, and the provision of to-date charges for state income taxes, in the amount of $571,502.

Net Income (Loss)

The overall net income for the three months ended September 30, 2002 is $1,894,202 compared to $523,949 for the three months ended September 30, 2001. The reason for this change is explained above.

The overall net income (loss) for the nine months ended September 30, 2002 is $4,653,320 compared to ($886,868) for the nine months ended September 30, 2001. The reason for this change is explained above.

The Company expects to increase its advertising spending during fiscal 2003, in order to grow its subscription revenues. The Company also intends to make additional technology investments during that period, including establishing a second data center.

Liquidity and Capital Resources

At September 30, 2002, the Company’s principal sources of liquidity consisted of cash of $9,689,921, compared to $4,325,580 as at December 31, 2001. This increase in cash is primarily the result of cash generated from operations and proceeds from the issuance of common stock pursuant to the

exercise of stock options, mitigated by repayments in respect of the Kiss.com Notes and capital expenditure.

Cash as at September 30, 2002 includes restricted cash of $3,359,139 (December 31, 2001: $nil) held on deposit with financial institutions in connection with credit card merchant services agreements.

The Company’s net working capital deficit decreased to ($1,732,747) at September 30, 2002 from ($2,933,491) at December 31, 2001, primarily as a result of cash generated from operations and proceeds from the issuance of common stock pursuant to the exercise of stock options, mitigated by the recognition of restricted cash as described above and the repayment of the Kiss.com Notes.

The Company expects to establish a second data center. The Company expects to fund the cost of the second data center with existing cash and the cash flow from its operations.

On the basis of the actual position as at September 30, 2002 and forecasts through 2002, the Company anticipates that it will be able to fund its operating expenses and capital expenditures for the remainder of 2002 with existing cash and the cash flow from its operations. The Company’s actual future cash requirements, however, will depend on many factors, including changes in its advertising and technology expenses, costs associated with the development and introduction of new services, and competitive pressures. The Company does not currently have a line of credit with a commercial bank. Such a credit facility may be difficult to obtain in the short-term with the Company’s historical operating results, or may not be obtainable on terms acceptable to the Company.

Accordingly, in order to obtain additional funds in the future, the Company may need to seek additional equity capital, which would be dilutive to current stockholders.

Accounts Payable and Accrued Liabilities

At September 30, 2002 accounts payable and accrued liabilities amounted to $4,219,411 compared to $2,013,209 at December 31, 2001. The significant component of this increase was an increase in accrued advertising expense due to the Company's continued investment in marketing activities, both online and offline in order to grow subscription revenues.

Recent Accounting Pronouncements

Risk Factors

Risks Related to the Company’s Financial Condition and Business Model

The Company has a limited operating history

The Company was formed in January 1999 in order to provide representation and other services to musical artists such as songwriters and performers. The Company had very limited operations and revenues, and limited business prospects, until May 23, 2000, the date of the acquisition of uDate.com Limited (“uDate-UK”).

uDate-UK was established in February 1998 to provide high quality introduction, matchmaking, relationship and dating services to Internet users. uDate-UK began commercial operation of its Internet dating service in February 1999. The Company has changed its business strategy to that of its subsidiary, uDate-UK.

On March 29, 2001, the Company acquired Kiss.com, Inc. — a picture personals Web site.

Due to the limited operating histories of each of the Company and its subsidiaries, it will be difficult for owners of the Company’s securities and persons considering an investment in the Company (collectively, “Investors”) to evaluate the business and prospects of the Company and an investment in the Company. As a new company, the Company faces risks and uncertainties relating to its ability to successfully implement its strategy. Investors must consider the risks, expenses and uncertainties that an early stage company in a new and rapidly evolving market faces. Some of these risks include:

	•		ability to sustain historical revenue growth rates;

	•		ability to increase brand awareness;

	•		managing expanding operations;

	•		competition;

	•		attracting, retaining and motivating qualified personnel;

	•		maintaining current, and developing new, relationships with portals, search engines, ISPs and other Web properties;

	•		ability to anticipate and adapt to the changing Internet market and any changes in government regulation;

	•		the level of usage of the Internet and traffic to the Company’s Web sites;

	•		continued acceptance of the Company’s products and services, including the social acceptance of Internet-based matchmaking and personals services;

	•		capital expenditure and other costs relating to the expansion of operations;

	•		the introduction of new products or services by the Company or its competitors;

	•		the mix of the services sold and the channels through which those services are sold;

	•		pricing changes; and

	•		general economic conditions and specific economic conditions in the Internet industry.

The Company may not be able to sustain profitability

For the three months ended September 30, 2002 the Company returned a net income of $1,894,202. At September 30, 2002, the Company had an accumulated deficit of approximately $2.4 million.

The Company cannot assure investors that it can sustain profitability in the future. If revenues grow at a slower rate than anticipated or decrease, or if advertising costs or other spending levels exceed expectations or cannot be adjusted to reflect slower or negative revenue growth, the Company may not be able to sustain profitability.

The Company’s business and growth will suffer if its new application does not succeed

The Company plans to introduce a new application that will change the look, feel and functionality of the Company’s Web sites. The Company may not be able to increase its revenues if the new application is not favorably received by existing members or fails to attract sufficient numbers of new members. The new application may contain design flaws or other defects that could require modifications, which may result in a loss of member confidence.

Quarterly results may fluctuate

Investors should not rely on quarterly operating results as an indication of future results because they are subject to significant fluctuations.

Fluctuations in operating results or the failure of operating results to meet the expectations of public market analysts and Investors may negatively impact the Company’s stock price. Quarterly operating results may fluctuate significantly in the future due to a variety of factors that could affect revenues or expenses in any particular quarter. Fluctuations in quarterly operating results could cause the Company’s stock price to decline. Investors should not rely on quarter-to-quarter comparisons of results of operations as an indication of future performance. Factors that may affect the Company’s quarterly results include:

	•		mismatches between resource allocation and consumer demand due to difficulties in predicting consumer demand in a new market;

	•		the demand for, and acceptance of, the Company’s Web sites, products, product enhancements and services;

	•		the timing and amount of the Company’s subscription revenues;

	•		changes in general economic conditions;

	•		the magnitude and timing of marketing initiatives;

	•		the maintenance and development of relationships with portals, search engines, ISPs and other Web properties;

	•		the introduction, development, timing, competitive pricing and market acceptance of the Company’s products and services and those of the Company’s competitors;

	•		the Company’s ability to manage anticipated growth and expansion;

	•		the Company’s ability to successfully integrate acquired operations; and

	•		technical difficulties or system downtime affecting the Internet generally or the operation of the Company’s products and services specifically.

As a result of the factors listed above and because the on-line dating and matchmaking market is still immature, making it difficult to predict consumer demand, it is possible that in future periods results of operations may be below the expectations of public market analysts and investors. This could cause the Company’s stock price to decline.

The Company’s expense levels may increase and costs may vary

The Company’s expense levels are based, in significant part, on its expectations as to future revenues and are therefore relatively fixed in the short term.

The Company’s major expenses continue to be selling and marketing costs, labor costs and technology costs. The Company anticipates that its expenses will increase as its business expands and if it makes further acquisitions. In addition, these costs may still be subject to dynamic and, from time to time, significant variation. If revenues fall below expectations in any quarter and the Company is unable to quickly reduce spending in response, its operating results would be lower than expected and the stock price may fall.

The Company’s business model is unproven and may not be adaptable to a changing market

If the Company is not able to anticipate changes in the on-line dating and matchmaking market or if the business model is not successful, the Company may not be able to expand the business or to successfully compete with other companies, which could have a material adverse effect on the Company’s business, results of operations and financial condition. The Company’s current business model depends on recurring revenues from members who subscribe for the Company’s fee-generating services (“Subscribers”).

Membership revenues depend upon (i) the conversion of new non-paying members to Subscribers; and (ii) existing Subscribers’ renewing their membership for further periods. The Company may have to change its business model if current Subscribers decide to discontinue the Company’s service and the Company is unable to replace them with new Subscribers. It is possible that the Company will be required to further adapt its business model in response to additional changes in the on-line dating and matchmaking market.

Additionally, the Company operates on a global basis with members and Subscribers in Europe and Asia, as well as North America. Changes in the economies, trade policies, and fluctuations in interest or exchange rates may have an impact on its future financial results. As the Company continues to operate more globally, seasonality may become an increasing factor in its financial performance.

Two large stockholders beneficially own approximately 65% of the Company’s stock; their interests could conflict with the Company’s; significant sales of stock held by them could have a negative effect on the Company’s stock price

Atlas Trust (Jersey) Limited and Terence Lee Zehrer beneficially owned approximately 65% of the Company’s outstanding common stock as of October 22, 2002. Mr. Zehrer is a member of the Company’s board of directors. As a result of their ownership and positions, they collectively are able to control all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. Such concentration of ownership may also have the effect of delaying or preventing a change in control of the Company. In addition, sales of significant amounts of stock held by them, or the prospect of such sales, could adversely affect the market price of our common stock.

The Company may not be able to obtain sufficient funds to grow its business and any additional financing may be on terms adverse to the interests of its stockholders

The timing, amount, terms and conditions of any additional financing required by the Company may be unattractive to the Company, and such financing may be unavailable. If the Company is able to raise additional funds and does so by issuing equity securities, holders of its common stock may experience significant dilution of their ownership interest and holders of these securities may have rights senior to those of the holders of the Company’s common stock.

If the Company obtains additional financing by issuing debt securities, the terms of these securities could limit its flexibility in making business decisions. If additional financing is not available when required or is not available on acceptable terms, the Company may be unable to fund its expansion, successfully promote its brand names, develop or enhance its products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on its business.

The Company will only be able to execute its business model if use of the Internet grows and its infrastructure is adapted to that growth

If Internet usage does not continue to grow, the Company may not be able to meet its business objectives. Increased Internet usage will depend, in large part, upon the maintenance of the Web infrastructure, such as a reliable network backbone with the necessary speed, data capacity and security, and timely development of enabling products, such as high speed modems, for providing reliable Web access and services and improved content. Internet usage may be inhibited by any of the following factors:

	•		the Internet infrastructure may not be able to support the demands placed on it, or its performance and reliability may decline as usage grows;

	•		Web sites may not be able to provide adequate security and authentication of confidential information contained in transmissions over the Internet;

	•		the Internet industry may not be able to adequately respond to privacy concerns of potential users; and

	•		Government regulation may decrease the utility of the Internet for some purposes.

The Company cannot assure investors that the Web infrastructure or Internet industry will be able to effectively respond to the demands placed on the Web by increased numbers of users, frequency of use or increased bandwidth requirements of users.

The Company may not be able to develop awareness of its brand names

The Company believes that continuing to build and maintain awareness of its brand names is critical to achieving widespread acceptance of its business and to sustain or increase the number of people who use its Web sites. Brand recognition is a key-differentiating factor among providers of on-line dating and matchmaking services, and the Company believes it could become more important as competition in its industry increases. In order to maintain and build brand awareness, the Company must succeed in its marketing efforts, provide high quality services and increase the number of members using its Web sites. If it fails to successfully protect, promote, position and maintain its brand names, incurs significant expenses in promoting its brands and fails to generate a corresponding increase in revenue as a result of

its branding efforts, or encounters legal obstacles which prevent the continued use of any of its brand names, the Company’s business, results of operations and financial condition could be materially adversely affected.

The Company may not be able to successfully introduce new or enhanced products or services

The failure of any new or enhanced products and services to achieve market acceptance and generate revenue could result in a material adverse effect on the Company’s revenues. The Company expects to introduce enhanced products and services in order to generate additional revenues, attract and retain more members to its Web sites and respond to competition. Any new or enhanced product or service introduced that is not favorably received could damage the Company’s reputation and the perception of its brand names.

Competition could cause the Company difficulty in attracting and retaining registered members and converting registered members to subscribers

The Company expects competition to continue to increase because the market poses no substantial barriers to entry for simple Web-based applications. The Company believes that its ability to compete depends upon many factors both within and beyond its control, including the following:

	•		the timing and market acceptance of new solutions and enhancements to existing solutions developed either by the Company or its competitors;

	•		customer service and support efforts;

	•		selling and marketing efforts; and

	•		ease of use, performance, price and reliability of solutions developed either by the Company or its competitors.

The Company competes with traditional dating and matchmaking services, as well as newspapers, magazines and other traditional media companies that provide dating and matchmaking services. It also competes with large Internet information hubs, or portals, such as Yahoo.com. Many of its current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources and larger customer bases than it does. These factors may allow them to respond more quickly than the Company can to new or emerging technologies and changes in customer requirements. It may also allow them to devote greater resources than the Company can to the development, promotion and sale of their products and services.

These competitors may also engage in more extensive research and development, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies. The Company cannot assure Investors that its competitors will not develop products or services that are equal or superior to its solutions or that achieve greater market acceptance than its solutions. In addition, current and potential competitors are making and are expected to continue to make strategic acquisitions or establish cooperative, and, in some cases, exclusive relationships with significant companies or competitors to expand their businesses or to offer more comprehensive solutions. Any of these competitors could cause the Company difficulty in attracting and retaining members and converting members to Subscribers and could jeopardize the Company’s existing affiliate program and relationships with portals, search engines, ISPs and other Web properties.

The short length of the average subscription requires that the Company must continually seek new subscribers to maintain its current level of revenue

The Company believes that the average length of a subscription for any on-line dating service, including those offered by uDate and Kiss, is approximately four months. The Company also believes that users of on-line dating services will often re-register on a new site following the expiration of their initial subscription on their original site, to increase their chances of a “fresh start.” This makes it difficult for the Company to have a stable customer base and requires that the Company must constantly seek new subscribers to maintain its current level of revenue.

The Company may lose business if it fails to keep pace with rapidly changing technologies and customer needs

To remain competitive, the Company must continually improve the responsiveness, functionality and features of its products and services and develop other products and services that are attractive to members. If it is unable to timely and successfully develop and introduce new services, products and enhancements to existing products in response to industry’s changing technological requirements, revenues could be materially adversely affected. New Internet-based services, products or enhancements that have been offered or may be offered in the future by the Company may contain design flaws or other defects that could require extensive modifications or result in a loss of client confidence.

The Company may lose members if the content of its Web sites is not attractive to them

The Company’s future growth depends on its ability to attract and retain members. This in turn depends in part on its ability to deliver original and compelling content to these members. The Company cannot assure Investors that its content will be attractive to Internet users. It also cannot assure Investors that it will be able to anticipate, monitor and successfully respond to rapidly changing consumer tastes and preferences to continue to attract a sufficient number of Internet users to its Web sites. Internet users can freely navigate and instantly switch among a large number of Web sites. In addition, many other Web sites offer very specific, highly targeted content. These sites could have greater appeal than the Company’s Web sites to particular groups within its target audience.

The Company’s business and growth will suffer if it is unable to hire and retain highly skilled personnel

The Company’s success depends to a significant extent upon a number of key management and technical personnel, the loss of one or more of whom could adversely affect the business. In addition, the Company believes that its future success will depend to a significant extent on its ability to recruit, hire and retain highly skilled employees for product development, selling, marketing, and customer service. Competition for such personnel in the Internet industry is intense, and there can be no assurance that the Company will be successful in attracting and retaining such personnel. Management of the Company will also be required to manage growth of the Company in a manner that requires a significant amount of management time and skill. There can be no assurance that the Company will be successful in managing any future growth or that any failure to manage such growth will not have a material adverse effect on the Company’s business, operating results or financial condition.

The Company’s future success depends to a significant degree on the skills, experience and efforts of Melvyn Morris, the Company’s Chief Executive Officer. The loss of the services of Mr. Morris could have a material adverse effect on the Company’s business, operating results and financial condition.

The Company does not currently maintain key person insurance for Mr. Morris or any other member of its management team.

In addition, though the Company has confidentiality agreements with each of its employees, if it were to lose a key employee, it cannot assure Investors that it would be able to prevent the unauthorized disclosure or use of its procedures, practices, new product development or client lists.

The Company may not be able to effectively manage its expanding operations

In order to execute its business plan, the Company must continue to grow significantly. If it is not able to expand its operations in an efficient manner, its expenses could grow disproportionately to revenues or its revenues could decline or grow at a slower rate than expected, either of which could have a material adverse effect on its business, results of operations and financial condition. The Company has recently experienced a period of rapid growth that has placed considerable demands on its managerial, operational, financial and information systems resources. The Company expects to continue to increase the scope of its operations.

The Company’s growth has placed, and its anticipated future growth, combined with the requirements the Company faces as a public company, will continue to place, a significant strain on its management, operations, systems and resources. The Company expects that it will need to continue to improve its financial and managerial controls and reporting systems and procedures, and will need to continue to expand, train and manage its workforce. The Company’s success depends to a significant extent on the ability of its executive officers and other members of senior management to operate effectively — both independently and as a group. It will also need to continue to expand and maintain close coordination among its products and technology, finance and administration and selling and marketing organizations. The Company cannot assure Investors that if it continues to grow, management will be effective in attracting and retaining additional qualified personnel, expanding its physical facilities, integrating acquired businesses or otherwise managing growth. It cannot assure Investors that its information systems, procedures or controls will be adequate to support its operations or that its management will be able to successfully offer its products and services and implement its business plan.

The failure to establish and maintain agreements and relationships with other Web properties could limit the growth of the Company’s business

The Company has entered into, and expects to continue to enter into, arrangements with third parties to increase its member base, bring traffic to its Web sites and enhance its brands. If any of the current agreements are terminated, it cannot assure Investors that it will be able to replace the terminated agreement with an equally beneficial arrangement. It also cannot assure Investors that it will be able to renew any of its current agreements when they expire or, if it is able to do so, that such renewals will be available on acceptable terms. It also does not know whether it will be successful in entering into additional agreements or that any relationships, if entered into, will be on terms favorable to the Company.

The Company may not be successful in its plan for international expansion

The Company may not be able to successfully execute its business plan in foreign markets. If revenue from international ventures is not adequate to cover its investment in those ventures, total revenues could be materially adversely affected. The Company believes that expansion into international markets through a combination of internal business expansion, strategic alliances, joint ventures and potential acquisitions will be important to continue the growth of the business. Future international operations might not succeed for a number of reasons including:

	•		difficulties in staffing and managing foreign operations;

	•		competition from local dating services and cultural and sociological attitudes toward dating services;

	•		operational issues such as longer customer payment cycles and greater difficulties in collecting accounts receivable;

	•		language and cultural differences;

	•		legal uncertainties inherent in transnational operations such as export and import regulations, tariffs and other trade barriers;

	•		taxation issues;

	•		consumer protection laws;

	•		lower level of credit card usage;

	•		unexpected changes in trading policies, regulatory requirements and exchange rates;

	•		issues relating to uncertainties of law and enforcement relating to the regulation and protection of e-commerce, content, privacy, and intellectual property; and

	•		general political and economic trends.

The Company may not be able to successfully make acquisitions of, or investments in, other companies

The Company expects its growth to continue, in part, by acquiring further complementary businesses, products, services or technologies. It expects to have discussions with companies regarding acquiring, or investing in, their businesses, products, services or technologies. The Company cannot assure Investors that it will be able to identify suitable acquisition or investment candidates. Even if it does identify suitable candidates, it cannot assure Investors that it will be able to make acquisitions or investments on commercially acceptable terms. Acquiring other businesses and technologies involves numerous risks, including:

	•		availability of financing on terms acceptable to the Company;

	•		diversion of management’s attention from other business concerns;

	•		retention of key personnel of the acquired company;

	•		entry into markets in which the Company has little or no direct prior experience;

	•		inability to identify and acquire businesses on a cost-effective basis;

	•		inability to manage and integrate acquired personnel, operations, services, products and technologies into its organization effectively; and

•

inability to retain and motivate key personnel and to retain the clients or goodwill of acquired entities.

In pursuing acquisitions, the Company may compete with competitors that may be larger and have greater financial and other resources than it has. Competition for these acquisition targets could result in increased prices. In addition, in executing the Company’s acquisition strategy, it may incur expenses without being able to identify suitable acquisition candidates. This could reduce its profitability.

The Company is dependant on third parties to process and collect its subscription receipts

All of the Company’s paying members purchase subscriptions online using electronic methods of payment such as bank debit or credit cards. The Company relies on its ability to maintain relationships with collections entities, such as acquiring banks and credit card associations in order to process and collect its subscription receipts. As online transactions are categorized as “cardholder not present” transactions, the Company is open to claims for chargebacks from individuals against alleged fraudulent charges or inappropriate billing. The Company employs fraud detection methodologies to attempt to ensure that these chargebacks remain within the levels acceptable to the collections entities. The collections entities may cease providing collections services to the company if chargebacks reach unacceptable levels. Any decision from these collections entities to discontinue providing collection services to the Company could have a material adverse effect on the Company’s business and results of operations. In addition, any failure on the part of either of these collections entities to process and collect these receipts, whether due to systems failures or breach of contractual obligation, could deprive the Company for an indefinite period of time of the funds it requires to operate its business on a daily basis.

Risks related to the Internet and the Company’s Technology Infrastructure

The Company’s technology may not be able to accommodate increased Web site traffic

To support its high level of growth it is critical that the Company scales its Web site operations to support growth and maintain acceptable levels of performance. The Company believes that the process of converting members to paying members is highly sensitive to Web site availability, performance, speed of page delivery and database operations. Any catastrophic failure at its facility could prevent it from serving its Web traffic for up to several days, and any failure of one or more of its Internet service providers may adversely affect the network’s performance.

The Company believes that its sites are among the busiest of sites on the Web. As the performance of the Company’s services are enhanced following upgrades, users typically stay on-line longer. This can make capacity planning extremely difficult, giving rise to spikes in demand for services. The long-term scalability of its current technology will be a critical factor as the Company grows.

The Company may experience reduced visitor traffic, reduced revenue and harm to its reputation in the event of unexpected network interruptions caused by system failures. Any system failure, including network, software or hardware failure, that causes an interruption in the delivery of the Company’s products and services or a decrease in responsiveness of its services could result in reduced visitor traffic, reduced revenue and could materially adversely affect its reputation and brand. The Company’s servers and software must be able to accommodate a high volume of traffic. The Company has experienced system interruptions in the past, and it believes that these interruptions will continue to occur from time to time in the future.

Any increase in demands on its servers beyond their current capacity will require it to expand and adapt its network infrastructure. If it is unable to add additional software and hardware to accommodate increased demand, it could experience unanticipated system disruptions and slower response times.

The computer and communications hardware that are used to maintain the Company’s Web sites are located at the Company’s server farm in Secaucus, New Jersey. Fire, floods, earthquakes, power loss and similar events could damage or cause interruptions in these systems. The Company does not presently have any secondary “off-site” systems.

The Company’s members may become dissatisfied by any system failure that interrupts its ability to provide its products and services to them or results in slower response times. The Company does not maintain business interruption insurance and its other insurance may not adequately compensate it for any losses that may occur due to any failures in its system or interruptions in its service.

Breaches of the Company’s network security could be costly

The Company may be required to expend capital and resources to protect against, or to alleviate, security breaches, which could reduce its profitability. A significant barrier to confidential communications over the Internet has been the need for security. If unauthorized persons penetrate its network security, they could misappropriate proprietary information or cause interruptions in its services. Misappropriation of the Company’s and its members’ proprietary information or interruptions of its services could result in reduced visitor traffic and a loss of members. Computer viruses may cause the Company’s systems to incur delays or other service interruptions and could damage its reputation and have a material adverse effect on its business, financial condition and results of operations. The inadvertent transmission of computer viruses could expose it to a material risk of loss or litigation and possible liability.

The Company’s intellectual property protection may not be adequate

The Company has developed technologies that it uses in its business. It relies primarily on a combination of common law trade secret, copyright and trademark protection and contractual provisions to protect its proprietary rights in such technologies. The Company has not yet obtained federal registrations covering all of its key marks.

The steps the Company has taken to protect its proprietary rights may not be adequate to deter misappropriation of proprietary information. The Company may not be able to detect unauthorized use of its proprietary information or take appropriate steps to enforce its intellectual property rights. In addition, the validity, enforceability and scope of protection of intellectual property in Internet-related industries are uncertain and still evolving. The laws of other countries in which the Company markets or may market its services in the future are uncertain and may afford little or no effective protection of its intellectual property. If the Company resorts to legal proceedings to enforce its intellectual property rights, the proceedings could be burdensome and expensive. The proceedings could also involve a high degree of risk.

Defending against intellectual property infringement claims could be time consuming and expensive, and the Company may be liable for infringing on the intellectual property rights of others. If the Company is not successful in defending against these claims, it could be subject to significant damages and the disruption of its business.

At this time the Company has not filed any applications for patents, copyrights or trademarks for its technologies. Patents, trademarks and copyrights may become important in the protection of the

commercial viability of uDate’s and Kiss’ products and the failure to obtain such patent protection could have an adverse effect on the commercial viability of such products. The Company’s success, therefore, may in part depend on its ability to obtain patents, trademarks and copyrights or licenses to such intellectual property in the future. It is not possible to anticipate the breadth or degree of protection that patents, trademarks and copyrights would afford any product or the underlying technologies. There can be no assurance that any patents, trademarks or copyrights issued or licensed to the Company will not be successfully challenged in the future or that any of the Company’s products will not infringe the patents, trademarks or copyrights of third parties. There can be no assurance that third parties will not assert infringement claims against the Company in the future with respect to any current or future product. Any such assertion, whether with or without merit, could require the Company to enter into costly litigation or royalty arrangements. If required, such royalty arrangements may not be available on reasonable terms, or at all.

The Company may be liable as a result of information retrieved from or transmitted over the Internet

The Company may be sued for defamation, civil rights infringement, negligence, copyright or trademark infringement, personal injury, product liability or other legal claims relating to information that is published or made available on its Web sites and the other sites linked to it. These types of claims have been brought, sometimes successfully, against on-line services in the past. The Company’s membership database holds confidential information concerning its members, and the Company could be sued if any of that information is misappropriated. The Company could also be sued for the content that is accessible from its Web sites and through links to other Internet sites or through content and materials that may be posted by members in chat rooms or on bulletin boards. The Company also offers e-mail services, which may subject it to potential risks, such as liabilities or claims resulting from unsolicited e-mail or spamming, lost or misdirected messages, security breaches, illegal or fraudulent use of e-mail or interruptions or delays in e-mail service. The Company’s insurance does not specifically provide for coverage of these types of claims and therefore may not adequately protect it against these types of claims. In addition, the Company could incur significant costs in investigating and defending such claims, even if it ultimately is not liable. If any of these events occur, the Company’s revenues could be materially adversely affected.

Other risks


		The Company may become subject to burdensome government regulations and legal uncertainties affecting the Internet which could adversely affect its business

Legal uncertainties and new regulations could increase the Company’s costs of doing business, require it to revise its products or services, prevent it from delivering its products and services over the Internet or slow the growth of the Internet, any of which could increase its expenses, reduce its revenues or cause its revenues to grow at a slower rate than expected and materially adversely affect its business, financial condition and results of operations. Laws and regulations directly applicable to Internet communications, commerce, recruiting and advertising are becoming more prevalent, and new laws and regulations are under consideration by the United States Congress, state legislatures, and foreign governments. Any legislation enacted or restrictions arising from current or future government investigations or policy could dampen the growth in use of the Internet generally and decrease the acceptance of the Internet as a communications, commercial, recruiting and advertising medium. The laws governing the Internet, however, remain largely unsettled, even in areas where there has been some legislative action. It may take years to determine whether and how existing laws such as those governing consumer protection, intellectual property, privacy, libel and taxation apply to the Internet. In addition to new laws and regulations being adopted, existing laws may be applied to the Internet.

In addition, any increased taxation of products and services sold over the Internet may decrease demand for products and services that the Company sells over the Internet. Current U.S. federal law prohibits states and localities from imposing any new taxes on Internet access or Internet-based transactions until November 1, 2003. Failure by Congress to renew this legislation and the subsequent imposition of new taxes on Internet-based transactions could adversely affect the Company’s future operating results which could result in a decline in its stock price.

The Company’s stock price may experience extreme price and volume fluctuations

The stock market in general and the market prices of shares in technology companies, particularly those such as the Company which offer Internet-based products and services, have been extremely volatile and have experienced fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. These fluctuations are in response to many factors, some of which are largely beyond the Company’s control. These factors include:

	•		quarterly variations in results of operations;

	•		adverse business developments;

	•		changes in financial estimates by securities analysts;

	•		investor perception of the Company in particular and on-line matchmaking services in general;

	•		announcements by competitors of new products and services; and

	•		general economic conditions both in the U.S. and in foreign countries.

The trading volume of the Company’s common stock is very low, which further increases the volatility of the Company’s stock price.

Since the Company’s stock price is potentially volatile, it may become subject to securities litigation, which is expensive and could result in a diversion of resources. Litigation brought against it could result in substantial costs to it in defending against the lawsuit and a diversion of management’s attention. Securities class action litigation has often been brought against companies that experience volatility in the market price of their securities. Since the Company’s stock price is volatile, it could be subject to securities litigation and incur higher expenses than expected, which could have a material adverse effect on its business and results of operations.

Future sales of the Company’s stock may negatively affect its stock price

The market price of the Company’s common stock could decline as a result of sales of a large number of shares of the common stock in the market or as a result of sales by its existing stockholders, or the perception that these sales could occur. The Company has and will continue to have a large number of shares of common stock outstanding and available for resale. These sales might make it more difficult for the Company to sell equity securities in the future at a time and at a price that it deems appropriate. Unregistered shares of its common stock currently outstanding are or will become eligible for sale without registration pursuant to Rule 144 under the Securities Act, subject to certain conditions of Rule 144. Certain holders of the common stock also have certain demand and piggyback registration rights enabling them to register their shares under the Securities Act for sale.

Item 3. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Based on their evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) as of a date within 90 days of the filing date of this Quarterly Report on Form 10-QSB, the Company’s chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are operating in an effective manner.

(b) Changes in internal controls. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation.

PART II.

Other Information

Item 1. Legal Proceedings

The Company has not been a party to, nor has its property been the subject of any legal proceedings beyond routine litigation incidental to its business.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders of the Company during the quarter ended September 30, 2002.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. A list of the exhibits to this Form 10-QSB is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.

(b) Reports on Form 8-K.

The Company did not file any Current Reports on Form 8-K during the period ended September 30, 2002.

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.


		UDATE.COM, INC.



November 14, 2002		By: /S/ MEL MORRIS
		Melvyn Morris Chief Executive Officer (Principal Executive Officer)



November 14, 2002		By: /S/ MICHAEL BROCKLESBY
		Michael Brocklesby Vice President and Chief Financial Officer (Principal Financial and Chief Accounting Officer)

CERTIFICATIONS

I, Mel Morris, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of uDate.com, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Date:		November 14, 2002		/S/ MEL MORRIS Mel Morris President and Chief Executive Officer (Principal Executive Officer)

CERTIFICATIONS

I, Michael Brocklesby, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of uDate.com, Inc.;


	a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


	a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


Date: November 14, 2002		/S/ MICHAEL BROCKLESBY Michael Brocklesby Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EXHIBITS INDEX


10.1		Contract of Employment between the Company and Eleanor Krivicic dated August 13, 2002.*

10.2		Agreement for Lease dated October 14, 2002 among Cedar House Investments Limited, Company and uDate.com Limited.

99.1		Certification of Mel Morris, President and Chief Executive Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2		Certification of Michael Brocklesby, Vice President and Chief Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan, contract or arrangement filed pursuant to Item 601 of Regulation S-B.

UDATE COM INC 10-Q