accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission
for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure required for complete financial statements
are not included herein. It is recommended that these financial statements be read in conjunction with the financial statements
and related notes of Urban AG. Corp (the "Company") as reported in the Company's Annual Report on Form 10-K for the
year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation of financial position, results of operations, and cash flows at the dates and for the periods
presented have been included. The results of operations for the three and nine months ended September 30, 2012 may not be indicative
of the results that may be expected for the year ending December 31, 2012, or any other period.
Ag. (the registrant, Company, we, us, our, or Urban
Ag) is the successor entity to Aquamer, Inc. (AQUM), a Delaware corporation, which was established in February
2000 to commercialize proprietary medical devices. In 2005 Aquamer became a wholly owned subsidiary of Bellacasa Productions,
Inc. (Bellacasa) a publicly traded company, which in 2007 distributed 100% of its AQUM shares to its shareholders,
thus creating a public entity that traded as AQUM. The Company is a calendar year corporation.
2007 to 2010 AQUM tried unsuccessfully to commercialize its medical device business and our Board of Directors closed those operations
and acquired Urban Agricultural Corporation, a Delaware corporation (UAC). UAC holds the exclusive rights under
a license from TerraSphere, Inc. (TerraSphere) to use their patented farming technology in Massachusetts, and the
right of first refusal to purchase exclusive licenses for New Jersey, Pennsylvania and California. Under the TerraSphere license
the Company receives certain vertical farming intellectual property and know-how from TerraSphere. The license was purchased by
UAC in May, 2010 for $1,000,000 with $250,000 paid at acquisition and payments totaling $750,000 due by May 1, 2011. Urban Ag
was unable to make payments due under the TerraSphere License . TerraSphere extended the payment terms under the TerraSphere License
through December 31, 2011. Effective March 31, 2012 (Effective Date) the Company entered into a Stock Purchase Agreement
(the "UAC Agreement) with Distressed Asset Acquisitions, Inc. (DAAI) to divest itself of all of its
ownership of UAC. The UAC Agreement provides that DAAI will pay $100 and assume all liabilities as of the Effective Date for 100%
of the stock in UAC.
the Company is focused on a long-term strategy of pursuing the consolidation of the fragmented industry that provides outsourced
services to General Contractors, Facility Managers/Owners, Architects and Engineers. This industry is focused on providing construction
path services including pre-construction services, site selection and preparation, hazardous material abatement and environment
remediation, electrical/data communication system integration, electrical cabling installation and design, restoration/remediation
services and post occupancy services.
pursuit of this strategy, on November 7, 2011 the Company entered into a Stock Purchase Agreement (the "Agreement"),
with CCS Environmental World Wide, Inc., a Delaware corporation (CCS World Wide, CCS, or the Seller)
and the shareholders of CCS (Shareholders). Pursuant to the terms of the Agreement, Urban Ag acquired 100% of the
outstanding shares of CCS. In exchange, the Company issued to the CCS Shareholders an aggregate of 7,900,000 shares of the Company's
common stock, $.0001 par value and five million warrants to purchase one share of common stock of the Company per Warrant. The
warrants are exercisable for a period of five years at a price of $3.00 per share. The Warrants become exercisable once CCS achieves
$50,000,000 in revenue in a single fiscal year. The shares purchased represented 78.8% of the outstanding common stock of the
Company after the closing.
to the Agreement, CCS became the Company's wholly-owned subsidiary. This transaction was recorded as a reverse merger. The results
of operations from CCS Worldwide are included for all periods included in these condensed consolidated financial statements.
Worldwide is a hazardous material abatement and environmental remediation company based in Brockton, Massachusetts. The Company,
based in Danvers, Massachusetts, currently acts as a Holding Company that has as its one operating subsidiary CCS Worldwide. CCS
Worldwide generates revenue within a single operating segment which provides hazardous material abatement and environment remediation
services through its four wholly owned subsidiaries - Commonwealth Contracting Services LLC; CCS Special Projects LLC; CCS Environmental,
Inc.; and CCS Environmental Services, Inc., all based in Brockton, Massachusetts. For the periods covered in this annual report,
our revenues consist of sales in the single operating segment providing services for hazardous material abatement and environmental
Worldwide has operated its current business since 2005 generating annual revenues of between $2 million and $12 million providing
services including removal of interior finishes, surfaces and fixtures; as well as the removal and proper disposition of certain
asbestos-containing and lead-painted building materials and certain other regulated materials. CCS Worldwide is awarded contracts
from its customers generally through a bidding process whereby contracts are typically awarded on a qualified low bidder basis.
Its revenue is comprised of both union and non-union contracts.
accompanying condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned
subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. As a result of reverse
merger accounting treatment, the Companys financial statements for the three and six months ended June 30, 2012 include
the results of operations and financial position of CCS Worldwide. The Companys financial statements for the year ended
December 31, 2011 reflect the consolidation of CCS Worldwide with the Company effective with the date of the Agreement.