##### Table of Contents



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]





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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                      



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##### Table of Contents



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

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PART IFinancial 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  | 
|                                    |                                                     |  |                      |                           |  |               |            |              | 

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|                                |                                                                                                                                                                                                                                            |  |           |                                            |   |   |            |            |   |   |            | 
|------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------- | ------------------------------------------ | - | - | ---------- | ---------- | - | - | ---------- | 
|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.

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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.

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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  | )        

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|                                                       |                                        |   |           |         |   |   |           |          |   |   |            |            |   |   |           |          |  
|------------------------------------------------------ | -------------------------------------- | - | --------- | ------- | - | - | --------- | -------- | - | - | ---------- | ---------- | - | - | --------- | -------- | -
|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.

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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.

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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.

9



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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 | 
|                                  |  |   |            | 

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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.

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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 | 

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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.

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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.

14



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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 |           

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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.

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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;                                                                                                                          

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| |  |  | 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

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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

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.

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

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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.

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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.

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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

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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

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.

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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;                                                              

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|
|
|
|
|

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.               

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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.

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| |  | 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

27



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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.

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| |  | 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.

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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:

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| |  |  | 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

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| |  |  | 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.

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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

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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

| | 
| | 
| | 

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.

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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.

35



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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.

36



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##### Table of Contents






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.

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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 MorrisChief Executive Officer
(Principal Executive Officer)                                             
|                 
|                  |  |                                                                                                                
|                 
|November 14, 2002 |  | By:  /S/   MICHAEL BROCKLESBY                                                                                  
|                  |  | Michael BrocklesbyVice President and Chief Financial Officer
(Principal Financial and Chief Accounting Officer)

38



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##### Table of Contents






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 MORRISMel Morris
President and Chief Executive Officer
(Principal Executive Officer)

39



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CERTIFICATIONS

I, Michael Brocklesby, 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/    MICHAEL BROCKLESBYMichael Brocklesby
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

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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.

41