**EXHIBIT 99.1**

 

**SAFE HARBORCOMPLIANCE STATEMENT FOR FORWARD-LOOKING STATEMENTS**

 

In passing the Private Securities Litigation ReformAct of 1995, or the Reform Act, Congress encouraged public companies to make“forward-looking statements” by creating a safe harbor to protect them fromsecurities law liability in connection with these statements.  We intend to qualify both our written andoral forward-looking statements for protection under the Reform Act and anyother similar safe harbor provisions.

 

Generally, forward-looking statements includeexpressed expectations of future events and the assumptions on which theseexpectations are based.  Allforward-looking statements are inherently uncertain as they are based on expectationsand assumptions concerning future events, and they are subject to numerousknown and unknown risks and uncertainties that could cause actual events orresults to differ materially from those projected.  Due to those uncertainties and risks, the investment community isurged not to place undue reliance on our written or oral forward-lookingstatements.  We do not undertake anyobligation to update or revise this Safe Harbor Compliance Statement forForward-Looking Statements to reflect future developments.  In addition, we do not undertake anyobligation to update or revise forward-looking statements to reflect changedassumptions, the occurrence of unanticipated events or changes to futureoperating results over time.  ThisStatement supersedes the Safe Harbor Statement filed as Exhibit 99.1 toour Quarterly Report on Form 10-Q for the quarter ended June 30, 2001.

 

We provide the following risk factor disclosure inconnection with our continuing effort to qualify our written and oralforward-looking statements for the safe harbor protection of the Reform Act andany other similar safe harbor provisions. Important factors currently known to our management that could causeactual results to differ materially from those in forward-looking statementsinclude the disclosures contained in the Quarterly Report on Form 10-Q to whichthis statement is appended as an exhibit and also include the following:

# ** **

# **Wehave experienced, and continue to experience, net losses and negative cashflows from operations.**

 

Since our inception, we have experienced, and arecontinuing to experience, operating losses and negative cash flow fromcontinuing operations.  Our statementsof operations for the nine months ended September 30, 2001, and the same periodin the prior year, reflect net losses from continuing operations of$12,500,296, and $15,120,521, respectively.

 

# **We may require additionalworking capital or financing to meet our operating demands.**

 

Our future financial results will depend primarily onour ability to increase advertising revenues and maintain our existinginstallations.  We cannot assure that wewill achieve profitability or positive cash flows from future operatingactivities.  If we experience operatingdifficulties, or if advertising revenues do not increase substantially, it islikely that we will be required to raise additional capital or obtainadditional financing to fund our operations. Based upon the Company’s current projections, the Company will need toraise additional capital in the near future for 2001 and 2002.  The Company is currently exploringcapital-raising alternatives.  TheCompany cannot be certain that any of the alternatives will be consummated.

 

# **We may not meet ourcovenants under our bank debt arrangements.**

 

# **At September 30, 2001, we were notin compliance with certain financial covenants required under our $5 millionline of credit facility. The Company received a waiver from the financialinstitution for the current default related to the financial covenants of the$5 million line of credit facility.  Theoutstanding amount on our credit facility is $5 million, which is due onJanuary 31, 2003.  We believe it ispossible that certain requirements contained in our loan covenants may not bemet during fiscal 2001.  If we fail tomeet a covenant under the bank loan, the financial institution has the right todeclare the loan due immediately.**

 

**Wedepend on our advertising revenues.**

 

We derive a significant portion of our revenues fromadvertisers displaying their commercials on the College TelevisionNetwork.  Although we have agreementswith certain national advertisers and have held discussions or had prioragreements with other national advertisers, we cannot assure that theseadvertisers will continue to purchase advertising from us, or that newadvertisers will purchase advertising from us. Because certain advertisers may discontinue or reduce advertising on ournetwork from time to time, we anticipate that we could experience fluctuationsin operating results and revenues. The failure to attract and enter into newand/or additional agreements with national advertisers and to derivesignificant revenues from these advertisers would have a material adverseeffect on our business and financial results.

 

# **We may need to raiseadditional capital.**

 

                We often are indiscussions with financial institutions regarding new credit facilities andexploring other capital-raising alternatives. Members of our management team are likely to expend considerableresources in pursuing and negotiating any such transaction.  We can offer no assurance that we will besuccessful in completing a capital-raising transaction, the terms andconditions of the transaction may pose additional risks to our Company.

 

# **We must maintain existinginstallations.**

 

Our network’s growth is dependent upon our ability tomaintain the number of installation sites at colleges and universities.  If we maintain our installation sites andincrease sell-out percentages and CPM rates, we will be able to increase ouradvertising revenue.  We have increasedour number of installations, including contracts for future installations, from1,790 as of September 30, 2000 to 1,843 as of September 30, 2001. We cannotassure that this growth will continue and that colleges and universities willnot require the removal of our system from current locations.  Due to the slowing of new installations dueto a lack of capital, our locations dropped by approximately 1% from June 30,2001 to September 30, 2001.  Ourcontracts with colleges and universities for installation sites typically havea three-year term.  The failure tomaintain our installation sites would have a material adverse effect on ourbusiness and financial results.

 

# **We depend upon our accessto programming.**

 

We believe that our ability to maintain access tomusic videos and other programming on a regular, long-term basis, on termsfavorable to us, is important to our future success and profitability.  Our network’s programming consists primarilyof music, news, information and entertainment. Our network’s music programming is provided free of charge by majormusic companies including Warner/Elektra/Atlantic, EMI, Polygram, MCA andBMG.  We also receive customized newsand sports feeds produced for the network by CNN through an agreement withTurner Private Networks. Termination of substantially all or a large number ofour programming agreements or the Turner Private Networks agreement, whichexpires on December 31, 2002,  wouldhave a material adverse effect on our business and financial results.

 

# **We depend upon satellitetechnology.**

 

The ability of our network to transmit ourprogramming, and thereby derive advertising revenue, is dependent upon properperformance of the satellite transmission equipment upon which our network’sprogramming delivery is based.  Ourcontract with Public Broadcasting Service, Inc. provides for our sublease oftransponder capacity on a satellite owned and operated by GE AmericanCommunications, Inc.  We are entitled tolimited protected service under the sublease in the event the satellite fails,which would enable the network’s programming to be redirected to a differentsatellite under certain circumstances and subject to certain limitations.However, in the event that our network’s programming is required to beredirected to a different satellite, our satellite dishes installed in each ofour affiliate locations would be required to be redirected in order for theprogramming signals to be received from the satellite.  This redirection procedure could take up to21 days for completion and would involve significant cost to us.  We have obtained insurance for certain ofthe costs associated with such a satellite failure, including the costs ofredirecting the satellite dishes, securing a new satellite transponder, and thelost advertising revenues resulting from the interruption in programming.

 

# **We depend on ouragreements with third parties.**

 

The ability of our network to transmit our programmingand to maintain and install our equipment is dependent upon performance bycertain third parties under contracts with us. We are substantially dependent upon performance by unaffiliatedcompanies for our day-to-day programming operations and system installation andmaintenance.

 

# **Any failure to maintainor improve market acceptance for the network would adversely affect ourbusiness.**

 

Our prospects will be significantly affected by thesuccess of our affiliate marketing efforts, the acceptance of our programmingby potential viewers and our ability to attract advertisers. Achieving marketacceptance for our network will require significant effort and expenditures byus to enhance awareness and demand by viewers and advertisers. Our currentstrategy and future marketing plans may be subject to change as a result of anumber of factors, including progress or delays in our affiliate marketingefforts, the nature of possible affiliation and other broadcast arrangementsthat may become available to us in the future, and factors affecting the directbroadcast industry. We cannot assure that our strategy will result in initialor continued market acceptance for the network.

 

# **We depend upon our keyexecutives.**

 

We are substantially dependent on the efforts of TomRocco, our President.  Jason Elkin, ourCEO, has left the Company, and the Company is implementing managementrestructuring that may cause a disruption in the business of the Company.  In addition, the loss of any other of theseexecutives could have a material adverse effect on our business and financialresults.

 

# **We depend on our salesstaff to maintain our business.**

 

Our business is, and will continue to be, dependentupon the sales skills of our account personnel and their relationships withclients.  There is substantialcompetition among media placement and advertising companies for talentedpersonnel and we are vulnerable to adverse consequences from the loss of keyindividuals.  Our employees aregenerally not under employment contracts and are free to move to competitors.

 

# **We may not be able tocompete successfully with other companies.**

 

CTN competes for advertisers with many other forms ofadvertising media, including television, Internet, radio, print, direct mailand billboard. There are no meaningful intellectual property barriers toprevent competitors from entering into this market, and we cannot assure that acompetitor with greater resources than us will not enter into the market.  We believe that competition could increaseas other organizations perceive the potential for commercial application of ourproduct or service.

 

# **We must continue to advanceour technology.**

 

We expect technological developments and enhancementsto continue at a rapid pace in the direct broadcast satellite network industryand related industries, and we cannot assure that technological developmentswill not require us to switch to a different transmission technology or causeour technology and products to be dated. Our future success could be largely dependent upon our ability to adaptto technological change and remain competitive.

 

# **Our principal stockholdercontinues to control our affairs.**

 

U-C Holdings, L.L.C. beneficially owns approximately85% of our outstanding voting stock, including common stock and votingpreferred stock.  As a result of itsownership, Holdings has, and will continue to have, sufficient voting power todetermine our direction and policies, the election of our directors, theoutcome of any other matter submitted to a vote of stockholders and to preventor cause a change in our control.

 

# **We may be subject toconflicts of interest and related party transactions.**

 

Certain conflicts of interest may arise as a result ofthe beneficial ownership interests in Holdings that are held by a majority ofour directors and certain senior management. Several members of our Board of Directors may be deemed to be indirectbeneficial owners of the securities owned by Holdings.  Conflicts of interest may arise as a resultof these affiliated relationships. Although no specific measures to resolve such conflicts of interest havebeen formulated, our management and Board have a fiduciary obligation to dealfairly and in good faith with the stockholders and will exercise reasonablejudgment in resolving any specific conflict of interest that may occur.

 

# **The holders of our commonstock could be materially diluted under certain circumstances.**

 

The conversion of the shares of convertible preferredstock into common stock or the payment of a dividend of shares of common stockto the holders of convertible preferred stock will result in dilution of votingrights of the currently outstanding public holders of the common stock.

 

# **Our revenues are subjectto seasonality.**

 

Our revenues are affected by the pattern ofseasonality common to most school-related businesses.  Historically, we have generated a significant portion of ourrevenues during the period of September through May and substantially lessrevenues during the summer months when most colleges and universities do nothold regular classes.

 

# **Our stock price andability to raise capital or obtain financing could be hurt by our outstandingwarrants and options.**

 

As of September 30, 2001, there are outstandingoptions to purchase 2,441,202 shares of our common stock granted to employees,officers and directors pursuant to our stock option plans and otherwise.  In addition, there are warrants outstandingthat permit their holders to purchase 924,832 shares of our common stock.  Holdings has entered into certain EquityProtection Agreements, dated April 25, 1997, which allow Holdings to purchaseadditional shares of our common stock at any time after the exercise of optionsor warrants that were outstanding on April 25, 1997 at the price of $2.75 pershare and $3.50 per share (as adjusted). As of the date hereof, the Equity Purchase Agreements representHoldings’ right to purchase 2,077,194 shares of CTN’s common stock.  Certain other holders of options andwarrants also have demand and piggy-back registration rights.  While such rights, warrants and options areoutstanding, they may (i) adversely affect the market price of our common stockand (ii) impair our ability to, and the terms on which we can, raise additionalequity capital or obtain debt financing.

 

# **Sales of our shares couldcause our stock price to fall.**

 

Sales of a substantial number of shares of commonstock in the public market could adversely affect the market price of ourcommon stock prevailing from time to time. All shares of our common stock, including shares held by Holdings, arefreely tradable or may be sold pursuant to Rule 144 under the SecuritiesAct.  The sale of the shares of ourcommon stock held by Holdings and other affiliates of CTN are subject tocertain volume limitations set forth in Rule 144 under the Securities Act.  As of September 30, 2001, options to purchase2,441,202 shares and warrants to purchase 924,832 shares of our common stockwere outstanding, of which options to purchase 1,472,613 shares and warrants topurchase 924,832 shares were exercisable.

 

**Possibility of NASDAQ delisting.**

 

**               **AlthoughNASDAQ has a temporary moratorium on delisting companies for not meetingcertain thresholds, the Company does not currently meet the NASDAQ listingrequirements and therefore, when this moratorium is lifted the Company’s stockmay be subject to delisting.

 

# **If we cannot integrateacquired companies with our business, our profitability may be adverselyaffected.**

 

We have completed a number of acquisitions sinceJanuary 1998 and may complete additional acquisitions of complementarybusinesses in the future.  Our operatingresults may be adversely affected if we cannot effectively and efficientlyintegrate these recently acquired companies. In addition, we may continue to seek to expand or complement ouroperations through the acquisition of additional companies or through thelicensing of programs that we believe are compatible with our business.  As of the date of this report, we have nodefinitive plans, agreements, commitments, arrangements or understandings withrespect to any significant acquisition. Under Delaware law, various forms of business combinations can beeffected without stockholder approval and, accordingly, stockholders will, inall likelihood, neither receive nor otherwise have the opportunity to evaluateany financial or other information which may be made available to us inconnection with any acquisition and must rely entirely upon the ability ofmanagement in selecting, structuring and consummating acquisitions that areconsistent with our business objectives.