SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-KSB

                   SPECIAL REPORT PURSUANT TO RULE 15(d)(2) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended: August 31, 2002

                                   UMDN, Inc.
                 (Name of small business issuer in its charter)
    Delaware                                                       95-4817171
------------------                                                 ----------
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                            Identification No.)

217 Ashland Avenue, Santa Monica California                                90405
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                              (Zip Code)

         Issuer's telephone number, including area code: (310) 396-1475
                                                         --------------

        Securities registered pursuant to Section 12(b) of the Act: None
                                                                    ----
        Securities registered pursuant to Section 12(g) of the Act: None
                                                                    ----

Check  whether  the Issuer:  (1) has filed all  reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [ ] No [X]. Form 10-QSB

Check if disclosure of delinquent  filers pursuant to Item 405 of Regulation S-B
is not  contained  herein,  and will not be  contained,  to the best of Issuer's
knowledge,  in the definitive  proxy or information  statements  incorporated by
reference  in  Part  III  of  this  Form  10-KSB  or  any  amendment  to  this
Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year = $ 91,353

The  aggregate  market  value of the Common Stock held by  nonaffiliates  of the
Issuer  was  approximately  $ 363,400  based  upon the price at which the Common
Stock was sold.

The number of  outstanding  shares of the  Issuer's  Common  Stock,  $0.0001 par
value, was 14,924,000 as of January 15, 2003.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

Transitional Small Business Disclosure Format (check one):  Yes        No   X
                                                                -----     ------


<PAGE>
Part II

Item 7. Financial Statements
<TABLE>
<CAPTION>
                                   UMDN, INC.
                                FINANCIAL REPORT
                  For the years ended August 31, 2001 and 2002





                                TABLE OF CONTENTS


                                                                                               Page
<S>                                                                                              <C>
Report of Independent Certified Public Accountants                                               3



Financial statements:

    Balance sheets                                                                               4
    Statements of operations                                                                     5
    Statements of stockholders' deficiency                                                       6
    Statements of cash flows                                                                     7
    Notes to financial statements                                                              9-16
</TABLE>
                                       2
<PAGE>

               Report of Independent Certified Public Accountants



The Board of Directors and Stockholders
UMDN, Inc.
Santa Monica, California


We have audited the  accompanying  balance sheets of UMDN, Inc. as of August 31,
2001  and  2002  and  the  related   statements  of  operations,   stockholders'
deficiency,  and cash flows for the years then ended. These financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of UMDN,  Inc. as of August 31,
2001 and 2002 and the results of its operations and its cash flows for the years
then ended, in conformity with accounting  principles  generally accepted in the
United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has  incurred  net losses since its  inception  and is  experiencing
liquidity problems. Those conditions raise substantial doubt about the Company's
ability to continue as a going  concern.  Management's  plans in regard to those
matters are  described in Note 2. The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.




GUMBINER, SAVETT, FINKEL, FINGLESON & ROSE, INC.


Santa Monica, California
January 13, 2003
                                       3
<PAGE>
<TABLE>
<CAPTION>
                                   UMDN, INC.
                                 BALANCE SHEETS
                       August 31, 2001 and August 31, 2002

                                     ASSETS
                                                                                           August 31,           August 31,
                                                                                             2001                 2002
                                                                                        --------------       --------------
CURRENT ASSETS
<S>                                                                                        <C>                  <C>
   Cash                                                                                    $   30,704           $   1,825
   Prepaid expenses                                                                               310                 310
   Deferred offering costs (Note 11)                                                           -                  155,356
                                                                                        --------------       --------------

        TOTAL CURRENT ASSETS                                                                   31,014             157,491
                                                                                        --------------       --------------

PROPERTY AND EQUIPMENT, at cost,
   net of accumulated depreciation (Notes 5 and 6)                                             18,547              15,563
                                                                                        --------------       --------------
        TOTAL ASSETS                                                                       $   49,561            $173,054
                                                                                        ==============       ==============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
   Accounts payable                                                                        $   20,987           $  39,109
    Accrued interest
                                                                                               11,453              11,970
   Consulting fees payable                                                                     31,000               6,000
   Legal fees payable                                                                          13,794              94,050
   Current portion of long-term debt (Note 6)                                                   2,673               2,870
   Deferred income                                                                             10,628              19,388
                                                                                        --------------       --------------

        TOTAL CURRENT LIABILITIES                                                              90,535             173,387
                                                                                        --------------       --------------

LONG-TERM DEBT (Note 6)                                                                         7,068               4,542
                                                                                        --------------       --------------

NOTES PAYABLE, STOCKHOLDERS (Note 3)                                                          120,000             308,000
                                                                                        --------------       --------------

COMMITMENT (Note 8)

STOCKHOLDERS' DEFICIENCY (Note 9)
   Series A convertible preferred stock, $.0001 par value:
      Authorized 10,000,000 shares;
      Issued and outstanding, 1,050,000 and zero shares at
        August 31, 2001 and August 31, 2002, respectively                                         105                   -
   Common stock, $.0001 par value:
      Authorized 40,000,000 shares;
      Issued and outstanding, 4,320,000 and 14,924,000
        shares at August 31, 2001 and August 31, 2002,
        respectively                                                                              432               1,492
   Paid-in capital                                                                            222,412             422,457
   Accumulated deficit                                                                       (390,991)           (736,824)
                                                                                        --------------       --------------

        TOTAL STOCKHOLDERS'
            DEFICIENCY                                                                       (168,042)           (312,875)
                                                                                        --------------       --------------

        TOTAL LIABILITIES AND
            STOCKHOLDERS' DEFICIENCY                                                       $   49,561           $ 173,054
                                                                                        ==============       ==============
</TABLE>
                See accompanying notes to financial statements.
                                        4
<PAGE>
<TABLE>
<CAPTION>
                                   UMDN, INC.
                            STATEMENTS OF OPERATIONS
                  For the years ended August 31, 2001 and 2002



                                                                                            August 31,          August 31,
                                                                                             2001                2002
                                                                                        --------------       --------------
<S>                                                                                       <C>                  <C>
REVENUE                                                                                   $   67,842           $   91,353
                                                                                        --------------       --------------


OPERATING EXPENSES
   General, selling and administrative
      expense                                                                                384,424              414,042
   Rescinded transaction costs (Note 4)                                                       60,193                    -
                                                                                        --------------       --------------


      TOTAL OPERATING EXPENSES                                                               444,617              414,042
                                                                                        --------------       --------------


LOSS FROM OPERATIONS                                                                        (376,775)            (322,689)


INTEREST EXPENSE                                                                              14,216               23,144
                                                                                        --------------       --------------


          NET LOSS                                                                         $(390,991)          $ (345,833)
                                                                                        ==============       ==============



Basic and diluted loss per common share                                                      $ (0.11)          $    (0.04)
                                                                                        ==============       ==============



Average number of shares outstanding                                                       3,636,195            9,651,607
                                                                                        ==============       ==============

</TABLE>
                See accompanying notes to financial statements.
                                        5
<PAGE>
                                   UMDN, INC.
                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                  For the years ended August 31, 2001 and 2002
<TABLE>
<CAPTION>
                                                    Proprietors      Common Stock    Preferred Stock   Paid-in   Accumulated
                                                    Deficiency     Shares   Amount    Shares   Amount  Capital     Deficit     Total
                                                    --------------------------------------------------------------------------------
<S>                                                   <C>         <C>       <C>       <C>      <C>      <C>         <C>       <C>
Balance, August 31, 2000                            $(158,807)        -      -       -       $           -    $   -      $ (158,807)

Proprietors' deficiency contributed
with respect to incorporation                         158,807   3,136,970   314      -       -      (159,121)     -              -

Preferred stock issued (Note 9)                           -         -        -  1,050,000   105        (105)      -              -

Common stock issued to unrelated parties                  -       120,000    12      -       -        29,988      -          30,000

Common stock issued with respect to private
placement, including 40,000 shares
to related parties, net of offering costs of
$36,733 (Note 3)                                          -       700,000    70      -       -       126,186      -         126,256

Exercise of stock options by related party                -       348,552    35      -       -       129,965      -         130,000

Common stock issued in exchange for services
(Note 9)                                                  -        14,478     1      -       -         4,499      -           4,500

Stock options granted in exchange for                     -         -        -       -       -        79,000      -          79,000
  for services (Note 9)

Contribution to capital in exchange for rent
(Note 3)                                                  -         -        -       -     12,000      -         12,000

Net loss                                                  -         -        -       -       -         -       (390,991)   (390,991)



Balance, August 31, 2001                                  -     4,320,000   432 1,050,000   105     222,412    (390,991)   (168,042)

Conversion of preferred stock into common
  stock (Note 9)                                          -    10,500,000  1,050(1,050,000)(105)       (945)      -              -

Common stock issued in exchange for services
 (Note 9)                                                 -       104,000    10      -       -        25,990      -          26,000

Contributions to capital in exchange for
  rent (Note 3)                                           -         -        -       -       -        12,000      -          12,000

Contributions to capital in exchange for
 salaries (Note 3)                                        -         -        -       -       -       140,000      -         140,000

Stock options granted in exchange for
services (Note 9)                                         -         -        -       -       -        23,000      -          23,000

Net loss                                                  -         -        -       -       -         -       (345,833)   (345,833)


Balance, August 31, 2002                            $     -    14,924,000 $ 1,492    -     $ -    $ 422,457  $ (736,824)  $(312,875)

</TABLE>
                See accompanying notes to financial statements.
                                        6
<PAGE>
<TABLE>
<CAPTION>
                                   UMDN, INC.
                            STATEMENTS OF CASH FLOWS
                  For the years ended August 31, 2001 and 2002

                                                                                                     August 31,        August 31,
                                                                                                        2001              2002
                                                                                                 ---------------    --------------


CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                                <C>              <C>
   Net loss                                                                                        $   (390,991)    $     (345,833)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
        Depreciation                                                                                      4,624             6,982
        Non-cash payments for services                                                                   83,500           163,000
        Non-cash payments for rent                                                                       12,000            12,000
        Changes in assets and liabilities:

          Decrease in accounts receivable                                                                   550                 -

          Decrease in prepaid legal fees                                                                  4,039                 -

          Increase in deferred offering costs                                                                 -          (155,356)
          Increase in accounts payable                                                                    1,728            18,122
          Increase in consulting fees payable                                                            31,000             1,000

          Increase in legal fees payable                                                                 13,794            80,256
          Increase  in accrued interest                                                                   9,132               517

          Decrease in accrued officers' salaries                                                        (50,000)                -
          Increase (decrease) in deferred income                                                         (3,146)            8,760
                                                                                                 ---------------    --------------

          Net cash used in operating activities                                                        (283,770)         (210,552)
                                                                                                 ---------------    --------------


CASH FLOWS FROM INVESTING ACTIVITIES:
   Property and equipment purchased                                                                      (6,442)           (3,997)
                                                                                                 ---------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from the issuance of common stock                                                           286,256                 -
   Proceeds from notes payable, stockholders                                                             30,000           188,000

   Long-term debt incurred                                                                                6,029                 -
   Long-term debt paid                                                                                   (1,540)           (2,330)
                                                                                                 ---------------    --------------

          Net cash provided by financing activities                                                     320,745           185,670
                                                                                                 ---------------    --------------


NET INCREASE (DECREASE) IN CASH                                                                          30,533          (28,879)


CASH - BEGINNING OF YEAR                                                                                    171            30,704
                                                                                                 ---------------    --------------


CASH - END OF YEAR                                                                                  $    30,704      $      1,825
                                                                                                 ===============    ==============


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid during the year for:

   Interest                                                                                         $    5,084        $    22,627

                                                                                                                         (Continued)
</TABLE>
                See accompanying notes to financial statements.
                                       7
<PAGE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

During the year ended  August  31,  2001,  common  stock  increased  by $314 and
paid-in capital decreased by $159,121 when the assets of the proprietorship were
transferred  and its  liabilities  were  assumed by the Company in exchange  for
shares of common stock issued to the proprietors.

During the year ended August 31, 2001,  preferred  stock  increased  and paid-in
capital  decreased by $105 as a result of the issuance of shares of common stock
as a stock dividend (Note 9).

During March 2002,  common stock  increased  by $1,050 and  preferred  stock and
paid-in  capital  decreased  by $105 and  $945,  respectively,  as a  result  of
conversion of preferred stock into common stock (Note 9).

During the year ended August 31, 2002,  common stock was issued for  liquidation
of accounts payable of $26,000 relating to services rendered.

                See accompanying notes to financial statements.
                                        8
<PAGE>
                                   UMDN, INC.
                          NOTES TO FINANCIAL STATEMENTS
                  For the years ended August 31, 2001 and 2002



NOTE 1:        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

               Formation of the Company and business:

               The  Company  provides  sales and  marketing  services  through a
               benefits  program  that it  created  specifically  for unions and
               association   members.   This  benefits   program   utilizes  the
               collective  bargaining  power of the unions to obtain  purchasing
               power with businesses ("providers").  The Company enrolls members
               of unions  and other  large  affinity  groups to  leverage  their
               buying power to elicit  proprietary  discounts  for their benefit
               from both local and national businesses. The Company provides its
               services through live operators,  an online interface and printed
               materials. The Company's revenues are derived from the businesses
               that provide the discounts.

               The Company  began its business in 1998 and was a  proprietorship
               through August 2000. Upon  incorporation in the state of Delaware
               in August  2000,  all of the  assets of the  proprietorship  were
               transferred  and its  liabilities  were assumed by the Company in
               exchange for shares of common stock issued to the proprietors.

               Use of estimates:

               The  preparation  of  financial  statements  in  conformity  with
               generally accepted  accounting  principles requires management to
               make estimates and assumptions  that affect the reported  amounts
               of assets and liabilities and disclosure of contingent assets and
               liabilities  at the  date  of the  financial  statements  and the
               reported  amounts of revenue and  expenses  during the  reporting
               period. Actual results could differ from those estimates.

               Revenue recognition:

               Revenue  is  recognized   ratably  over  the  terms  of  provider
               agreements,  generally six months to one year.  Amounts  received
               from  provider   agreements   for  which  revenue  has  not  been
               recognized, net of related commissions,  are reported as deferred
               revenue.  Subsequent to the expiration of provider agreements, if
               a new  contractual  agreement  has not  been  entered  into,  the
               Company, at its option, may decide to allow the vendors to remain
               on the vendor network listing without receiving listing payments.

               Depreciation:

               Depreciation is computed  principally on the straight-line method
               based on the estimated  useful lives of the assets,  generally as
               follows:

                Computer equipment                                     3-5 years
                Furniture and fixtures                                  10 years


                                                                     (Continued)

                                        9
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 1:        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

               Deferred taxes on income:

               The Company  records  deferred  taxes on income for  transactions
               that are reported in different years for financial  reporting and
               tax purposes  using an asset and liability  method whereby assets
               and  liabilities  are recognized for the future tax  consequences
               attributable  to  differences  between  the  financial  statement
               carrying  amounts of existing  assets and  liabilities  and their
               respective  tax bases.  Deferred tax assets and  liabilities  are
               measured using enacted tax rates expected to apply in the year in
               which those temporary differences are expected to be recovered or
               settled.  The effect on deferred tax assets and  liabilities of a
               change in tax rates is  recognized  in  operations  in the period
               that includes the enactment date.

               Loss per common share:

               Basic and diluted  loss per common  share is computed by dividing
               the net loss by the  weighted  average  number of  common  shares
               outstanding  for the year. The weighted  average number of common
               shares  outstanding  for computing the basic and diluted loss per
               common  share was  3,636,195  and  9,651,607  for the years ended
               August 31, 2001 and 2002, respectively. For purposes of the above
               calculation, the preferred shares outstanding are antidilutive.

               Stock-based compensation:

               The Company accounts for stock-based compensation arrangements in
               accordance with  provisions of APB No. 25,  "Accounting for Stock
               Issued to Employees"  and related  interpretations,  and complies
               with the disclosure  provisions of SFAS No. 123,  "Accounting for
               Stock-Based  Compensation."  Under APB No. 25,  compensation cost
               for employees is recognized  based on the difference,  if any, on
               the date of grant between the fair value of the Company's  common
               stock and the amount an  employee  must pay to acquire the stock.
               The Company accounts for stock-based compensation arrangements to
               consultants in accordance with the provisions of SFAS No. 123.


NOTE 2:        BASIS OF PRESENTATION AND GOING CONCERN

               The accompanying financial statements have been prepared assuming
               that the Company will continue as a going concern.  However,  the
               Company has sustained  operating  losses since its inception.  In
               addition,  the  Company has used  substantial  amounts of working
               capital in its operations.  Further, at August 31, 2001 and 2002,
               current  liabilities  exceeded  current  assets by  approximately
               $59,000  and  $171,000   (excluding   deferred  offering  costs),
               respectively,  and total  liabilities  exceeded  total  assets by
               approximately   $168,000  and   $313,000,   respectively.   These
               conditions raise substantial doubt about the Company's ability to
               continue as a going  concern.  The  financial  statements  do not
               include  any  adjustments  that might  result from the outcome of
               this uncertainty.
                                                                     (Continued)

                                       10
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 2:        BASIS OF PRESENTATION AND GOING CONCERN (Continued)

               In view of these matters, realization of a major portion of the
               assets in the accompanying balance sheet is dependent upon a
               successful financing and the success of the Company's future
               operations. Management anticipates cash flows from a contract
               which is currently suspended. Should this contract be terminated
               , the Company will receive a termination fee of $100,000. In
               addition, the Company's majority stockholders intend to sell
               their registered shares through a public offering from which they
               intend to contribute a portion of the proceeds to the Company.
               Management believes that these actions and revenues from
               operations if successful, will enable the Company to continue as
               a going concern. Management also believes that if sufficient
               funds are not raised, the Company will have to curtail its
               operations.


NOTE 3:        RELATED PARTY TRANSACTIONS

               Notes payable, stockholders:

               In November 2001, the Company entered into a promissory note with
               its majority  stockholders and officers under which it may borrow
               up to $350,000.  Interest is payable at 8% per annum.  Payment of
               the balance outstanding plus interest is due in November 2003. At
               August 31, 2002,  $188,000 was outstanding under this note. As of
               January 13, 2003, no amount was available under this note.

               The Company was also indebted to certain of its  stockholders  in
               the  amount  of   $120,000  as  of  August  31,  2001  and  2002,
               respectively,  on notes payable bearing interest at 8% per annum,
               due through January, 2004. Notes payable in the amount of $80,000
               as of August 31, 2001 and 2002 were  guaranteed  by the principal
               officers/stockholders of the Company.

               Interest expense on these notes amounted to approximately $10,000
               and  $13,000  for the  years  ended  August  31,  2001 and  2002,
               respectively.

               Rent:

               The  Company  leases  its  office   facility  from  its  majority
               stockholders  on a  month-to-month  basis.  Rent  charged  by the
               stockholders  was  contributed to capital and amounted to $12,000
               for each of the years ended August 31, 2001 and 2002.

               Salaries:

               Salaries  charged  by the two  principal  officers  amounting  to
               $140,000  were  accrued and  contributed  to capital for the year
               ended  August 31,  2002.  Since May 31,  2001,  the  Company  has
               accrued salaries for the two principal  officers in the amount of
               $14,000 per month.  Salaries for the two  principal  officers for
               the year ended August 31, 2001 and two months  ended  October 31,
               2002 were accrued and paid.

                                                                     (Continued)

                                       11
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 3:        RELATED PARTY TRANSACTIONS (Continued)

               Common stock:

               The  Company  issued  388,552  shares of common  stock to related
               parties for $140,000 during the year ended August 31, 2001.

NOTE 4:        STOCK PURCHASE AND SALE AGREEMENT

               In May 2001,  the  Company's  stockholders  entered  into a stock
               purchase and sale agreement with Delta Capital Technologies, Inc.
               ("DCTG"),  whereby the stockholders  received 1,000,000 shares of
               DCTG common stock in exchange  for their shares of the  Company's
               common stock. Due to the difficulty of raising capital financing,
               DCTG was unable to provide the needed  financing for the Company.
               In  November  2001,  the  Company  exercised  an  option  in  the
               agreement  with  DCTG  to  rescind  this  transaction.   Expenses
               incurred  with respect to this  agreement  and its reversal  have
               been  included  in the  statements  of  operations  as  rescinded
               transactions costs.

NOTE 5:        PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>
               Property and equipment consisted of the following:

                                                                                                August 31,        August 31,
                                                                                                  2001                2002
                                                                                            ---------------   -----------------

<S>                                                                                                 <C>               <C>
                  Computer equipment                                                                $21,205           $25,202
                  Furniture and fixtures                                                              4,765             4,765
                                                                                            ---------------   -----------------
                                                                                                     25,970            29,967
                  Less accumulated depreciation                                                       7,423            14,404
                                                                                            ---------------   -----------------
                                                                                                    $18,547           $15,563
                                                                                            ===============   =================
</TABLE>
                                       12
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002

NOTE 6:        LONG-TERM DEBT
<TABLE>
<CAPTION>
               Long-term debt consisted of the following:

                                                                                               August 31,          August 31
                                                                                                 2001                 2002
                                                                                            --------------      ---------------
<S>                                                                                                  <C>               <C>
                  Notes, collateralized by computer equipment, payable
                    $425 per month through June 2004, including
                    interest ranging from 15% to 45% per annum.                                      $9,741            $7,412

                        Current portion                                                               2,673             2,870
                                                                                                      -----             -----

                        Noncurrent portion                                                           $7,068            $4,542
                                                                                                      =====             =====

</TABLE>
               Maturities of long-term debt during the succeeding  four years as
               of  August  31,  2002 are  approximately  $2,900  (2003);  $3,100
               (2004); $800 (2005) and $600 (2006).



NOTE 7:        TAXES ON INCOME

               As of August 31, 2001 and 2002,  the Company  had  available  net
               operating loss carryforwards  amounting to approximately $350,000
               and $696,000,  respectively,  that may be applied  against future
               federal and state taxable income and that expire through 2022 for
               federal tax purposes and 2010 for state tax purposes.

               Temporary  differences giving rise to deferred tax assets consist
               of the net operating loss carryforwards. Since the Company cannot
               determine  if it is more  likely than not that the  deferred  tax
               assets will be realized,  deferred tax assets recognized for loss
               carryforwards  are  fully  offset  by a  valuation  allowance  of
               approximately  $140,000 and $279,000 at August 31, 2001 and 2002,
               respectively.



NOTE 8:        COMMITMENT

               On  November  1,  2001,  the  Company   entered  into  employment
               agreements  with its two  principal  officers  expiring in August
               2005.  As part of the  agreement,  the officers have been granted
               monthly  salaries of $7,000  each.  For the year ended August 31,
               2002, the officers contributed salaries in the amount of $140,000
               to paid-in capital. The officers may defer future salaries for an
               undetermined  period of time with rights to demand payment at any
               time.

                                       13
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 9:        STOCKHOLDERS' DEFICIENCY

               Preferred stock:

               During the year ended August 31, 2001, 1,050,000 shares of series
               A preferred stock were issued as a stock dividend. In March 2002,
               all of the shares of series A preferred stock were converted into
               10,500,000  shares of common stock based on a conversion ratio of
               ten shares of common  stock for each share of series A  preferred
               stock.  All of the  shares  of  series  A  preferred  stock  have
               reverted  to the status of  authorized,  but  unissued  shares of
               preferred stock.

               Common stock:

               The Company issued 14,478 and 104,000 shares of common stock, for
               promotional  and consulting  services  provided  during the years
               ended August 31, 2001 and 2002, respectively. These services were
               valued at $4,500  and  $26,000  respectively.  For the year ended
               August 31, 2001, the services  rendered  amounted to $4,500,  and
               the  number of shares  issued  was based on the fair value of the
               shares at the time of incorporation in August 2001 as established
               by the board of  directors.  For the year ended  August 31, 2002,
               the  services  rendered  amounted to  $26,000,  and the number of
               shares  issued  was based on the value of the  private  placement
               shares sold at $.25 per share in August 2001.

               Stock options:

               The Company has granted  stock options for the purchase of shares
               of the  Company's  common stock to some of its  consultants.  The
               exercise price of the options  outstanding at August 31, 2001 and
               2002 ranged from $.02 to $.25 per share and these options  expire
               through 2012.  Some of these options were granted at prices below
               fair  market  value,  which  resulted  in  charges  to expense of
               $79,000 and $23,000 for the years ended August 31, 2001 and 2002,
               respectively.  These  options  were fully vested as of August 31,
               2002.

               In April 2002, the Company  adopted the 2002 Stock Option Plan of
               UMDN,  Inc. which provides for the issuance of both incentive and
               non-qualified stock options to employees,  non-employee directors
               and  consultants.  Under the plan,  the  Company  may issue stock
               options  for up to 20% of the  total  number  of shares of common
               stock outstanding from time to time. Vesting of the stock options
               to employees and  consultants is determined by a committee of the
               board of directors.  Options  granted to  non-employee  directors
               vest  equally  over four years  commencing  on the date of grant.
               During April 2002, the Company granted  non-qualified  options to
               purchase  300,000  shares of the Company's  common stock for $.25
               per share to non-employee directors,  which was the fair value at
               the date of grant,  of which  75,000 were vested as of August 31,
               2002. These options expire through April 2012.


                                                                     (Continued)

                                       14
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 9:        STOCKHOLDERS' DEFICIENCY (Continued)

               Stock options:  (Continued)

               During the year ended August 31,  2002,  the Company also granted
               non-qualified  options to purchase  400,000  shares of  Company's
               common   stock   ranging   from   $.02  to  $.25  per   share  to
               non-employees,  which  was the fair  value at the date of  grant.
               These options  expire through March 2007 and were fully vested as
               of August 31, 2002.

               The weighted average  remaining  contractual life for the options
               was 3 years and 5 months  and 5 years as of August  31,  2001 and
               2002, respectively.

               The weighted-average  fair value at the date of grant for options
               granted for the years ended August 31, 2001 and 2002 was $.19 and
               $.23 per option, respectively. The weighted-average fair value of
               these  options  at the  date of grant  was  estimated  using  the
               Black-Scholes    option-pricing    model   with   the   following
               weighted-average  assumptions for the years ended August 31, 2001
               and  2002,  respectively,  risk-free  interest  rates of 5.2% and
               4.0%,  respectively,  dividends  yields  of 0%  each,  volatility
               factors of the  expected  market  price of the  Company's  common
               stock of 10% each,  and a  weighted-average  expected life of the
               options of 3.2 and 5.5 years.

               Following  is a summary of options  activity  for the years ended
               August 31, 2001 and 2002:

<TABLE>
<CAPTION>
                                                                                                               Weighted Average
                                                                                                                   Exercise
                                                                                                    Shares          Price


               <S>                                                                                  <C>             <C>
                    Balance outstanding and exercisable, August 31, 2000                             200,000         .05
                        Options granted                                                              300,000         .02
                                                                                                     -------

                    Balance outstanding and exercisable, August 31, 2001                             500,000         .03
                        Options granted                                                              700,000         .21
                        Options cancelled                                                           (100,000)        .02
                                                                                                     -------

                    Balance outstanding, August 31, 2002                                           1,100,000        $.15
                                                                                                   =========         ===

                    Balance exercisable, August 31, 2002                                             875,000        $.13
                                                                                                     =======         ===
</TABLE>
               Warrants:

               In connection with the private  placement of the Company's common
               stock during the year ended August 31, 2001, the Company  granted
               warrants  for the  purchase  of 700,000  shares of the  Company's
               common  stock for $.75 per share on or  before  May 31,  2002 and
               $1.00 per share  thereafter.  In connection  with the issuance of
               common stock for services,  the Company also granted warrants for
               the purchase of 12,000 shares of the  Company's  common stock for
               $1.00 per share  during April 2002.  The  warrants are  currently
               exercisable and expire on May 31, 2003.

                                       15
<PAGE>
                                   UMDN, INC.
                   NOTES TO FINANCIAL STATEMENTS (Continued)
                  For the years ended August 31, 2001 and 2002


NOTE 10:       PRO FORMA EARNINGS PER SHARE

               Pro  forma  loss and pro forma  loss per share are not  presented
               since the  Company  accounts  for all stock  options  under  SFAS
               No.123 because all options have been granted to non-employees and
               the  pro  forma  amounts  would  be the  same  as the  historical
               reported amounts.

NOTE 11:       DEFERRED OFFERING COSTS

               Deferred  offering  costs  consist  mainly of  professional  fees
               incurred  relating to the Company's public stock offering on Form
               SB-2 which became  effective on October 2, 2002. These costs will
               be  offset  against  proceeds  received  from  the  sale  of  the
               Company's  stock. As of January 13, 2003,  there were no proceeds
               from the sale of the Company's  stock.  The Company has engaged a
               financial consultant to assist with the sale of its stock.

                                       16
<PAGE>
SIGNATURES


               Pursuant  to the  requirements  of  Section  13 or  15(d)  of the
Securities  Exchange Act of 1934,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                             UMDN, Inc.

                                             By:  /s/ Kent Keith
                                                --------------------------------
                                                 Kent Keith
                                                 President



                                             By:  /s/ Starla Keith
                                                --------------------------------
                                                  Starla Keith
                                                  Chief Financial Officer

Dated: January 23, 2003

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

NAME                                   TITLE                          DATE
/s/ Kent Keith
----------------------           President and Director         January 23, 2003
Kent Keith

/s/ Starla Keith
----------------------           Chief Financial Officer        January 23, 2003
Starla Keith                     and Director

/s/ Maj Hagman
----------------------           Director                       January 23, 2003
Maj Hagman

/s/ Gary Horowitz
----------------------           Director                       January 23, 2003
Gary Horowitz

/s/ Michael Posner
----------------------           Director                       January 23, 2003
Michael Posner

                                       17
<PAGE>

                                 CERTIFICATIONS
I, Kent Keith, certify that:

1. I have reviewed this special report pursuant to Rule 15(d)(2) of the Exchange
Act on Form 10-KSB of UMDN, Inc. ("Registrant");

2. Based on my  knowledge,  this  special  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 special
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this  special  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 special 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 special 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 special report (the "Evaluation Date"); and

               c)  presented in this special  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
special report whether 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.

                                                    /s/ Kent Keith
Date: January 23, 2003                              ----------------------------
                                                        Kent Keith, President


                                       18
<PAGE>
I, Starla Keith, certify that:

1. I have reviewed this special report pursuant to Rule 15(d)(2) of the Exchange
Act on Form 10-KSB of UMDN, Inc. ("Registrant");

2. Based on my  knowledge,  this  special  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 special
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this  special  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 special 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 special 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 special report (the "Evaluation Date"); and

               c)  presented in this special  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
special report whether 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.


                                            /s/ Starla Keith
Date: January 23, 2003                     -------------------------------------
                                           Starla Keith, Chief Financial Officer


                                       19