10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2012

or

[_]   Transitional Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

000-52327

(Commission file number)

URBAN AG. CORP.

(Exact name of registrant as specified in its charter)

Delaware	80-0664054
(State of incorporation)	(IRS Employer   Identification Number)

800 Turnpike Street, Suite 103
North Andover, Massachusetts 01845

(Address of principal executive offices)

(978) 739-9460

(Registrant's telephone number)

Indicate by check mark whether the registrant (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]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every

Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Not Applicable.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. (Check one):

Large accelerated filer  [_]  Accelerated filer  [_]  Non-accelerated filer  [_]  Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes   [_]  No [X]

The number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date was:

Class A Common Stock, $0.0001 par value	20,308,164 shares outstanding on November 16, 2012
Series A Preferred Stock, $0.0001 par value	10,100,000 shares outstanding on November 16, 2012

DOCUMENTS INCORPORATED BY REFERENCE:

None

FORWARD-LOOKING STATEMENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains both historical and forward-looking statements. The forward-looking statements in this quarterly report are not based on historical facts, but rather reflect the current expectations of our management concerning future results and events. These forward-looking statements include, but are not limited to, statements concerning our plans to continue the marketing, commercialization and sale of our services and planned future products and product candidates; address certain markets; and evaluate additional product candidates for subsequent sales. In some cases, these statements may be identified by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," or "continue," or the negative of such terms and other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, the outcome of an ongoing contractual dispute in connection with our accounts receivable factoring arrangement, levels of business activity, performance, or achievements. These statements involve known and unknown risks and uncertainties that may cause our or our industry's results, levels of activity, performance or achievements to be materially different from those expressed or implied by forward-looking statements.

Management's Discussion and Analysis ("MD&A") should be read together with our financial statements and related notes included elsewhere in this quarterly report. This quarterly report, including the MD&A, contains trend analysis and other forward-looking statements. Any statements in this quarterly report that are not statements of historical facts are forward-looking statements. These forward-looking statements made herein are based on our current expectations, involve a number of risks and uncertainties and should not be considered as guarantees of future performance.

The most pressing factors that could cause actual results to differ from those in our forward looking statements materially and adversely are our lack of working capital and our need to raise approximately $1.6 million of additional capital to payoff arrearages of approximately $900,000 of payroll taxes and $700,000 of labor union costs as of October 5, 2012; and the need to complete the winding down of our approximately $1.7 million accounts receivable factoring liability as of October 5, 2012 and to establish a new accounts receivable financing arrangement.

Other factors that could cause actual results to differ materially include without limitation:

· our limited ability to repay our debt and our payroll tax and union costs arrearages and the potential adverse consequences thereof;

· the outcome of our ongoing dispute with our accounts receivable factor and the outcome of any future legal proceedings that may arise out of that dispute;

· our ability to continue to finance our business;

· an inability to arrange debt or equity financing;

· the outcome of potential disputes that could arise with labor unions;

· the impact of new technologies on our services and our competition;

· adverse changes in laws or rules or regulations of governmental agencies;

· interruptions or cancellation of existing contracts;

· impact of competitive services and pricing;

· continued availability of adequately skilled labor at the current prices;

· the ability of management to execute plans and motivate personnel in the execution of those plans;

· the presence of competitors with greater financial resources;

· our ability to maintain our current pricing model and/or decrease our cost of sales;

· the adoption of new, or changes in, accounting principles;

· the costs inherent with complying with new statutes and regulations applicable to public reporting companies, such as the Sarbanes-Oxley Act of 2002

These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in the forward-looking statements in this quarterly report. Other unknown or unpredictable factors also could have material adverse effects on our future results. The forward-looking statements in this quarterly report are made only as of the date of this quarterly report, and we do not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. See also Item 1A, "RISK FACTORS"

URBAN AG CORP.

FORM 10-Q

September 30, 2012

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	F-1
Item 1 – Condensed Consolidated Financial Statements	F-1
Condensed Consolidated Balance Sheets	F-1
Condensed Consolidated Statements of Operations	F-2
Condensed Consolidated Statements of Cash Flows	F-3
Notes to Condensed Consolidated Financial Statements	F-4 - F-7
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	5
Item 4 - Controls and Procedures	5
PART II - OTHER INFORMATION	7
ITEM 1 – LEGAL PROCEEDINGS	7
ITEM 1A – RISK FACTORS	7
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	7
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES	7
ITEM 4 – (REMOVED AND RESERVED)	7
ITEM 5 – OTHER INFORMATION	7
ITEM 6 – EXHIBITS	7

Unless the context requires otherwise, references in this quarterly report to "Urban AG.," “Urban AG,” “Urban,” "the Company," "we," "our" and "us" refer to Urban AG. Corp. This quarterly report contains trademarks and trade names of other parties.

1

PART I - FINANCIAL INFORMATION

Item 1 – Condensed Consolidated Financial Statements

URBAN AG. CORP. (formerly AQUAMER MEDICAL CORP.)

Condensed Consolidated Balance Sheets

	September 30, 2012 (unaudited)			December 31, 2011 (audited)
Assets
Current assets:
Cash	$	25		$	25
Accounts receivable, less allowances for doubtful accounts and provision for contract adjustments of $564,972 and $459,104 at September 30, 2012 and December 31, 2011, respectively		2,475,840			1,812,733
Other current assets		31,657			30,000
Total current assets		2,507,522			1,842,758
Fixed assets, net		327,858			344,196
Other assets:
Due from related parties		170,522			33,234
Total assets	$	3,005,902		$	2,220,188
Liabilities and Stockholders'  Deficiency
Current liabilities:
Accounts payable and other current liabilities	$	2,838,612		$	2,647,042
Accrued expenses and payroll tax liabilities		1,494,555			339,993
Due to related parties		–			–
Line of credit		1,371,360			1,996,330
Mass CDFC loan		327,039			354,503
Discontinued operations		191,538			271,848
Current portion of long-term debt		378,407			92,255
Short term notes payable		937,881			570,250
Total current liabilities		7,539,392			6,272,221
Long term debt		–			189,400
Net liabilities of discontinued operations		–			–
Total liabilities	$	7,539,392		$	6,461,621
Stockholders' deficiency
Preferred stock, $.0001 par value; authorized 50,000,000 and 10,000,000 shares; 10,000,000 and none  issued and outstanding at September 30, 2012 and December 31, 2011 respectively.		1,000			–
Common stock, $.0001 par value; authorized 200,000,000 and 15,000,000; 20,308,164 and 11,477,184 shares issued and outstanding at September 30, 2012 and December 31, 2011 respectively.		2,030			1,148
Additional paid-in capital		2,569,804			1,891,058
Retained deficit		(7,106,324	)		(6,133,639	)
Total stockholders' equity		(4,533,490	)		(4,241,433	)
Total liabilities and stockholders’ deficiency	$	3,005,902		$	2,220,188

See accompanying notes to condensed consolidated financial statements.

F-1

URBAN AG. CORP. (formerly AQUAMER MEDICAL CORP.)

Condensed Consolidated Statements of Operations

(unaudited)

	Three Months ended					Nine Months ended
	September 30		September 30			September 30			September 30
	2012		2011			2012			2011
Revenue	$	1,963,691	$	1,860,926		$	5,506,380		$	5,383,129
Costs of sales		1,729,210		1,552,096			4,784,774			3,365,193
Gross profit		234,481		308,830			721,606			2,017,936
Costs and expenses:
General and administrative		156,802		642,568			2,030,651			1,710,883
Depreciation		29,100		17,819			89,537			45,603
Total costs and expenses		185,902		660,387			2,120,188			1,756,486
Income (Loss) from continuing operations before other (income)  and expense		48,579		(351,557	)		(1,398,582	)		261,450
Interest expense, net of interest income		12,661		42,663			181,252			403,494
Other (income) expense				(10,600	)		(607,149	)		(10,600	)
Total other (income) and expense		12,661		32,063			(425,897	)		392,894
Income (Loss) from continuing operations before income taxes		35,918		(383,620	)		(972,685	)		(131,444	)
Income taxes		–					–			–
Income (loss) from continuing operations		35,918		(383,620	)		(972,685	)		(131,444	)
Net income (loss)	$	35,918	$	(383,620	)	$	(972,685	)	$	(131,444	)
Basic and diluted income (loss) per share from continuing operations	$	0.001	$	(0.18	)	$	(0.05	)	$	(0.06	)
Weighted average basic and diluted common shares outstanding		20,308,164		2,127,184			20,308,164			2,127,184

See accompanying notes to condensed consolidated financial statements.

F-2

URBAN AG. CORP. (formerly AQUAMER MEDICAL CORP.)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	September 30, 2012			September 30, 2011
Cash flows from operating activities:
Net income (loss)	$	(972,685	)	$	(131,444	)
Adjustments to reconcile net loss items not requiring the use of cash:
Depreciation		89,537			45,603
Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable, net of allowances		(663,107	)		101,398
(Increase)/decrease in prepaid expenses and other current assets		(1,657	)		(30,000	)
Increase/(decrease) in accounts payable and other current liabilities		191,570			(80,430	)
Increase/(decrease) in accrued expenses		1,154,562			174,300
Increase/(decrease) in current portion of long term debt		286,152			(47,917	)
Net cash used in operating activities		84,372			31,510
Cash flows from investing activities:
Net investment in plant, property and equipment		(73,199	)		(157,230	)
Net cash used in investing activities		(73,199	)		(157,230	)
Cash flows from financing activities:
Increase/ (decrease) in short term notes payable		340,167			364,473
Net increase/ (decrease) in line of credit		(624,970	)		176,443
Net change in due to, due from related parties		(137,288	)		4,363
Increase/ (decrease) in long term debt		(189,400	)		(275,344	)
Increase in capital stock and additional paid in capital		680,628
Distributions and other equity adjustments					(173,625	)
Net cash generated by financing activities		69,137			96,310
Change in cash from continuing operations		80,310			(29,410	)
Change in cash from discontinued operations		(80,310	)		–
Cash at beginning of period		25			29,455
Cash at end of period	$	25		$	45

See accompanying notes to condensed consolidated financial statements. 

F-3

URBAN AG. CORP. (formerly AQUAMER MEDICAL CORP)

Notes to Condensed Consolidated Financial Statements

September 30, 2012

(unaudited)

1. Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the financial statements and related notes of Urban AG. Corp (the "Company") as reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations for the three and nine months ended September 30, 2012 may not be indicative of the results that may be expected for the year ending December 31, 2012, or any other period.

Organization and Background

Urban Ag. (the “registrant”, “Company,” “we”, “us”, “our”, or “Urban Ag”) is the successor entity to Aquamer, Inc. (“AQUM”), a Delaware corporation, which was established in February 2000 to commercialize proprietary medical devices. In 2005 Aquamer became a wholly owned subsidiary of Bellacasa Productions, Inc. (“Bellacasa”) a publicly traded company, which in 2007 distributed 100% of its AQUM shares to its shareholders, thus creating a public entity that traded as AQUM. The Company is a calendar year corporation.

From 2007 to 2010 AQUM tried unsuccessfully to commercialize its medical device business and our Board of Directors closed those operations and acquired Urban Agricultural Corporation, a Delaware corporation (“UAC”). UAC holds the exclusive rights under a license from TerraSphere, Inc. (“TerraSphere”) to use their patented farming technology in Massachusetts, and the right of first refusal to purchase exclusive licenses for New Jersey, Pennsylvania and California. Under the TerraSphere license the Company receives certain vertical farming intellectual property and know-how from TerraSphere. The license was purchased by UAC in May, 2010 for $1,000,000 with $250,000 paid at acquisition and payments totaling $750,000 due by May 1, 2011. Urban Ag was unable to make payments due under the TerraSphere License . TerraSphere extended the payment terms under the TerraSphere License through December 31, 2011. Effective March 31, 2012 (“Effective Date”) the Company entered into a Stock Purchase Agreement (the "UAC Agreement”) with Distressed Asset Acquisitions, Inc. (“DAAI”) to divest itself of all of its ownership of UAC. The UAC Agreement provides that DAAI will pay $100 and assume all liabilities as of the Effective Date for 100% of the stock in UAC.

Currently the Company is focused on a long-term strategy of pursuing the consolidation of the fragmented industry that provides outsourced services to General Contractors, Facility Managers/Owners, Architects and Engineers. This industry is focused on providing construction path services including pre-construction services, site selection and preparation, hazardous material abatement and environment remediation, electrical/data communication system integration, electrical cabling installation and design, restoration/remediation services and post occupancy services.

In pursuit of this strategy, on November 7, 2011 the Company entered into a Stock Purchase Agreement (the "Agreement"), with CCS Environmental World Wide, Inc., a Delaware corporation (“CCS World Wide,” “CCS,” or the “Seller”) and the shareholders of CCS (“Shareholders”). Pursuant to the terms of the Agreement, Urban Ag acquired 100% of the outstanding shares of CCS. In exchange, the Company issued to the CCS Shareholders an aggregate of 7,900,000 shares of the Company's common stock, $.0001 par value and five million warrants to purchase one share of common stock of the Company per Warrant. The warrants are exercisable for a period of five years at a price of $3.00 per share. The Warrants become exercisable once CCS achieves $50,000,000 in revenue in a single fiscal year. The shares purchased represented 78.8% of the outstanding common stock of the Company after the closing.

Pursuant to the Agreement, CCS became the Company's wholly-owned subsidiary. This transaction was recorded as a reverse merger. The results of operations from CCS Worldwide are included for all periods included in these condensed consolidated financial statements.

CCS Worldwide is a hazardous material abatement and environmental remediation company based in Brockton, Massachusetts. The Company, based in Danvers, Massachusetts, currently acts as a Holding Company that has as its one operating subsidiary CCS Worldwide. CCS Worldwide generates revenue within a single operating segment which provides hazardous material abatement and environment remediation services through its four wholly owned subsidiaries - Commonwealth Contracting Services LLC; CCS Special Projects LLC; CCS Environmental, Inc.; and CCS Environmental Services, Inc., all based in Brockton, Massachusetts. For the periods covered in this annual report, our revenues consist of sales in the single operating segment providing services for hazardous material abatement and environmental remediation.

F-4

CCS Worldwide has operated its current business since 2005 generating annual revenues of between $2 million and $12 million providing services including removal of interior finishes, surfaces and fixtures; as well as the removal and proper disposition of certain asbestos-containing and lead-painted building materials and certain other regulated materials. CCS Worldwide is awarded contracts from its customers generally through a bidding process whereby contracts are typically awarded on a qualified low bidder basis. Its revenue is comprised of both union and non-union contracts.

Basis of Presentation

The accompanying condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. As a result of reverse merger accounting treatment, the Company’s financial statements for the three and six months ended June 30, 2012 include the results of operations and financial position of CCS Worldwide. The Company’s financial statements for the year ended December 31, 2011 reflect the consolidation of CCS Worldwide with the Company effective with the date of the Agreement.

   2.     Summary of Significant Accounting Policies

Going Concern

The accompanying condensed consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. This assumption, that the Company continues to operate as a going concern, is presently in question and contingent upon the Company's ability to raise additional funds. The accompanying condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company has experienced substantial losses, has a working capital deficiency of approximately $5.0 million, a stockholders’ deficit of approximately $7.1 million and is in default on several financial obligations at September 30, 2012, which raises substantial doubt about the Company's ability to continue as a going concern.

Additionally, the Company’s accounts receivable financing arrangement has been terminated by the lender and an alternative source of financing receivables has not been obtained. Also, as of October 5, 2012, the Company has delinquent payroll taxes and union benefits arising in 2012 of approximately $900,000 and $700,000 respectively.

Use of Estimates

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

Cash and Cash Equivalents

For financial statement presentation purposes, those short-term, highly liquid investments with original maturities of three months or less are considered to be cash or cash equivalents.

Accounts Receivable

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining allowances for potential credit losses which, when realized, have been within management's expectations. The allowance method is used to account for uncollectible amounts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Allowance for doubtful accounts and provision for contract adjustments was $564,972 at September 30, 2012 and $459,104 at December 31, 2011.

Revenue Recognition

For financial reporting, profits on construction contracts are recognized by the Company on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimate total construction costs for each contract. This method is used because contracts in process include all materials, direct labor and subcontractor costs and those indirect costs related to contract performance, such as depreciation, motor vehicles, payroll taxes, employee benefits, small tools, insurance, etc. Selling and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. An amount equal to contract costs attributable to claims is included in revenues when realization is probable and the amount can be reasonably estimated. Because of the inherent uncertainties in estimating costs, it is at least reasonably possible that the Company’s estimates of costs and revenues will change.

F-5

Property, Plant and Equipment

Property and equipment are reported at cost less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Lives for property, plant and equipment are as follows: leasehold improvements—Lesser of term or useful life; machinery and equipment—5 to 15 years; furniture and fixtures—3 to 10 years; computer hardware and software 3 to 7 years. Routine maintenance costs are expensed as incurred. Expenditures for renewals and betterments are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the accounts and gains or losses are recognized in operations. The Company recorded $89,537 and $45,603 in depreciation expense for the nine months ended September 30, 2012 and 2011, respectively. The Company recorded $29,100 and $17,819 in depreciation expense for the three months ended September 30, 2012 and 2011, respectively.

Valuation of Intangibles and Other Long Lived Assets

The recoverability of long-lived assets, including equipment and intangible assets, is reviewed when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock Based Compensation

Stock based awards are accounted for according to the provisions of FASB ASC 718. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate.

Income Taxes

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax laws. Allowances are recorded if recovery is uncertain.

Earnings per Common Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Basic and diluted earnings per share are the same as outstanding options are anti-dilutive. Dilutive common equivalent shares consist of options to purchase common stock (only if those options are exercisable and at prices below the average share price for the period) and shares issuable upon the conversion of the Company's securities.

Impairment

Intangible assets with estimable lives and other long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. Judgment is required to estimate future operating cash flows.

F-6

   3.     Events of Material Impact Subsequent to Year End

Summitbridge Settlement - On January 11, 2012, the Company executed a Loan Purchase and Sale Agreement with Summitbridge Credit Investments LLC (“Summitbridge”) in order to resolve certain outstanding loans owed by the recently acquired CCS Environmental Worldwide Inc. to Summitbridge, along with accrued interests and fees, in the amount of $2,018,339 (the “Summitbridge Settlement”). Pursuant to the Loan Purchase and Sale Agreement, the parties agreed to the following: (i) that Summitbridge sell, assign, convey and transfer to the Company, without recourse, representation or warranty all of Summitbridge’s interest in the loans; and (ii) the Company to pay Summitbridge the amount of $1,335,000.

Secured Promissory Note and Convertible Preferred Stock Purchase Agreement - On January 12, 2012, the Company entered into a Secured Promissory Note and Convertible Preferred Stock Purchase Agreement with Peter S. Johnson, Esq. as Trustee of the Magliochetti Family 2009 Trust DTD 1/12/09 (the “Magliochetti Trust”) whereby the parties agreed to the following: (i) the Maliochetti Trust agreed to lend to the Company $1,000,000, and (ii) for the Company to issue 10,000,000 shares of Series A Convertible Preferred Stock pursuant to a Certificate of Designation in form and substance acceptable to the Magliochetti Trust and to take all steps necessary and desirable to amend its Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock such that a sufficient number of such shares of common stock shall be reserved for issuance upon conversion of the Series A Preferred Stock.

Factoring and Security Agreement - On March 9th, 2012, the Company entered into a Factoring & Security Agreement (the “Agreement”) with Midland American Capital (“Midland”). As part of the agreement, the Company sold its right, title and interest in its accounts receivable, with full recourse. The initial value of accounts receivable purchased by Midland was $1,100,002. As of March 31, 2012, the total outstanding accounts receivable of the Company that has been purchased by Midland is $2,317,155. As stipulated in the Agreement, approximately 80% of the amount of accounts receivable purchased by Midland throughout the term of the Agreement is funded to the Company for operational use and working capital. As of March 31, 2012, the Company has been funded a total of $1,672,291 and Midland has received a total of $236,419 in collections from the Company’s customers. The initial term of the Agreement is for 12 months and will automatically renew for an additional 12 months at the end of the initial term and each subsequent term unless terminated by the Company via 60 days written notice to Midland. The Agreement contains warranties and covenants that must be complied with on a continuing basis. Midland has terminated this agreement early and is no longer making advances on new accounts receivable.

Change in Capitalization - Effective January 12, 2012, the Board of Directors and a majority of the Company’s shareholders increased the Company's authority to issue all classes stock to 200,000,000 shares of Common Stock, $.0001 par value (“Common Stock”) and 50,000,000 shares of Preferred Stock, $.0001 par value (“Preferred Stock”). In addition, 10,000,000 shares of the authorized and un-issued Preferred Stock of the Company were designated as “Series A Preferred Stock” (“Series A Preferred”). The Third Amended and Restated Certificate of Incorporation of Urban AG. Corp was filed with the State of Delaware Secretary of State Division of Corporations on April 30, 2012 to effectuate the increases in Common Stock and Preferred Stock.

The10,000,000 shares of authorized Series A Preferred bear dividends at the rate of 12% of the Original Issue Price of $.005 per share, per annum, plus any previously issued and accrued dividends (compounded monthly) to be declared and paid monthly in cash. Holders of shares of Series A Preferred have voting rights equal to two times the number of shares of Common Stock to be received upon conversion of the Series A Preferred. The Series A Preferred Shares are convertible initially into shares of common stock on a one-to-one basis, subject to adjustment to prevent dilution of the conversion rights of the holders resulting from the issuance of shares of common stock or rights to acquire common stock. The holders of the Common Stock and the holders of Series A Preferred each voting as a class, are each entitled to elect two directors.

The Series A Preferred is subject to mandatory redemption by the Company upon the request of a majority of the holders of Series A Preferred, after January 10, 2015, for a Redemption Price payable in cash in three annual installments. The Redemption Price (as defined in the Certificate) shall be the greater of the original Issue Price ($.005) plus accrued but unpaid dividends and the fair market value of the shares.

The 10,000,000 shares of Series A Preferred held by the Magliochetti Trust had accrued and unpaid dividends of approximately $5,100 at October 5, 2012.

F-7

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

General

Urban Ag. Corp. (the “registrant”, “Company,” “we”, “us”, “our”, or “Urban Ag”) is the successor entity to Aquamer, Inc. (“AQUM”), a Delaware corporation, which was established in February 2000 to commercialize proprietary medical devices. In 2005 Aquamer became a wholly owned subsidiary of Bellacasa Productions, Inc. (“Bellacasa”) a publicly traded company, which in 2007 distributed 100% of its AQUM shares to its shareholders, thus creating a public entity that traded as AQUM. The Company is a calendar year corporation.

Business Overview

From 2007 to 2010 AQUM tried unsuccessfully to commercialize its medical device business and our Board of Directors closed those operations and acquired Urban Agricultural Corporation, a Delaware corporation (“UAC”). UAC holds the exclusive rights under a license from TerraSphere, Inc. (“TerraSphere”) to use their patented farming technology in Massachusetts, and the right of first refusal to purchase exclusive licenses for New Jersey, Pennsylvania and California. Under the TerraSphere license the Company receives certain vertical farming intellectual property and know-how from TerraSphere. The license was purchased by UAC in May, 2010 for $1,000,000 with $250,000 paid at acquisition and payments totaling $750,000 due by May 1, 2011. Urban Ag was unable to make payments due under the TerraSphere License . TerraSphere extended the payment terms under the TerraSphere License through December 31, 2011. Effective March 31, 2012 (“Effective Date”) the Company entered into a Stock Purchase Agreement (the "UAC Agreement”) with Distressed Asset Acquisitions, Inc. (“DAAI”) to divest itself of all of its ownership of UAC. The UAC Agreement provides that DAAI will pay $100 and assume all liabilities as of the Effective Date for 100% of the stock in UAC.

Currently the Company is focused on a long-term strategy of pursuing the consolidation of the fragmented industry that provides outsourced services to General Contractors, Facility Managers/Owners, Architects and Engineers. This industry is focused on providing construction path services including pre-construction services, site selection and preparation, hazardous material abatement and environment remediation, electrical/data communication system integration, electrical cabling installation and design, restoration/remediation services and post occupancy services.

In pursuit of this strategy, on November 7, 2011 the Company entered into a Stock Purchase Agreement (the "Agreement"), with CCS Environmental World Wide, Inc., a Delaware corporation (“CCS World Wide,” “CCS,” or the “Seller”) and the shareholders of CCS (“Shareholders”). Pursuant to the terms of the Agreement, Urban Ag acquired 100% of the outstanding shares of CCS. In exchange, the Company issued to the CCS Shareholders an aggregate of 7,900,000 shares of the Company's common stock, $.0001 par value and five million warrants to purchase one share of common stock of the Company per Warrant. The warrants are exercisable for a period of five years at a price of $3.00 per share. The Warrants become exercisable once CCS achieves $50,000,000 in revenue in a single fiscal year. The shares purchased represented 78.8% of the outstanding common stock of the Company after the closing.

Pursuant to the Agreement, CCS became the Company's wholly-owned subsidiary. This transaction was recorded as a reverse merger. The results of operations from CCS Worldwide are included for all periods included in these condensed consolidated financial statements.

CCS Worldwide is a hazardous material abatement and environmental remediation company based in Brockton, Massachusetts. The Company, based in Danvers, Massachusetts, currently acts as a Holding Company that has as its one operating subsidiary CCS Worldwide. CCS Worldwide generates revenue within a single operating segment which provides hazardous material abatement and environment remediation services through its four wholly owned subsidiaries - Commonwealth Contracting Services LLC; CCS Special Projects LLC; CCS Environmental, Inc.; and CCS Environmental Services, Inc., all based in Brockton, Massachusetts. For the periods covered in this annual report, our revenues consist of sales in the single operating segment providing services for hazardous material abatement and environmental remediation.

CCS Worldwide has operated its current business since 2005 generating annual revenues of between $2 million and $12 million providing services including removal of interior finishes, surfaces and fixtures; as well as the removal and proper disposition of certain asbestos-containing and lead-painted building materials and certain other regulated materials. CCS Worldwide is awarded contracts from its customers generally through a bidding process whereby contracts are typically awarded on a qualified low bidder basis. Its revenue is comprised of both union and non-union contracts.

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RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2011

NET REVENUES - Net revenues for the three months ended September 30, 2012 increased by $102,765 or approximately 6% to $1,963,691 from $1,860,926 in the comparable period in 2011.

The $102,765 change in net revenues from 2012 over the comparable three month period in 2011 consisted of increased sales in our core asbestos business of approximately $248,000 and decreased sales in our other services of approximately $145,000.

COST OF SALES - Cost of sales for the three months ended September 30, 2012 increased by $177,144 or approximately 11% to $1,729,210 from $1,552,096 in the comparable period in 2011.

The increase in cost of sales is correlative to the increase in sales for the three months ended September 30, 2012 over the comparable period in 2011. Cost ratios for direct labor and union costs, direct materials, subcontractors, waste disposal, other trades, and other direct costs remained reasonably consistent for the three months ended September 30, 2012 over the comparable period in 2011.

GENERAL AND ADMINISTRATIVE - General and administrative costs for the three months ended September 30, 2012 decreased by approximately $486,000 or 76% to $156,802 from $642,568 in the comparable period in 2011.

The decrease in general and administrative costs consisted primarily of decreased costs of approximately $295,000 in indirect salaries and wages and approximately $117,000 in legal and professional advisory fees. The balance of the change was comprised of increases and decreases in various general and administrative costs netting to approximately $74,000.

DEPRECIATION - Depreciation increased for the three months ended September 30, 2012 increased by $11,281 or approximately 63% to $29,100 from $17,819 in the comparable period in 2011.

The change is correlative to increased investment in property plant and equipment in 2012 over the comparable period in 2011.

INTEREST, NET OF INTEREST INCOME - Interest expense for the three months ended September 30, 2012 decreased by $30,002 or approximately 70% to $12,661 from $42,663 in the comparable period in 2011.

The change in interest expense was attributed to various refinancing activities carrying different terms and rates in the 2012 period compared to the comparable period in 2011.

NINE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER 30, 2011

NET REVENUES - Net revenues for the nine months ended September 30, 2012 increased by $123,251 or approximately 2% to $5,506,380 from $5,383,129 in the comparable period in 2011.

The $123,251 change in net revenues from 2012 over the comparable nine month period in 2011 consisted of increased sales in our core asbestos business of approximately $523,000 and decreased sales in our other services of approximately $400,000.

COST OF SALES - Cost of sales for the nine months ended September 30, 2012 increased by $1,419,581 or approximately 42% to $4,784,774 from $3,365,193 in the comparable period in 2011.

Cost of sales for the nine months ended September 30, 2012 increased to approximately 87% of sales from 62% of sales for the comparable nine month period in 2011. Our cost of sales percentages have historically fluctuated greatly depending on the composition of union and non-union work and on the cost of waste disposal charges. Union work generally has much tighter margins and is generally less profitable to the Company. In addition, the profit margins on fixed bid work can vary greatly and sometimes results in gross losses on those types of jobs compared to jobs that are comprised of, and are billed on, a cost plus basis.

Union cost overruns and charges for union labor represented the bulk of the adverse changes in the nine months ended September 30, 2012 over the comparable 2011 period. Labor costs increased from approximately 35% of sales for the nine months ended September 30, 2011 to approximately 49% of sales for the nine months ended September 30, 2012. Union benefit charges increased from approximately 14% of sales to approximately 26% of sale for the same periods.

Most of the adverse increased cost margin for the nine months ended September 30, 2012 occurred in the three months ended June 30, 2012.

GENERAL AND ADMINISTRATIVE - General and administrative costs for the nine months ended September 30, 2012 increased by approximately $319,768 or 19% to $2,030,651 from $1,710,883 in the comparable period in 2011.

The increase in general and administrative costs consisted primarily of increased costs of approximately $129,000 in indirect salaries and wages and approximately $200,000 in legal and professional advisory fees. The balance of the change was comprised of increases and (decreases) in various general and administrative costs netting to approximately ($9,000).

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DEPRECIATION - Depreciation for the nine months ended September 30, 2012 increased by $43,934 or approximately 96% to $89,537 from $45,603 in the comparable period in 2011.

The change is correlative to increased investment in property plant and equipment in 2012 over the comparable period in 2011.

INTEREST, NET OF INTEREST INCOME - Interest expense for the nine months ended September 30, 2012 decreased by $222,242 or approximately 55% to $181,252 from $403,494 in the comparable period in 2011.

The change in interest expense was attributed to various refinancing activities carrying different terms and rates in the 2012 period compared to the comparable period in 2011.

OTHER INCOME – Other income for the nine months ended September 30, 2012 was $607,149. This other income of $607,149 related to a one time gain on the re-financing and discount recognized on the payoff of the Company’s line of credit. The other income of $10,600 for the comparable period in 2011 was principally comprised on gain from the disposition of certain property plant and equipment.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2012, we had unrestricted cash of less than $1,000 and a working capital deficit of approximately $5.0 million. Our financial condition has been materially and adversely affected by certain negative actions taken by our accounts receivable factor.

Our ability to continue our business activities as a going concern including continuation of our existing business service lines and funding our strategic growth plans will depend upon, among other things, raising capital from third parties or receiving net cash flows from our existing business operations.

The Company plans to meet its financial obligations and commitments for the next 12 months by raising additional capital in the form of debt or equity instruments. In furtherance of that goal, the Company is currently engaged in ongoing discussions with potential investors, however presentations to and discussions with those potential investors in an attempt to provide important funds to the Company have been unsuccessful to date. We are uncertain whether we will be able to obtain any financing, or if we are able to obtain financing that it will be on commercially favorable terms. There can be no assurance that we will be able to obtain financing on any terms. Without these funds, we will be unable to repay our outstanding debt and other current and long-term liabilities.

To the extent we are able, if we are able, to obtain additional financing, the proceeds will be applied to pay our current liabilities and for working capital purposes.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, dilution of the interests of existing shareholders may occur.  If we raise additional funds through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of common stock and the terms of such debt could impose restrictions on our operations.  Regardless of whether our assets prove to be adequate to meet our operational needs, we may seek to compensate providers of services by issuance of stock in lieu of cash, which may also result in dilution to existing shareholders.

On January 9, 2012, the Company executed a Loan Purchase and Sale Agreement with Summitbridge Credit Investments LLC (“Summitbridge”) in order for Summitbridge to acquire certain outstanding loan obligations (the “Obligations”) owed by the recently acquired CCS Environmental Worldwide Inc. in the amount of $2,018,339, which includes the face amount of the underlying loans plus accrued interest and fees (the “Summitbridge Settlement”). Pursuant to the The Summitbridge Settlement,, the Company and Summitbridge agreed to the following: (i) that Summitbridge sell, assign, convey and transfer to the Company, without recourse, representation or warranty all of Summitbridge’s interest in the Obligations; and (ii) the Company to pay Summitbridge the amount of $1,335,000 in consideration thereof . A copy of the Summitbridge Settlement is included as Exhibit 10.15 to this Annual Report on Form 10-K. 

On January 12, 2012, the Company entered into a Secured Promissory Note and Convertible Preferred Stock Purchase Agreement with Peter S. Johnson, Esq. as Trustee of the Magliochetti Family 2009 Trust DTD 1/12/09 (the “Magliochetti Trust”) whereby the Company and the Magliochetti Trust agreed to the following: (i) the Magliochetti Trust agreed to lend to the Company $950,000 in cash, and (ii) for the Company to issue 10,000,000 shares of Series A Convertible Preferred Stock pursuant to a Certificate of Designation in form and substance acceptable to the Magliochetti Trust and to take all steps necessary and desirable to amend its Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock such that a sufficient number of such shares of common stock shall be reserved for issuance upon conversion of the Series A Preferred Stock

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On March 9th, 2012, the Company, through its operating subsidiaries, CCS Environmental Worldwide Inc., a Delaware Corporation, CSS Environmental Services Inc., a Delaware Corporation, Commonwealth Contracting Services LLC, a Massachusetts limited liability company, and CCS Special Projects LLC, a Massachusetts limited liability company (individually each the “Seller”, or “Sellers”) entered into a Factoring & Security Agreement (the “Factoring Agreement”) with Midland American Capital (“Midland”). As part of the Factoring Agreement, each Seller sold its rights, title and interest in its accounts receivable, with full recourse. The initial value of accounts receivable purchased by Midland was $1,100,002. As of March 31, 2012, the total outstanding accounts receivable of the Company that have been purchased by Midland is $2,317,155. As stipulated in the Factoring Agreement, approximately 80% of the amount of accounts receivable purchased by Midland throughout the term of the Factoring Agreement is funded to each Seller by Midland for operational use and working capital. As of March 31, 2012, the Sellers had been funded a total of $1,672,291 and Midland has received a total of $236,419 in collections from the Sellers’ customers. The Factoring Agreement initial Term began on March 9, 2012 for a one year period and shall be automatically extended for successive one year terms unless each Seller shall provide written notice to Midland of Sellers’ shared intention to terminate whereupon the Factoring Agreement shall terminate on the effective date specified in such notice of termination (such effective date being the “Early Termination Date”). The termination date is the earlier of (i) the Early Termination Date, or (ii) the end of the last Term that was not followed by an extension or renewal under the Factoring Agreement. The Factoring Agreement contains warranties and covenants that must be complied with on a continuing basis. The Purchaser has asserted an event of default under the terms of the Factoring Agreement, as amended. The Company is in the process of an orderly winding down of its obligations under the Factoring Agreement. The Sellers’ obligations under the Factoring Agreement, as amended, have been guaranteed by the Company.

Effective March 31, 2012 the Company entered into a Stock Purchase Agreement (the "UAC Agreement”) with Distressed Asset Acquisitions, Inc. (“DAAI”) to divest itself of all ownership of its wholly owned subsidiary, Urban Agricultural Corporation (“UAC”). The UAC Agreement provides that DAAI will pay $100 and assume all liabilities of UAC as of the Effective Date for 100% of the stock in UAC.

On June 18, 2012, the Company entered into a Short Term Loan Agreement (“Short Term Loan”) with the Magliochetti Trust whereby the Magliochetti Trust lent $68,000 in cash to the Company at an annual interest rate of 10.3% plus additional consideration consisting of 500,000 shares of the Common Stock of the Company. The loan matured on June 25, 2012. As of October 5, 2012 the Company has not repaid the Short Term Loan.

On July 15, 2012, the Company entered into a Promissory Note Agreement with the Magliochetti Trust whereby the Magliochetti Trust lent $500,000 in cash to the Company at an interest rate of 10%. The Promissory Note Agreement is payable on or before December 31, 2012.

On July 13, 2012, the Company entered into a Promissory Note Agreement with the Magliochetti Trust whereby the Magliochetti Trust lent $80,000 in cash to the Company at an interest rate of 12%. The Company is currently in default on the terms of the note, having failed to make required monthly interest payments beginning in August 2012, although the lender has not issued a notice and demand for payment to the Company.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, our Chief Executive Officer and Chief Financial Officer (the "Certifying Officer") conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, (the “1934 Act”), the term "disclosure controls and procedures" means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including the Certifying Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the Certifying Officer has concluded that our disclosure controls and procedures are not effective to ensure that all material information is recorded, processed, summarized and reported by our management on a timely basis in order to comply with our disclosure obligations under the 1934 Act, and the rules and regulations promulgated there-under.

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Based upon this evaluation the Certifying Officer has concluded that the following material weaknesses in our disclosure controls and procedures existed as of the end of the period covered by this quarterly report:

· Lack of reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.

· Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rule 13a-15(f) under the 1934 Act. The Company's internal control over financial reporting is designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements and the reliability of financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Management assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control - Integrated Framework. Based on our assessment, we believe that, as of March 31, 2012, the Company's internal control over financial reporting is not effective based on those criteria. This quarterly report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this quarterly report. Further, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

In the ordinary course of business, we may from time to time be involved in various threatened or actual legal proceedings which the company will vigorously defend. The litigation process is inherently uncertain and it is possible that the outcome of such matters may result in a material adverse effect on the financial condition and/or results of operations of the Company. In the opinion of the management of AQUM, matters currently pending or threatened against the Company are not expected to result in a material adverse effect on our financial position or result of operations.

ITEM 1A – RISK FACTORS

There are a number of important factors that could cause our actual results to differ materially from those indicated or implied by forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Aside from those risks discussed below, there have been no material changes to the risk factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

RISKS RELATED TO OUR BUSINESS

If our attempts to secure additional financing are not successful, we will be required to cease or curtail our operations, or obtain funds on unfavorable terms. These factors create a substantial doubt about our ability to continue as a going concern.

Our available resources are not sufficient to fund our operations, without additional sources of financing we would not be able to continue our business, and we expect to incur operating losses for the foreseeable future. Consequently, in order to maintain our operations, which we have already curtailed substantially, we will need to access additional equity or debt capital. Securing financing is proving even more difficult than anticipated. These factors create a substantial doubt about our ability to continue as a going concern. In light of our negative stockholders’ equity, there can be no assurance that we will be able to obtain the necessary additional capital on a timely basis or on acceptable terms, if at all, to continue our operations and, to the extent available, to fund the development of our business. In any of such events, the continuation of our operations would be materially and adversely affected and we may have to cease conducting business.

As noted above, Urban Ag is in the process of attempting to secure sufficient financing to continue operations. We have been working to obtain financing from outside investors for more than 6 months, but have not yet been successful. In the interim, short-term debt financing provided primarily by a corporate investor has secured all of the company’s assets, and is being utilized to support governance and compliance activities. Additionally, non-payment of professional and other service providers and reduced general spending have been instituted until such time as financing is secured, if ever. If we are unable to obtain financing, we will be required to further curtail our operations or cease conducting business. Given our current level of debt, we do not expect that our stockholders would receive any proceeds if we declare bankruptcy or seek to liquidate the Company.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – (REMOVED AND RESERVED)

ITEM 5 – OTHER INFORMATION

None.

ITEM 6 – EXHIBITS

Exhibit 31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Urban Ag Medical Corp.           (Registrant)
By:	/s/ Billy V. Ray, Jr.
	Billy V. Ray, Jr. Chief Financial Officer

Date: November 28, 2012

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EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Billy, V. Ray, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Urban Ag, Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter of the annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 28, 2012

/s/ Billy V. Ray, Jr.

Billy V. Ray, Jr.
Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Billy V. Ray, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Urban Ag. Corp.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter of the annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 28, 2012

/s/ Billy V. Ray, Jr.

Billy V. Ray, Jr.

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the quarterly report on Form 10-Q of Urban Ag. Corp. (the "Company") for the nine month period ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, that, to such officer’s knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 28, 2012

/s/ Billy V. Ray, Jr.

Billy V. Ray, Jr.
Chief Executive Officer

/s/ Billy V. Ray, Jr.

Billy V. Ray, Jr.
Chief Financial Officer

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2. Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Summary Of Significant Accounting Policies Policies

Going Concern

The accompanying condensed consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. This assumption, that the Company continues to operate as a going concern, is presently in question and contingent upon the Company's ability to raise additional funds. The accompanying condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company has experienced substantial losses, has a working capital deficiency of approximately $5.0 million, a stockholders’ deficit of approximately $7.1 million and is in default on several financial obligations at September 30, 2012, which raises substantial doubt about the Company's ability to continue as a going concern.

Additionally, the Company’s accounts receivable financing arrangement has been terminated by the lender and an alternative source of financing receivables has not been obtained. Also, as of October 5, 2012, the Company has delinquent payroll taxes and union benefits arising in 2012 of approximately $900,000 and $700,000 respectively.

Use of Estimates

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

Cash and Cash Equivalents

For financial statement presentation purposes, those short-term, highly liquid investments with original maturities of three months or less are considered to be cash or cash equivalents.

Accounts Receivable

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining allowances for potential credit losses which, when realized, have been within management's expectations. The allowance method is used to account for uncollectible amounts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Allowance for doubtful accounts and provision for contract adjustments was $564,972 at September 30, 2012 and $459,104 at December 31, 2011.

Revenue Recognition

For financial reporting, profits on construction contracts are recognized by the Company on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimate total construction costs for each contract. This method is used because contracts in process include all materials, direct labor and subcontractor costs and those indirect costs related to contract performance, such as depreciation, motor vehicles, payroll taxes, employee benefits, small tools, insurance, etc. Selling and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. An amount equal to contract costs attributable to claims is included in revenues when realization is probable and the amount can be reasonably estimated. Because of the inherent uncertainties in estimating costs, it is at least reasonably possible that the Company’s estimates of costs and revenues will change.

Property, Plant and Equipment

Property and equipment are reported at cost less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Lives for property, plant and equipment are as follows: leasehold improvements—Lesser of term or useful life; machinery and equipment—5 to 15 years; furniture and fixtures—3 to 10 years; computer hardware and software 3 to 7 years. Routine maintenance costs are expensed as incurred. Expenditures for renewals and betterments are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the accounts and gains or losses are recognized in operations. The Company recorded $89,537 and $45,603 in depreciation expense for the nine months ended September 30, 2012 and 2011, respectively. The Company recorded $29,100 and $17,819 in depreciation expense for the three months ended September 30, 2012 and 2011, respectively.

Valuation of Intangibles and Other Long Lived Assets

The recoverability of long-lived assets, including equipment and intangible assets, is reviewed when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock Based Compensation

Stock based awards are accounted for according to the provisions of FASB ASC 718. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate.

Income Taxes

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax laws. Allowances are recorded if recovery is uncertain.

Earnings per Common Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Basic and diluted earnings per share are the same as outstanding options are anti-dilutive. Dilutive common equivalent shares consist of options to purchase common stock (only if those options are exercisable and at prices below the average share price for the period) and shares issuable upon the conversion of the Company's securities.

Impairment

Intangible assets with estimable lives and other long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. Judgment is required to estimate future operating cash flows.

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3. Events of Material Impact Subsequent to Year End

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

3. Events of Material Impact Subsequent to Year End

Summitbridge Settlement - On January 11, 2012, the Company executed a Loan Purchase and Sale Agreement with Summitbridge Credit Investments LLC (“Summitbridge”) in order to resolve certain outstanding loans owed by the recently acquired CCS Environmental Worldwide Inc. to Summitbridge, along with accrued interests and fees, in the amount of $2,018,339 (the “Summitbridge Settlement”). Pursuant to the Loan Purchase and Sale Agreement, the parties agreed to the following: (i) that Summitbridge sell, assign, convey and transfer to the Company, without recourse, representation or warranty all of Summitbridge’s interest in the loans; and (ii) the Company to pay Summitbridge the amount of $1,335,000.

Secured Promissory Note and Convertible Preferred Stock Purchase Agreement - On January 12, 2012, the Company entered into a Secured Promissory Note and Convertible Preferred Stock Purchase Agreement with Peter S. Johnson, Esq. as Trustee of the Magliochetti Family 2009 Trust DTD 1/12/09 (the “Magliochetti Trust”) whereby the parties agreed to the following: (i) the Maliochetti Trust agreed to lend to the Company $1,000,000, and (ii) for the Company to issue 10,000,000 shares of Series A Convertible Preferred Stock pursuant to a Certificate of Designation in form and substance acceptable to the Magliochetti Trust and to take all steps necessary and desirable to amend its Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock such that a sufficient number of such shares of common stock shall be reserved for issuance upon conversion of the Series A Preferred Stock.

Factoring and Security Agreement - On March 9th, 2012, the Company entered into a Factoring & Security Agreement (the “Agreement”) with Midland American Capital (“Midland”). As part of the agreement, the Company sold its right, title and interest in its accounts receivable, with full recourse. The initial value of accounts receivable purchased by Midland was $1,100,002. As of March 31, 2012, the total outstanding accounts receivable of the Company that has been purchased by Midland is $2,317,155. As stipulated in the Agreement, approximately 80% of the amount of accounts receivable purchased by Midland throughout the term of the Agreement is funded to the Company for operational use and working capital. As of March 31, 2012, the Company has been funded a total of $1,672,291 and Midland has received a total of $236,419 in collections from the Company’s customers. The initial term of the Agreement is for 12 months and will automatically renew for an additional 12 months at the end of the initial term and each subsequent term unless terminated by the Company via 60 days written notice to Midland. The Agreement contains warranties and covenants that must be complied with on a continuing basis. Midland has terminated this agreement early and is no longer making advances on new accounts receivable.

Change in Capitalization - Effective January 12, 2012, the Board of Directors and a majority of the Company’s shareholders increased the Company's authority to issue all classes stock to 200,000,000 shares of Common Stock, $.0001 par value (“Common Stock”) and 50,000,000 shares of Preferred Stock, $.0001 par value (“Preferred Stock”). In addition, 10,000,000 shares of the authorized and un-issued Preferred Stock of the Company were designated as “Series A Preferred Stock” (“Series A Preferred”). The Third Amended and Restated Certificate of Incorporation of Urban AG. Corp was filed with the State of Delaware Secretary of State Division of Corporations on April 30, 2012 to effectuate the increases in Common Stock and Preferred Stock.

The10,000,000 shares of authorized Series A Preferred bear dividends at the rate of 12% of the Original Issue Price of $.005 per share, per annum, plus any previously issued and accrued dividends (compounded monthly) to be declared and paid monthly in cash. Holders of shares of Series A Preferred have voting rights equal to two times the number of shares of Common Stock to be received upon conversion of the Series A Preferred. The Series A Preferred Shares are convertible initially into shares of common stock on a one-to-one basis, subject to adjustment to prevent dilution of the conversion rights of the holders resulting from the issuance of shares of common stock or rights to acquire common stock. The holders of the Common Stock and the holders of Series A Preferred each voting as a class, are each entitled to elect two directors.

The Series A Preferred is subject to mandatory redemption by the Company upon the request of a majority of the holders of Series A Preferred, after January 10, 2015, for a Redemption Price payable in cash in three annual installments. The Redemption Price (as defined in the Certificate) shall be the greater of the original Issue Price ($.005) plus accrued but unpaid dividends and the fair market value of the shares.

The 10,000,000 shares of Series A Preferred held by the Magliochetti Trust had accrued and unpaid dividends of approximately $5,100 at October 5, 2012.

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Current assets:
Cash	$ 25	$ 25
Accounts receivable, less allowances for doubtful accounts and provision for contract adjustments of $564,972 and $459,104 at September 30, 2012 and December 31, 2011, respectively	2,475,840	1,812,733
Other current assets	31,657	30,000
Total current assets	2,507,522	1,842,758
Fixed assets, net	327,858	344,196
Due from related parties	170,522	33,234
Total assets	3,005,902	2,220,188
Current liabilities:
Accounts payable and other current liabilities	2,838,612	2,647,042
Accrued expenses	1,494,555	339,993
Due to related parties
Line of credit	1,371,360	1,996,330
Mass CDFC loan	327,039	354,503
Discontinued operations	191,538	271,848
Current portion of long-term debt	378,407	92,255
Short term notes payable	937,881	570,250
Total current liabilities	7,539,392	6,272,221
Long term debt		189,400
Total liabilities	7,539,392	6,461,621
Stockholders' deficiency
Preferred stock; authorized 50,000,000 and 10,000,000 shares; 10,000,000 and none issued and outstanding at September 30, 2012 and December 31, 2011 respectively.	1,000
Common stock, $.0001 par value; authorized 200,000,000 and 15,000,000; 20,308,164 and 11,477,184 shares issued and outstanding at September 30, 2012 and December 31, 2011 respectively.	2,030	1,148
Additional paid-in capital	2,569,804	1,891,058
Retained deficit	(7,106,324)	(6,133,639)
Total stockholders' deficiency	(4,533,490)	(4,241,433)
Total liabilities and stockholders' deficiency	$ 3,005,902	$ 2,220,188

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1. Interim Financial Statements

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1. Interim Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the financial statements and related notes of Urban AG. Corp (the "Company") as reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations for the three and nine months ended September 30, 2012 may not be indicative of the results that may be expected for the year ending December 31, 2012, or any other period.

Organization and Background

Urban Ag. (the “registrant”, “Company,” “we”, “us”, “our”, or “Urban Ag”) is the successor entity to Aquamer, Inc. (“AQUM”), a Delaware corporation, which was established in February 2000 to commercialize proprietary medical devices. In 2005 Aquamer became a wholly owned subsidiary of Bellacasa Productions, Inc. (“Bellacasa”) a publicly traded company, which in 2007 distributed 100% of its AQUM shares to its shareholders, thus creating a public entity that traded as AQUM. The Company is a calendar year corporation.

From 2007 to 2010 AQUM tried unsuccessfully to commercialize its medical device business and our Board of Directors closed those operations and acquired Urban Agricultural Corporation, a Delaware corporation (“UAC”). UAC holds the exclusive rights under a license from TerraSphere, Inc. (“TerraSphere”) to use their patented farming technology in Massachusetts, and the right of first refusal to purchase exclusive licenses for New Jersey, Pennsylvania and California. Under the TerraSphere license the Company receives certain vertical farming intellectual property and know-how from TerraSphere. The license was purchased by UAC in May, 2010 for $1,000,000 with $250,000 paid at acquisition and payments totaling $750,000 due by May 1, 2011. Urban Ag was unable to make payments due under the TerraSphere License . TerraSphere extended the payment terms under the TerraSphere License through December 31, 2011. Effective March 31, 2012 (“Effective Date”) the Company entered into a Stock Purchase Agreement (the "UAC Agreement”) with Distressed Asset Acquisitions, Inc. (“DAAI”) to divest itself of all of its ownership of UAC. The UAC Agreement provides that DAAI will pay $100 and assume all liabilities as of the Effective Date for 100% of the stock in UAC.

Currently the Company is focused on a long-term strategy of pursuing the consolidation of the fragmented industry that provides outsourced services to General Contractors, Facility Managers/Owners, Architects and Engineers. This industry is focused on providing construction path services including pre-construction services, site selection and preparation, hazardous material abatement and environment remediation, electrical/data communication system integration, electrical cabling installation and design, restoration/remediation services and post occupancy services.

In pursuit of this strategy, on November 7, 2011 the Company entered into a Stock Purchase Agreement (the "Agreement"), with CCS Environmental World Wide, Inc., a Delaware corporation (“CCS World Wide,” “CCS,” or the “Seller”) and the shareholders of CCS (“Shareholders”). Pursuant to the terms of the Agreement, Urban Ag acquired 100% of the outstanding shares of CCS. In exchange, the Company issued to the CCS Shareholders an aggregate of 7,900,000 shares of the Company's common stock, $.0001 par value and five million warrants to purchase one share of common stock of the Company per Warrant. The warrants are exercisable for a period of five years at a price of $3.00 per share. The Warrants become exercisable once CCS achieves $50,000,000 in revenue in a single fiscal year. The shares purchased represented 78.8% of the outstanding common stock of the Company after the closing.

Pursuant to the Agreement, CCS became the Company's wholly-owned subsidiary. This transaction was recorded as a reverse merger. The results of operations from CCS Worldwide are included for all periods included in these condensed consolidated financial statements.

CCS Worldwide is a hazardous material abatement and environmental remediation company based in Brockton, Massachusetts. The Company, based in Danvers, Massachusetts, currently acts as a Holding Company that has as its one operating subsidiary CCS Worldwide. CCS Worldwide generates revenue within a single operating segment which provides hazardous material abatement and environment remediation services through its four wholly owned subsidiaries - Commonwealth Contracting Services LLC; CCS Special Projects LLC; CCS Environmental, Inc.; and CCS Environmental Services, Inc., all based in Brockton, Massachusetts. For the periods covered in this annual report, our revenues consist of sales in the single operating segment providing services for hazardous material abatement and environmental remediation.

CCS Worldwide has operated its current business since 2005 generating annual revenues of between $2 million and $12 million providing services including removal of interior finishes, surfaces and fixtures; as well as the removal and proper disposition of certain asbestos-containing and lead-painted building materials and certain other regulated materials. CCS Worldwide is awarded contracts from its customers generally through a bidding process whereby contracts are typically awarded on a qualified low bidder basis. Its revenue is comprised of both union and non-union contracts.

Basis of Presentation

The accompanying condensed consolidated financial statements include the consolidated accounts of the Company and its wholly-owned subsidiaries, with all significant intercompany balances and transactions eliminated in consolidation. As a result of reverse merger accounting treatment, the Company’s financial statements for the three and six months ended June 30, 2012 include the results of operations and financial position of CCS Worldwide. The Company’s financial statements for the year ended December 31, 2011 reflect the consolidation of CCS Worldwide with the Company effective with the date of the Agreement.

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2. Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

3. Summary of Significant Accounting Policies

Going Concern

The accompanying condensed consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. This assumption, that the Company continues to operate as a going concern, is presently in question and contingent upon the Company's ability to raise additional funds. The accompanying condensed consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern.  The Company has experienced substantial losses, has a working capital deficiency of approximately $5.0 million, a stockholders’ deficit of approximately $7.1 million and is in default on several financial obligations at September 30, 2012, which raises substantial doubt about the Company's ability to continue as a going concern.

Additionally, the Company’s accounts receivable financing arrangement has been terminated by the lender and an alternative source of financing receivables has not been obtained. Also, as of October 5, 2012, the Company has delinquent payroll taxes and union benefits arising in 2012 of approximately $900,000 and $700,000 respectively.

Use of Estimates

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

Cash and Cash Equivalents

For financial statement presentation purposes, those short-term, highly liquid investments with original maturities of three months or less are considered to be cash or cash equivalents.

Accounts Receivable

The Company extends credit to its customers in the normal course of business and performs ongoing credit evaluations of its customers, maintaining allowances for potential credit losses which, when realized, have been within management's expectations. The allowance method is used to account for uncollectible amounts. The evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. Allowance for doubtful accounts and provision for contract adjustments was $564,972 at September 30, 2012 and $459,104 at December 31, 2011.

Revenue Recognition

For financial reporting, profits on construction contracts are recognized by the Company on the percentage-of-completion method, measured by the percentage of costs incurred to date to estimate total construction costs for each contract. This method is used because contracts in process include all materials, direct labor and subcontractor costs and those indirect costs related to contract performance, such as depreciation, motor vehicles, payroll taxes, employee benefits, small tools, insurance, etc. Selling and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions and estimated profitability, including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. An amount equal to contract costs attributable to claims is included in revenues when realization is probable and the amount can be reasonably estimated. Because of the inherent uncertainties in estimating costs, it is at least reasonably possible that the Company’s estimates of costs and revenues will change.

Property, Plant and Equipment

Property and equipment are reported at cost less accumulated depreciation. Equipment under capital leases is stated at the present value of minimum lease payments. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Lives for property, plant and equipment are as follows: leasehold improvements—Lesser of term or useful life; machinery and equipment—5 to 15 years; furniture and fixtures—3 to 10 years; computer hardware and software 3 to 7 years. Routine maintenance costs are expensed as incurred. Expenditures for renewals and betterments are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the accounts and gains or losses are recognized in operations. The Company recorded $89,537 and $45,603 in depreciation expense for the nine months ended September 30, 2012 and 2011, respectively. The Company recorded $29,100 and $17,819 in depreciation expense for the three months ended September 30, 2012 and 2011, respectively.

Valuation of Intangibles and Other Long Lived Assets

The recoverability of long-lived assets, including equipment and intangible assets, is reviewed when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Stock Based Compensation

Stock based awards are accounted for according to the provisions of FASB ASC 718. Our primary type of share-based compensation consists of stock options. We use the Black-Scholes option pricing model in valuing options. The inputs for the valuation analysis of the options include the market value of the Company's common stock, the estimated volatility of the Company's common stock, the exercise price of the warrants and the risk free interest rate.

Income Taxes

Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. Deferred taxes are recognized for the estimated taxes ultimately payable or recoverable based on enacted tax laws. Allowances are recorded if recovery is uncertain.

Earnings per Common Share

Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Basic and diluted earnings per share are the same as outstanding options are anti-dilutive. Dilutive common equivalent shares consist of options to purchase common stock (only if those options are exercisable and at prices below the average share price for the period) and shares issuable upon the conversion of the Company's securities.

Impairment

Intangible assets with estimable lives and other long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets is measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. Judgment is required to estimate future operating cash flows.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Allowances for doubtful accounts and contract adjustments	$ 564,973	$ 459,104
Preferred stock shares authorized	50,000,000	10,000,000
Preferred stock par value	$ 0.0001	$ 0.0001
Preferred stock shares issued	10,000,000	0
Preferred stock shares outstanding	10,000,000	0
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	200,000,000	15,000,000
Common stock shares issued	20,308,164	11,477,184
Common stock shares outstanding	20,308,164	11,477,184

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 20, 2012
Document And Entity Information
Entity Registrant Name	Urban Ag. Corp.
Entity Central Index Key	0001381324
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		20,308,164
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Revenue	$ 1,963,691	$ 1,860,926	$ 5,506,380	$ 5,383,129
Cost of sales	1,729,210	1,552,096	4,784,774	3,365,193
Gross profit (loss)	234,481	308,830	721,606	2,017,936
Costs and expenses:
General and administrative	156,802	642,568	2,030,651	1,710,883
Depreciation	29,100	17,819	89,537	45,603
Total costs and expenses	185,902	660,387	2,120,188	1,756,486
Income (loss) from continuing operations before other (income) and expense	48,579	(351,557)	(1,398,582)	261,450
Interest expense, net of interest income	12,661	42,663	181,252	403,494
Other (income) expense		(10,600)	(607,149)	(10,600)
Total other (income) and expense	12,661	32,063	(425,897)	392,894
Income (Loss) from continuing operations before income taxes	35,918	(383,620)	(972,685)	(131,444)
Income taxes
Income (loss) from continuing operations	35,918	(383,620)	(972,685)	(131,444)
Net income (loss)	$ 35,918	$ (383,620)	$ (972,685)	$ (131,444)
Basic and diluted income (loss) per share from continuing operations	$ 0.001	$ (0.18)	$ (0.05)	$ (0.06)
Weighted average basic and diluted common shares outstanding	20,308,164	2,127,184	20,308,164	2,127,184

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3. Events of Material Impact Subsequent to Year End (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2012
Sumimtbridge
Settlement amount	2,018,339
Cash due on settlement	1,335,000
Magliochetti Trust
Loan face amount	1,000,000
Accrued dividends on preferred stock	5,100
Midland
Preferred stock issued in exchange for loan	10,000,000

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income (loss)	$ (972,685)	$ (131,444)
Adjustments to reconcile net loss items not requiring the use of cash:
Depreciation	89,537	45,603
Change in operating assets and liabilities:
(Increase)/decrease in accounts receivable, net of allowances	(663,107)	101,398
(Increase)/decrease in prepaid expenses and other current assets	(1,657)	(30,000)
Increase/(decrease) in accounts payable and other current liabilities	191,570	(80,430)
Increase/(decrease) in accrued expenses	1,154,562	174,300
Increas/(decrease) in current portion of long term debt	286,152	(47,917)
Net cash used in operating activities	84,372	31,510
Cash flows from investing activities:
Net investment in plant, property and equipment	(73,199)	(157,230)
Net cash used in investing activities	(73,199)	(157,230)
Cash flows from financing activities:
Increase/(decrease) in short term notes payable	340,167	364,473
Net increase/(decrease) in line of credit	(624,970)	176,443
Net change in due to related parties	(137,288)	4,363
Increase/(decrease) in long term debt	(189,400)	(275,344)
Increase in capital stock and additiional paid in capital	680,628
Distributions and other equity adjustments		(173,625)
Net cash generated by financing activities	69,137	96,310
Change in cash from continuing operations	80,310	(29,410)
Change in cash from discontinued operations	(80,310)
Cash at beginning of period	25	29,455
Cash at end of period	$ 25	$ 45

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2. Summary of Significant Accounting Policies (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2012
Working capital	$ (5,000,000)
Delinquent payroll taxes	900,000
Delinquent union benefits	$ 700,000
Leasehold Improvements [Member]
Useful lives of assets	LESSER OF TERM OR USEFUL LIFE
Machinery and Equipment [Member]
Useful lives of assets	5-15 years
Furniture and Fixtures [Member]
Useful lives of assets	3-10 years
Computer Equipment [Member]
Useful lives of assets	3-7 years