U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED March 31, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-17394
CORFACTS INC. AND SUBSIDIARIES
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New Jersey 22-2478379
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer ID No.)
incorporation or organization)
2323 Highway 9 North, Howell, NJ 07731
---------------------------------------------
(Address of principal executive offices)
Registrants telephone number, including area code: (800) 696-7788
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 [X] No [ ]
Transitional Small Business Disclosure Format: Yes [ ] No [X]
Registrant had 8,098,433 shares of Common Stock, no par value, outstanding
on March 31, 2003.
File Number
0-17394
Corfacts, Inc. & Subsidiaries
Form 10-QSB
March 31, 2003
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Consolidated Balance Sheet at March 31, 2003 3.
Condensed Consolidated Statements of Operations for the
three months ended March 31, 2003 and 2002 4.
Condensed Consolidated Statements of Cash Flows for the
three months ended March 31, 2003 and 2002 5.
Notes to Condensed Consolidated Financial Statements 6.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 9.
PART II - OTHER INFORMATION 11.
Item 1. Legal Proceedings 11.
Item 2. Changes in Securities 11.
Item 3. Defaults Upon Senior Securities 11.
Item 4. Submission of Matters to a Vote of Security holders 11.
Item 5. Other Information 11.
Item 6. Exhibits and Reports on Form 8-K 11.
Signatures 12.
-2-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC. & SUBSIDIARIES
BALANCE SHEET
(Unaudited)
March 31, 2003
ASSETS
Current Assets
Cash and cash equivalents $ 259,197
Certificates of deposit 758,997
Interest receivable 5,664
Accounts receivable, net of allowance for
bad debts of $127,531 762,757
Prepaid expenses and other current assets 219,332
Prepaid income taxes 113,638
Other receivable municipal tax liens and
Accrued interest net of estimated
Disposition costs of $6,155 -
---------
Total Current Assets 2,119,585
---------
Property and equipment, at cost,
less accumulated depreciation of $393,554 815,926
Goodwill and customer lists, and covenant, net of
accumulated amortization of $223,986 128,097
Other assets
Security deposits 217,583
Deferred taxes 111,200
---------
Total Other Assets 328,783
---------
TOTAL ASSETS $3,392,391
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 786,860
Deferred revenue 450,466
Customer deposits 21,148
Current portion of note payable - officers 143,970
Current portion of note payable - other 5,221
Current portion of capitalized lease obligations 169,523
---------
Total Current Liabilities 1,577,188
---------
Capitalized lease obligations, net of
current portion 378,662
Note payable - officer, net of current portion 249,532
Deferred Taxes 124,900
Stockholders' equity
Common stock, no par value, 20,000,000 shares
authorized; 8,098,433 shares issued and
outstanding in 2003 1,287,352
Retained earnings 774,757
Less: Treasury stock, 3,864,088 shares at cost (1,000,000)
---------
TOTAL STOCKHOLDERS' EQUITY 1,062,109
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,392,391
=========
See notes to consolidated financial statements.
-3-
CORFACTS, INC. & SUBSIDIARIES
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
2002 2003
----------------------
Revenue:
Net sales of telemarketing services $ 2,500,307 $ 1,795,476
--------- ---------
Total revenues 2,500,307 1,795,476
--------- ---------
Direct operating expenses 1,250,797 1,114,068
--------- ---------
Gross Profit 1,249,510 681,408
Costs & expenses:
Selling, general & administrative 785,445 893,017
Depreciation and amortization 52,326 67,623
--------- ---------
Total costs & expenses 837,771 960,640
Income (loss) from operations 411,739 (279,232)
Other income/(expense)
Interest income 8,406 5,219
Interest expense (19,083) (20,129)
--------- ---------
Total other income/(expense) (10,677) (14,910)
--------- ---------
Income before income taxes 401,062 (294,142)
(Provision for)/benefit from income taxes (162,800) 101,268
--------- ---------
Net income (loss) $ 238,262 $ (192,874)
========= =========
Basic earnings (loss) per common share $ .029 $ (.024)
========= =========
Weighted Average common shares outstanding 8,088,433 8,098,433
========= =========
Diluted earnings (loss) per common share $ .028 $ (.024)
========= =========
Weighted Average common shares and equivalents
outstanding for diluted earnings
per common share 8,470,933 8,098,433
========= =========
See notes to the consolidated financial statements.
-4-
CORFACTS, INC. & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended
March 31,
2002 2003
---------------------
Cash flows from operating activities:
Net income $ 238,262 $(192,874)
Adjustments to reconcile net income
to net cash used in operations:
Depreciation and amortization 53,326 67,623
Bad debts provision 7,500 17,500
Deferred income taxes 5,400 (109,295)
Accounts receivable 271,696 36,327
Interest receivable (2,925) 2,206
Prepaid Income Taxes - 8,027
Prepaid expense and other current
assets (49,664) (158,355)
Accounts payable and accrued expenses (80,198) 140,758
Deferred revenue (36,300) 96,745
Customer Deposits (34,239) (86,370)
Income taxes payable (62,554) -
-------- -------
Net cash provided by operating
activities 309,304 (177,708)
-------- -------
Cash flows used in investing activities:
Purchase of equipment (13,688) (13,482)
-------- --------
Net cash provided by (used in) investing
activities (13,688) (13,482)
-------- --------
Cash flows from financing activities:
Notes receivable advances 12,717 -
(Purchase)redemption of certificates
of deposit - 256,671
Repayment of note to shareholder (42,148) (45,192)
Repayment of acquisition notes (7,113) (7,702)
Repayment of capitalized lease
obligations (49,884) (70,552)
Net cash used in financing -------- --------
activities (86,428) 133,225
-------- --------
Net increase (decrease) in cash and
Cash equivalents 209,188 (57,965)
Cash and cash equivalents at
beginning of period 1,379,941 317,162
--------- --------
Cash and cash equivalents at
end of period $1,589,129 $ 259,197
========= ========
See notes to the consolidated financial statements.
-5-
CORFACTS, INC. & SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
OVERVIEW
Corfacts, Inc., through its wholly owned subsidiaries, is a full service
telemarketing company, providing traditional outgoing call services and
customized marketing programs.
The Company specializes in providing telemarketing services for many
industries, including the medical profession. By offering an initial
consultation to local patrons, existing or new practices contract with us to
find new customers. We offer calling programs based on hours or on the
number of patients the customer is looking to reach. Our initial program is
normally a guaranteed program whereby the client's area is tested to see the
effectiveness of this type of marketing program. If the area is successful,
many clients continue with our services, customizing their monthly marketing
to meet their individual budget. If the program is not a success in that
particular geographic area, the customer is issued a pro-rated refund for
those patients we were not able to provide them. We believe that this is
the most effective marketing dollar offered unlike an ad in any other
medium which provides no guarantee.
The Company provides similar services to mortgage brokers, providing
different size programs that guarantee the broker with interested homeowners
with qualified criteria for refinancing.
The Company has also done extensive telemarketing for the publishing, cable
and utility industries, providing services that meet reporting requirements
that are mandated by their industry.
Revenues are recognized when earned based upon standard billing rates charged
by for hours worked or based upon completion of contracted terms. During the
first quarter ended March 31, 2003, the company has expanded its telemarketing
services to include the sale of warranty contracts. Revenues and expenses
from the sale of these contracts are recognized ratably over the contract
period.
NOTE 1 - BASIS OF PRESENTATION
The accompanying interim consolidated financial statements are unaudited and
have been prepared in accordance with generally accepted accounting principles
and with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been March 31,
2003 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2003. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
company's Annual Report on form 10-KSB for the year ended December 31, 2002.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Actual results could differ from
those estimates.
Earnings per share - The Company computes earnings per share in accordance
with Statements of Financial Accounting Standards (SFAS) No. 128. Basic EPS
excludes dilution and is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for
the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts resulted in the issuance of common stock that
-6-
CORFACTS, INC. & SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
then shared in the earnings of the entity. Options to acquire 654,429 shares
of common stock for the three months ended March 31, 2003 were excluded from
the calculation of diluted earnings per share because of their anti-dilutive
effect.
Stock based compensation - Financial Accounting Statement No. 123, Accounting
for Stock Based Compensation, encourages, but does not require companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to continue to account for stock-based
compensation using the intrinsic method prescribed in Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. Accordingly, compensation cost for stock options is measured
as the excess, if any, of the quoted market price of the Company's stock at
the date of the grant over the amount an employee must pay to acquire the
stock. The Company has adopted the "disclosure only" alternative described in
SFAS 123 and SFAS 148, which require pro forma disclosures of net income and
earnings per share as if the fair value method of accounting had been applied.
New Accounting Pronouncements - In April 2002, the FASB issued SFAS No. 145
"Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement
No. 13, and Technical Corrections." This statement rescinds SFAS No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," and an amendment of
that statement, SFAS No. 44, "Accounting for Intangible Assets of Motor
Carriers," and SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-
Fund Requirements." This statement amends SFAS No. 13, "Accounting for Leases,
"to eliminate inconsistencies between the required accounting for sale-
leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. Also, this statement amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. Provisions of SFAS No.
145 related to the rescission of SFAS No. 4 were effective for the Company
on November 1, 2002 and provisions affecting SFAS No. 13 were effective for
transactions occurring after May 15, 2002. The adoption of SFAS No. 145 did
not have a material impact on our financial statements.
In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." This statement covers restructuring type
activities beginning with plans initiated after December 31, 2002. Activities
covered by this standard that are entered into after that date will be
recorded in accordance with the provisions of SFAS No. 146. Management does
not believe there will be a significant impact on our consolidated financial
position or results of operations.
In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure," which provides alternative methods
of transition for a voluntary change to fair value based method of accounting
for stock-based employee compensation as prescribed in SFAS 123, "Accounting
for Stock-Based Compensation." Additionally, SFAS 148 required more prominent
and more frequent disclosures in financial statements about the effects of
stock-based compensation. The provisions of this Statement are effective for
fiscal years ending after December 15, 2002, with early application permitted
in certain circumstances. The Company has adopted the disclosure provisions
in these consolidated financial statements as disclosed above under Stock
Based Compensation.
In November 2002, the FASB Issued FASB interpretation (FIN) No. 45 "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Other." FIN No. 45 requires guarantor to
recognize, at the inception of a qualified guarantee, a liability for the
fair value of the obligation undertaken in issuing or modified after December
31, 2002. Management does not expect adoption of this Interpretation to have a
-7-
CORFACTS, INC. & SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 2003
(Unaudited)
material impact on the Company's financial conditions or results of
operations.
Effective January 1, 2002, the Company adopted SFAS Nos. 141 and 142. SFAS
142 eliminates amortization of goodwill and certain other intangible assets,
but requires annual testing for impairment (comparison of fair market value
to carrying value). Fair value is estimated using the present value of
expected future cash flows and other measures. The adoption of SFAS No. 141
and 142 did not have a material impact on our financial statements.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Note Payable, generated by the purchase of Metro Marketing, Inc., is
payable to the President and shareholder of the Company and bears a rate of
7%. During the three months ended March 31, 2003 and 2002, interest
expense on this note was $0 and $732, respectively. This note was fully
satisfied in January 2003.
The Note Payable generated by the Repurchase of Shares from the Vice
President bears an interest rate of 7%. During the three months ended March
31, 2003 and 2002, interest expense on this note was $7,289 and $9,611,
respectively.
NOTE 3 - INCOME TAXES
The Company and its wholly owned subsidiaries file a consolidated Federal
income tax return. Corfacts uses the asset and liability method in providing
income taxes on all transactions that have been recognized in the
consolidated financial statements. The asset and liability method required
that deferred taxes be adjusted to reflect the tax rates at which future
taxable amounts will be settled or realized. The effects of tax rate changes
on future deferred tax liabilities and deferred tax assets, as well as other
Changes in income tax laws, are recognized in net earnings in the period such
changes are enacted. Valuation allowances are established when necessary to
reduce deferred tax assets to amounts expected to be realized.
Deferred taxes consist of the following at:
March 31, 2003
--------------
Total deferred tax assets $ 111,200
Less: Valuation allowance -
Deferred tax liability (124,900)
-------
Net deferred tax liability $( 13,700)
=======
The reconciliation of income tax computed at the U.S. Federal statutory rates
to income tax expense at March 31, 2003 and March 31, 2002 is as follows:
Percentage of
Pretax income
2003 2002
------------------
Tax at US statutory rates 34.0 % 34.0 %
State income taxes, net of
federal tax benefit 6.0 % 6.0 %
Other adjustments (40.0)% .6 %
---- ----
Income tax provision 00.0 % 40.6 %
==== ====
-8-
NOTE 4 - EARNINGS PER SHARE OF COMMON STOCK
The following reconciles amounts reported in the financial statements:
For the three months ended March 31, 2002 2003
---------------------
Weighted-average number of shares on which
earnings (loss) per share calculations are based:
Basic 8,088,433 8,098,433
Add - incremental shares under stock
option plans 382,500 0
--------- ---------
Assuming dilution 8,470,933 8,098,433
========= =========
Net income (loss) applicable to
common stockholders $ 238,262 $ (192,874)
========= =========
Net income (loss) on which diluted earnings
per share is calculated $ 238,262 $ (192,874)
======== =========
Earnings (loss) per share of common stock:
Basic $ .029 $ (.024)
======== =========
Assuming dilution $ .028 $ (.024)
======== =========
Stock options to purchase 220,000 and 375,000 common shares in 2003 and 2002
respectively, were outstanding, but were not included in the computation of
diluted earnings per share because the exercise price of the options was
greater than the average market price of the common shares and, therefore
the effect would have been antidilutive. Options to acquire 654,429 shares
of common stock for the three-month period ended March 31, 2003 were excluded
from the calculation of diluted earnings per share because of their anit-
dilutive effect.
-9-
CORFACTS, INC. & SUBSIDIARIES
PART I - FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The analysis of the Company's financial condition, capital resources and
operating results should be viewed in conjunction with the accompanying
financial statements, including the notes thereto.
RESULTS OF OPERATIONS
Three months ended March 31, 2003 compared to the three months ended March
31, 2002
The Company is reporting a net loss of $192,874 on total revenues of
$1,795,476 for the three months ended March 31, 2003 as compared to net
income of $238,262 on total revenues of $2,500,307 for the comparable three
months ended March 31, 2002. The decrease in sales of $704,831 for the
quarter ended March 31, 2003 as compared to the quarter ended March 31, 2002
is attributable to many factors. The Company completed a project for a major
customer in the third quarter of 2002. Sales for this customer in the first
quarter of 2003 were $1,476 as compared to $692,892 for the quarter ended
March 31, 2002. In addition to the completion of work for this customer,
the move to the new corporate headquarters, as mentioned below, affected new
sales during the month of February 2003.
Basic loss per share for the three months ended March 31, 2003 was $0.024 as
compared to basic earnings per share of $0.029 for the same period in 2002.
Selling, general and administrative costs were $893,017 for the three months
ended March 31, 2003 as compared to $785,445 for the three months ended March
31, 2002. Selling, general and administrative expenses increased by
$107,572 due to numerous factors. The Company moved its corporate
headquarters during the first quarter of 2003 and incurred approximately
$50,000 in one-time moving expenses related to this move. In addition to
this, the increase in the monthly rent in the new location contributed
approximately $42,000 in the comparison to costs for the first quarter of
2002. The Company has consolidated all offices into this one location,
providing management with the ability to fully monitor all operations on a
daily basis.
Depreciation and amortization expense for the three months ended March 31,
2003 was $67,623 as compared to $52,326 for the same period in 2002.
Depreciation and amortization expense increased $15,297 for the period as
compared to the three months ended March 31, 2002 mainly due to the purchase
of new equipment and furniture related to the move to the new location.
The Company recorded $5,219 in interest income for the three months ended
March 31, 2003 as compared to interest income of $8,406 for the same period
last year.
Interest expense for the three months ended March 31, 2003 was $20,129 as
compared to $19,083 for the three months ended March 31, 2002.
-10-
CORFACTS, INC. & SUBSIDIARIES
PART I - FINANCIAL INFORMATION
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $542,397 at March 31, 2003, as compared to
$893,372 at December 31, 2002. The loss incurred during the first quarter of
2003 has decreased working capital by $350,975.
FORWARD LOOKING AND OTHER STATEMENTS
Forward looking statements above and elsewhere in this report are subject to
risks and uncertainties. Forward-looking statements include information
concerning possible or assumed future results of operations and cash flows.
These statements are identified by words such as "believes," "expects,"
"anticipates" or similar expressions. Such forward looking statements are
based on the beliefs of Corfacts, Inc. and its Board of Directors in which
they attempt to analyze the Company's competitive position in its industry
and the factors affecting its business. Stockholders should understand that
each of the foregoing risk factors, in addition to those discussed elsewhere
in this document and in the documents which are incorporated by reference
herein, could affect the future results of Corfacts, Inc. and could cause
those results to differ materially from those expressed in the forward-
looking statements contained or incorporated by reference herein. In
addition there can be no assurance that Corfacts, Inc. and its Board have
correctly identified and assessed all of the factors affecting the Company's
business.
ITEM 3. CONTROLS AND PROCEDURES
Ariel Freud, our Chief Executive Officer performed an evaluation of the
Company's disclosure controls and procedures within 90 days prior to the
filing date of this report. Based on his evaluation, he concluded that the
controls and procedures in place are sufficient to assure that material
information concerning the Company which could affect the disclosures in the
Company's quarterly and annual reports is made known to him by the other
officers and employees of the Company, and that the communications occur
with promptness sufficient to assure the inclusion of the information in the
then-current report.
There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect those controls subsequent
to the date on which Mr. Freud performed his evaluation.
INFLATION
The rate of inflation has had little impact on the Company's results of
operations and is expected to not have a significant impact on continuing
operations.
-11-
CORFACTS, INC. & SUBSIDIARY
PART II - OTHER INFORMATION
Item 1. Legal proceedings:
None
Item 2. Changes in securities:
None
Item 3. Defaults upon senior securities:
None
Item 4. Submission of matters to a vote of security Holders:
None
Item 5. Other information:
None
Item 6. Exhibits and Reports on Form 8-K:
99 Section 906 Certification
-12-
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.
May 20, 2003 /s/ Ariel Freud
-------------------
Ariel Freud
President, Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 20, 2003 /s/ Ariel Freud
------------------
Ariel Freud
President, Chairman
EXHIBIT 99
Section 906 Certification:
I, Ariel Freud, certify that:
1. I have reviewed this annual report on Form 10-QSB of Corfacts, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements and other
financial information included in this annual 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 annual
report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for
the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this annual
report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data and
have identified for the registrant's auditors any material weaknesses
in internal controls; and
b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. I have indicated in this annual report whether or not there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 20, 2003 /s/ Ariel Freud
-----------------------------
Ariel Freud, Chief Executive
and Financial Officer
EXHIBIT 99: SECTION 906 CERTIFICATION
The undersigned officers certify that this report fully complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934, and that
the information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of Corfacts, Inc.
A signed original of this written statement required by Section 906 has been
provided Corfacts, Inc. and will be retained by Corfacts, Inc. and furnished to
the Securities and Exchange Commission or its staff upon request.
Date: May 20, 2003 /s/ Ariel Freud
-----------------------------
Ariel Freud, Chief Executive
and Financial Officer