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 June 30, 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 Hwy. 9 No., Howell, NJ 07731
---------------------------------------------
(Address of principal executive offices)
Registrant's 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
June 30, 2003
File Number
0-17394
Corfacts, Inc. & Subsidiaries
Form 10-QSB
June 30, 2003
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at June 30, 2003 3.
Consolidated Statements of Operations for the
three months and six months ended
June 30, 2003 and 2002 4.
Consolidated Statements of Cash Flows for the
three months and six months ended
June 30, 2003 and 2002 5.
Notes to Consolidated Financial Statements 6.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 10.
PART II - OTHER INFORMATION 13.
Item 1. Legal Proceedings 13.
Item 2. Changes in Securities 13.
Item 3. Defaults Upon Senior Securities 13.
Item 4. Submission of Matters to a Vote of
Securityholders 13.
Item 5. Other Information 13.
Item 6. Exhibits and Reports on Form 8-K 13.
Signatures 14.
-2-
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC. & SUBSIDIARIES
BALANCE SHEET
(Unaudited)
June 30, 2003
ASSETS
Current Assets
Cash and cash equivalents $ 438,968
Certificates of deposit 623,366
Interest receivable 6,215
Accounts receivable, net of allowance for
bad debts of $104,709 1,006,980
Prepaid expenses and other current assets 308,187
Deferred contract cost 135,204
Prepaid income tax 113,806
Other receivable municipal tax liens including
accrued interest net of estimated
disposition costs of $6,155 -
---------
Total Current Assets 2,632,726
---------
Property and equipment, at cost,
less accumulated depreciation of $452,357 757,123
Goodwill and customer lists, and covenant, net of
accumulated amortization of $232,854 119,229
Other assets
Security deposits 194,694
Deferred taxes 177,900
Deferred contract cost 330,034
---------
Total Other Assets 702,628
---------
TOTAL ASSETS $4,211,706
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $1,095,041
Deferred revenue 566,272
Customer deposits 21,149
Current portion of note payable - officers 146,504
Current portion of capitalized lease obligations 150,254
---------
Total Current Liabilities 1,979,220
---------
Capitalized lease obligations, net of
current portion 343,763
Note payable - officers', net of current portion 211,942
Deferred taxes 146,900
Deferred revenue 617,094
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 625,435
Less: Treasury stock, 3,864,088 shares at cost (1,000,000)
---------
TOTAL STOCKHOLDERS' EQUITY 912,787
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,211,706
=========
See notes to consolidated financial statements.
-3-
CORFACTS, INC. & SUBSIDIARIES
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
2002 2003 2002 2003
Revenue:
Net sales of
telemarketing services $ 2,753,574 $ 1,788,376 $ 5,253,881 $3,583,852
--------- --------- --------- ---------
Total revenues 2,753,574 1,788,376 5,253,881 3,583,852
--------- --------- --------- ---------
Direct operating expenses 1,302,812 1,107,223 2,553,609 2,221,291
--------- --------- --------- ---------
Gross Profit 1,450,762 681,153 2,700,272 1,362,561
Costs & expenses:
Selling, general &
administrative 812,737 793,733 1,598,182 1,686,750
Depreciation and
amortization 54,782 67,671 107,108 135,294
--------- --------- -------- ---------
Total costs & expenses 867,519 861,404 1,705,290 1,822,044
Income (loss) from operations 583,243 (180,251) 994,982 (459,483)
Other income/(expense)
Interest income 9,403 5,441 17,809 10,660
Interest expense (16,806) (19,213) (35,889) (39,342)
--------- --------- --------- ---------
Total other income/(expense) (7,403) (13,772) (18,080) (28,682)
Income (loss) before income
taxes 575,840 (194,023) 976,902 (488,165)
Provision for (benefit from)
income taxes 227,560 44,700 390,360 145,968
--------- --------- --------- ---------
Net income (loss) $ 348,280 $ (149,323) $ 586,542 $ (342,197)
========= ========= ========= =========
Basic earnings per common
share $ .043 $ (.018) $ .073 $ (.042)
========= ========= ========= =========
Average common shares
outstanding 8,088,433 8,098,433 8,088,433 8,098,433
========== ========== ========== =========
Diluted earnings per
Common share $ .041 $ (.018) $ .068 $ (.018)
========== ========== ========== =========
Average common shares and
Equivalents outstanding for
diluted earnings per common
share 8,584,754 8,098,433 8,584,754 8,098,433
========== ========== ========== =========
See notes to the consolidated financial statements.
-4-
CORFACTS, INC. & SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
2002 2003
---------------------
Cash flows from operating activities:
Net income (loss) $ 586,542 $(342,197)
Adjustments to reconcile net income
to net cash used in operations:
Depreciation and amortization 107,108 135,294
Bad debts provision 15,000 37,314
Deferred income taxes (14,340) (153,995)
Accounts receivable 385,647 (49,976)
Interest receivable (8,975) 1,745
Prepaid income taxes - 7,859
Prepaid expense and other current
assets (127,244) (385,821)
Other assets (56,000) (481,561)
Accounts payable and accrued expenses 70,658 448,939
Deferred revenue (126,800) 829,645
Customer Deposits 12,761 (86,369)
-------- --------
Net cash provided by (used in)
operating activities 844,357 (39,123)
-------- --------
Cash flows used in investing activities:
Redemption of CD's - 392,302
Purchase of equipment (78,696) (13,482)
-------- --------
Net provided by (used in) investing
activities (78,696) 378,820
-------- --------
Cash flows from financing activities:
Notes receivable advances 18,065 -
Repayment of note to shareholder (85,039) (80,248)
Repayment of acquisition notes (14,367) (12,923)
Repayment of capitalized lease
obligations (106,262) (124,720)
Net cash used in financing -------- --------
activities (187,603) (217,891)
-------- --------
Net increase (decrease) in cash and
Cash equivalents 578,058 121,806
Cash and cash equivalents at
beginning of period 1,379,941 317,162
--------- ---------
Cash and cash equivalents at
end of period $1,957,999 $ 438,968
========= =========
See notes to the consolidated financial statements.
-5-
CORFACTS, INC. & SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 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 aninitial
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
for hours worked or based upon completion of contracted terms. During the
six months ended June 30, 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 included.
Operating results for the six-month period ended June 30, 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
then shared in the earnings of the entity. Options to acquire 654,429 shares
of common stock for the six months ended June 30, 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 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 six months ended June 30, 2003 and 2002, interest expense on
this note was $0 and $1,286 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 six months ended June
30, 2003 and 2002, interest expense on this note was $14,030 and $18,657
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:
June 30, 2003
--------------
Total deferred tax assets $ 177,900
Less: Valuation allowance -
Deferred tax liability (146,900)
-------
Net deferred tax liability $ 31,000
=======
The reconciliation of income tax computed at the U.S. Federal statutory rates
to income tax expense at June 30, 2003 and June 30, 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)% (1.0)%
---- ----
Income tax provision 00.0 % 39.0 %
==== ====
NOTE 4 - EARNINGS PER SHARE OF COMMON STOCK
The following reconciles amounts reported in the financial statements:
For the six months ended June 30, 2002 2003
-----------------------
Weighted-average number of shares on which
earnings (loss) per share calculations are based:
Basic 8,098,433 8,098,433
Add - incremental shares under stock
option plans 496,321 -
--------- ---------
Assuming dilution 8,584,754 8,098,433
========= =========
Net income (loss) applicable to
common stockholders $ 586,542 $ (342,197)
========= =========
Net income (loss) on which diluted earnings
per share is calculated $ 586,542 $ (342,197)
========= =========
Earnings (loss) per share of common stock:
Basic $ .073 $ (.042)
========= =========
Assuming dilution $ .068 $ (.042)
========= =========
Stock options to purchase 275,000 and 170,000 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 1,131,000 shares
of common stock for the six-month period ended June 30, 2003 were excluded
from the calculation of diluted earnings per share because of their anit-
dilutive effect.
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
Six months ended June 30, 2003 compared to the six months ended
June 30, 2002
The Company is reporting a net loss of $342,197 on total
revenues of $3,583,852 for the six months ended June 30, 2003 as
compared to net income of $586,542 on total revenues of
$5,253,881 for the comparable six months ended June 30, 2002.
The decrease in sales of $1,670,029 for the six months ended June
30, 2003 as compared to the six months ended June 30, 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 for the six months ended June 30, 2003 were $1,476
as compared to $1,168,902 for the first six months of 2002. In
addition to the completion of work for this customer, the move to
the new corporate headquarters, as mentioned below, dramatically
affected new sales during the first quarter of 2003.
Basic loss per share for the six months ended June 30, 2003 was
$0.042 as compared to basic earnings per share of $0.073 for the
same period in 2002.
Selling, general and administrative costs were $1,686,750 for the
six months ended June 30, 2003 as compared to $1,598,182 for the
six months ended June 30, 2002. Selling, general and
administrative expenses increased by $88,568 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 $88,500 in the comparison
to rental expense for the first six months 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 six months ended
June 30, 2003 was $135,294 as compared to $107,108 for the same
period in 2002. Depreciation and amortization expense increased
$28,186, which was mainly attributable to depreciation expense
recognized for the purchase of new equipment and furniture
required for the corporate move in February 2003.
The Company recorded $10,660 in interest income for the six
months ended June 30, 2003 as compared to interest income of
$17,809 for the same period last year. Interest expense for the
six months ended June 30, 2003 was $39,342 as compared to $35,889
for the six months ended June 30, 2002.
Three months ended June 30, 2003 compared to the three months
ended June 30, 2002
The Company is reporting a net loss of $149,323 on total revenues
of $1,788,376 for the three months ended June 30, 2003 as
compared to net income of $348,280 on total revenues of
$2,753,574 for the comparable three months ended June 30, 2002.
Basic loss per share for the three months ended June 30, 2003 was
$0.018 as compared to basic earnings per share of $0.043 for the
same period in 2002.
Selling, general and administrative costs were $793,733 for the
three months ended June 30, 2003 as compared to $812,737 for the
three months ended June 30, 2002.
Depreciation and amortization expense for the three months ended
June 30, 2003 was $67,671 as compared to $54,782 for the same
period in 2002.
The Company recorded $5,441 in interest income for the three
months ended June 30, 2003 as compared to interest income of
$9,403 for the same period last year.
Interest expense for the three months ended June 30, 2003 was
$19,213 as compared to $16,806 for the three months ended June
30, 2002.
CORFACTS, INC. & SUBSIDIARIES
PART I - FINANCIAL INFORMATION
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $653,506 at June 30, 2003, as
compared to $893,372 at December 31, 2002. The losses that have
continued into the first half of 2003 have decreased cash flow by
$239,866. However, the Company has taken measures during the
second quarter to reduce costs and will not incur any additional
one-time cash outlays related to the move to the new Corporate
headquarters, which took place during the first quarter of this
year.
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.
CORFACTS, INC. & SUBSIDIARIES
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
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.
August 14, 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.
August 14, 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: August 14, 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: August 14, 2003 /s/ Ariel Freud
-----------------------------
Ariel Freud, Chief Executive
and Financial Officer
President, Chairman