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, 1996
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
COMMISSION FILE NUMBER 0-17394
CORFACTS, INC.
(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)
50 Hwy 9, Morganville, NJ 07751
(Address of principal executive offices)
Issuer's telephone number, including area code:
(908) 972-2500
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
State the number of shares outstanding of each of the
issuer's classes of common equity as of the latest
practicable date.
Class Outstanding as of March 31, 1996
Common stock, no par value 8,005,314
Transitional Small Business Disclosure Format:Yes No X
File Number
0-17394
Corfacts, Inc.
Form 10-QSB
March 31, 1996
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Balance Sheets at
March 31, 1996 and December 31, 1995 3.
Condensed Statements of Operations
for the three months ended March
31, 1996 and 1995 4.
Condensed Statements of Cash Flows
for the three months ended March
31, 1996 and 1995 5.
Notes to Condensed Financial Statements 6.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7.
PART II - OTHER INFORMATION 9.
Signatures 10.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC.
BALANCE SHEETS
March 31, December 31,
1996 1995
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 34,657 $ 75,830
Interest bearing deposits 445,071 442,306
Interest receivable 2,700 1,954
Contract royalty receivable 3,310 6,376
Loan receivable, officer 40,389 40,389
Note receivable, buyer 23,140 15,208
Other receivable-municipal
tax liens, net 30,806 29,658
Total Current Assets 580,073 611,721
Other assets
Loan receivable, officer 91,725 91,725
Investment in partnership 2,048 1,863
Other assets 1,200 1,200
Total Other Assets 94,973 94,788
TOTAL ASSETS $ 675,046 $706,509
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and
accrued liabilities $ 19,624 $ 23,329
Total Current Liabilities 19,624 23,329
Stockholders' equity
Common stock, no par value,
20,000,000 shares authorized;
8,005,314 shares issued and
outstanding in 1996 and 1995 1,159,571 1,159,571
Retained(deficit) (504,149) (476,391)
TOTAL STOCKHOLDERS' EQUITY 655,422 683,180
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 675,046 $ 706,509
See accompanying notes to condensed financial statements.
CORFACTS, INC.
STATEMENTS OF OPERATIONS
Three months ended
March 31,
1996 1995
(Unaudited)
Income:
Revenue sharing $ - $ 4,348
Equity in earnings of
unconsolidated investee 185 1,799
Income from tax liens, net 1,148 5,150
Interest income, net 4,227 3,841
Total income 5,560 15,138
Costs & expenses:
General & administrative 33,318 28,387
Total costs & expenses 33,318 28,387
Net (loss) $(27,758) $(13,249)
Net (loss) per share $ (.003) $ (.002)
Weighted average shares
outstanding 8,005,314 8,005,314
See accompanying notes to condensed financial statements.
CORFACTS, INC.
STATEMENTS OF CASH FLOWS
Three months ended
March 31,
1996 1995
(Unaudited)
Cash flows from operating activities:
Net (loss) $(27,758) $(13,249)
Adjustments to reconcile net loss
to net cash used in operations:
(Increase) decrease in accounts
receivable 2,320 (1,616)
Increase in other assets - -
Increase (decrease) in
accounts payable 139 (9,528)
Increase (decrease) in
accrued expenses
and other liabilities (3,844) (1,875)
Net cash used in operating
activities (29,143) (26,268)
Cash flows from investing activities:
(Increase) decrease in tax lien
receivable (1,148) 8,137
(Increase) decrease in
partnership investment (185) 27,697
(Increase) decrease in advance
on contract - (3,000)
Net cash provided by investing
activities (1,333) 32,834
Cash flows from financing activities:
Payment to buyer (7,932) (1,015)
Loan to officers - (925)
Net cash provided by (used in)
financing activities (7,932) (1,940)
Net increase (decrease)in cash
and cash equivalents (38,408) 4,626
Cash and cash equivalents at
beginning of period 518,136 489,854
Cash and cash equivalents at
end of period $479,728 $494,480
CORFACTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed consolidated interim financial
statements included herein have been prepared by Corfacts,
Inc. (the "Company"), without audit, in accordance with
generally accepted accounting principles for interim
financial information and pursuant to the rules and
regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures made are adequate
to make the information presented not misleading.
In the opinion of management, the information furnished
for the three month period ended March 31, 1996 and 1995
includes all adjustments, consisting solely of normal
recurring accruals necessary for a fair presentation of the
financial results for the respective interim periods and is
not necessarily indicative of the results of operations to
be expected for the entire fiscal year ending December 31,
1996. It is suggested that the interim financial statements
be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 1995,
as filed with the Securities and Exchange Commission on Form
10-KSB (Commission File Number 0-17394).
NOTE 2 - DUE FROM RELATED PARTIES
Receivables have been generated by transactions with
related parties, which are detailed as follows:
Current Long-term
Due from Buyer: $23,140 $ -
Due from Officer 40,389 91,725
$63,529 $ 91,725
NOTE 3 - ASSET SALE
The Company sold specific assets and liabilities of the
Information division, effective August 1, 1991, to Ford
Publishing, Inc. These assets included all of the existing
book inventory, Corfacts' customer database, the business
information software and a collection of marketing material.
In addition to the negotiated purchase price, Corfacts has
been receiving 5% of gross sales, up to a total of $50,000,
or 5% of the first $1 million in sales of the buyer. The Company
earned the balance of this royalty during 1995 and received
the final payment against this $50,000 during the first
quarter of 1996.
NOTE 4 - OTHER RECEIVABLES
Municipal tax liens subject the Company to the potential
loss of investment. If the Company is forced to foreclose
on the real estate listed as collateral, there is a
potential for total loss from the investment if the property
cannot be sold.
NOTE 5 - INVESTMENT IN PARTNERSHIP
The partnership's only assets are municipal tax liens.
If the Company is forced to foreclose on the real estate
listed as collateral, there is a potential for total loss
from this investment if the property cannot be sold.
CORFACTS, INC.
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, 1996, compared to the three
months ended March 31, 1995
Corfacts has been unsuccessful in locating a suitable merger
or acquisition candidate to return the Company to a more
active operating status. After the first quarter of 1996,
the Company began negotiations to purchase a minority
interest in a telemarketing firm which has been operating
for approximately two years. The telemarketing firm is
currently profitable and not in need of working capital to
maintain its current level of activity. Corfacts intends to
monitor this transaction, if negotiated successfully, over
the next 90 to 180 days to determine the future role of
Corfacts in regard to this purchase.
Revenue sharing relative to the sale of the information
division was $0 as compared to $4,348 for the same quarter
last year, due to the fact that Ford Publishing finished its
obligation to Corfacts regarding the $50,000 in royalty
payments during the last quarter of fiscal 1995. The Company
received the final payment pertaining to this revenue
sharing during the quarter ended March 31, 1996.
Income derived from the Company's partnership in tax lien
investment was $185, as compared to $1,799 for the same
quarter in 1995. Income from the Company's solely owned tax
liens was $1,148, as compared to $5,150 for the three months
ended March 31, 1995. Revenues from tax lien investments
has been reduced to a minimum. The majority of the Company's
Tax Lien Certificates have either been assigned or redeemed.
The Company elected to assign many of its Tax Liens to third
parties in order to eliminate the costs of foreclosure on
those properties that reached the two year threshold, which
would have allowed the Company to start foreclosure
proceedings. Many investment companies are willing to take
assignments on older Certificates bearing up to 18% interest
because the market for these Certificates has become very
competitive, with interest rates that are typically well
below those rates that are available with Certificates of
Deposit.
Interest income for the three months ended March 31, 1996
was $4,227 as compared to $3,841 for the same period last
year. Interest income consists primarily of interest earned
on Certificates of Deposit and on the Note to Buyer.
General and administrative costs increased by $4,931 from
$28,387 in 1995 to $33,318 in 1996. This increase is
primarily attributable to an increase in Officer Salary.
Net loss for the three months ended March 31, 1996 was
$27,758, or $.003 per share, as compared to $13,249, or
$.002 for the same period last year. The Company's
operations have remained relatively constant and the Company
does not expect any material increase in revenues in the
near future.
FINANCIAL CONDITION AND LIQUIDITY
At March 31, 1996, the Company had current assets of
$580,073, including $479,728 in cash and cash equivalents,
which includes $394,140 in certificates of deposit. This
amount exceeded the Company's current liabilities of $19,624
providing working capital of $560,449.
The average monthly cash usage, net of interest and revenues
earned on investments has increased to approximately $9,000,
due to the loss in revenue sharing which ended during the
final quarter of 1995. The investment in a new business or
joint venture would, of course, change this monthly cash
usage with the initial outlays required, results of the
investment, and the length of time it would take for the
investment to become self funding.
There are no plans at this time to increase personnel or
make any capital expenditures during fiscal 1996.
Most of the cash available in the Company has been invested
in 90 day FDIC insured Certificates of Deposit at various
local banking institutions. The interest rates on these
Certificates have been averaging between 2.75% and 4%.
Management reviews these Certificates as they mature.
CORFACTS, INC.
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:
(a) Exhibits - None
(b) Reports on Form 8-K - None
Item 7. EX-27 - Edgar
SIGNATURES
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.
CORFACTS, INC.
May 12, 1996 /s/ Larry Finkelstein
Larry Finkelstein, Chairman and CEO
(Duly authorized officer and principal
financial officer)