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 SEPTEMBER 30, 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)
41 East Main St., Freehold, NJ 07728
(Address of principal executive offices)
Issuer's telephone number,including area code:(908)780-1188
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.
Outstanding as of
Class September 30, 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
September 30, 1996
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Balance Sheets at
September 30, 1996 and December 31, 1995 3.
Condensed Statements of Operations
for the nine months ended September
30, 1996 and 1995 4.
Condensed Statements of Cash Flows
for the nine months ended September
30, 1996 and 1995 5.
Notes to Condensed Financial Statements 6.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8.
PART II - OTHER INFORMATION 10.
Signatures 11.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC.
BALANCE SHEETS
September 30, December 31,
1996 1995
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 8,566 $ 75,830
Interest bearing deposits 406,066 442,306
Interest receivable 5,785 1,954
Contract royalty receivable 2,485 6,376
Loan receivable, officer 45,389 40,389
Note receivable, buyer 23,301 15,208
Other receivable-municipal
tax liens, net 33,054 29,658
_______ _______
Total Current Assets 524,646 611,721
Other assets
Loan receivable, officer 91,725 91,725
Investment in partnership 2,055 1,863
Other assets 1,200 1,200
Total Other Assets 94,980 94,788
_______ _______
TOTAL ASSETS $ 619,626 $706,509
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and
accrued liabilities $ 18,955 $ 23,329
______ ______
Total Current Liabilities 18,955 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) (558,900) (476,391)
________ _________
TOTAL STOCKHOLDERS' EQUITY 600,671 683,180
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 619,626 $ 706,509
See accompanying notes to condensed financial statements.
CORFACTS, INC.
STATEMENTS OF OPERATIONS
Nine months ended
September 30,
1996 1995
______ _____
(Unaudited)
Income:
Revenue sharing $ - $ 9,740
Equity in earnings of
unconsolidated investee 192 5,279
Income from tax liens, net 3,396 14,133
Interest income, net 15,226 11,751
______ ______
Total income 18,814 40,903
Costs & expenses:
General & administrative 101,323 83,899
_______ ______
Total costs & expenses 101,323 83,899
Net (loss) $(82,509) $(42,996)
Net (loss) per share $ (.01) $ (.005)
Weighted average shares
outstanding 8,005,314 8,005,314
See accompanying notes to condensed financial statements.
CORFACTS, INC.
STATEMENTS OF CASH FLOWS
Nine months ended
September 30,
1996 1995
______ ______
(Unaudited)
Cash flows from operating activities:
Net loss $(82,509) $(42,996)
Adjustments to reconcile net loss
to net cash used in operations:
(Increase) decrease in accounts
receivable 60 (5,075)
Increase in prepaid expenses - (7,170)
Decrease in accounts payable
and accrued liabilities (4,374) (1,042)
_______ ________
Net cash used in operating
activities (86,823) (56,283)
Cash flows from investing activities:
(Increase) decrease in tax lien
receivable (3,396) 99,362
(Increase) decrease in
partnership investment (192) 31,446
Net cash (used in) provided by _________ _______
investing activities (3,588) 130,808
Cash flows from financing activities:
Payment to buyer (8,093) ( 9,519)
Loan to officer (5,000) (35,725)
Net cash used in financing
activities (13,093) (45,244)
Net increase (decrease) in cash and _______ ________
cash equivalents (103,504) 29,281
Cash and cash equivalents at
beginning of period 518,136 489,854
Cash and cash equivalents at ________ ________
end of period $414,632 $519,135
CORFACTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 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 nine month period ended September 30, 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: $23,301 $ -
Due from Officer 45,389 91,725
_______ ________
$68,690 $ 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
NINE MONTHS ENDED SEPTEMBER 30, 1996, COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 1995
Over the past four years, Corfacts has been unsuccessful in
locating a suitable merger or acquisition candidate to return
the Company to a more active operating status. However, the
Company has signed a Letter of Intent to acquire all the
assets of 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 is currently in negotiations
to acquire this Company as a wholly-owned subsidiary and for management
to become involved in the day today operations of this company. Management
is closely monitoring the operations of this firm and hopes to reach an
agreement during the fourth quarter of this year.
Revenue sharing relative to the sale of the information division
was $0 as compared to $9,740 for the same period 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 $192, as compared to $5,279 for the same nine
months in 1995. Income from the Company's solely owned tax
liens was $3,396, as compared to $14,133 for the nine months
ended September 30, 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 nine months ended September 30, 1996
was $15,266 as compared to $11,751 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 $17,424 from
$83,899 in 1995 to $101,323 in 1996. This increase is
primarily attributable to an increase in Officer Salary and
legal expenses associated with the proposed transaction
mentioned above.
Net loss for the nine months ended September 30, 1996 was
$82,509 or $.01 per share, as compared to $42,996, or $.005
per share 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 September 30, 1996, the Company had current assets of
$446,202, including $414,632 in cash and cash equivalents,
which includes $399,356 in certificates of deposit. This
amount exceeded the Company's current liabilities of $18,955
providing working capital of $427,247.
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
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.
November 12, 1996 /s/ Larry Finkelstein
Larry Finkelstein, Chairman and CEO
(Duly authorized officer and principal
financial officer)