SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 13, 1999
------------------------------
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 001-14995 13-4056901
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6 Greene Street, New York, New York 10013
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 966-0666
--------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
EXPLANATORY NOTE
On October 28, 1999, Accufacts Pre-Employment Screening, Inc., a Delaware
corporation (the "Company"), filed with the Securities and Exchange Commission a
Current Report on Form 8-K (the "Form 8-K") with respect to the acquisition of
Maglio, Inc. on October 13, 1999. This amendment is being filed for the purpose
of including financial statements and pro forma financial information required
by Item 7 of Form 8-K and should be read in conjunction with the Company's Form
8-K.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
a. Audited financial statements of Maglio, Inc. for the years ended
December 31, 1998 and 1997
b. Unaudited financial statements of Maglio, Inc. for the nine months
ended September 30, 1999 and 1998
c. Unaudited Proforma Combined financial statements of Accufacts
Pre-Employment Screening, Inc. as of September 30, 1999 and for the
periods ended September 30, 1999 and December 31, 1998
<PAGE>
MAGLIO, INC.
CONTENTS
- --------------------------------------------------------------------------------
Page
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Income 3
Statements of Changes in Stockholder's Equity 4
Statements of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6-8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
Maglio, Inc.
We have audited the accompanying balance sheets of Maglio, Inc. as of December
31, 1998 and 1997, and the related statements of income, changes in
stockholder's equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Maglio, Inc. as of December 31,
1998 and 1997, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
December 1, 1999
Marcum & Kliegman LLP
New York, New York
1
<PAGE>
MAGLIO, INC.
BALANCE SHEETS
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
ASSETS
1998 1997
-------- --------
CURRENT ASSETS
Cash $ 9,935 $ 5,216
Accounts receivable 180,550 200,854
-------- --------
Total Current Assets 190,485 206,070
PROPERTY AND EQUIPMENT, Net 98,502 69,025
OTHER ASSETS
Security deposits 5,846 994
-------- --------
TOTAL ASSETS $294,833 $276,089
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 25,417 $ 26,938
Note payable, related party 21,945 9,800
-------- --------
TOTAL LIABILITIES 47,362 36,738
-------- --------
COMMITMENTS
STOCKHOLDER'S EQUITY
Common stock, $0.10 par value, 1,000 authorized,
100 issued and outstanding 10 10
Additional paid in capital 19,720 19,720
Retained earnings 227,741 219,621
-------- --------
TOTAL STOCKHOLDER'S EQUITY 247,471 239,351
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY $294,833 $276,089
======== ========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
MAGLIO, INC.
STATEMENTS OF INCOME
For the Years Ended December 31, 1998 and 1997
- --------------------------------------------------------------------------------
1998 1997
---------- ----------
SALES $1,231,560 $1,072,576
COST OF SALES 874,227 706,264
---------- ----------
GROSS PROFIT 357,333 366,312
GENERAL AND ADMINISTRATIVE EXPENSES 305,459 263,207
---------- ----------
OPERATING INCOME 51,874 103,105
---------- ----------
OTHER EXPENSE
Interest expense, net 1,062 2,134
Loss on disposal of property and equipment 4,689 995
---------- ----------
TOTAL OTHER EXPENSE 5,751 3,129
---------- ----------
INCOME BEFORE TAXES 46,123 99,976
OTHER TAXES 2,003 1,680
---------- ----------
NET INCOME $ 44,120 $ 98,296
========== ==========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
MAGLIO, INC.
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
For the Years Ended December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid in Retained
Shares Amount Capital Earnings Total
--------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1997 100 $ 10 $ 19,720 $ 132,102 $ 151,832
Distributions to stockholder -- -- -- (10,777) (10,777)
Net income -- -- -- 98,296 98,296
--------- --------- --------- --------- ---------
BALANCE, December 31, 1997 100 10 19,720 219,621 239,351
Distributions to stockholder -- -- -- (36,000) (36,000)
Net income -- -- -- 44,120 44,120
--------- --------- --------- --------- ---------
BALANCE, December 31, 1998 100 $ 10 $ 19,720 $ 227,741 $ 247,471
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
MAGLIO, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 44,120 $ 98,296
-------- --------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 27,409 20,735
Loss on disposal of fixed assets 4,689 995
Decrease (increase) in accounts receivable 20,304 (77,437)
Increase in security deposits (4,852) --
(Decrease) increase in accounts payable and accrued expenses (1,521) 8,350
-------- --------
TOTAL ADJUSTMENTS 46,029 (47,357)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 90,149 50,939
-------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchases of property and equipment (61,575) (25,582)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of note payable, related party 12,145 --
Repayments of note payable, related party -- (9,890)
Distribution to stockholder (36,000) (10,777)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (23,855) (20,667)
-------- --------
NET INCREASE IN CASH 4,719 4,690
CASH - Beginning 5,216 526
-------- --------
CASH - Ending $ 9,935 $ 5,216
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the years for:
Interest $ 1,193 $ 2,139
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
MAGLIO, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - Summary of Significant Accounting Policies
Description of Business
Maglio, Inc (the "Company") was incorporated on May 22, 1986 in the State
of Florida. The Company acts as an information service bureau and is
engaged primarily in the business of verifying job applicant background
information for employers throughout the United States.
Property and Equipment and Depreciation
Property and equipment are recorded at cost. Depreciation is computed using
the straight-line method over the expected useful lives of the assets. Upon
retirement or other disposition of depreciable assets, the cost and related
accumulated depreciation are eliminated from the accounts, and any gain or
loss on disposal is credited to or charged against income. In the event of
a trade in, the undepreciated cost of the trade-in is included in the cost
of the newly acquired asset.
Revenue Recognition
Revenues are recorded at the time of performance of service.
Advertising Cost
Advertising costs are expensed as incurred.
Income Taxes
The Company, with the consent of their stockholders, has elected to be
taxed as an "S" Corporation under the Internal Revenue Code. In lieu of
corporate income taxes, the stockholders of an "S" corporation are taxed on
their proportionate share of the corporation's taxable income. Accordingly,
no provision or liability for federal income taxes has been included in the
financial statements. A provision, however, for the Florida Intangible tax
and Florida Tangible Personal Property tax has been included.
Use of Estimates in the Financial Statements
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 and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
6
<PAGE>
MAGLIO, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 2 - Property and Equipment
Property and equipment is comprised of the following at December 31, 1998
and 1997:
Estimated
1998 1997 Useful Lives
-------- -------- ---------------
Furniture $ 56,097 $ 26,161 7 years
Telephone equipment 39,490 37,608 5 years
Computer equipment 63,313 59,234 5 years
-------- --------
158,900 123,003
Less: accumulated depreciation 60,398 53,978
-------- --------
Property and equipment, net $ 98,502 $ 69,025
======== ========
Depreciation expense for the years ended December 31, 1998 and 1997
amounted to $27,409 and $20,735, respectively.
NOTE 3 - Note Payable, Related Party
The Company has available a $25,000 unsecured line of credit with a
relative of the Company's stockholder through July 1, 2000. The line bears
interest at 11% with interest payable annually. The outstanding balance
under the line at December 31, 1998 and 1997 is $21,945 and $9,800,
respectively.
NOTE 4 - Commitments
During 1998 the Company entered into a 5 year noncancelable operating lease
for its premises, which expires July 31, 2003. The Company is obligated to
pay a monthly rental of $4,317 which increases annually. Rent expense for
the years ended December 31, 1998 and 1997 was $48,746 and $34,325,
respectively.
Further minimum rental payments under the above noncancelable operating
lease as of December 31, 1998 are as follows:
7
<PAGE>
MAGLIO, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 4 - Commitments, continued
For the Year Ending
December 31, Amount
-----------------------------------
1999 $ 52,417
2000 53,897
2001 55,376
2002 57,165
2003 34,102
--------
Total $252,957
========
NOTE 5 - Major Customer
During the years ended December 31, 1998 and 1997, a majority of the
Company's sales were to two customers. Sales to these customers totaled
$318,025 (26%) and $127,099 (10%) for the year ended December 31, 1998 and
$159,635 (15%) and $100,017 (9%) for the year ended December 31, 1997.
Accounts receivable from these customers were $50,299 and $19,932 as of
December 31, 1998 and $55,086 and $18,272 as of December 31, 1997.
NOTE 6 - Subsequent Event
On October 13, 1999 the Company was acquired by Maglio-AccuFacts
Pre-Employment Screening, Inc., a wholly-owned subsidiary of AccuFacts
Pre-Employment Screening, Inc. ("Accufacts"). The acquisition was completed
by issuing 177,471 shares of Accufacts common stock ("Acquisition Shares")
in exchange for 100% of the Company's common stock. The Acquisition Shares
consist of 174,971 shares of common stock in consideration for the
acquisition and 2,500 shares of common stock in consideration for the
stockholder of the company entering into a non-competition agreement.
8
<PAGE>
MAGLIO, INC.
BALANCE SHEETS (UNAUDITED)
September 30, 1999 and 1998
- --------------------------------------------------------------------------------
ASSETS
1999 1998
-------- --------
CURRENT ASSETS
Cash $ 113 $ 36,090
Accounts receivable 212,560 170,029
-------- --------
Total Current Assets 212,673 206,119
PROPERTY AND EQUIPMENT, Net 84,296 87,413
OTHER ASSETS
Security deposits 5,846 5,846
-------- --------
TOTAL ASSETS $302,815 $299,378
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 40,618 $ 38,177
Note payable, related party 34,945 6,800
-------- --------
TOTAL LIABILITIES 75,563 44,977
-------- --------
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock, $0.10 par value, 1,000 authorized,
100 issued and outstanding 10 10
Additional paid in capital 19,720 19,720
Retained earnings 207,522 234,671
-------- --------
TOTAL STOCKHOLDERS' EQUITY 227,252 254,401
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $302,815 $299,378
======== ========
<PAGE>
MAGLIO, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
For the Nine Months Ended September 30, 1999 and 1998
- --------------------------------------------------------------------------------
1999 1998
--------- ---------
SALES $ 900,217 $ 901,995
COST OF SALES 669,193 640,107
--------- ---------
GROSS PROFIT 231,024 261,888
GENERAL AND ADMINISTRATIVE EXPENSES 238,300 226,401
--------- ---------
OPERATING (LOSS) INCOME (7,276) 35,487
OTHER EXPENSE
Interest expense, net 2,465 416
Loss on disposal of property and equipment -- 3,500
--------- ---------
TOTAL OTHER EXPENSE 2,465 3,916
--------- ---------
INCOME BEFORE OTHER TAXES (9,741) 31,571
OTHER TAXES 478 521
--------- ---------
NET (LOSS) INCOME $ (10,219) $ 31,050
========= =========
<PAGE>
MAGLIO, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)
For the Nine Months Ended September 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional
--------------------- Paid in Retained
Shares Amount Capital Earnings Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1999 100 $ 10 $ 19,720 $ 227,741 $ 247,471
Distributions to stockholders -- -- -- (10,000) (10,000)
Net loss -- -- -- (10,219) (10,219)
--------- --------- --------- --------- ---------
BALANCE, September 30, 1999 100 $ 10 $ 19,720 $ 207,522 $ 227,252
========= ========= ========= ========= =========
</TABLE>
<PAGE>
MAGLIO, INC.
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY (UNAUDITED)
For the Nine Months Ended September 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional
--------------------- Paid in Retained
Shares Amount Capital Earnings Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, January 1, 1998 100 $ 10 $ 19,720 $ 219,621 $ 239,351
Distributions to stockholders -- -- -- (16,000) (16,000)
Net income -- -- -- 31,050 31,050
--------- --------- --------- --------- ---------
BALANCE, September 30, 1998 100 $ 10 $ 19,720 $ 234,671 $ 254,401
========= ========= ========= ========= =========
</TABLE>
<PAGE>
MAGLIO, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Nine Months Ended September 30, 1999 and 1998
- --------------------------------------------------------------------------------
1999 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $(10,219) $ 31,050
-------- --------
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 23,000 20,500
(Increase) decrease in accounts receivable (32,010) 30,825
Increase in security deposits -- (4,852)
Increase in accounts payable and accrued expenses 15,201 11,239
-------- --------
TOTAL ADJUSTMENTS 6,191 57,712
-------- --------
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (4,028) 88,762
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (8,794) (38,888)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of note payable, related party 13,000 --
Repayments of note payable, related party -- (3,000)
Distribution to stockholder (10,000) (16,000)
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 3,000 (19,000)
-------- --------
NET (DECREASE) INCREASE IN CASH (9,822) 30,874
CASH - Beginning 9,935 5,216
-------- --------
CASH - Ending $ 113 $ 36,090
======== ========
<PAGE>
MAGLIO, INC.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - Presentation
The balance sheet of the Company as of September 30, 1999 and 1998, the
related statements of operations, stockholders' equity and cash flows for
the nine months ended September 30, 1999 and 1998 included in the financial
statements have been prepared by the Company without audit. In the opinion
of management, the accompanying financial statements include all
adjustments (consisting of normal, recurring adjustments) necessary to
summarize fairly the Company's financial position and results of
operations. The results of operations for the nine months ended September
30, 1999 and 1998 are not necessarily indicative of the results of
operations for the full year or any other interim period.
NOTE 2 - Subsequent Event
On October 13, 1999 the Company was acquired by Maglio-AccuFacts
Pre-Employment Screening, Inc., a wholly-owned subsidiary of AccuFacts
Pre-Employment Screening, Inc. ("Accufacts"). The acquisition was completed
by issuing 177,471 shares of Accufacts common stock ("Acquisition Shares")
in exchange for 100% of the Company's common stock. The Acquisition Shares
consist of 174,971 shares of common stock in consideration for the
acquisition and 2,500 shares of common stock in consideration for the
stockholder of the company entering into a non-competition agreement.
<PAGE>
UNAUDITED PROFORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Proforma Combined Balance Sheet as of September 30, 1999
reflects the financial position of Accufacts Pre-Employment Screening, Inc. (the
"Company") as if the acquisition of Maglio, Inc. ("Maglio") had occurred on
September 30, 1999 (the "Acquisition"). The Unaudited Proforma Combined
Statement of Operations for the nine months ended September 30, 1999 and the
year ended December 31, 1998 presents the Company's results of operations as if
the Acquisition had been consummated on January 1, 1999 and 1998, respectively.
The Unaudited Proforma Combined Financial Statements reflect the Acquisition
using the purchase method of accounting. The Proforma Combined Financial
Statements do not purport to be indicative of the results of operations or
financial position of the Company that would have been achieved had the
Acquisition actually occurred as of the assumed dates and for the periods
presented. The Proforma Combined Financial Statements are based on historical
financial statements of the Company and Maglio for the periods indicated in the
Proforma statements. The Proforma Combined Financial Statements are based on the
assumptions set forth in the notes and should be read in conjunction with the
separate historical financial statements of the Company and Maglio and notes
hereto.
A preliminary allocation of the purchase price has been made to Goodwill in the
accompanying Unaudited Proforma Combined Financial Statements based on available
information. The actual allocation of purchase price and resulting effect on
income from operations may differ significantly from the proforma amounts
included herein. These unaudited proforma adjustments represent the Company's
preliminary determination of purchase accounting adjustments and are based upon
available information and certain assumptions that the Company believes to be
reasonable. Consequently, the amounts reflected in the Unaudited Proforma
Combined Financial Statements are subject to change, and the final amounts may
differ substantially.
<PAGE>
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC
PRO FORMA COMBINED BALANCE SHEET (Unaudited)
September 30, 1999
<TABLE>
<CAPTION>
Accufacts
Pre-Employment Pro Forma
ASSETS Screening, Inc. Maglio, Inc Adjustments Combined
------ --------------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ 221,581 $ 113 $ 221,694
Accounts receivable 341,421 212,560 553,981
----------- ----------- -----------
TOTAL CURRENT ASSETS 563,002 212,673 775,675
----------- ----------- -----------
PROPERTY AND EQUIPMENT, Net 63,134 84,296 147,430
----------- ----------- -----------
OTHER ASSETS
Security deposits 2,708 5,846 8,554
Prepaid expenses 82,369 0 82,369
Intangible asset 13,933 0 13,933
Goodwill 0 0 144,562 a 144,562
Non-competition agreement 5,313 b 5,313
Investment in affiliate 0 0 227,252 a 227,252 c 0
----------- ----------- -----------
TOTAL OTHER ASSETS 99,010 5,846 254,731
----------- ----------- -----------
TOTAL ASSETS $ 725,146 $ 302,815 $ 1,177,836
=========== =========== ===========
LIABILITES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITES
Accounts payable and accrued expenses 136,757 40,618 $ 177,375
Current maturities of capital lease obligations 9,617 0 9,617
Notes payable, bank 47,428 0 47,428
Notes payable, related party 0 34,945 34,945
Loans payable, stockholder 21,280 0 21,280
----------- ----------- -----------
TOTAL CURRENT LIABILITES 215,082 75,563 290,645
----------- ----------- -----------
OTHER LIABILITIES
Deferred income taxes payable 40,000 0 40,000
Capital lease obligations, less current maturities 2,556 0 2,556
----------- ----------- -----------
TOTAL OTHER LIABILITIES 42,556 0 42,556
TOTAL LIABILITIES 257,638 75,563 333,201
----------- ----------- -----------
COMMITMENTS
STOCKHOLDER'S EQUITY
Preferred stock, $.01 par value, 5,000,000 shares
authorized none issued and outstanding 0 0 0
Common stock, $ 0.01 par value, 50,000,000 shares 25 b
authorized, 6,476,504 issued and outstanding at
September 30, 1999 62,990 10 10 c 1,750 a 64,765
Common stock subscribed, 150,967 at September 30, 1999 1,510 1,510
5,288 b
Additional paid in capital 944,470 19,720 19,720 c 370,064 a 1,319,822
Stock subscription receivable (301,934) (301,934)
Accumulated (deficit) earnings (239,528) 207,522 207,522 c (239,528)
----------- ----------- -----------
TOTAL STOCKHOLDER'S EQUITY 467,508 227,252 844,635
----------- ----------- -----------
TOTAL LIABILITES AND STOCKHOLDER'S
EQUITY $ 725,146 $ 302,815 $ 1,177,836
=========== =========== ===========
</TABLE>
<PAGE>
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS (Unaudited)
For the Nine Months Ended September 30, 1999
<TABLE>
<CAPTION>
Accufacts
Pre-Employment Proforma
Screening, Inc. Maglio, Inc Adjustments Combined
--------------- -----------------------------------------------
<S> <C> <C> <C> <C>
REVENUES $1,366,461 $900,217 $2,266,678
---------- -------- ----------
COST OF SALES 908,750 669,193 1,577,943
---------- -------- ----------
GROSS PROFIT 457,711 231,024 688,735
1,328 e
GENERAL AND ADMINISTRATIVE EXPENSES 577,861 238,300 5,421 d 822,910
---------- -------- ----------
OPERATING LOSS (120,150) (7,276) (134,175)
---------- -------- ----------
OTHER EXPENSE
Interest expense, net 5,165 2,465 7,630
---------- -------- ----------
LOSS BEFORE INCOME TAXES (125,315) (9,741) (141,805)
INCOME TAXES 1,549 478 2,027
---------- -------- ----------
NET LOSS (126,864) (10,219) (143,832)
========== ======== ==========
Per share data
Net loss per share, Basic and Diluted (0.02)
Weighted average number of common shares outstanding 6,287,863
</TABLE>
<PAGE>
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS (Unaudited)
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Accufacts
Pre-Employment Proforma
Screening, Inc. Maglio, Inc Adjustments Combined
--------------- ----------- ----------- --------
<S> <C> <C> <C> <C>
REVENUES $1,598,772 $1,231,560 $2,830,332
COST OF SALES 1,119,043 874,227 1,993,270
---------- ---------- ----------
GROSS PROFIT 479,729 357,333 837,062
1,771 e
GENERAL AND ADMINISTRATIVE EXPENSES 552,474 305,459 7,228 d 866,932
---------- ---------- ----------
OPERATING (LOSS) INCOME (72,745) 51,874 (29,870)
---------- ---------- ----------
OTHER EXPENSE
Interest expense, net 10,031 1,062 11,093
Loss on disposal of property and equipment 0 4,689 4,689
---------- ---------- ----------
TOTAL OTHER EXPENSES 10,031 5,751 15,782
---------- ---------- ----------
(LOSS) INCOME BEFORE INCOME TAXES (82,776) 46,123 (45,652)
INCOME TAXES 42,105 2,003 44,108
---------- ---------- ----------
NET (LOSS) INCOME (124,881) $44,120 (89,760)
========== ========== ==========
Per share data
Net loss per share, Basic and Diluted (0.02)
Weighted average number of common shares outstanding 5,358,567
</TABLE>
<PAGE>
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
September 30, 1999
a To record the acquisition of Maglio, Inc. by the issuance of 174,971 shares
of Accufacts Pre-employment Screening, Inc. common stock at fair market
value of $ 2.125, for 100% of the assets and liabilities of Maglio, Inc.
174,971 shares $ 2.125 market value 371,814
Net book value which is approximately the fair
market value at the acquisition date 227,252
-------
Net assets acquired in excess of purchase price 144,562
=======
b To record the issuance of 2,500 shares of Accufactts Pre-Employment
Screening, Inc. common stock at the fair market value of $ 2.125, in
consideration for a noncompetition agreement with a stockholder of Maglio.
c To eliminate the equity section of the acquired company.
d To record amortization expense (20 year life) relating to Goodwill for the
year ended December 31, 1998 and the nine months ended September 30, 1999
e To record amortization expense (3 year life) relating to the noncompetition
agreement for the year ended December 31, 1998 and the nine months ended
September 30, 1999
<PAGE>
SIGNATURE
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 hereunto duly authorized.
ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
Date: December 22, 1999 By: /s/ Philip Luizzo
--------------------- --------------------------------
Name: Philip Luizzo
Title: President and Chief Executive
Officer
(principal executive officer)
