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, 1995
( ) 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 Highway 9, Morganville, NJ 07751
(Address of principal executive offices) (Zip code)
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 September 30, 1995
Common stock, no par value 8,005,314
Transitional Small Business Disclosure Format: Yes No X
<PAGE>
File Number 0-17394
Corfacts, Inc.
Form 10-QSB
September 30, 1995
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Balance Sheets at
September 30, 1995 and December 31, 1994 3.
Condensed Statements of Operations
for the nine months ended September 30, 1995
and 1994 4.
Condensed Statements of Cash Flows
for the nine months ended September 30, 1995
and 1994 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 11.
Signatures 12.<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC.
BALANCE SHEETS
September 30, December 31,
1995 1994
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 79,348 $ 4,246
Interest bearing deposits 439,787 485,608
Accounts receivable, net 231 5,881
Loan receivable, officer 34,869 33,944
Receivable from buyer 22,750 13,231
Other receivable 10,725 -
Prepaid expenses 7,170 -
Other receivable - municipal tax liens 14,367 27,761
Total Current Assets 609,247 570,671
Other assets
Loan receivable, officer 97,245 62,445
Investment in partnership 15,210 46,656
Other receivable - municipal tax liens 16,503 102,471
Other assets 1,200 1,200
Total Other Assets 130,158 212,772
TOTAL ASSETS $739,405 $783,443
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liab 16,763 17,805
Total Current Liabilities 16,763 17,805
Stockholders' equity
Common stock, no par value,
20,000,000 shares authorized;
8,005,314 shares issued and
outstanding in 1995 and 1994 1,159,571 1,159,571
Retained (deficit) (436,929) (393,933)
TOTAL STOCKHOLDERS'
EQUITY 722,642 765,638
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $739,405 $ 783,443
See accompanying notes to condensed financial statements.<PAGE>
CORFACTS, INC.
STATEMENTS OF OPERATIONS
Nine months ended September 30,
1995 1994
(Unaudited)
Income:
Revenue sharing $ 9,740 $ 8,785
Contract royalty revenue - 2,099
Equity in earnings of
unconsolidated investee 5,279 5,356
Income from tax liens, net 14,133 10,514
Interest and other income, net 11,751 11,650
Total income 40,903 38,404
Costs & expenses:
General & administrative 83,899 71,983
Depreciation and amortization - 2,773
Total costs & expenses 83,899 74,756
Net loss $(42,996) $(36,352)
Net loss per share $ (.005) $ (.005)
Weighted average shares
outstanding 8,005,314 8,005,314
See accompanying notes to condensed financial statements.<PAGE>
CORFACTS, INC.
STATEMENTS OF CASH FLOWS
Nine months ended September 30,
1995 1994
(Unaudited)
Cash flows from operating activities:
Net loss $(42,996) $(36,352)
Adjustments to reconcile net loss
to net cash used in operations:
Depreciation - 2,773
(Increase) decrease in accounts
receivable (5,075) 5,173
Increase in prepaid expenses (7,170) (18,350)
Decrease in accounts payable
& accrued liabilities (1,042) (24,679)
Net cash used in operating
activities (56,283) (71,435)
Cash flows from investing activities:
Decrease in tax lien receivable 99,362 30,672
Decrease in partnership
investment 31,446 13,309
Decrease in advance on contract - 14,990
Net cash provided by investing
activities 130,808 58,971
Cash flows from financing activities:
Repayment from partner - 31,504
Note receivable from buyer ( 9,519) (4,161)
Repayment from (loan to) officer (35,725) 23,605
Net cash provided by (used in)
financing activities (45,244) 50,948
Net increase (decrease) in cash
and cash equivalents 29,281 38,484
Cash and cash equivalents at
beginning of period 489,854 508,307
Cash and cash equivalents at end
of period $519,135 $546,791
<PAGE>
CORFACTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(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
areadequate to make the information presented not misleading.
In the opinion of management, the information furnished for the
nine month period ended September 30,1995 and 1994 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, 1995. It is suggested that the interim
financial statements be read in conjunction with the audited
consolidated financial statements for the year ended December 31,
1994, as filed with the Securities and Exchange Commission on
Form 10-K (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: $22,750 $ -
Due from Officer 34,869 97,245
$57,619 $97,245
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 of the buyer, and will continue to receive these
payments up to a total payment of $50,000. However, Corfacts
cannot predict whether all of these payments will actually be
received, and is, therefore, recording this income as Revenue
Sharing.
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.<PAGE>
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, 1995,COMPARED TO THE NINE MONTHS
ENDED SEPTEMBER 30, 1994
Corfacts has been unsuccessful in locating a suitable merger or
acquisition candidate to return the Company to a more active
operating status. As a result of this, management has decided to
return its focus to the publishing industry and is now compiling
data for use in a new informational directory. It is expected
that the first edition will be completed within the next six
months. Management will carefully monitor this project with
the intent of developing this operation, if successful, into
expanded geographical and informational areas.
Revenue sharing relative to the sale of the information division
for the nine month period ended September 30, 1995 was $9,740 as
compared to $8,785 for the same period last year. The increase
in revenue sharing is the result of higher sales for Ford
Publishing during this period as compared to the nine months
ended September 30, 1994. To date, the Company has earned
approximately $49,800 of the total $50,000 royalty payment to be
paid by Ford Publishing, Inc. The Company expects to earn the
remainder of this royalty during the fourth quarter of 1995.
During the first quarter of 1995, the Company entered into a
joint venture publishing project with Ford Publishing, Inc. As
part of this agreement, Corfacts has invested $10,000 to help
fund the completion of this project. In addition to being repaid,
the Company will also receive royalties on all books sold. In the
event that these directories do not sell as projected, the
Company is guaranteed a predetermined return on its investment.
These directories began shipment in June and the Company has
received approximately $6,800 in royalties to be applied to the
repayment of its original investment. If this project is
successful, the Company will evaluate other publishing projects
with Ford Publishing in the future.
Total income derived from Tax Lien investments was $19,412 for
the nine month period ended September 30,1995, as compared to
$15,870 for the same period in 1994. Total income from Tax Lien
investments is broken down into two categories. Income derived
from the Company's partnership in tax lien investment was $5,279,
as compared to $5,356 for the same nine month period in 1994.
Income from the Company's solely owned tax liens was $14,133,
as compared to $10,514 for the same period in 1994. Management
expects revenues from tax lien investments to decline due to the
increased competitive bidding on these liens, which has caused
the Company to refrain from making any new purchases, to date, in
fiscal 1995. In addition, the Company has assigned the majority
of its older tax lien certificates to third parties to avoid the
expense of foreclosure on these properties and the possible loss
of its original investment.
Interest and other income for the nine months ended September 30,
1995 was $11,751 as compared to $11,650 for the same period last
year. Interest and other income consists primarily of interest
earned on Certificates of Deposit and on Receivable from Buyer.
General and administrative costs increased by $11,916 from
$71,983 in 1994 to $83,899 in 1995. This increase is primarily
attributable to an increase in Officer Salary. There was no
depreciation expense for the nine months ended September 30, 1995
as compared to the nine months ended September 30, 1994, due to
the fact that all equipment and furniture have now been fully
depreciated.
Net loss for the nine months ended September 30, 1995 was
$42,996, or $.005 per share, as compared to $36,352, 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 or expenses in
the near future.
FINANCIAL CONDITION AND LIQUIDITY
At September 30, 1995, the Company had current assets of
$609,247,including $519,135 in cash and cash equivalents, which
includes $389,787 in 90 day certificates of deposit. This amount
exceeded the Company's current liabilities of $16,763, providing
working capital of $592,484.
The average monthly cash usage, net of interest and revenues
earned on investments is approximately $6,000. An 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 1995. The Company plans to
use outside contractors for all research and compiling of data
for any publishing or other projects.
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 4.5%. Management reviews these
Certificates as they mature.
Revenues from Tax Lien investments are expected to diminish in
the future as many existing liens are redeemed and additional
liens have not been purchased due to the growing popularity of
these instruments and the increasing number of investors who are
willing, unlike the Company, to purchase these liens at very low
interest rates.<PAGE>
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<PAGE>
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 11, 1995 /s/ Larry Finkelstein
Larry Finkelstein, Chairman and CEO
(Duly authorized officer and
principal financial officer)
