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, 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 June 30, 1996
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
June 30, 1996
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Balance Sheets at
June 30, 1996 and December 31, 1995 3.
Condensed Statements of Operations
for the six months ended June
30, 1996 and 1995 4.
Condensed Statements of Cash Flows
for the six months ended June
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.<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CORFACTS, INC.
BALANCE SHEETS
June 30, December 31,
1996 1995
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 6,370 $ 75,830
Interest bearing deposits 447,781 442,306
Interest receivable 4,850 1,954
Contract royalty receivable 2,935 6,376
Loan receivable, officer 45,389 40,389
Note receivable, buyer 14,317 15,208
Other receivable-municipal
tax liens, net 31,954 29,658
Total Current Assets 553,596 611,721
Other assets
Loan receivable, officer 91,725 91,725
Investment in partnership 1,989 1,863
Other assets 1,200 1,200
Total Other Assets 94,914 94,788
TOTAL ASSETS $ 648,510 $706,509
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and
accrued liabilities $ 18,859 $ 23,329
Total Current Liabilities 18,859 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) (529,920) (476,391)
TOTAL STOCKHOLDERS' EQUITY 629,651 683,180
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 648,510 $ 706,509
See accompanying notes to condensed financial statements.
<PAGE>
CORFACTS, INC.
STATEMENTS OF OPERATIONS
Six months ended
June 30,
1996 1995
(Unaudited)
Income:
Revenue sharing $ - $ 6,721
Equity in earnings of
unconsolidated investee 127 2,482
Income from tax liens, net 2,296 9,566
Interest income, net 10,236 7,504
Total income 12,659 26,273
Costs & expenses:
General & administrative 66,188 56,266
Total costs & expenses 66,188 56,266
Net (loss) $(53,529) $(29,993)
Net (loss) per share $ (.007) $ (.004)
Weighted average shares
outstanding 8,005,314 8,005,314
See accompanying notes to condensed financial statements.
<PAGE>
CORFACTS, INC.
STATEMENTS OF CASH FLOWS
Six months ended
June 30,
1996 1995
(Unaudited)
Cash flows from operating activities:
Net (loss) $(53,529) $(29,993)
Adjustments to reconcile net loss
to net cash used in operations:
Decrease in accounts receivable 545 5,724
Increase in prepaid expenses - (2,164)
Decrease in accounts payable
and accrued liabilities (4,470) (5,513)
Net cash used in operating
activities (57,454) (31,946)
Cash flows from investing activities:
(Increase) decrease in tax lien
receivable (2,296) 31,870
(Increase) decrease in
partnership investment (126) 27,014
Net cash provided by investing
activities (2,422) 58,884
Cash flows from financing activities:
Payment (to) from buyer 891 (15,890)
Loan to officer (5,000) (35,725)
Net cash used in financing
activities (4,109) (51,615)
Net decrease in cash and
cash equivalents (63,985) (24,677)
Cash and cash equivalents at
beginning of period 518,136 489,854
Cash and cash equivalents at
end of period $454,151 $465,177
<PAGE>
CORFACTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 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 six month period ended June 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: $14,317 $ -
Due from Officer 45,389 91,725
$59,706 $ 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.<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
Six months ended June 30, 1996, compared to the six months
ended June 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 now has an acquisition candidate and is negotiating with
this company, which has been operating for approximately two
years. Management is closely monitoring the operations of this firm
and hopes to reach an agreement during the third quarter of this year.
Revenue sharing relative to the sale of the information
division was $0 as compared to $6,721 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 $127, as compared to $2,482 for the same six
months in 1995. Income from the Company's solely owned tax
liens was $2,296, as compared to $9,566 for the six months
ended June 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 six months ended June 30, 1996 was
$10,236 as compared to $7,504 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 $9,922 from
$56,266 in 1995 to $66,188 in 1996. This increase is
primarily attributable to an increase in Officer Salary.
Net loss for the six months ended June 30, 1996 was $53,529,
or $.007 per share, as compared to $29,993, or $.004 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 June 30, 1996, the Company had current assets of $553,596,
including $454,151 in cash and cash equivalents, which
includes $396,377 in certificates of deposit. This amount
exceeded the Company's current liabilities of $18,859
providing working capital of $534,737.
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.
<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.
August 12, 1996 s/s Larry Finkelstein
Larry Finkelstein, Chairman and CEO
(Duly authorized officer and principal
financial officer)<PAGE>
11
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 454,151
<SECURITIES> 0
<RECEIVABLES> 99,445
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 553,596
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 648,510
<CURRENT-LIABILITIES> 18,859
<BONDS> 0
0
0
<COMMON> 1,159,571
<OTHER-SE> (529,920)
<TOTAL-LIABILITY-AND-EQUITY> 648,510
<SALES> 0
<TOTAL-REVENUES> 12,659
<CGS> 0
<TOTAL-COSTS> 66,188
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (53,529)
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<INCOME-CONTINUING> (53,529)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (53,529)
<EPS-PRIMARY> (.007)
<EPS-DILUTED> 0
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