SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                              FORM 10-KSB/A (NO.1)

(Mark One)

  [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
      1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

                                       OR

  [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE OF
      ACT 1934.

        From the transition period from              to            .
                                        ------------   ------------

                        COMMISSION FILE NUMBER 001-14995

                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


                    DELAWARE                              13-4056901
         -------------------------------            --------------------
         (State or Other Jurisdiction of            (I.R.S. Employer
         Incorporation or Organization)              Identification No.)


       2180 S.R. 434 WEST, SUITE #4150, FL                  32779
    ----------------------------------------              ----------
    (Address of Principal Executive Offices)              (Zip Code)


                                 (407) 682-5051
                ------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


<PAGE>


Securities registered under Section 12(b) of the Exchange Act:



Title of Each Class                       Name of Each Exchange
                                          on Which Registered

Common Stock, par                               OTCBB
value $.01 per share


         Securities registered under Section 12(g) of the Exchange Act:

                                       N/A
                                ----------------
                                (Title of Class)

Check whether the issuer: (1) filed all reports to be filed by Section 13 or
15(d) of the 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 past 90 days.

Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.   X
                               -----

Revenues for the Company's fiscal year ended December 31, 2003 were $4,571,984.

The aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the average closing bid asked quotations for the common
stock on March 22, 2004, as reported on the OTC Bulletin Board was approximately
$1,129,000.

As of March 22, 2004, the registrant had 6,721,913 shares outstanding.

Transitional Small Business Disclosure (check one): Yes      No X
                                                       ----    ----

<PAGE>


                                EXPLANATORY NOTE

The independent auditor's report of Tedder, James, Worden & Associates, P.A.
included with the original filing of the Company's 10-KSB on March 30, 2004, was
inadvertently dated March 30, 2004 instead of February 6, 2004. As such, an
amended independent auditor's report dated February 6, 2004 is included
herewith. There have been no other amendments to the original 10-KSB filing
beyond correction of the date of the independent auditor's report.






















<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Accufacts Pre-Employment Screening, Inc. Date: April 2, 2004


BY: /S/ PHILIP LUIZZO
-----------------------------
PHILIP LUIZZO
DIRECTOR, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)


In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




/S/ PHILIP LUIZZO                            DATE: APRIL 2, 2004
---------------------------------------
PHILIP LUIZZO
DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)

/S/ JOHN C. SVEDESE                          DATE: APRIL 2, 2004
---------------------------------------
JOHN C. SVEDESE
VICE PRESIDENT AND DIRECTOR

/S/ RICHARD J. MAGLIO                        DATE: APRIL 2, 2004
---------------------------------------
RICHARD J. MAGLIO
DIRECTOR

/S/ ANTHONY LUIZZO                           DATE: APRIL 2, 2004
---------------------------------------
ANTHONY LUIZZO
SECRETARY AND DIRECTOR




                                     PAGE 19

<PAGE>


                                INDEX OF EXHIBITS




           EXHIBIT
           NUMBER              DESCRIPTION OF EXHIBIT
           ------              ----------------------

2.1        Plan and Agreement of Merger of Maglio, Inc. and Maglio-Accufacts
           Pre-Employment Screening, Inc., dated October 11, 1999, by and among
           Accufacts Pre-Employment Screening, Inc., Maglio-Accufacts
           Pre-Employment Screening, Inc., and Maglio, Inc. (1)

2.2        Supplemental Agreement, dated as of October 11, 1999, by and among
           Accufacts Pre-Employment Screenings, Inc., Maglio, Inc.,
           Maglio-Accufacts Pre-Employment Screening, Inc., and Richard J.
           Maglio. (1)

2.3        Agreement and Plan of Merger dated as of November 20, 2002 by and
           between Accufacts Pre- Employment Screening, Inc., Kroll Background
           America, Inc, and Accufacts Acquisition Corp., a wholly-owned
           subsidiary of Kroll Background America, Inc. (8)


2.4        Extension of Agreement and Plan of Merger dated as of February 28,
           2003 by and between Accufacts Pre- Employment Screening, Inc., Kroll
           Background America, Inc, and Accufacts Acquisition Corp., a
           wholly-owned subsidiary of Kroll Background America, Inc. (8)


3.1        Articles of Incorporation of Accufacts Pre-Employment Screening, Inc.
           and Certificate of Merger (2)

3.2        By-laws of Accufacts Pre-Employment Screening, Inc. (2)

3.3        Certificate of Incorporation of Maglio-Accufacts Pre-Employment
           Screening, Inc. (4)

3.4        By-laws of Maglio-Accufacts Pre-Employment Screening, Inc. (4)

4.1        Specimen of Common Stock Certificate of Accufacts Pre-Employment
           Screening, Inc. (2)

4.2        Asset Purchase Agreement dated August 26, 1998 between Southern
           Cargo, Inc. and Accufacts Pre-Employment Screening, Inc. (2)

4.3        Shareholder Rights and Registration Rights Agreement, dated as of
           October 11, 1999, by and between Accufacts Pre-Employment Screening,
           Inc. and Richard J. Maglio (1)

10.1       Employment Agreement, dated September 1, 1998, between the Registrant
           and Philip Luizzo (2)




                                     PAGE 20
<PAGE>


10.2       Amendment, dated October 5, 1999, to the Employment Agreement, dated
           September 1, 1998, between the Registrant and Philip Luizzo (3)

10.3       Employment Agreement, dated September 1, 1998, between the Registrant
           and John Svedese (2)

10.4       Employment Agreement, dated October 11, 1999, by and among the
           Registrant, Maglio- Accufacts Pre-Employment Screening, Inc., and
           Richard J. Maglio (4)

10.5       Lease Agreement, dated April 1, 1997, between the Registrant and 6
           Greene Street Associates, LLC, as amended (4)

10.6       Lease Agreement, dated August 28, 1998, between Maglio, Inc. and CB
           Sanlando Center, Inc. (4)

10.7       Employment Agreement dated December 1, 2004 between the Registrant
           and Philip Luizzo (9)

16.1       Letter on Change in Certifying Accountant (5)

16.2       Letter on Change in Certifying Accountant (6)

16.3       Letter on Change in Certifying Accountant (7)

21.1       List of Subsidiaries (4)

23.1       Consent of Tedder, James, Worden & Associates, P.A.

31.1       Certificate of Chief Executive Officer pursuant to The Sarbanes-Oxley
           Act of 2002

32.1       Certificate pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
           Section 906 of the Sarbanes-Oxley Act of 2002


-----------------------------------
      (1) Filed as an exhibit to the Registrant's Current Report on Form 8-K,
          dated October 13, 1999, filed with the Securities and Exchange
          Commission on October 28, 1999, and is incorporated by reference
          herein.

      (2) Filed as an exhibit to the Registrant's Form 10-SB filed with the
          Securities and Exchange Commission on May 7, 1999 and is incorporated
          by reference herein.

      (3) Filed as an exhibit to the Registrant's Quarterly Report on Form
          10-QSB for the quarter ended September 30, 1999 filed with the
          Securities and Exchange Commission on November 15, 1999 and is
          incorporated by reference herein.

      (4) Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB
          for the year ended December 31, 1999 and is incorporated by reference
          herein.

      (5) Filed as an exhibit to the Registrant's Current Report on Form 8-K
          dated December 8, 2000, filed with the Securities and Exchange
          Commission on December 13, 2000 and is incorporated by reference
          herein.


                                     PAGE 21
<PAGE>


      (6) Filed as an exhibit to the Registrant's Current Report on Form 8-K/A
          dated December 8, 2000 filed with the Securities and Exchange
          Commission on December 18, 2000 and is incorporated by reference
          herein.

      (7) Filed as an exhibit to the Registrant's Current Report on Form 8-K
          dated July 17, 2002, filed with the Securities and Exchange Commission
          on July 19, 2002 and is incorporated by reference herein.

      (8) Filed as an exhibit to the Registrant's Current Report on Form 8-K
          Dated February 28, 2003, filed with Securities and Exchange Commission
          on March 4, 2003.

      (9) Filed as an exhibit to the Registrant's Annual Report on Form 10-KSB
          for the fiscal year ended December 31, 2003, and is incorporated by
          reference herein.








                                     PAGE 22
<PAGE>


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------


To the Stockholders and Board of Directors of
Accufacts Pre-Employment Screening, Inc. and Subsidiary
New York, NY


We have audited the accompanying consolidated balance sheet of Accufacts
Pre-Employment Screening, Inc. and Subsidiary, as of December 31, 2003, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the years ended December 31, 2003 and 2002. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Accufacts
Pre-Employment Screening, Inc. and Subsidiary as of December 31, 2003, and the
results of their operations and their cash flows for the years ended December
31, 2003 and 2002 in conformity with accounting principles generally accepted
in the United States of America.


February 6, 2004

/s/ Tedder, James, Worden & Associates, P.A.
--------------------------------------------
Orlando, Florida









                                       F-1
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2003


                                     ASSETS

Current assets:

    Cash                                                     $   798,067
    Accounts receivable, net of allowance for
        doubtful accounts of $9,800                              605,074
    Employee advances                                              1,000
    Prepaid expense                                               16,208
                                                             -----------
            Total current assets                               1,420,349
                                                             -----------

Property and equipment, net                                      144,780
                                                             -----------

Other assets:
    Security deposits                                              5,835
    Loan fees, net                                                   470
    Goodwill                                                     125,543
    Deferred taxes                                                36,095
                                                             -----------
            Total other assets                                   167,943
                                                             -----------

            Total assets                                     $ 1,733,072
                                                             ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Lines of credit                                          $       403
    Current maturities of capital lease obligations               12,168
    Accounts payable                                             154,310
    Accrued expenses                                              54,577
    Income taxes payable                                             916
    Deferred taxes                                               188,093
                                                             -----------

            Total current liabilities                            410,467

Other liabilities:
    Capital lease obligations, less current maturities             3,270
                                                             -----------
            Total liabilities                                    413,737
                                                             -----------

Commitments                                                         --

Stockholders' equity:
    Preferred stock, $.01 par value, 5,000,000 shares
        authorized, none issued or outstanding                      --
    Common stock, $.01 par value, 50,000,000 shares
        authorized, 6,721,913 issued and outstanding              67,219
    Additional paid-in capital                                 1,326,953
    Accumulated deficit                                          (74,837)
                                                             -----------
            Total stockholders' equity                         1,319,335
                                                             -----------

            Total liabilities and stockholders' equity       $ 1,733,072
                                                             ===========



See accompanying notes to consolidated financial statements.




                                       F-2
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2003 AND 2002



                                                      2003           2002
                                                 --------------   ------------


Revenue                                          $ 4,571,984    $ 4,075,669
Cost of services                                   3,189,311      2,899,076
                                                 -----------    -----------

Gross profit                                       1,382,673      1,176,593

Operating expenses:
    General and administrative                       842,827      1,008,382
    Loss on disposal of fixed assets                  10,227            --
                                                 -----------    -----------

Operating income                                     529,619        168,211

Other income (expense):
    Other income                                       7,142          2,304
    Proceeds from grants                                 --          83,234
    Amortization expense                              (2,128)        (5,188)
    Interest expense, net                             (1,221)       (13,568)
                                                 -----------    -----------

Income before income taxes                           533,412        234,993

Income tax (expense) benefit                        (203,442)        25,000
                                                 -----------    -----------

Net income                                       $   329,970        259,993
                                                 ===========    ===========

Net income per share, basic and diluted          $       .05    $       .04
                                                 ===========    ===========

Weighted average number of common
    shares outstanding, basic and diluted          6,711,763      6,627,471
                                                 ===========    ===========




See accompanying notes to consolidated financial statements.



                                       F-3
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                    COMMON STOCK
                                -------------------    ADDITIONAL   ACCUM-
                                 SHARES                PAID-IN      ULATED
                                 ISSUED   PAR VALUE    CAPITAL      DEFICIT       TOTAL
                               ---------  ---------   -----------  ---------   ----------
<S>                            <C>        <C>         <C>          <C>        <C>
Balance at December 31, 2001   6,627,471   $66,275   $1,319,821   $(664,800)   $  721,296

Net income                          --        --           --       259,993       259,993
                               ---------   -------   ----------   ---------    ----------

Balance at December 31, 2002   6,627,471    66,275    1,319,821    (404,807)      981,289

Common stock issued               94,442       944        7,132        --           8,076

Net income                          --        --           --       329,970       329,970
                               ---------   -------   ----------   ---------    ----------

Balance at December 31, 2003   6,721,913   $67,219   $1,326,953   $ (74,837)   $1,319,335
                               =========   =======   ==========   =========    ==========
</TABLE>


See accompanying notes to consolidated financial statements.



                                       F-4
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                   2003       2002
                                                                ---------   ----------

<S>                                                            <C>          <C>
Cash flows from operating activities:

    Net income                                                 $ 329,970    $ 259,993
    Adjustments to reconcile net income to
        net cash provided by operating activities:
            Depreciation and amortization                        209,639      202,405
            Provision for deferred income taxes                  203,498      (51,500)
            Loss on disposal of fixed assets                      10,227         --
            Decrease in allowance for doubtful accounts          (16,201)        --
             (Increase) decrease in accounts receivable           (53,736)     140,698
              Increase in employee advances                        (1,000)        --
              Increase in prepaid expense                         (10,472)      (5,735)
              Decrease in security deposits                         2,708         --
              Increase in loan fees                                (1,000)        --
            Decrease in accounts payable
                 and accrued expenses                            (71,120)     (69,396)
            (Decrease) increase in income taxes payable          (25,584)      26,500
            Increase in other current liabilities                   --          8,077
                                                               ---------    ---------
                Total adjustments                                246,958      251,049
                                                               ---------    ---------
                Net cash provided by
                    operating activities                         576,928      511,042
                                                               ---------    ---------

Cash flows from investing activities:
    Purchases of property and equipment                          (56,261)     (40,512)
                                                               ---------    ---------
                Net cash used in investing activities            (56,261)     (40,512)
                                                               ---------    ---------

Cash flows from financing activities:
    Repayments on capital lease obligations                      (13,043)     (12,440)
    Net (repayments) borrowings on lines of credit               (70,206)     (16,790)
    Net (repayments) proceeds of stockholder loans                  --       (121,280)
                                                               ---------    ---------
                Net cash used in financing activities            (83,249)    (150,510)
                                                               ---------    ---------

Net increase in cash                                             437,418      320,020

Cash, beginning of year                                          360,649       40,629
                                                               ---------    ---------

Cash, end of year                                              $ 798,067    $ 360,649
                                                               =========    =========

Supplemental disclosures:
   Interest paid                                               $   1,221    $  13,695
                                                               =========    =========
   Income taxes paid                                           $  25,528    $    --
                                                               =========    =========

   Non-cash financing activities:

      Issuance of common stock in connection with
         the Company's Employee Stock Purchase Plan            $   8,077    $      --
                                                               =========    =========

</TABLE>



See accompanying notes to consolidated financial statements.


                                       F-5

<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


1. Summary of significant accounting policies:

    Nature of business:
        Accufacts Pre-Employment Screening, Inc. ("Accufacts") was incorporated
        on October 6, 1994 in the State of New York. On August 31, 1998,
        Accufacts consummated a merger with a public shell, Southern Cargo
        Company ("Southern"), a Florida corporation. Southern simultaneously
        with this merger changed its name to Accufacts Pre-Employment Screening
        Inc. ("APES") and shortly thereafter re-incorporated in the State of
        Delaware.

        APES through its subsidiary act as an information service bureau and are
        engaged primarily in the business of verifying job applicant background
        information for employers using databases and a national network of
        agents throughout the United States.

    Principles of consolidation
        The Consolidated financial statements include the accounts of APES and
        its wholly owned subsidiary, Maglio-Accufacts Pre-Employment Screening,
        Inc., collectively referred to as the "Company". All significant
        accounts and transactions have been eliminated in the consolidation.

    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.

    Revenue recognition
        Revenues are recorded at the time of performance of service.

    Advertising cost
        Advertising costs are expensed as incurred. For the years ended December
        31, 2003 and 2002, advertising expense was $4,142 and $3,713,
        respectively.

    Income taxes
        The Company's method of accounting for income taxes is the liability
        method required by FASB Statement No. 109 "Accounting for Income Taxes".
        Income taxes are provided for the tax effects of transactions reported
        in the financial statements and consist of taxes currently due and
        deferred taxes.

                                       F-6
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


1. Summary of significant accounting policies - continued:

    Computer software:
        The Company adopted Statement of Position ("SOP") 98-1, "Accounting for
        the Costs of Computer Software Developed or Obtained for Internal Use".
        SOP 98-1 establishes the accounting for costs of software products
        developed or purchased for internal use, including when such costs
        should be capitalized. In accordance with SOP 98-1, payroll and
        payroll-related costs incurred which were directly associated with the
        internal-use software project were capitalized by the Company and such
        capitalized costs are amortized on a straight-line basis over three
        years.

    Net income per common share:
        The Company has adopted Statement of Financial Accounting Standards No.
        128, "Earnings per share," ("SFAS 128"). This pronouncement establishes
        standards for computing and presenting earnings per share ("EPS") for
        entities with common stock or potential common stock. The pronouncement
        requires the presentation of net income or loss per common share based
        on the weighted average number of shares outstanding during the periods.
        It also requires the presentation of diluted EPS which includes common
        stock equivalents arising from the exercise of stock options using the
        treasury stock method, provided exercise prices are less than the
        average market price, and when such inclusion results in further
        dilution. When losses have been incurred, warrants and options are not
        included since the effect would dilute loss per share.

    Use of estimates in the financial statements:
        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States of America 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.

    Fair Value of Financial Instruments
        The Company's financial instruments include cash, accounts receivable,
        accounts payable and capital lease obligations. Due to the short-term
        nature of these instruments, the fair value of these instruments
        approximate their recorded value. The Company has other liabilities
        which it believes are stated at estimated fair market value.

    Impairment of long-lived assets:
        The Company evaluates its long-lived assets for financial impairment as
        events or changes in circumstances indicate the carrying value of a
        long-lived asset may not be fully recoverable. The Company evaluates the
        recoverability of long-lived assets by measuring the carrying amount of
        the assets against their estimated undiscounted future cash flows
        (undiscounted and without interest charges). If such evaluations
        indicate that the future undiscounted cash flows of certain long-lived
        assets are not sufficient to recover the carrying value of such assets,
        the assets are adjusted to their fair values.



                                       F-7
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


1. Summary of significant accounting policies - continued:

    Stock-Based Compensation

         SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"),
         encourages the use of a fair-value method of accounting for stock-based
         awards under which the fair value of stock options is determined on the
         date of grant and expensed over the vesting. As allowed by SFAS 123, we
         have elected to account for our stock-based compensation plans under an
         intrinsic value method that requires compensation expense to be
         recorded only if, on the grant date, the current market price of our
         common stock exceeds the exercise price the employee must pay for the
         stock. Our policy is to grant stock options at the fair market value of
         our underlying stock at the date of grant.

         The Company has adopted the disclosure-only provisions of SFAS 123.
         Accordingly, no compensation cost has been recognized for the stock
         option plans.


    Goodwill and Intangible Assets:

         Effective January 1, 2002, the Company adopted Statement of Financial
         Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
         ("SFAS No. 142"). In accordance with SFAS No. 142, goodwill is no
         longer amortized but is tested at least annually for impairment. The
         amortization provisions of SFAS No. 142 apply to goodwill and
         intangible assets acquired after June 30, 2001. With respect to
         goodwill and intangible assets acquired prior to July 1, 2001, the
         Company began applying the new accounting rules effective January 1,
         2002.

         In connection with the transitional impairment evaluation, SFAS No. 142
         required the Company to perform an initial assessment of whether there
         is an indication that goodwill was impaired as of January 1, 2002. The
         Company compared the fair value to the carrying value with the fair
         values being derived using discounted cash flow analyses. The
         assumptions used in these discounted cash flow analyses are consistent
         with our internal planning. The impairment test performed indicated
         that impairment did not exist related to the Company's goodwill at
         December 31, 2002. The Company updated its assessment of the valuation
         of goodwill during 2003 and no impairment was determined to exist at
         December 31, 2003. Future impairment tests will be performed on the
         Company's goodwill and the Company's earnings may be subject to
         volatility if goodwill impairments occur in the future.



                                       F-8
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


1. Summary of significant accounting policies - continued:

    Recent accounting pronouncements:

         In January 2003, the Financial Accounting Standards Board ("FASB")
         issued Interpretation No. 46, Consolidation of Variable Interest
         Entities ("Interpretation No. 46"). In general, a variable interest
         entity is a corporation, partnership, trust, or any other legal
         structure used for business purposes that either does not have equity
         investors with voting rights or has equity investors that do not
         provide sufficient financial resources for the entity to support its
         activities. Interpretation No. 46 requires a variable interest entity
         to be consolidated by a company if that company is subject to a
         majority of the risk of loss from the variable interest entity's
         activities or is entitled to receive a majority of the entity's
         residual returns or both. The Company does not expect that
         Interpretation No. 46 will have a material effect on the Company's
         results of operations or financial condition as the Company does not
         currently utilize or have interests in any variable interest entities.

         In May 2003, the FASB issued Statement of Financial Accounting
         Standards No. 150, Accounting for Certain Financial Instruments with
         Characteristics of both Liabilities and Equity ("SFAS No. 150"). SFAS
         No. 150 establishes standards for how an issuer classifies and measures
         certain financial instruments with characteristics of both liabilities
         and equity. SFAS No. 150 is effective for financial instruments entered
         into or modified after May 31, 2003, except for mandatorily redeemable
         financial instruments. Mandatorily redeemable financial instruments are
         subject to the provisions of SFAS No. 150 beginning as of January 1,
         2004. The Company adopted SFAS No. 150 on June 1, 2003. The adoption of
         SFAS No. 150 did not have a material effect on the Company's results of
         operations or financial condition.

         In December 2003, the Securities and Exchange Commission ("SEC") issued
         Staff Accounting Bulletin No. 104 ("SAB No. 104"), Revenue Recognition.
         SAB No. 104 revises or rescinds portions of the interpretive guidance
         included in Topic 13 of the codification of staff accounting bulletins
         in order to make this interpretive guidance consistent with current
         authoritative accounting and auditing guidance and SEC rules and
         regulations. The Company periodically evaluates its revenue recognition
         policies in relation to staff accounting bulletins and other generally
         accepted accounting principles and SEC guidance. The Company believes
         its revenue recognition policies are in compliance with the provisions
         of SAB No. 104.







                                        F-9
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

2. Property and equipment:

        Property and equipment is comprised of the following at December
31,2003:

                                                                 ESTIMATED
                                                  AMOUNT        USEFUL LIVES
                                                  ------        ------------

           Furniture and fixtures           $        53,175        7 years
           Computer equipment                       117,168        5 years
           Telephone equipment                       25,292        5 years
           Other office equipment                    10,383        5 years
           Computer software                        509,655        3 years
                                            ---------------
                                                    715,673
           Less: accumulated depreciation          (570,893)
                                            ---------------
           Property and equipment, net      $       144,780
                                            ===============

        Depreciation expense for the years ended December 31, 2003 and 2002
amounted to $207,511 and $197,218, respectively.

3. Intangible assets:

        Intangible assets at December 31, 2003 consist of the following:

                                                                ESTIMATED
                                                   AMOUNT      USEFUL LIVES
                                                   ------      ------------

            Customer lists                    $        19,000    5 years
            Non-competition covenant                    5,313    3 years
                                              ---------------
                                                       24,313
            Less: accumulated amortization            (24,313)
                                              ---------------

            Intangible assets, net            $          --
                                              ===============


        Amortization expense for the years ended December 31, 2003 and 2002
amounted to $1,598 and $5,188, respectively.

4. Accrued Expenses:

        Accrued expenses at December 31, 2003 consisted of the following:

                     Accrued salaries and benefits         $            24,953
                     Accrued sales tax payable                          26,245
                     Other                                               3,379
                                                           -------------------
                                                           $            54,577
                                                           ===================


                                      F-10
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


5. Lines of credit:

        The Company has a $400,000 line of credit with a bank that matures May
        1, 2004 and can be renewed annually subject to certain conditions and
        covenants. The line bears interest at prime plus 1% (5.0% at December
        31, 2003). Interest is payable monthly. The line of credit is
        collateralized by substantially all of the assets of the Company and is
        personally guaranteed by the majority stockholder and president of the
        Company. The Company had $0 outstanding on the line of credit at
        December 31, 2003.

        The Company also has a $25,000 business checking line of credit with a
        bank that is due on demand. The credit line bears interest at prime plus
        6% (10.00% at December 31, 2003), payable monthly, and is collateralized
        by substantially all of the assets of the Company. The Company had $403
        outstanding at December 31, 2003.

6. Income taxes:

        The Company prepares its income tax returns on the cash basis of
        accounting and its financial statements on the accrual basis of
        accounting which results in temporary tax timing differences.

        The income tax (expense) benefit for the years ended December 31, 2003
        and 2002 consists of the following:

                                              2003                 2002
                                         ---------------      ---------------
                     Current:
                        Federal          $             -      $             -
                        State                         56              (26,500)

                     Deferred:
                        Federal                 (173,991)              34,200
                        State                    (29,507)              17,300
                                         ---------------      ---------------

                                         $      (203,442)     $        25,000
                                         ===============      ===============

        The components of the net deferred tax asset (liability) at December 31,
        2003 consist of the following:

          Cash basis accounting adjustment                $   (171,062)
          Tax basis depreciation and amortization              (14,375)
          Goodwill amortization                                 (2,655)
          Net operating loss carryforward                       36,094
                                                          ---------------
                                                              (151,998)
          Less: valuation allowance                                 -
                                                          ---------------

          Net deferred tax liability                      $   (151,998)
                                                          ===============

                                      F-11


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


6. Income taxes - continued:

        The net change in the valuation allowance for the years ended December
        31, 2003 and 2002 was $0 and $138,000, respectively, resulting from
        managements' expectation that it is more likely than not that the
        Company will be able to realize the benefits of net operating loss
        carryforwards in future years.

        The following is a reconciliation of income tax computed at the Federal
        Statutory rate to the provisions for taxes:


                                                       2003           2002
                                                   ------------  ------------
           Income tax computed at
               federal statutory rate              $   (181,360)  $   (80,000)
           State income tax, net of federal
               tax benefit                              (19,787)       (6,000)
           Change in valuation allowance                      -       112,000
           Permanent differences                              -        (1,000)
           Other                                         (2,295)            -
                                                   ------------  ------------

                                                   $   (203,442) $     25,000
                                                   ============  ============

        At December 31, 2003, based upon tax returns filed and to be filed, the
        Company has net operating loss carryforwards for federal tax purposes of
        approximately $95,015 which will expire in the year 2019.

7. Commitments:

    Capital lease obligations:
        The Company obtained equipment under three capital leases expiring
        through the year 2005. The assets and liabilities under capital leases
        are recorded at the lower of the present value of the minimum lease
        payments or the fair values of the assets. The assets are included in
        property and equipment and are being depreciated over their estimated
        useful lives.

        Property included under capital leases at December 31, 2003 is as
        follows:

                     Computer equipment                    $            29,457
                     Telephone equipment                                21,677
                                                           -------------------
                                                                        51,134
                     Less accumulated depreciation                     (36,739)
                                                           -------------------

                                                           $            14,395
                                                           ===================


                                      F-12
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

7. Commitments - continued:

        Future minimum lease payments under capital leases as of December 31,
        2003 are as follows:

                        PRINCIPAL             INTEREST             TOTAL
                     --------------       --------------     --------------

            2004             12,168                1,853             14,021
            2005              3,270                  194              3,464
                     --------------       --------------     --------------

                     $       15,438       $        2,047     $       17,485
                     ==============       ==============     ==============

        Interest rates on the capitalized leases range from 9.0% to 23.4%,
        respectively, and interest is imputed based on the lessor's implicit
        rate of return. Monthly payments range from $499 to $693 per month.

    Operating lease agreements:
        The Company is obligated under noncancelable operating leases for office
        space and office equipment expiring through September 2007. Rent expense
        for the years ended December 31, 2003 and 2002 was $120,015 and
        $122,641, respectively.

        Future minimum rental payments under the above noncancelable operating
        leases as of December 31, 2003 are as follows:

                   2004                 $            91,419
                   2005                              54,926
                   2006                               4,357
                   2007                               3,267
                                        -------------------

                                        $           153,969
                                        ===================
    Employment agreements:
        On December 1, 2003, the Company entered into a five-year and two-month
        employment agreement with an officer whereby the Company will pay a
        total salary of $300,000 per annum, with an annual compensation increase
        at the rate of five percent (5%). The employment agreement also calls
        for a bonus in the form of common stock to be paid at the discretion of
        the Board of Directors based on the Company meeting certain
        profitability milestones. At December 31, 2003, total future minimum
        commitments under this agreement are approximately $1,700,000.

    Consulting agreement:
        The Company had a one-year management consulting agreement in place
        calling for the payment of $3,800 per month expiring in July 2002. The
        Company has also granted stock options to purchase 140,000 shares of
        common stock at an exercise price of $.35 per share, and another 140,000
        shares of common stock at $.50 per share. All options granted and vested
        on a quarterly basis over the duration of the agreement, with the
        options expiring in February 2003. In February 2003, the options for
        140,000 shares were exercised under provisions of the agreement allowing
        a cashless exercise of the options. Based on a market price on date of
        exercise of $0.435 per share and a strike price of $0.35 per share,
        27,356 shares were issued.

8. Legal Proceedings
        The Company may be a party to various legal actions, proceedings and
        pending claims in the normal course of business. Management does not
        expect the outcome of any such claims to have a material adverse effect
        on the Company's financial position or results of operations.


                                      F-13

<PAGE>