SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

                                   (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, 2002

                                       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.)

       6 GREENE STREET NEW YORK, NY                   10013
       ----------------------------                   -----
   (Address of Principal Executive Offices)         (Zip Code)


                                 (212) 966-0666
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


         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



<PAGE>


         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, 2002 were $4,075,669.

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 14, 2003, as reported on the OTC Bulletin Board was approximately
$1,206,000.

As of March 14, 2003, the registrant had 6,721,913 shares outstanding.

Transitional Small Business Disclosure (check one): Yes ___ No _X_

                           FORWARD LOOKING STATEMENTS
                           --------------------------

Accufacts Pre-Employment Screening, Inc., a Delaware corporation ("Accufacts" or
the "Company"), cautions readers that certain important factors may affect the
Company's actual results and could cause such results to differ materially from
any forward-looking statements that may be deemed to have been made in this Form
10-KSB or that are otherwise made by or on behalf of the Company. For this
purpose, any statements contained in the Form 10-KSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the generality of the foregoing, words such as "may," "expect," "believe,"
"anticipate," "intend," or comparable terminology are intended to identify
forward-looking statements. Factors that may affect the Company's results
include, but are not limited to, the Company's limited operating history, its
ability to produce additional products and services, its dependence on a limited
number of customers and key personnel, its possible need for additional
financing, its dependence on certain industries, and competition from its
competitors. The Company is also subject to other risks detailed herein or set
forth from time to time in the Company's filings with the Securities and
Exchange Commission.



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS


GENERAL

Accufacts Pre-Employment Screening, Inc. was incorporated in the State of New
York on October 6, 1994. On August 31, 1998, the Company effected merger into
Southern Cargo Company, Inc., (Southern Cargo) a public shell incorporated in
the State of Florida in 1993. Simultaneously with the merger, Southern Cargo
changed the name of the company to Accufacts Pre-Employment Screening, Inc.
(Accufacts), and shortly thereafter reincorporated under the same name in the
State of Delaware.




<PAGE>

On October 13, 1999, Accufacts acquired all of the operating assets of Maglio,
Inc., ("Maglio"), a Florida corporation engaged in providing pre-employment
screening services. The acquisition was accomplished by merging Maglio into a
new entity, Maglio-Accufacts Pre-Employment Screening, Inc. (Maglio-Accufacts),
a Delaware corporation and a wholly-owned subsidiary of Accufacts.

As used in this Form 10-KSB, the names "Accufacts Pre-Employment Screening,
Inc.," "Accufacts" and the "Company" all refer to the existing Delaware
corporation, its predecessor business entities and the Maglio-Accufacts
subsidiary. The term "business" refers to the business of the Company, its
predecessors, and subsidiaries.


AGREEMENT AND PLAN OF MERGER


On November 20, 2002, we entered into an Agreement and Plan of Merger with Kroll
Background America, Inc. (KBA) and Accufacts Acquisition Corp., a wholly-owned
subsidiary of KBA. Subject to the terms of the merger agreement, KBA will
acquire all outstanding shares of our common stock at a price of $ 0.47 per
share, and Accufacts will become a wholly-owned subsidiary of KBA. The merger is
subject to certain customary closing conditions, including the approval by
shareholders holding a majority of all of our issued and outstanding stock. We
intend to solicit proxies from our shareholders for approval of this
transaction.

In accordance with the terms of the merger agreement, we are required to obtain
the approval of KBA prior to filing our proxy for a special meeting of
shareholders to approve the contemplated transaction. In the event a stockholder
does not approve or abstains from voting on the proposed transaction, the
stockholder will have the right of appraisal as a dissenting stockholder under
Delaware law. Mr. Philip Luizzo, Chairman, President, and principal stockholder
of Accufacts has agreed to vote his shares, representing approximately 56% of
our issued and outstanding common stock, in favor of the Agreement and Plan of
Merger. The Agreement and Plan of Merger as amended, provides that the merger
may be terminated by any of the parties if the effective date of the merger
shall not have occurred by May 31, 2003. Additional information related to the
Agreement and Plan of Merger is available in the Company's Form 8-K report filed
February 28, 2003 with the Securities and Exchange Commission. The forward
looking statements contained in this report do not necessarily reflect the
anticipated results to our business and/or operations subsequent to the
contemplated merger transaction whereby Accufacts would become a wholly-owned
subsidiary of KBA and would cease to be a reporting company.


BUSINESS PROFILE

Accufacts is primarily engaged in researching and providing decision support
information to our clients, generally Human Resources (HR) departments of
corporations. These services typically include pre-employment background checks
and screenings of new hire candidates and/or employees. The background
information products and services currently provided by Accufacts include:


o          Criminal history checks
o          Credit reports
o          Social Security number verifications
o          Driving record histories
o          Previous employer verifications
o          Education verifications
o          Professional reference verifications
o          Professional license verifications
o          Federal criminal/civil searches
o          Substance testing
o          Exit interviews.



<PAGE>


We believe that employers increasingly are realizing the benefits of conducting
thorough background checks of candidate employees not only because of the desire
to help assure a better quality employee, but also to mitigate the risks of
potential negligent hiring lawsuits. Additionally, many companies and
organizations are discovering that their increasing security concerns may be
addressed by conducting background checks and screenings.

Accufacts has approximately 850 clients located throughout the United States.
During each of the last two fiscal years, sales of the Company's products and
services were made in all 50 states. During 2002, we expanded our international
research efforts and believe we developed certain unique/customized features to
our data retrieval and management reporting capabilities. These initiatives have
been well received by clients.

Our business strategy includes accelerating market presence throughout the
United States, especially involving mid to large market opportunities. The
Company also expects to further develop selected international markets in
conjunction with current client requirements. Accufacts also intends to enhance
existing products, develop new/expanded capabilities, and pursue the potential
integration of other related services and/or product lines that either
complement or expand the existing business.


MARKETS

Accufacts markets its pre-employment/decision support products and services to
corporations and organizations throughout the United States. Many small firms
are first-time users of these services. However, many of our mid-size and
especially larger clients have a history of contracting for our products and
services. The Company believes that it has strong differentiators from the
competition.

In general, certain types of business and industry sectors lend themselves
strongly to utilizing pre-employment screenings and other related services.
Overall, these sectors may include:


            o    High technology

            o    Health care

            o    Retail

            o    Manufacturing

            o    Professional services

            o    Information technology

            o    Food/hospitality

            o    Government, both federal and state organizations.





<PAGE>



PRODUCTS AND SERVICES

Accufacts' products and services are designed to verify job applicant background
information and provide research results to facilitate the HR decision
processes. The Company sees itself as a partner with the client in optimizing
decisions. Our clients may request and receive records by telephone, mail, and
facsimile or through our Web site. Clients may also receive results via our
proprietary decision support software or a modem-equipped personal
computer/terminal to access our on-line order-placing network. This network is
available 24 hours a day, seven days a week. We license our software to our
clients free of charge.

The prices charged to clients for research services and resulting reports
prepared by Accufacts vary in price from a few dollars to over $75.00, depending
upon the type(s) and location(s) of the research requested by the client. The
resulting reports may be viewed directly on-line, printed from the on-line site,
or received by fax. The reports remain in our host computer system indefinitely
and are available to the client at no additional cost as long as the client is
in an active status. Otherwise, a nominal cost may apply.

Our in-house computer host system consists of automated, networked PCs running
Windows NT, using SQL data bases which automatically read orders out to our
agents and/or to third party databases for automatic processing. In addition,
Accufacts operates its Internet-based consumer order entry system with the same
automatic computer system, thereby reducing turnaround time and operating costs.

Accufacts' network field retrieval system currently consists of individuals and
small companies located throughout the United States. The agents are engaged as
independent contractors, who are paid a fee on a per-search/per- document, per
day, or monthly basis. The number of field retrievers in each state or locality
depends on the size, population density, number of counties, and the respective
organization/ structure of the court files and documentation systems utilized.
Accufacts believes that it currently offers an extensive range of products and
services. Among those most commonly requested by clients are:


      o    CRIMINAL HISTORY CHECKS - Searches in selected geographical areas for
           the presence of a criminal record. This background information is
           available statewide from 32 states or from all 3,300 counties in the
           United States on a county-by-county basis. The remaining 18 states do
           not have an accessible statewide depository for this type of
           information. This information is retrieved through our network agent
           system, computer access directly into the states and certain counties
           or, in some instances, by facsimile, mail and telephone.

      o    MOTOR VEHICLE REPORTS - Confirms driving records. This background
           information is retrieved by Accufacts through a non-affiliated third
           party and is available from all 50 states, the District of Columbia,
           and Puerto Rico. The same information can be obtained directly by
           Accufacts from the source or from other non-affiliated third parties.
           These reports and the credit reports discussed below are the only two
           products for which we serve as a broker.

      o    CREDIT INFORMATION CHECKS - This background information is a special
           form of a common "credit report" designed for employment purposes
           only. We serve as a broker for this information notably from a major
           credit bureau (Experian), and retrieve the information through
           proprietary software that we developed and own.

      o    SOCIAL SECURITY NUMBER VERIFICATIONS - This report will verify the
           issue date and name associated with the reported number. It will also
           indicate if the number has been reported deceased or not issued as of
           a certain date. The report may also reveal other names, including,
           "also-known-as" or maiden names, and/or addresses previously or
           currently used by the applicant.

      o    EMPLOYMENT VERIFICATIONS - Pursuant to the client's requirements,
           this report can include a complete verification of all previous
           employers, or a review of the most recent two or three positions
           held.

      o    EDUCATION VERIFICATIONS - This report contains the applicant's
           academic history including: name of institution, dates of attendance,
           major course of study and the type of degree(s) received by the
           individual.




<PAGE>


      o    PROFESSIONAL LICENSE VERIFICATIONS - Professional licenses in most
           states may be verified to include physicians, registered nurses,
           dentists, chiropractors, physical therapists, attorneys, certified
           public accountants, et al.

      o    PROFESSIONAL/PERSONAL REFERENCE VERIFICATIONS - This report is based
           on an interview of a co-worker or personal reference as provided by
           the applicant. The co-worker or personal reference is questioned as
           to the length and nature of their relationship with the applicant and
           the applicant's skills and work ethic.

      o    FEDERAL SEARCHES - This search consists of a check for criminal and
           civil filings in a federal district identified by the client, or the
           district of residence as identified by us. This search will reveal
           criminal and civil information that has not been purged, sealed or
           expunged by the court and generally involves a two to four-year time
           frame from the date of the offense.



ACCELERATED MARKET PRESENCE

Accufacts intends to continue the acceleration of its market presence throughout
the United States and international markets. New marketing initiatives were
approved by management for implementation in 2002 which are expected to
significantly bolster our market presence and market awareness in capturing new
business. In general, the Company is realigning specific program development
strategies focusing on discrete market sectors. Proprietary research techniques
are being implemented to facilitate the timely qualifying of opportunities and
our proposal processes. Additionally, Accufacts plans to further expand and
refine other marketing techniques. These will include:



      o    Strategic teaming initiatives

      o    Improved development of lead prospects and telephone responses

      o    Potential use of independent resellers

      o    Use of public relations projects and promotions

      o    Participation in trade shows and seminars

      o    Advertising in trade publications

      o    Improving our Web site and incorporating additional features on the
           Internet

o Mailing of news releases to existing customers, prospective customers, and
investors.



LONG-TERM CLIENT RELATIONSHIPS

Accufacts is fully committed to providing quality products and services to our
clients and maintaining strong client service relationships. Management believes
that the emphasis on building long-term relationships with our customers has
played a significant role in our success. Indeed, follow-on orders are essential
to our business base and growth. Management further believes that these
relationships are important not only to generate additional sales from existing
clients, but also for referrals. A large percentage of our sales have been
generated by referrals from clients. We intend to continue to send Company
information to existing clients as well as monitor larger clients on a daily
basis, and contact clients on a regular basis for user feedback and quality
assurance.




<PAGE>


QUALITY CLIENT SERVICE AND SUPPORT

In order to offer clients quality service and support, Accufacts has developed
and will continue to enhance our client service and support program(s)
including:


      o    The availability of a client service representative twelve hours a
           day, Monday through Friday

      o    In-house training of all client service representatives on Accufacts'
           products

      o    System quality control checks for Accufacts' products and services

      o    Minimum acceptable performance guidelines for employees.



MARKETING

Accufacts centers all marketing efforts in its Program Development department.
Proprietary research tools and software are the cornerstone of our marketing
activities. The Company has an extensive marketing training program that was
established in 2001. Specific target research techniques are addressed as well
as specific target qualification actions, industry/competition understanding,
and proposal development skills. Additional Program Development/marketing
activities include: direct marketing activities, exhibitions at trade shows,
Internet vehicles, strategic public relations activities, market research
results, and focused in-house research efforts to identify and capture new
opportunities, especially involving large new accounts. The Company currently
has four (4) employees involved in marketing activities.


CLIENTS

Accufacts has approximately 850 clients located throughout the United States.
During each of the fiscal years ended December 31, 2002, 2001, and 2000 revenues
were generated in all 50 states. No single client of the Company accounted for
more than 5% of total revenues during the fiscal years ended December 31, 2002,
2001, or 2000.

The Company believes that it has very good relations with its clients. We
frequently customize reports or other elements of our services to accommodate
client needs. This places Accufacts in a unique position to maintain these
clients in a long-term relationship.


GOVERNMENT REGULATION

Accufacts is a "consumer reporting agency" and is therefore subject to the
provisions of the Fair Credit Reporting Act (FCRA), and is regulated by the
Federal Trade Commission ("FTC") under the Federal Trade Commission Act. Under
the provisions of the FCRA, a consumer reporting agency may furnish a "consumer
report" to a customer (other than a consumer or in response to a court order)
only if such agency has reason to believe that the customer intends to use the
information for a permissible purpose. Permissible purposes include use in
connection with a credit transaction involving the consumer on whom the
information is to be furnished or the review or collection of an account of the
consumer or the legitimate need by the consumer for the information in
connection with a business transaction concerning the consumer. The background
checking reports of Accufacts are consumer reports for purposes of the FCRA. In
addition, certain of Accufacts' consumer reports are "investigative consumer
reports" within the meaning of that term under the FCRA. The FCRA also prohibits
disclosure of obsolete information concerning a consumer. Obsolete information
generally means information that is more than seven years old.



<PAGE>


The FCRA requires a consumer reporting agency to maintain reasonable procedures
designed to ensure that the prohibitions on the use of obsolete information are
not violated, and that the information contained in a consumer credit report is
used for a proper purpose. In addition, a consumer reporting agency must follow
reasonable procedures to assure maximum accuracy of the information concerning
the consumer about whom the report relates. The FCRA also requires a consumer
reporting agency, upon request from a consumer, to disclose all information
about that consumer in a consumer report, together with the source and the
recipients of the information. In some cases, this information must be delivered
to the consumer at no cost, and, in others, the agency may charge a reasonable
fee. Historically, Accufacts has not charged such a fee.

The Consumer Credit Reporting Reform Act (CCRRA) of 1996 amended the FCRA and
added new requirements on consumer reporting agencies providing consumer reports
for employment purposes. The requirements include:


      o    Providing clients with a notification of their responsibilities under
           the FCRA

      o    Obtaining certifications from clients that they are performing
           certain specific actions as required by the FCRA

      o    Providing the subject of the report with a free copy of the report if
           adverse action is taken by an employer based on information in the
           consumer report

      o    Providing a copy of a "Summary of Your Rights Under the Fair Credit
           Reporting Act" with each consumer report.



The CCRRA also placed new requirements on the resale of consumer reports. A
consumer reporting agency providing consumer reports to a reseller must now
obtain the identity of the end user of the information for each report. In
addition, the consumer reporting agency must receive certifications from
resellers that their customers are performing the same specific actions as are
required of the consumer reporting agency's direct customers, and ensure that
reports are being resold only for permissible purposes.

The FCRA provides that an investigative consumer report may not be prepared on
any consumer unless such consumer receives notice thereof in writing not later
than three days after the date on which the report was first requested. Notice
to a consumer must include a statement, among others, that the consumer has the
right to request complete disclosure of the nature and scope of the
investigation requested. The FCRA further provides that if the consumer requests
disclosure of the information, the consumer reporting agency must make such
disclosure in writing not later than five days after the date on which the
request for disclosure was received. A consumer reporting agency may not be held
liable for any violation of the FCRA provisions relating to investigative
consumer reports if that agency shows by preponderance of the evidence that at
the time of the violation, such agency maintained reasonable procedures to
assure compliance with those provisions. Of our current products,
education/credential confirmations and reference checks are investigative
consumer reports for purposes of the FCRA.

The FCRA provides for civil liability sanctions against a consumer reporting
agency by a consumer for willful or negligent noncompliance with the FCRA and
criminal sanctions against officers and directors thereof who knowingly and
willfully disclose information in a report to a person not authorized to receive
the information.



<PAGE>


State laws also impact the Company's business. There are a number of states that
have laws similar to the FCRA, and some states which have human rights laws more
strict than the FCRA. A large number of states also regulate the type of
information which can be made available to the public and/or impose conditions
to the release of the information. For example, some state laws prohibit access
to certain types of information, such as workers' compensation histories or
criminal histories, while others restrict access without a signed release from
the subject of the report. In addition, many privacy and consumer advocates and
federal regulators have become increasingly concerned with the use of personal
information, particularly credit reports. Attempts have been made and will
continue to be made by these groups to adopt new or additional federal and state
legislation to regulate the use of personal information. Federal and/or state
laws relating to consumer reporting agencies and/or access and use of personal
information amended or enacted in the future could adversely impact Accufacts'
operations.


LEGAL CONSIDERATIONS

Under general legal concepts and, in some instances, by specific state and
federal statute, Accufacts could be held liable to customers and/or to the
subjects of background checking reports prepared by Accufacts for inaccurate
information or misuse of the information. The FCRA contains civil liability
provisions for willful and negligent noncompliance with its requirements. The
FCRA further provides in effect that, except for liability for willful or
negligent noncompliance with the FCRA and false information furnished with
malice or willful intent to injure a consumer, a consumer reporting agency, any
user of information or any person who furnishes information to a consumer
reporting agency will not be liable to the consumer for defamation, invasion of
privacy or negligence based on information disclosed to such consumer under the
provisions of the FCRA.

Accufacts has developed and implemented internal policies designed to help
ensure that background information retrieved concerning a consumer is accurate
and that it otherwise complies with the provisions of the FCRA. In addition,
each customer of Accufacts is required to sign an agreement, wherein such
customer agrees, among other matters, to accept responsibility for using
information provided by Accufacts in accordance with the provisions of the FCRA
and all other applicable federal and state laws and regulations including
federal and state equal opportunity laws and regulations. Accufacts also has
internal checks in place regarding access and release of such information.
Additionally, Accufacts requires that all employees sign a written
acknowledgment covering the proper procedures for handling confidential
information.


COMPETITION

The pre-employment screening/background check industry is highly fragmented and
highly competitive. We face both direct and indirect competition for our
products and services. Additionally, many companies choose to perform such
candidate background checking using in-house personnel.

In terms of direct competition to the Company, there are a large number of
companies engaged in the sale of one or more of the background checking products
that we sell. We believe that this number will increase. A significant number of
these competitors are small companies operating on a local or regional basis.
Additionally, some large companies are operating on a national scale. We believe
that the background checking portion of our larger direct competitors' business
is currently only a portion of their overall operations. Unlike some of our
direct competitors, Accufacts serves as an intermediary for only two of its
products -- credit reports and motor vehicle driving records -- and obtains the
data for the remainder of its products directly from the source. We believe that
this assists in establishing better response times, maintaining higher degrees
of quality, and developing competitive pricing advantages. We also believe that
we have a competitive advantage over many of our competitors because of the wide
variety of products that we offer to customers, and because of our newly
developed order entry and report retrieval system. However, many of our
competitors have substantially greater financial and personnel resources than
Accufacts. In addition, it is possible that one or more of our larger direct
competitors could expand their background checking product line in the future.


<PAGE>



Indirect competition is another aspect of our industry. We face indirect
competition from a number of companies engaged in, among other things, drug,
aptitude and attitude testing, handwriting analysis and on-the-job trial
employment (employee leasing). These procedures, though often used in
conjunction with background checking, compete with Accufacts' products and
services. Most of these competitors operate on a national scale and have
substantially greater financial and personnel resources than Accufacts. In
addition, it is possible that one or more of these competitors could expand
their product lines in the future to include background checking products and
services.



EMPLOYEES

Accufacts has a total of 24 full-time employees, four (4) of whom are involved
in marketing, one (1) in finance, 13 in data research, one (1) in programming,
two (2) in customer service and three (3) in management. None of our employees
are represented by labor unions or are subject to collective bargaining
arrangements. Accufacts considers its relations with its employees to be good.



ITEM 2.  DESCRIPTION OF PROPERTY


Accufacts maintains its corporate headquarters office at a 3,000 square foot
facility located at 6 Greene Street, New York, NY 10013 pursuant to a lease
agreement, dated April 1, 1997, with 6 Greene Street Associates, LLC. The lease,
as amended, is for five years, expiring May 2003. The Company has the option to
extend the lease subsequently, if desired. The rent is $2,500 per month, or
$30,000 per year, including heat, and excluding electrical utilities.

Maglio-Accufacts, the wholly-owned subsidiary of Accufacts, and successor to
Maglio, Inc., maintains a 2,960 square foot office located at 2180 West State
Road 434, Suite 4150, Longwood, Florida 32779 pursuant to a lease agreement,
dated May 28, 1998, as amended, between Maglio, Inc. and CB Sanlando Center,
Inc, and assigned to Maglio-Accufacts. The lease agreement expires January 31,
2004. The monthly rent is $4,687 for the period from August 1, 2001 to July 31,
2002 and $4,872 for the period from August 1, 2002 to January 31, 2004.

Management considers present office space adequate to meet our foreseeable
needs.



ITEM 3.  LEGAL PROCEEDINGS

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


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.





<PAGE>




                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

In August 1998, Southern Cargo acquired all of the assets and assumed all of the
liabilities of our Company and changed its name to Accufacts Pre-Employment
Screening, Inc. and its state of incorporation from Florida to Delaware. On
September 9, 1998, the Company's common stock, par value $.01 per share,
commenced being quoted on the OTC Bulletin Board ( "OTCBB,") under the symbol
"APES." The following table sets forth the high and low bid prices for the
Company's Common Stock for the last two completed fiscal years on a quarterly
basis. The quotations represent bids between dealers and do not include retail
mark-up, mark-down or commissions, and do not necessarily represent actual
transactions.



----------------------------------------------------------------------
                                    LOW BID PRICE*    HIGH BID PRICE*
----------------------------------------------------------------------
Fiscal 2002
----------------------------------------------------------------------

1st Quarter                        $   .1500             $    .4500

2nd Quarter                            .1200                  .3200

3rd Quarter                            .1000                  .3400

4th Quarter                            .2000                  .4500

----------------------------------------------------------------------


Fiscal 2001:

1st Quarter                        $   .1100             $   .4100

2nd Quarter                            .1700                 .3600

3rd Quarter                            .1700                 .2500

4th Quarter                            .1700                 .4000


-------------------------------------------

*Source: Historical prices from Yahoo! Finance



<PAGE>


The Company believes that as of March 14 ,2003, there were approximately 850
holders of record of 6,721,913 shares of Common Stock, including holders that
maintain their ownership in "Street-Name."



DIVIDENDS

The Company has never paid cash dividends on its Common Stock and does not
anticipate paying a dividend in the foreseeable future. The Company anticipates
that future earnings, if any, will be retained for the development of its
business. Accordingly, the Company does not anticipate paying dividends on its
Common Stock in the foreseeable future. The payment of future dividends will be
at the sole discretion of the Company's Board of Directors and will depend upon
considerations including general business conditions.



RECENT SALES OF UNREGISTERED SECURITIES

On October 13, 1999, the Company issued an aggregate of 177,471 shares of its
common stock to Richard J. Maglio, the principal owner of Maglio, Inc., of which
174,971 shares were issued in connection with the acquisition of Maglio, Inc. by
Maglio-Accufacts, and 2,500 shares in consideration for Mr. Maglio entering into
a non-competition agreement with the Company. We relied upon Section 4 (2)
promulgated under the Act in that such issuance did not involve a public
offering.

On October 11, 1999, the Company issued to Richard J. Maglio, in connection with
the acquisition of Maglio, Inc. by Maglio-Accufacts, an option to purchase up to
50,000 shares of common stock of Accufacts at a purchase price of $2.50 per
share at any time commencing October 11, 2000 until, and including, October 11,
2002. The Company relied upon Section 4 (2) under the Act in that such issuance
did not involve a public offering.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Certain statements in this report may be deemed to be forward-looking statements
that are made pursuant to the "Safe Harbor" provisions of the Private Securities
Litigation Reform Act of 1995.

Accufacts was founded in 1994 to provide pre-employment screenings and
background checks for clients. Following a merger with Southern Cargo Company (a
public shell) in 1998, we became a publicly traded company and changed the
company name to Accufacts Pre-Employment Screening, Inc.

The forward looking statements contained herein do not necessarily reflect the
anticipated results to our business and /or operations subsequent to the
contemplated merger transaction (discussed SUPRA) whereby Accufacts would become
a wholly-owned subsidiary of Kroll Background America and would cease to be a
reporting company.

Fundamentally, the Accufacts business approach is to research and provide a
variety of background and due diligence reports to clients regarding their
employee candidates. These may include such items as: criminal background
checks, Social Security number verifications, employment verifications,
professional license verifications, education verifications, credit reports,
driving records, and other reports. We believe that obtaining background checks
is a proven, prudent part of a client's hiring process. Falsification of
application information is not uncommon, and courts have held employers liable
for harm caused by employees, especially when there is a pattern of behavior.
Furthermore, statistics indicate that pre-employment screenings increase
employee integrity and decrease turnover, which improves business performance.

The market for background checks/pre-employment screenings and related due
diligence is highly competitive. Most competitors are small local firms, but a
few large national companies exist in the market. Accufacts competes on both
levels. Overall, we believe that we have developed proprietary software tools
incorporating the latest information technologies. This enables our clients to
submit orders and track the status of the search at any time. We customize
reports upon request. We have an automated client service program that is
available on-line, 24 hours a day, 7 days a week. This ensures the fastest
response possible.



<PAGE>


Our acquisition of Maglio, Inc. in 1999 increased our client base and provided
additional resources that we believe will expand our position in the market.
During 2002, we enhanced our client support technology and we are developing new
product areas and technologies to offer clients in 2003.

The results of operations for fiscal year ended December 31, 2002 included
revenues of $4,075,669. This is a decrease of 2.2% from the results of the
period ended December 31, 2001. In general, this decrease in revenues was
primarily due to a weak results experienced in the first and second quarters of
2002, at least in part stemming from the spillover effects of the terrorist
attacks of September 11, 2001. The revenue gap between 2002 and 2001 closed
significantly during the last quarters of 2002. Additionally, 2002 revenues
reflect increases in new accounts somewhat off-set by the termination of
accounts that were unprofitable to the Company.

Although revenues were down 2.2%, the Company's cost of services decreased 9.8%,
from $ 3,212,519 in 2001 to $2,899,076 in 2002. A primary reason for this
decrease was a reduction experienced in orders for criminal history checks,
which in turn decreases outside research costs required to complete orders, as a
percentage of revenues. These costs generally include mandated fees at
courthouses for criminal searches and related other direct costs. The Company
expects to continue to reduce the impact of these outside costs (as a percentage
of revenues) during 2003.

General and administrative expenses rose in 2002 by 10.2%, or from $915,346 in
2001 to $1,008,382 in 2002. This increase is generally attributable to
significant one-time costs for necessary legal and financial due diligence
requirements associated with the pending Agreement and Plan of Merger between
the Company and Kroll, Inc.

Accufacts realized an increase in net income from $ 30,776 in 2001, to $259,993
for 2002. A significant contributor to this increase was the reduction
experienced in direct costs of services.

The average days outstanding of receivables was 53 days for the fiscal year
ended December 31, 2002, as compared to 55 days for the fiscal year ended
December 31, 2001, representing a decrease in the average time to collect
accounts receivable. The Company regularly reviews its accounts receivable aging
and has initiated specific policies and procedures to assist in timely
collections.


LIQUIDITY AND CAPITAL RESOURCES

The Company's financing activities for the year ended December 31, 2002 included
borrowing from a bank, stockholder loans, and net borrowings under capital lease
obligations of $68,331. The Company's financing activities resulted in net cash
provided by financing activities of $109,506 for the year ended December 31,
2002. The Company believes it will be able to fund its short-term cash needs
through funds from operations and, if required, additional capital raising
efforts.

The Company intends to increase its business through the use of operating
profits and borrowings. The Company believes that its anticipated cash flow from
operations and existing bank facilities will provide the liquidity to meet its
current foreseeable cash needs for at least a year.

At December 31, 2002, the Company had total assets $1,490,762, compared with
$1,320,298 at December 31, 2001, representing an increase of $170,464, or 12.9%.
At December 31, 2002, the Company had total liabilities of $509,473, as compared
to $599,002 at December 31, 2001, representing a decrease in liabilities of
$89,529, or 14.9%.

Net cash provided by operations in fiscal year 2002 was $511,042 compared with
$186,697 used in operations in 2001. The result was an increase in ending year
cash from $40,629 in 2001 to $360,649 at the end of 2002.


<PAGE>



The Company has a $75,000 line of credit with a bank through June 30, 2003. As
of December 31, 2002, the Company had $64,549 outstanding on the line. The line
bears interest at prime rate plus two (2) percent and is secured by
substantially all of the assets of the Company and is personally guaranteed by a
stockholder of the firm.

The Company also has a $25,000 business checking/overdraft line of credit with a
bank. As of December 31, 2002, the Company had $6,060 outstanding against the
line. It bears interest at prime rate plus six (6) percent and is secured by
substantially all of the assets of the Company.

There have been no significant changes to internal controls or in other factors
that could significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


ITEM 7.  FINANCIAL STATEMENTS.

Consolidated Financial Statements are found immediately following the signature
page of this Form on pages F-1 through F-14.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

On July 17, 2002, by resolution of its Board of Directors, the Company resolved
to change auditing firms and dismissed Cuthill & Eddy LLP and retained Tedder,
James, Worden & Associates, P.A.

The report of Cuthill & Eddy on the Company's financial statements for the past
two years did not contain an adverse or disclaimer of opinion and was not
qualified or modified as to uncertainty audit scope or accounting principles.
There were no disagreements with the Company's former accounting firm in any
matter of accounting principles, practice, financil statement disclosures or
auditing scope or procedures in connection with audits by the Company's  former
accounting firm for the two most recent fiscal years, and in any subsequent
interim period preceeding the change of accounting firms.

On December 8, 2000, the Company, by resolution of its Board of Directors,
resolved to change auditing firms and dismissed Marcum & Kliegman and retained
Meeks, Dorman and Company P.A., which subsequently was merged with Cuthill &
Eddy LLP.

The report of Cuthill & Eddy on the Company's financial statements for the past
two (2) years did not contain adverse or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope, or accounting principles.
There were no disagreements with the Company's former accounting firm in any
matter of accounting principles, practices, financial statement disclosures, or
auditing scope or procedures in connection with audits by the Company's former
accounting firm for the two (2) most recent fiscal years, and in any subsequent
interim period preceding such change of accounting firms.




                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.


The directors and executive officers of Accufacts and Maglio-Accufacts are as
follows:



<TABLE>
<CAPTION>


                                                          DIRECTOR OF                           DIRECTOR OF
                             POSITION WITH                ACCUFACTS         POSITION WITH       MAGLIO-ACCUFACTS
NAME                  AGE    ACCUFACTS                      SINCE          MAGLIO-ACCUFACTS     SINCE
----                  ---    ---------                   ------------      ----------------     ------

<S>                <C>    <C>                              <C>          <C>                   <C>
Philip Luizzo          37    Chief Executive Officer,        1998          President and             1999
                             President and Chairman                        Director
                             Of the Board
John C. Svedese        42    Vice President and              1998          Vice President and        1999
                             Director                                      Director

Richard J. Maglio      56    Director                        2001          Vice President of         1999
                                                                           Operations and
                                    Director
Anthony J. Luizzo      61    Corporate Secretary and         1998          Corporate Secretary       1999
                             Director                                      and Director

James E. Patterson     51    Director                        2001          Director                  2001

</TABLE>



<PAGE>


Philip Luizzo, the President, Chief Executive Officer and Chairman of the Board
of Directors of Accufacts and the President and a Director of Maglio-Accufacts,
has served as the President and Chief Executive Officer of Accufacts and its
predecessor, Southern Cargo, since 1994 and as President of Maglio-Accufacts
since 1999. For more than two years prior to 1994, Mr. Luizzo was a manager of
L.C. Security. Mr. Luizzo earned an undergraduate degree in finance from The
University of Nevada, Las Vegas and has authored a number of articles on
background screening for major magazines and professional journals including
Security Management Magazine and The Internal Auditing Alert. Mr. Luizzo has
lectured to numerous companies and professional organizations on aspects of
conducting background investigations for prospective employees. Philip Luizzo is
the son of Anthony J. Luizzo, the Corporate Secretary and a Director of
Accufacts and Maglio-Accufacts.

John C. Svedese, the Vice President and a Director of Accufacts and
Maglio-Accufacts, has over 12 years experience as a senior investigative auditor
for the New York City District Council of Carpenters. Mr. Svedese has been with
Accufacts and its predecessor, Southern Cargo, since 1994 and with
Maglio-Accufacts since 1999, and is familiar with all aspects of the Company's
growth and development. Mr. Svedese monitors the day-to-day operations of
Accufacts in the New York City office. In order to maintain Accufacts' high
level of personal as well as professional services, he also acts as the business
liaison between Accufacts and its clients. Mr. Svedese assists the Board of
Education of the City of New York by providing seminars regarding pre-employment
screening by corporations to its faculty and students.

Richard J. Maglio, the Vice President of Operations and a Director of
Maglio-Accufacts since October 1999, served as the President of Maglio, Inc., a
business engaged in providing employment background screening services to client
companies throughout the United States, since its inception in 1986 until it was
merged into Maglio-Accufacts in October 1999. Previously, Mr. Maglio served as
Vice President, Human Resources, for a major division of General Mills. He has
served on numerous HR industry boards and is a member of the Board of Directors
for the Central Chapter of the Society for Human Resources Management. Mr.
Maglio earned an undergraduate degree in Human Resources Management from the
University of Wisconsin-Oshkosh in 1968.

Anthony J. Luizzo, CFE, CST, DABFE, the Corporate Secretary and a Director of
Accufacts and Maglio-Accufacts, has been an owner and principal employee of L.C.
Consulting Group, Inc. for more than five years. Mr. Luizzo has over 35 years of
law enforcement and security management experience as a former detective with
the New York City Police Department and as a senior security administrator with
the New York City Mayor's Office of Economic Development and Business Services
and the NYC Health & Hospitals Corporation. Anthony Luizzo earned a graduate
degree in criminology and undergraduate degree in security management from
Pacific Western University and held adjunct faculty positions at John Jay
College of Criminal Justice Studies and New York University. Mr. Luizzo is
presently an adjunct faculty member at Long Island University. Mr. Luizzo is a
certified fraud examiner, certified security trainer, certified police
instructor, and a board certified forensic examiner. He has written over 25
articles addressing aspects of security and loss prevention management for a
wide variety of magazines and professional trade journals including The CPA
Journal, Security Management Magazine, The Journal of Health Care Protection
Management, and The White Paper. He is the author of "Play it Safe," a retail
fraud prevention brochure, and coauthor of Fraud Auditing: A Complete Guide, a
workbook for accountants and auditors on conducting fraud audits and
investigations published by the Foundation for Accounting Education. Mr. Luizzo
has lectured on security management issues to corporations, municipal agencies
and professional organizations nationwide. He has conducted over 5,000 security
surveys for corporations, hospitals, commercial, institutional and residential
complexes, and often testifies as a security expert in litigation involving
deficient security. Mr. Luizzo is the President of the New York Chapter of
Certified Fraud Examiners. He serves or has served on the Board of Directors of
The Associated Licensed Detectives of New York State, The Society of
Professional Investigators, and The Academy of Security Educators and Trainers.
Anthony Luizzo is the father of Philip Luizzo, the President, Chief Executive
Officer and Chairman of the Board of Directors of Accufacts and the President
and a Director of Maglio-Accufacts.


<PAGE>



James E. Patterson, has been a Director of Accufacts and Maglio-Accufacts since
2001. Mr. Patterson has over 25 years of experience as a corporate executive and
is a noted management consultant and contributing writer. He is President and
CEO of Vector Gp., an international consulting firm since 1997. He has served as
a Director of Applied Management Corporation and is Chairman of the Board of the
Theater at Holy Cross, a non-profit New York City theater organization
specializing on new artists. He holds B.S and M.S. degrees in Economics and has
completed extensive Ph.D. work in Economics.

All directors hold office until the next annual meeting of stockholders and
until their successors have been elected and qualified.

Section 16(a) Beneficial Ownership Reporting Compliance

Under securities laws of the United States, the Company's directors, executive
officers, and any persons holding more than ten percent of the Company's common
stock are required to report their initial ownership of the Company's common
stock and any subsequent changes in their ownership to the Securities and
Exchange Commissions ("SEC"). Specific due dates have been established by the
SEC, and the company is required to disclose any failure to file by those dates.
Based upon (i) the copies of Section 16 (a) reports that the Company received
from such persons for 2001 fiscal year transactions, and (ii) the written
representations received from one or more of such persons that no annual Form 5
reports were required to be filed for them for fiscal year 2001, the Company
believes that there has been compliance with all Section 16 (a) filing
requirements applicable to such officers, directors, and ten-percent beneficial
owners for such fiscal year.


ITEM 10.  EXECUTIVE COMPENSATION.

The following summary compensation table sets forth the aggregate compensation
paid or accrued by the Company to the Chief Executive Officer and to the four
most highly compensated executive officers other than the Chief Executive
Officer whose annual compensation exceeded $100,000 for the fiscal year ended
December 31, 2002 (collectively, the "Named Executive Officers") for services
during the fiscal years ended December 31, 2002, 2001, and 2000:


<TABLE>
<CAPTION>



                           SUMMARY COMPENSATION TABLE


                               ANNUAL COMPENSATION
                               -------------------

                                                                                   OTHER ANNUAL
                                     FISCAL                                        COMPENSATION
NAME AND PRINCIPAL POSITION           YEAR         SALARY($)         BONUS($)         ($)(1)
---------------------------           ----         ---------         --------         ------
<S>                                <C>           <C>              <C>             <C>
Philip Luizzo, President              2002          $182,325         $   0           $    0
            and                       2001          $173,643         $   0           $    0
Chief Executive Officer               2000          $165,375         $   0           $    0

<FN>
---------
(1)        Includes a monthly car allowance of $700 per month.
</FN>
</TABLE>


Currently, the Directors of the Company are not compensated for serving on the
Board of Directors.

On October 11, 1999, the Company entered into an employment agreement with
Richard J. Maglio, the Vice President of Operations and a Director of
Maglio-Accufacts. The term of the employment agreement was for three years,
commencing October 11, 1999 until October 11, 2002, during which Mr. Maglio was
employed as the Vice President of Operations of Maglio-Accufacts. Pursuant to
the terms of the employment agreement, Mr. Maglio receives an annual base salary
of $75,000, which is increased by a minimum of 4.0% for each subsequent year,
and 3.0% of any profits of the Company in excess of $500,000. Mr. Maglio also
received options to purchase up to 50,000 shares of Common Stock of Accufacts at
a purchase price of $2.50 per share at any time commencing October 11, 2000
until October 11, 2002. No options were exercised. During the term of the
employment agreement, Mr. Maglio was entitled to be reimbursed for automobile
expenses not exceeding $521 per month and for expenses incurred in connection
with his employment. Mr. Maglio's compensation under the foregoing employment
agreement was $75,000 for the fiscal year ended December 31, 2002. Although, the
term of Mr. Maglio's agreement has expired, he continues to be employed by the
Company under the same terms and conditions of his prior employment agreement.

The shareholders of the Company, during the Annual Meeting in 2001, approved a
Board resolution to implement an employee stock purchase plan. The plan became
effective in January 2002 and was terminated by unanimous consent of the Board
of Directors on December 31, 2002. Under the Stock Purchase Plan, the Company
issued 67,086 shares of common stock to eight (8) participating employees after
December 31, 2002.




EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

Philip Luizzo is employed as President and Chief Executive Officer of Accufacts
under an employment agreement, dated September 1, 1998, as amended. The term of
Mr. Luizzo's employment agreement is five years and provides for (i) an annual
base salary of $150,000 plus a cost of living adjustment provision, (ii) 10.0%
of any profit in excess of $500,000, (iii) reasonable out-of-pocket expenses and
(iv) a monthly car allowance of up to $700. In addition, in the event Mr. Luizzo
is terminated without cause or if there is a change-of-control (as defined in
the employment agreement) of the Company, Mr. Luizzo is entitled to receive his
salary for a period of two years commencing on the date of termination or
change-of-control, as the case may be. Also, if the Company terminates the
employment agreement without cause, the Company shall purchase Mr. Luizzo's
shares in the Company over a period of 6 months at the lesser of (x) market
value (average of bid and asked prices) or (y) $1.00 per share.

John Svedese is employed as Vice President under an employment agreement dated
September 1, 1998. The term of Mr. Svedese's agreement is five (5) years and
provides for (i) an annual base salary of $50,000, plus a cost-of-living
adjustment provision. He is entitled to receive his salary for a period of two
(2) years commencing on the date of termination or change-of-control, as the
case may be.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information concerning the beneficial ownership
of the Company's outstanding Common Stock as of March 14, 2003, by (i) each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock, (ii) each Named Executive Officer,
(iii) each of the Company's directors and (iv) all executive officers and
directors as a group. Unless otherwise indicated below, all persons listed have
sole voting and investment power with respect to their shares of Common Stock
except to the extent that authority is shared by spouses under applicable law.




<PAGE>



<TABLE>
<CAPTION>



                                                 AMOUNT OF            AMOUNT OF           PERCENTAGE OF CLASS
NAME AND ADDRESS OF BENEFICIAL OWNER (1)     COMMON STOCK OWNED    OPTIONS AWARDED (2)             (3)
----------------------------------------     ------------------    -------------------    --------------------
<S>                                             <C>                  <C>                      <C>
Philip Luizzo                                       3,770,000            30,000                   56.53%
John C. Svedese                                        10,754            15,000                      *
Richard J. Maglio(4)                                  177,471             --                       2.64%
Anthony J. Luizzo                                      10,754             --                         *
James E. Patterson                                     27,356            30,000                      *
All executive officers and directors
      as a group                                    3,996,335            75,000                   60.57%

<FN>
--------------------
 *Denotes less than 1%.

--------------------
(1)        Unless otherwise noted, the address for each individual is in care of
           Accufacts Pre-Employment Screening, Inc., 6 Greene Street, New York,
           New York 10013.

(2)        A person is deemed to be the beneficial owner of securities that can be
           acquired by such person within 60 days from the date hereof. Each
           beneficial owner's percentage ownership is determined by assuming that
           options or warrants that are held by such person (but not those held by any
           other person) and which are exercisable within 60 days from the date of
           filing this Form 10-KSB has been exercised. Unless otherwise indicated,
           the Company believes that all persons named in the table have sole voting
           and investment power with respect to all shares of Common Stock
           beneficially owned by them.

(3)        Based on 6,721,913 shares of Common Stock as of March 14, 2003.

(4)        Address for reporting person is c/o Maglio-Accufacts Pre-Employment
           Screening, Inc., 2180 West State Road 434, Suite 4150, Longwood,
           Florida
           32779

</FN>
</TABLE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                                      None.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

a)         Exhibits are incorporated by reference to the Index of Exhibits
           provided at the end of this Report on Form 10-KSB. Also incorporated
           by reference are all exhibits filed on the Company's Registration
           Statement on Form 10-SB.

b)         A current report on Form 8-K dated February 28, 2003 and filed March
           4, 2003 reported that the Company, Kroll Background America, Inc.
           (KBA) and Accufacts Acquisition Corp., a wholly owned subsidiary of
           KBA amended the Agreement and Plan of Merger previously entered into
           November 20, 2002, whereby the deadline for the effective time for
           the contemplated merger transaction in which Accufacts would become a
           wholly-owned subsidiary of KBA has been extended from February 28,
           2003 to May 31, 2003.


                                   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: March 28, 2003




                        BY: /S/ PHILIP LUIZZO
                        PHILIP LUIZZO
                        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: MARCH 28, 2003
-----------
PHILIP LUIZZO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)

/S/ JOHN C. SVEDESE                          DATE: MARCH 28, 2003
-------------------
JOHN C. SVEDESE
VICE PRESIDENT AND DIRECTOR

/S/ JAMES E. PATTERSON                       DATE: MARCH 28, 2003
----------------------
JAMES E. PATTERSON
DIRECTOR

/S/ RICHARD J. MAGLIO                        DATE: MARCH 28, 2003
---------------------
RICHARD J. MAGLIO
DIRECTOR

/S/ ANTHONY LUIZZO                           DATE: MARCH 28, 2003
------------------
ANTHONY LUIZZO
SECRETARY AND DIRECTOR




<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)

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)

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)

-----------------------------------

      (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.

      (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.





<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, 2002, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for the year 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 audit.

We conducted our audit 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 audit provides a reasonable
basis for our opinion.

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

As discussed in Note 2 to the financial statements, the Company changed its
method of accounting for goodwill and intangible assets.




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

January 30, 2003, except as to the paragraph entitled Consulting Agreement and
Note 6, which is as of March 28, 2003


                                       F-1


<PAGE>



<TABLE>
<CAPTION>




                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2002


                                     ASSETS

Current assets:

<S>                                                                 <C>
    Cash                                                            $   360,649
    Accounts receivable, net of allowance for
        doubtful accounts of $26,000                                    535,137
    Prepaid expense                                                       5,735
                                                                    -----------
            Total current assets                                        901,521
                                                                    -----------

Property and equipment, net                                             306,257
                                                                    -----------

Other assets:
    Security deposits                                                     8,543
    Goodwill                                                            125,543
    Intangible assets, net                                                1,598
    Deferred taxes                                                      147,300
                                                                    -----------
            Total other assets                                          282,984
                                                                    -----------

            Total assets                                            $ 1,490,762
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Lines of credit                                                 $    70,609
    Current maturities of capital lease obligations                      13,043
    Accounts payable                                                    225,122
    Accrued expenses                                                     54,884
    Income taxes payable                                                 26,500
    Deferred taxes                                                       95,800
    Other current liabilities                                             8,077
                                                                    -----------

            Total current liabilities                                   494,035

Other liabilities:
    Capital lease obligations, less current maturities                   15,438
                                                                    -----------
            Total liabilities                                           509,473
                                                                    -----------

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, 6,627,471 issued and outstanding                     66,275
    Additional paid-in capital                                        1,319,821
    Accumulated deficit                                                (404,807)
                                                                    -----------
            Total stockholders' equity                                  981,289
                                                                    -----------

            Total liabilities and stockholders' equity              $ 1,490,762
                                                                    ===========





                 See accompanying notes to financial statements.
</TABLE>


                                       F-2


<PAGE>



<TABLE>
<CAPTION>




                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001



                                                      2002             2001
                                                 --------------   ------------


<S>                                                <C>              <C>
Revenue                                            $ 4,075,669      $ 4,169,138
Cost of services                                     2,899,076        3,212,519
                                                   -----------      -----------

Gross profit                                         1,176,593          956,619

Operating expenses:
    General and administrative                       1,008,382          915,346
                                                   -----------      -----------

Operating income                                       168,211           41,273

Other income (expense):
    Other income                                         2,304             --
    Proceeds from grants                                83,234             --
    Amortization expense                                (5,188)            --
    Interest expense, net                              (13,568)         (10,497)
                                                   -----------      -----------

Income before income taxes                             234,993           30,776

Income tax (benefit)                                   (25,000)            --
                                                   -----------      -----------

Net income                                         $   259,993           30,776
                                                   ===========      ===========

Net income per share, basic and diluted            $       .04      $       .01
                                                   ===========      ===========

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









                 See accompanying notes to financial statements.

</TABLE>


                                       F-3


<PAGE>

<TABLE>
<CAPTION>





                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 2002 AND 2001


                                    COMMON STOCK
                                -------------------    CAPITAL       ACCUM-
                                 SHARES                IN EXCESS     ULATED
                                 ISSUED   PAR VALUE    PAR VALUE     DEFICIT      TOTAL
                               ---------  ---------   -----------    ---------   ---------



<S>                            <C>         <C>       <C>          <C>          <C>
Balance at December 31, 2000   6,627,471   $66,275   $1,319,821   $(695,576)   $  690,520

Net loss                            --        --           --        30,776        30,776
                               ---------   -------   ----------   ---------    ----------

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
                               =========   =======   ==========   =========    ==========










                 See accompanying notes to financial statements.
</TABLE>


                                       F-4


<PAGE>


<TABLE>
<CAPTION>





                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                   2002       2001
                                                                ---------   ----------

Cash flows from operating activities:

<S>                                                            <C>          <C>
    Net income                                                 $ 259,993    $  30,776
    Adjustments to reconcile net income to
        net cash provided by (used in) operating activities:
            Depreciation and amortization                        202,405      179,513
            Provision for deferred income taxes                  (51,500)        --
                Decrease in accounts receivable                  140,698        8,474
            (Increase) decrease in prepaid expense                (5,735)       9,865
            Decrease in accounts payable
                 and accrued expenses                            (69,396)    (415,325)
            Increase in income taxes payable                      26,500         --
            Increase in other current liabilities                  8,077         --
                                                               ---------    ---------
                Total adjustments                                251,049     (217,473)
                                                               ---------    ---------
                Net cash provided by (used in)
                    operating activities                         511,042     (186,697)
                                                               ---------    ---------

Cash flows from investing activities:
    Purchases of property and equipment                          (40,512)    (116,534)
                                                               ---------    ---------
                Net cash used in investing activities            (40,512)    (116,534)
                                                               ---------    ---------

Cash flows from financing activities:
    Repayments on capital lease obligations                      (12,440)      (9,130)
    Net (repayments) borrowings on lines of credit               (16,790)      28,636
    Net (repayments) proceeds of stockholder loans              (121,280)      90,000
                                                               ---------    ---------
                Net cash provided by (used in)
                    financing activities                        (150,510)     109,506
                                                               ---------    ---------

Net increase (decrease) in cash                                  320,020     (193,725)

Cash, beginning of year                                           40,629      234,354
                                                               ---------    ---------

Cash, end of year                                              $ 360,649    $  40,629
                                                               =========    =========

Supplemental disclosures:
    Interest paid                                              $  13,695    $  10,497
                                                               =========    =========

    Non-cash financing activities:
        Capital lease obligations                              $    --      $   4,142
                                                               =========    =========







                 See accompanying notes to financial statements.

</TABLE>


                                       F-5


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


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 and 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, 2002 and 2001, advertising expense was $3,713 and $9,137,
        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, 2002 AND 2001


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 form 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, notes payable and loans payable. 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:
        Property and equipment and intangible assets are reviewed for impairment
        whenever events or changes in circumstances indicate that the carrying
        amount may not be recoverable. If the sum of the expected undiscounted
        cash flows is less than the carrying value of the related asset or group
        of assets, a loss is recognized for the difference between the fair
        value and carrying value of the asset or group of assets.

                                       F-7


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1. Summary of significant accounting policies - continued:

    Stock-Based Compensation
         The Company has adopted Statement of Financial Accounting Standards No.
         123, "Accounting for Stock-Based Compensation" ("SFAS 123"). SFAS 123
         prescribes accounting and reporting standards for all stock-based
         compensation plans, including employee stock options, restricted stock,
         employee stock purchase plans and stock appreciation rights. SFAS 123
         requires compensation expense to be recorded (i) using the new fair
         value method or (ii) using the existing rules prescribed by Accounting
         Principles Board Opinion No. 25, "Accounting for Stock Issued to
         Employees" ("APB 25") and related interpretations with pro forma
         disclosure of what net income and earnings per share would have been
         had the Company adopted the new fair value method. The Company intends
         to continue to account for its stock based compensation plans in
         accordance with the provisions of APB 25.

     Goodwill and Intangible Assets:

             In June 2001, the Financial Accounting Standards Board issued
             Statement of Financial Accounting Standard (SFAS) No. 142,
             "Goodwill and Intangible Assets". SFAS No. 142 requires that
             goodwill no longer be amortized, but instead be tested for
             impairment at least annually. SFAS No. 142 also requires recognized
             intangible assets determined to have a finite useful life be
             amortized over their respectful estimated useful lives and reviewed
             for impairment in accordance with SFAS 144, "Accounting for the
             Impairment and Disposal of Long-Lived Assets". Any recognized
             intangible asset determined to have an indefinite useful life will
             not be amortized, but instead tested for impairment in accordance
             with the Standard until its life is determined to no longer be
             indefinite.

             In connection with the transitional impairment evaluation, SFAS No.
             142 required the Company to perform an assessment of whether there
             is an indication that goodwill was impaired as of January 1, 2002,
             the date of the adoption of the provisions of SFAS No. 142. The
             impairment test performed indicated that an impairment did not
             exist and, accordingly, there was no cumulative effect of a change
             in accounting principle. During the year ended December 31, 2002,
             there were no changes in the carrying amount of goodwill.


                                       F-8


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


1. Summary of significant accounting policies - continued:

    Recent accounting pronouncements:

           In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
           Retirement Obligations". SFAS 143 addresses financial accounting and
           reporting for obligations associated with the retirement of tangible
           long-lived assets and the associated asset retirement costs. SFAS 143
           applies to (a) all entities and (b) legal obligations associated with
           the retirement of long-lived assets that result from the acquisition,
           construction, development and/or the normal operation of long-lived
           assets, except for certain obligations and lessees. SFAS 143 is
           effective for financial statements issued for fiscal years beginning
           after June 15, 2002. The Company does not believe the adoption of
           SFAS No. 143 will have a material impact on our financial position or
           results of operations.

           Also in August 2001, the FASB issued SFAS No. 144, "Accounting for
           the Impairment or Disposal of Long-Lived Assets," which established
           one accounting model to be used for long-lived assets to be disposed
           of by sale and broadens the presentation of discontinued operations
           to include more disposal transactions. SFAS 144 supersedes FASB
           Statement No. 121, "Accounting for the Impairment of Long-Lived
           Assets and for Long-Lived Assets to Be Disposed Of" and the
           accounting and reporting provisions of APB Opinion No.30, "Reporting
           the Results of Operations- Reporting the Effects of Disposal of a
           Seqment of a Business, and Extraordinary, Unusual and Infrequently
           Occurring Events and Transactions" for the disposal of a segment of a
           business (as previously defined in that Opinion). SFAS No. 144 also
           amends ARB No.51, "Consolidated Financial Statements", to eliminate
           the exception to consolidation of a subsidiary for which control is
           likely to be temporary. The provisions of SFAS No. 144 became
           effective for financial statements issued for fiscal years beginning
           after December 15, 2001. The adoption of SFAS No. 144 has had no
           impact on the Company's financial position or results of operations.

           In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
           Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
           Technical Corrections," which rescinds SFAS No. 4, "Reporting Gains
           and Losses from Extinguishments of Debt" and an amendment of that
           Statement and SFAS No. 64, "Extinguishments of Debt Made to Satisfy
           Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS No. 44,
           "Accounting for Intangible Assets for Motor Carriers." SFAS No. 145
           amends SFAS No. 13, "Accounting for Leases," to eliminate an
           inconsistency between the accounting for sale-leaseback transactions
           and the required accounting for certain lease modifications that have
           economic effects that are similar to sale-leaseback transactions.
           SFAS No. 145 also amends other existing authoritative pronouncements
           to make various technical corrections, clarify meanings, or decide
           their applicability under changed conditions. SFAS No. 145 is
           effective for fiscal years beginning after May 15, 2002. The Company
           does not expect the adoption of SFAS No. 145 will have a material
           impact on its financial position or results of operations.

           In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
           Associated with Exit or Disposal Activities," which addresses
           significant issues regarding the recognition, measurement, and
           reporting of costs associated with exit and disposal activities,
           including restructuring activities. SFAS No. 146 requires that costs
           associated with exit and disposal activities be recognized when they
           are incurred rather than at the date of a commitment to an exit or
           disposal plan. SFAS No. 146 is effective for all exit and disposal
           activities initiated after December 31, 2002. The Company does not
           expect the adoption of SFAS No. 146 to have a material impact on its
           financial position or results of operations.


                                          F-9


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

2. Property and equipment:

        Property and equipment is comprised of the following at December 31,
2002:

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

           Furniture and fixtures           $        71,646        7 years
           Computer equipment                       147,733        5 years
           Telephone equipment                       25,292        5 years
           Other office equipment                    60,946        5 years
           Computer software                        528,587        3 years
                                            ---------------
                                                    834,204
           Less: accumulated depreciation          (527,947)
                                            ---------------
           Property and equipment, net      $       306,257
                                            ===============

        Depreciation expense for the years ended December 31, 2002 and 2001
amounted to $197,218 and $166,886, respectively.

3. Intangible assets:

        Intangible assets at December 31, 2002 consists 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            (22,715)
                                              ---------------

            Intangible assets, net            $         1,598
                                              ===============


        Amortization expense for the years ended December 31, 2002 and 2001
amounted to $5,188 and $12,627, respectively.

                                      F-10


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


4. Lines of credit:

        The Company has a $75,000 line of credit with a bank that is due on
        demand. The line bears interest at prime plus 2% (6.25% at December 31,
        2002), payable monthly, is collateralized by substantially all of the
        assets of the Company and is personally guaranteed by a stockholder of
        the Company. The Company had $64,549 outstanding on the line of credit
        at December 31, 2002.

        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% (10.25% at December 31, 2002), payable monthly, and is collateralized
        by substantially all of the assets of the Company. The Company had
        $6,060 outstanding at December 31, 2002.

5. 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, 2002
        and 2001 consists of the following:

                                              2002                 2001
                                         ---------------      ---------------
                     Current:
                        Federal          $             -      $             -
                        State                     26,500                    -

                     Deferred:
                        Federal                  (34,200)                   -
                        State                    (17,300)                   -
                                         ---------------      ---------------

                                         $       (25,000)     $             -
                                         ===============      ===============

        The components of the net deferred tax asset at December 31, 2002
        consist of the following:

          Cash basis accounting adjustment                $   (95,800)
          Tax basis depreciation and amortization             (22,800)
          Net operating loss carryforward                     170,100
                                                          ---------------
                                                               51,500
          Less: valuation allowance                                 -
                                                          ---------------

          Net deferred tax asset                          $    51,500
                                                          ===============

                                      F-11


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


5. Income taxes - continued:

        The net change in the valuation allowance was $138,000 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:


                                                       2002           2001
                                                   ------------  ------------
           Income tax (benefit) computed at
               federal statutory rate              $     80,000  $      7,000
           State income tax, net of federal
               tax benefit                                6,000             -
           Change in valuation allowance               (112,000)       (7,000)
           Permanent differences                          1,000         1,000
           Other                                              -        (1,000)
                                                   ------------  ------------

                                                   $    (25,000) $          -
                                                   ============  ============

        At December 31, 2002, based upon tax returns filed and to be filed, the
        Company has net operating loss carryforwards for federal tax purposes of
        approximately $364,000 which will expire in the year 2019.

6. 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, 2002 is as
        follows:

                     Computer equipment                    $            29,457
                     Telephone equipment                                21,677
                                                           -------------------
                                                                        51,134
                     Less accumulated depreciation                     (26,511)
                                                           -------------------

                                                           $            24,623
                                                           ===================

                                      F-12


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

6. Commitments - continued:

        Future minimum lease payments under capital leases as of December 31,
        2002 are as follows:

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

            2003             13,043                4,054             17,097
            2004             12,168                1,853             14,021
            2005              3,270                  194              3,464
                     --------------       --------------     --------------

                     $       28,481       $        6,101     $       34,582
                     ==============       ==============     ==============

        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, office equipment, and vehicles expiring through September 2004.
        Rent expense for the years ended December 31, 2002 and 2001 was $122,641
        and $111,246, respectively.

        Future minimum rental payments under the above noncancelable operating
        leases as of December 31, 2002 are as follows:

                   2003                 $            85,174
                   2004                               8,647
                                        -------------------

                                        $            93,821
                                        ===================

    Employment agreements:
        On September 1, 1998, the Company entered into two five-year employment
        agreements with two officers whereby the Company will pay a total salary
        of approximately $200,000 per annum plus a bonus to the senior officer
        based on 10% of any profits in excess of earnings, interest taxes and
        depreciation of $500,000. At December 31, 2002, total future minimum
        commitments under these two agreements are $159,412.


                                      F-13


<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

6. Commitments - continued:

    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 agreement also provided that the consultant was eligible for a
           bonus at the end of 2001 and again at the mid-point of 2002 provided
           that the Company has at least $220,000 in operating income at the end
           of 2001, and a minimum of $240,000 in operating income for the first
           half of 2002. The bonus is determined at the Company's sole
           discretion and was not met in 2001 or 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.

    Plan of Merger:
           On November 20, 2002, Accufacts entered into an Agreement and Plan of
           Merger with Kroll Background America, Inc. (KBA) and Accufacts
           Acquisition Corp., a wholly-owned subsidiary of KBA. Subject to the
           terms of the merger agreement, KBA will acquire all outstanding
           shares of our common stock at a price of $ 0.47 per share, and
           Accufacts will become a wholly-owned subsidiary of KBA. The merger is
           subject to certain customary closing conditions, including the
           approval by shareholders holding a majority of all of our issued and
           outstanding stock. We intend to solicit proxies from our shareholders
           for approval of this transaction.

7. Employee Stock Purchase Plan:

           Under its employee stock purchase plan, the Company is authorized to
           issue up to 200,000 shares of common stock to its full-time
           employees, nearly all of whom are eligible to participate. Employees
           can choose each quarter to have between 2% and 10% of their earnings
           withheld to purchase the Company's stock. Funds are held and options
           outstanding at the end of a quarter are automatically exercised at an
           exercise price equal to the lesser of eighty-five percent (85%) of
           the fair (market) value of the shares at (i) the beginning of a
           quarter or (ii) the end of the quarter. Under the plan, the Company
           received deposits for the purchase of 67,086 shares in 2002. A
           liability of $8,077 is included in the consolidated balance sheet as
           other liabilities, representing amounts withheld from employee
           earnings during the year for which shares had not been issued as of
           December 31, 2002. As is permitted by generally accepted accounting
           principles, the Company follows the provisions of APB Opinion No. 25
           in accounting for the plan and, accordingly, no compensation expense
           has been recognized. Proforma amounts are not included as they are
           immaterial.


                                          F-14





<PAGE>