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, 2000


                                       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



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

                                       N/A
                                       ---
                                (Title of Class)

<PAGE>






     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, 2000 were
$4,209,629.

     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 April 2, 2001, as reported on the OTC Bulletin Board was
approximately $972,000. As of April 2, 2001, the registrant had 6,627,471 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.



                                      -2-
<PAGE>




                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

     Accufacts Pre-Employment Screening, Inc. was originally incorporated in the
state of New York on October 6, 1996. On August 31, 1998, Accufacts
Pre-Employment Screening was merged into Southern Cargo Company, Inc.,
("Southern Cargo") a public shell incorporated in the State of Florida in 1993
but which did not commence operations until mid-1998. Simultaneously, Southern
Cargo changed its name to Accufacts Pre-Employment Screening, Inc.,
("Accufacts") and shortly thereafter reincorporated under the same name in the
State of Delaware.

     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, by merging Maglio into Maglio-Accufacts
Pre-Employment Screening, Inc. ("Maglio-Accufacts"), a Delaware corporation and
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 Maglio-Accufacts. The term
"business" refers to the business of the Company, its predecessors and
subsidiaries.


BUSINESS PROFILE

     Accufacts is primarily engaged in researching and providing pre-employment
background checks and screenings of individuals for clients through the use of
databases and a national network of agents (engaged on an independent contractor
basis) developed by Accufacts. The background information products and services
currently provided by Accufacts consist of:


         -   Criminal histories
         -   Pre-employment credit reports
         -   Social security number verifications
         -   Driving record histories
         -   Pre-employment verifications
         -   Education verifications
         -   Professional reference verifications
         -   Professional license verifications
         -   Federal criminal/civil searches
         -   Sex offender registrations
         -   National fugitive searches.


         Accufacts believes that employers increasingly are realizing the
benefits of conducting thorough background checks of employees as well as the
verifying employment applications, not only because of the desire to help assure
a better quality employee, but also, in some industries, the concern with
negligent hiring lawsuits. Accufacts has approximately 700 customers located
throughout the United States. During each of the fiscal years ended December 31,
2000, 1999, and 1998, sales of the Company's services were made in all 50
states. Our business strategy is to accelerate market presence throughout the
United States. Accufacts also intends to enhance our existing products, develop
new ones and pursue acquisitions of other companies, assets and/or product lines
that either complement or expand our existing business.



                                      -3-
<PAGE>





MARKETS

     Accufacts markets its employment background checking products and services
throughout the United States. Although any company with employees is a potential
customer of Accufacts, we believe that companies or businesses with one or more
of the following characteristics would typically benefit most from conducting
background checks on employees and job-applicants:

         -   High risk of liability for negligent hiring lawsuits relating to
             the action or inaction of employees

         -   Physically demanding jobs

         -   Employees with access to goods and cash of employers

         -   High employee turnover

         -   Desire for better quality employees, not only with respect to
             competence, but also integrity.


Industries in which one or more of these characteristics exist include:


         -   Construction

         -   Retail

         -   Manufacturing

         -   Property management, including commercial office buildings,
             apartments and hotels

         -   Medical, including nursing homes, hospitals and in-home health care
             providers

         -   City and county governments, including schools, gaming, temporary
             and permanent placement agencies

         -   Accounting firms.




PRODUCTS AND SERVICES

     Accufacts' products and services are designed to verify job applicant
background information for employers and consist of database searches through
the use of our in-house computer system and manual retrieval and copying of
public records by our network courier system. Our clients may request and
receive records by telephone, mail, and facsimile or through our two web sites,
www.accufacts.com and www.maglioinc.com, or by using proprietary software
developed by Accufacts or a modem-equipped personal computer or 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 customers of reports prepared by Accufacts vary in
price from $5.00 to $75.00 per report, depending upon the type and location of
the background check requested by the customer. The reports may be viewed
on-line or printed in either Accufacts' or the customer's offices. The reports
remain in a computer file in Accufacts' host computer system for two (2) years
and are available to the customer at no additional cost during that period.



                                      -4-
<PAGE>


     Our in-house computer host system consists of automated, networked PCs
running Window 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 as compared to our competitors.

     Accufacts' network agent system currently consists of persons and small
companies located throughout the United States. The agents are engaged as
independent contractors by written agreements which provide for payment of a fee
on a per document, per day or monthly basis. The number of agents in each state
or locality depends on the size, population density, numbers of counties, and
the organization of the court systems within the state or locality.


     Accufacts currently offers the following products and services:


         -- Criminal Histories - 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.

         -- Motor Vehicle Driving 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.

         -- Credit Information - 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 for all three of the major credit bureaus (Equifax,
TRW and TransUnion) and retrieve the information from these credit bureaus
through proprietary software that we developed and own. Our clients may order
reports from any combination of the three credit bureaus.

         -- 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.

         -- 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.

         -- 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.

         -- Professional License Verifications - Professional licenses in most
states may be verified to include physicians, registered nurses, dentists,
chiropractors, physical therapists, attorneys, certified public accountants,
etc.

         -- 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.




                                      -5-
<PAGE>




         -- 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 search.

         -- New York State Sex Offender Registry Searches - This is a statewide
search of the New York State Sex Offender Registry Database. New York State sex
offenders are categorized by the risk that they pose to public safety. For a sex
offender to be included in the registry, he or she must be under the supervision
of the New York State Criminal Justice System.

         -- Nationwide Search for Outstanding Warrants - This search is
conducted through a law-enforcement entity and includes a search of the National
Criminal Index Computer ( NCIC ) database for wanted persons. It should be noted
that for a subject to be listed in the NCIC database, a State, Local or Federal
Law Enforcement Agency must have entered the subject into the database as a
wanted person.



ACCELERATED MARKET PRESENCE


     Accufacts intends to continue the acceleration of its market presence
throughout the United States. In part, we plan to further expand and refine
sales and marketing techniques. We have used and refined certain techniques over
the past several years, including the following:


         -   Face-to-face selling with prospective customers, primarily larger
             companies

         -   In-house telemarketing to existing customers and to prospective
             customers who have shown an interest in purchasing our  products
             and services

         -   Independent resellers

         -   Public relations projects and promotions

         -   Participation in trade shows and seminars

         -   Advertising in trade publications

         -   Maintaining a Web page on the Internet

         -   Mailing of news releases to existing customers and to
             prospective customers.





                                      -6-
<PAGE>




ACQUISITIONS OF OTHER COMPANIES AND/OR PRODUCT LINES

     Accufacts may pursue the acquisition of other companies, assets and/or
product lines that either complement or expand our business. Target companies
may include regional or state background checking companies or companies with
complementary products including but not limited to drug testing, skills testing
or safety and security products. We may use cash or stock or a combination of
stock and cash to affect any such acquisitions. We have had, and will continue
to have, discussions from time-to-time with potential acquisition candidates.

     Other than our acquisition of Maglio, Inc. in October 1999, we have not
consummated any acquisitions nor is any acquisition currently considered
probable as of the date of this Form 10-KSB.


LONG-TERM CUSTOMER RELATIONSHIPS

     Accufacts is fully committed to providing quality products and services to
our customers. Management believes that the emphasis on building long-term
relationships with our customers has played a significant role in our success.
Management further believes that these relationships are important not only to
generate additional sales from existing customers, but also for customer
referrals. A large percentage of our sales have been generated by referrals from
customers. We intend to continue to send company information to existing
customers; monitor larger customers on a daily basis; and contact customers on a
regular basis through telesales.


QUALITY CUSTOMER SERVICE AND SUPPORT

     In order to offer customers quality service and support, Accufacts has
developed and will continue to enhance a client service and support program
including:


         -   The availability of a customer service representative twelve hours
             a day Monday through Friday

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

         -   Quality control checks for Accufacts' products

         -   Minimum acceptable performance guidelines for employees.


In addition, Accufacts realizes the importance of long-term employees to the
success of its operations and, therefore, strives to provide a positive work
environment and benefits package for employees.




                                      -7-
<PAGE>



MARKETING AND SALES

     Accufacts' marketing program consists of direct marketing activities,
exhibitions at trade shows, the Internet, strategic public relations activities,
market research results, and in-house telemarketing. All of the leads generated
by these marketing activities are referred to new customer telesales
representatives for follow-up and, if applicable, obtaining all documentation
(including executed User Agreements) needed to open new customer accounts.

     There are five employees at corporate headquarters in New York who are
involved in marketing activities, one of whom is the Director of
Marketing/Program Development.


CUSTOMERS

     Accufacts currently has approximately 700 customers located throughout the
United States. During each of the fiscal years ended December 31, 2000, 1999,
and 1998 sales were made in 50 states. No single customer of Accufacts accounted
for more than 10.0% of total sales during the fiscal years ended December 31,
2000, 1999, or 1998.

     Historically, Accufacts experiences 35.0% of its annual sales in the fourth
quarter due to increased hiring by retailers, starting in mid-October and
continuing through the holiday season.


GOVERNMENT REGULATION

     Accufacts is a "consumer reporting agency" and is therefore subject to the
provisions of the 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.

     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:

         -   Providing customers with a notification of their responsibilities
             under the FCRA

         -   Obtaining certifications from customers that they are performing
             certain specific actions as required by the FCRA

         -   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

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



                                      -8-
<PAGE>



     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.





                                      -9-
<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 materially 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.

     In February 2000, Accufacts obtained an errors and omissions insurance
policy for our officers, directors and employees in the amount of $5.0 million.
The policy was recently renewed and management expects to maintain such
insurance.


COMPETITION

     The background checking industry is highly fragmented and highly
competitive. We face both direct and indirect competition for our products and
services. Additionally, many companies elect to perform employee candidate
background checking in-house.





                                      -10-
<PAGE>


DIRECT COMPETITION

     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; while some are large companies operating
on a national scale. To our knowledge, the background checking portion of the
business of our larger direct competitors is currently a small portion of their
overall operation. Unlike many of our direct competitors, Accufacts serves as a
broker for only two of its products -- credit reports and motor vehicle driving
records -- and obtains the data for the remainder of its products from the
source. We believe that this assists in developing a competitive pricing
advantage. We also believe that we have a competitive advantage over many of our
competitors because of the wide variety of products that we can offer to
customers, and because of our newly developed order entry and report retrieval
system. Many of our competitors, however, 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.


INDIRECT COMPETITION

     Additionally, 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 40 full-time employees, five of whom are involved
in marketing, two in finance, 24 in data processing, one in programming, five in
customer service and three 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 rent is $2,500 per month,
or $30,000 per year, including heat, but excluding electrical charges.

     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 term of the lease agreement is for
five years, expiring July 31, 2003, and the monthly rent is (i) $4,440 for the
period from August 1, 1999 to September 31, 2000, (ii) $4,564 for the period
from August 1, 2000 to July 31, 2001, (iii) $4,687 for the period from August 1,
2001 to July 31, 2002 and (iv) $4,872 for the period from August 1, 2002 to July
31, 2003.

     Management considers our present office space adequate for our foreseeable
needs.


ITEM 3. LEGAL PROCEEDINGS

         None.


                                      -11-
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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.







                                     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
included retail mark-up, mark-down or commissions, and do not necessarily
represent actual transactions.

--------------------------------------------------------------------------------
                                   LOW BID PRICE*        HIGH BID PRICE*
--------------------------------------------------------------------------------
Fiscal 2000
--------------------------------------------------------------------------------

1st Quarter                         $1.3750                  $2.5625

2nd Quarter                           .5000                   2.0000

3rd Quarter                           .4375                    .9063

4th Quarter                           .0650                    .5625

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


Fiscal 1999:

1st Quarter                          $1.2500                 $4.3750

2nd Quarter                           1.1250                  5.0000

3rd Quarter                           1.5625                  2.7500

4th Quarter                           1.6250                  2.6875

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

*Source:  NASDAQ OTCBB Quarterly Reports.




                                      -12-
<PAGE>




     The Company believes that as of March 31, 2001, there were approximately
1,500 holders of record of 6,627,471 shares of Common Stock, including holders
that maintain their ownership in a "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

     No unregistered equity securities of the registrant were sold by the
Company during the period covered by this report.


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 1996 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 public company and changed the company name
to Accufacts Pre-Employment Screening, Inc.

     Fundamentally, the Accufacts' business approach is to provide a variety of
background reports to a client regarding an employee candidate. These may
include such items as a: criminal background check, social security number
verification, employment verification, professional license verification,
education verification, credit report, driving record, 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 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
have successfully 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,
every day. This ensures the fastest response possible.

     Our acquisition of Maglio, Inc. was a major step for the company. It
increased our client base and provided additional resources that we believe will
expand our position in the market. During 2000, we had to integrate operations
without any disruption in client service, recognizing that timely background
reports are of paramount value to clients. This was a formidable task.
Furthermore, since we were integrating computer systems, we enhanced our client
support technology and developed at least one new product area to offer clients
in 2001.

     Management believes that the full integration of the Maglio acquisition
will be completed in early 2001. Our focus will be on continuing to refine
operations, increasing revenues through aggressive marketing initiatives, and
generating a stream of positive earnings. We believe that we are poised to
leverage our competitive advantages and generate profitable growth.


                                      -13-
<PAGE>


     The results of operations for fiscal year ending December 31, 2000 included
revenues of $4,209,629. This is an increase of 84.4% over 1999, where revenues
were $2,283,533. In general, this increase in revenues was due to three (3)
primary factors. First, completion of the acquisition of Maglio, Inc. in late
1999 added revenues and the existing client base to consolidated results for the
Company in 2000. Second, the Company expanded its core business base (excluding
that augmented by the wholly-owned subsidiary) as a result of ongoing marketing
activities. Third, the Company experienced increases in cross-selling additional
services to the existing client base.

     Although revenues were up approximately 84% in 2000, the Company's cost of
sales rose 102.4%, from $1,531,924 in 1999 to $3,100,132 in 2000. The primary
reason for this disproportionate increase was a set of one-time costs associated
with the acquisition and resulting consolidation cited above. Specifically, and
as a means to maintain client service and effect a seamless transition, certain
duplicate staff (e.g., customer service/account representatives, and
researchers) were retained during 2000. This ensured that virtually no Maglio
accounts were lost during the consolidation and integration. The Company expects
to eliminate such redundancies in early 2001, which should have a positive
effect on future costs of sales. Maintaining exceptional quality of service is a
priority for the Company. Furthermore, certain operating contracts in effect for
the subsidiary during 2000 increased cost of sales. In most cases, these were
renegotiated or left to expire as the Company entered 2001.

     General and administrative expenses rose 43.5% in 2000, to $1,446,432 up
from $1,008,012 in 1999. As with cost of sales, certain general and
administrative expense increases were the result of the effects of
consolidation. In particular, the requirement existed to modify certain features
of the proprietary software system to accommodate the consolidation of Maglio,
Inc. and the full integration of the Florida operations center. Additionally,
increased legal and accounting fees were realized in 2000 as necessary to fully
consolidate operations of the subsidiary.

     Net loss for the fiscal year ended December 31, 2000 was $367,346, as
compared to a net loss of $215,566 for 1999. The amount of net loss in 2000
exceeded that of 1999 by 70.4%. The basis for this loss is reflected in the cost
of sales and general and administrative discussions presented above. Management
anticipates realizing the economic and performance advantages resulting from the
acquisition/consolidation beginning in fiscal year 2001. Generating positive net
earnings is a priority management objective.

     Days outstanding in receivables was 64 days for the fiscal year ended
December 31, 2000, as compared to 62 days for the fiscal year ended December 31,
1999, representing an increase 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.


     The Company's financing activities for the year ended December 31, 2000
included borrowing from a bank, stockholder loans, and net borrowings under
capital lease obligations of $61,639. The Company's financing activities
resulted in net cash provided by financing activities of $681,115 for the year
ended December 31, 1999. 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.


LIQUIDITY AND CAPITAL RESOURCES

     The Company intends to increase its business through the use of operating
profits and borrowings and additional capital raising. The Company believes that
its anticipated cash flow operations as well as availability of funds from
existing bank facilities and proceeds of the offering completed recently will
provide the liquidity to meet its current foreseeable cash needs for at least a
year.


                                      -14-
<PAGE>


     At December 31, 2000, the Company had total assets $1,591,199, compared
with $1,510,236 at December 31, 1999, representing an increase of $80,963, or
5%. At December 31, 2000, the Company had total liabilities of $900,679, as
compared to $452,370 at December 31, 1999, representing an increase in
liabilities of $448,309.

     Net cash provided by operations in fiscal year 2000 was $287,493 compared
with $394,927 used in operations for 1999. Purchases of property and equipment
during 2000, in part, led to a decline in ending year cash from $298,331 in 1999
to $234,354 at the end of 2000.

     The Company has a $75,000 line of credit with a bank through June 30, 2001.
As of December 31, 2000, the Company had $54,471 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, 2000, the Company had $4,293 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.



ITEM 7. FINANCIAL STATEMENTS.

         Consolidated Financial Statements are found immediately following the
signature page of this Form on pages F-1 through F-16.


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


     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.

     The report of Marcum & Kliegman on the Company's financial statements for
fiscal years 1999 and 1998 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 fiscal years 1999 and 1998, and in any
subsequent interim period preceding such change of accounting firms.



                                      -15-
<PAGE>



                                    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        35    Chief Executive Officer,    1998        President and         1999
                           President and Chairman                  Director
                           Of the Board
John C. Svedese      40    Vice President and          1998        Vice President and    1999
                           Director                                Director

Richard J. Maglio    54    --                          --          Vice President of     1999
                                                                   Operations and
                                                                   Director

Anthony J. Luizzo    59    Corporate Secretary and     1998        Corporate Secretary   1999
                           Director                                and Director

Frank Luizzo         51    Director                    1998        Director              1999

Joseph W. Slattery   63    Director                    1998        Director              1999
</TABLE>


     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, and the nephew of Frank Luizzo, 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.





                                      -16-
<PAGE>





     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. 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, and the brother of Frank Luizzo, a Director
of Accufacts and Maglio-Accufacts.

     Frank Luizzo, CFE, a Director of Accufacts and Maglio-Accufacts, has, for
more than the past two years, been the Director of Operations of several
security-related departments at the Hard Rock Hotel and Casino in Las Vegas,
Nevada. For more than three years prior thereto, he was the General Manager of
United Coin Machine Co. in Las Vegas Nevada, which is in the business of
managing slot machine route operations. Mr. Luizzo has over 30 years of law
enforcement and security management experience as a former Nevada State Trooper
and Gaming Agent/Supervisor - Gaming Control Board State of Nevada. Mr. Frank
Luizzo is presently the Director of Security for The Hard Rock Hotel and Casino,
Las Vegas, Nevada and formerly held positions as General Manager, United Coin
Machine Co. and Assistant to the Chairman, Aladdin Hotel and Casino. Mr. Luizzo
coauthored an article on "Casino Fraud" featured in Security Management Magazine
and was prominently featured in television documentaries on "Gaming Security"
for The Discovery Channel and "E" Entertainment. Mr. Luizzo is a member and past
president of the Las Vegas Security Chief's Association, a member of the
International Association of Financial Crime Investigators, and current
president of the Harmon Avenue Business Association. Mr. Frank Luizzo is the
uncle of Philip Luizzo, the President, Chief Executive Officer and Chairman of
the Board of Accufacts and the President and a Director of Maglio-Accufacts, and
the brother of Anthony J. Luizzo, the Corporate Secretary and a Director of
Accufacts and Maglio-Accufacts.

      Joseph W. Slattery, CFE, a Director of Accufacts and Maglio-Accufacts, has
been a manager with L.C. Security where he conducts the security board training
division for more than the past five years. Mr. Slattery has over 40 years of
law enforcement and security management experience as a former Deputy Inspector
with the New York City Police Department and as private security
consultant/trainer. Mr. Slattery earned an undergraduate/graduate degree in
security management from John Jay College of Criminal Justice Studies. Mr.
Slattery is a certified fraud examiner and a certified security guard instructor
in New York State. Mr. Slattery is a former treasurer for The Captain's
Endowment Association - New York City Police Department and a current board
member of The New York Chapter of Certified Fraud Examiners. Mr. Slattery has
lectured on various aspects of security, loss prevention and fraud prevention
management to corporations, municipal agencies and professional organizations
nationwide. Throughout his career, he has conducted numerous security surveys of
corporate facilities, hospitals, and commercial/industrial entities.


                                      -17-
<PAGE>


     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 2000 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
2000, 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, 2000 (collectively, the "Named Executive Officers") for
services during the fiscal years ended December 31, 2000, 1999 and 1998:






                                      -18-
<PAGE>





                           SUMMARY COMPENSATION TABLE


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

                                                                    OTHER ANNUAL
                                FISCAL                              COMPENSATION
NAME AND PRINCIPAL POSITION      YEAR       SALARY($)    BONUS($)      ($)(1)
---------------------------      ----       ---------    --------      ------
Philip Luizzo, President         2000       $150,000       $  0         $  0
            and                  1999       $150,000       $  0         $ 8,400
Chief Executive Officer          1998       $ 49,420       $  0         $  0

---------
(1)      Includes a monthly car allowance of $700 per month.


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 is for three years,
commencing October 11, 1999 until October 11, 2002, during which Mr. Maglio is
to be employed as the Vice President of Operations of Maglio-Accufacts. Pursuant
to the terms of the employment agreement, Mr. Maglio is to receive an annual
base salary of $75,000, which shall be 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. During the term of the employment
agreement, Mr. Maglio is 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, 2000.

     The Company does not have a stock option plan at this time. However, the
Company is considering adopting a stock purchase plan for all employees.


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.




                                      -19-
<PAGE>



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 31, 2001, 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.
<TABLE>
<CAPTION>

                                              AMOUNT AND NATURE OF        PERCENTAGE OF CLASS
NAME AND ADDRESS OF BENEFICIAL OWNER (1)      BENEFICIAL OWNERSHIP (2)         (3)
----------------------------------------      ------------------------         ----
<S>                                                  <C>                      <C>
Philip Luizzo                                        3,770,000                56.9%
John C. Svedese                                              0                   --
Richard J. Maglio(4)                                   177,471                 2.7%
Anthony J. Luizzo                                            0                   --
Frank Luizzo                                                 0                   --
Joseph W. Slattery                                           0                   --
All executive officers and directors
      as a group (six persons)                       3,947,471                59.6%

<FN>

----------
(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 6,627,471 shares of Common Stock as of March 31, 2001.

(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

      In the area of reports, a Current Report of Form 8-K was filed by the
Company on December 13, 2000 and an amendment to the Current Report was filed on
Form 8-K/A on December 18, 2000 concerning a change in accountants whereby the
Company resolved to change accounting firms and retain Meeks, Dorman and Company
P.A.

     Concerning exhibits, they 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 From
10-SB.


                                      -20-
<PAGE>




                                   SIGNATURES

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



                                  Accufacts Pre-Employment Screening, Inc.
Date: April 11, 2001
                                  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: April 11, 2001
         -----------
         Philip Luizzo
         President and Chief Executive Officer
         (Principal Executive Officer)

         /S/ JOHN C. SVEDESE                              Date: April 11, 2001
         -------------------
         John C. Svedese
         Vice President and Director

         /S/ FRANK LUIZZO                                 Date: April 11, 2001
         ----------------
         Frank Luizzo
         Director

         /S/ JOSEPH W. SLATTERY                           Date: April 11, 2001
         ----------------------
         Joseph W. Slattery
         Director

         /S/ ANTHONY LUIZZO                               Date: April 11, 2001
         ------------------
         Anthony Luizzo
         Secretary and Director


                                      -21-
<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)
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)
21.1     List of Subsidiaries (4)
27.1     Financial Data Schedule

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

(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.



                                      -22-
<PAGE>





                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 2000



<PAGE>





                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                                TABLE OF CONTENTS


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

Independent Auditor's Report                              F - 1

Independent Auditor's Report                              F - 2

Consolidated Financial Statements

         Consolidated Balance Sheet                       F - 3

         Consolidated Statements of Operations            F - 4

         Consolidated Statements of Changes in
                Stockholders' Equity                      F - 5

         Consolidated Statements of Cash Flows            F - 6

Notes to Consolidated Financial Statements                F - 7 to F - 17









<PAGE>








               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


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


We have audited the accompanying consolidated balance sheet of Accufacts
Pre-Employment Screening, Inc. and Subsidiary, as of December 31, 2000, and the
related consolidated statements of operations, changes in 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion.

In our opinion, the 2000 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Accufacts
Pre-Employment Screening, Inc. and Subsidiary at December 31, 2000, and the
results of their consolidated operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.




Meeks, Dorman & Company, P.A.
Longwood, Florida
March 13, 2001









                                      F - 1



<PAGE>

                          INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying consolidated statements of operations, changes
in stockholders' equity and cash flows of Accufacts Pre-Employment Screening,
Inc. and Sudsidiary for the year ended December 31, 1999. 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 generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 results of operations and
cash flows of Accufacts Pre-Employment Screening, Inc. and Subsidiary for the
year ended December 31, 1999, in conformity with generally accepted accounting
principals.

/s/ MARCUM & KLIEGMAN LLP
-------------------------

March 14, 2000
New York, New York


                                     F - 2

<PAGE>

<TABLE>
<CAPTION>
                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET
                               December 31, 2000


================================================================================
ASSETS
Current Assets:
<S>                                                                 <C>
      Cash                                                          $   234,354
      Accounts receivable, net of allowance
        for doubtful accounts of $55,434                                684,309
      Prepaid expense                                                     9,855
-------------------------------------------------------------------------------
          Total Current Assets                                          928,518
-------------------------------------------------------------------------------

Property and Equipment, Net                                             509,173
-------------------------------------------------------------------------------

Other Assets:
      Security deposits                                                   8,553
      Intangible assets, net                                            144,955
-------------------------------------------------------------------------------
          Total Other Assets                                            153,508
-------------------------------------------------------------------------------
TOTAL ASSETS                                                        $ 1,591,199
===============================================================================

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities:
      Line of credit                                                $    58,764
      Current maturities of capital lease
        obligations                                                       9,889
      Accounts payable and accrued expenses                             764,726
      Loan payable to stockholder                                        31,280
-------------------------------------------------------------------------------
          Total Current Liabilities                                     864,659
-------------------------------------------------------------------------------

Other Liabilities:
      Capital lease obligations,
        less current maturities                                          36,020
-------------------------------------------------------------------------------
          Total Liabilities                                             900,679
-------------------------------------------------------------------------------

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
        authorized, 6,627,471 issued and
        outstanding                                                      66,275
      Additional paid-in capital                                      1,319,821
      Accumulated deficit                                              (695,576)
-------------------------------------------------------------------------------
          Total Stockholders' Equity                                    690,520
-------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 1,591,199
===============================================================================

   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                     F - 2

<PAGE>

<TABLE>
<CAPTION>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS

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

For the years ended December 31,                          2000           1999
---------------------------------------------------------------------------------

<S>                                                    <C>            <C>
Revenue                                                $ 4,209,629    $ 2,283,533

Cost of sales                                            3,100,132      1,531,924
---------------------------------------------------------------------------------

Gross profit                                             1,109,497        751,609
---------------------------------------------------------------------------------

General and administrative expenses                      1,446,432      1,008,012
---------------------------------------------------------------------------------

Operating loss                                            (336,935)      (256,403)
Other income (expense):
     Interest income, net                                     --            4,857
     Interest expense                                       (8,418)          --
     Loss on disposal of fixed asset                        (6,284)          --
     Other expense                                          (2,009)          --
---------------------------------------------------------------------------------

Loss before income taxes                                  (353,646)      (251,546)
---------------------------------------------------------------------------------

Income tax (expense) benefit                               (13,700)        35,980
---------------------------------------------------------------------------------

Net loss                                               $  (367,346)   $  (215,566)
---------------------------------------------------------------------------------

Net (loss) per share, basic and diluted                $     (0.06)   $     (0.03)
---------------------------------------------------------------------------------

Weighted average number of common shares outstanding     6,627,471      6,228,556
================================================================================


   The accompanying notes are an integral part of these financial statements.
</TABLE>


                                     F - 3


<PAGE>

<TABLE>
<CAPTION>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

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

                                         Common Stock                         Capital          Stock
                                    Shares         Shares                    in Excess       Subscription    Accumulated
                                  Subscribed       Issued       Par Value   of Par Value      Receivable       Deficit       Total
------------------------------------------------------------------------------------------------------------------------------------

<S>                                <C>          <C>          <C>           <C>              <C>         <C>            <C>
Balance at December 31, 1998         375,000      6,075,000    $    64,500   $   944,470      (750,000)   $  (112,664)   $  146,306
------------------------------------------------------------------------------------------------------------------------------------
Stock subscription received         (375,000)       375,000           --            --         750,000          --          750,000
Issuance of shares relating to
     acquisition                        --          174,971          1,750       370,063          --            --          371,813
Issuance of shares relating to
     non-competition agreement          --            2,500             25         5,288          --            --            5,313
Net loss                                                                                          --        (215,566)      (215,566)
------------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1999            --        6,627,471         66,275     1,319,821          --        (328,230)     1,057,866

Net loss                                --             --             --            --            --        (367,346)      (367,346)
------------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2000            --        6,627,471    $    66,275   $ 1,319,821          --     $  (695,576)   $   690,520
====================================================================================================================================

   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                     F - 4

<PAGE>

<TABLE>
<CAPTION>

                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

===================================================================================
For the years ended December 31,                               2000         1999
-----------------------------------------------------------------------------------

Cash flows from operating activities:
<S>                                                         <C>          <C>
     Net loss                                               $(367,346)   $(215,566)
     Adjustments to reconcile net loss to net
        Cash used in operating activities:
                Depreciation and amortization                  65,413       44,330
                Loss on disposal of property                    6,284         --
                Provision for doubtful accounts                50,598         --
                Increase in accounts receivable               (98,447)    (119,593)
                Decrease (increase) in prepaid expense         58,717      (68,572)
                Increase in accounts payable and
                        accrued expenses                      570,664        6,074
                Provision for deferred income taxes            (1,600)     (41,600)
-----------------------------------------------------------------------------------
      Total adjustments                                       654,839     (179,361)
-----------------------------------------------------------------------------------
      Net cash provided by (used in) operating activities     287,493     (394,927)
-----------------------------------------------------------------------------------

Cash flows from investing activities:
    Purchases of property and equipment                      (413,109)     (23,702)
    Payment for intangible asset                                 --        (21,000)
    Cash acquired in connection with acquisition                 --          4,348
-----------------------------------------------------------------------------------
              Net cash used in investing activities          (413,109)     (40,354)
-----------------------------------------------------------------------------------

Cash flows from financing activities:
     Proceeds from capital lease obligations                   46,992         --
     Repayments on capital lease obligations                  (10,843)      (9,179)
     Net borrowings (repayments) of note payable, bank         15,490      (54,706)
     Repayments of stockholder loans                             --         (5,000)
     Proceeds from stockholder loans                           10,000         --
     Proceeds from issuance of common stock                      --        750,000
-----------------------------------------------------------------------------------
              Net cash provided by financing activities        61,639      681,115
-----------------------------------------------------------------------------------

Net (decrease) increase in cash                               (63,977)     245,834
Cash - beginning of year                                      298,331       52,497
-----------------------------------------------------------------------------------

Cash - end of year                                          $ 234,354    $ 298,331
===================================================================================

Supplemental disclosures:

Cash paid during the years for:
    Interest                                                $   8,418    $   6,192
    Income taxes                                               12,100        4,529

Non-cash investment and financing activities:
    Issuance of shares resulting from merger                      --       371,813
    Issuance of shares resulting from collection of
        stock subscription                                        --       750,000
    Issuance of shares relating to a non-competition
        agreement                                                 --         5,313

    The company acquired the following assets and liabilities in connection with
    its acquisition of Maglio, Inc. during the year ended December 31, 1999:

    Accountants receivable                                        --       227,475
    Property and equipment                                        --        84,296
    Security deposit                                              --         5,846
    Accounts payable                                              --       (35,632)
    Notes payable                                                 --       (34,645)
-----------------------------------------------------------------------------------
    Total                                                         --      $247,340
===================================================================================

   The accompanying notes are an integral part of these financial statements.
</TABLE>

                                     F - 5





                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 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.

BUSINESS COMBINATION - On October 13, 1999, APES acquired all of the net assets
of Maglio, Inc. ("Maglio"), a Florida corporation, by merging Maglio with and
into Maglio-Accufacts Pre-Employment Screening, Inc. ("MAPES"), a wholly-owned
subsidiary established by APES. The acquisition was accounted for using the
purchase method of accounting and was completed by issuing 177,471 shares of
APES common stock consisting of 174,971 shares of common stock in consideration
for the acquisition and 2,500 shares of common stock in consideration for a
stockholder of Maglio entering into a non-competition agreement. The purchase
price over the fair value of the net assets acquired was $120,125 and is being
amortized using the straight-line method over 20 years. The fair value of the
non-competition agreement was $5,313 and is being amortized using the
straight-line method over the term of the agreement (see Note 3).

PRINCIPLES OF CONSOLIDATION - The Consolidated financial statements include the
accounts of APES and MAPES, collectively referred to as the "Company". The
operations and financial position of MAPES were included in the consolidated
financial statements since October 13, 1999. 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.



                                      F - 6
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CONCENTRATIONS OF CREDIT RISK - The Company has cash balances in a bank in
excess of the maximum amount insured by the FDIC as of December 31, 2000 and
1999.

ADVERTISING COST - Advertising costs are expensed as incurred. For the years
ended December 31, 2000 and 1999, advertising expense was $6,003 and $34,128,
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. The Company files a consolidated federal tax return.

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 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 LOSS 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 loss per common share based on
the weighted average number of shares outstanding during the periods. It also
requires the presentation of diluted EPS. When losses have been incurred,
warrants and options are not included since the effect would dilute loss per
share. Therefore, diluted EPS is not presented for the Company for the years
ended December 31, 2000 and 1999 because there were net losses in both years.
When net income applicable to common stock is reported, warrants and options are
included using the treasury stock method, provided exercise prices are less than
the average market price, and when such inclusion results in further dilution.

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS - The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.




                                     F - 7
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

RECLASSIFICATIONS - Certain reclassifications have been made in the 1999
financial statements to conform to the 2000 presentation.

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.

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.

COMPREHENSIVE INCOME - The Company has adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130
requires the reporting of comprehensive income in addition to net income from
operations. Comprehensive income is a more inclusive financial reporting
methodology that includes disclosure of certain financial information that
historically had not been recognized in the calculation of net income. The
adoption of SFAS 130 and the related required disclosures have no effects on the
financial statements for the years ended December 31, 2000 and 1999.




                                     F - 8
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REPORTING OF SEGMENTS - Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information",
establishes criteria for determining an operating segment and establishes
disclosure requirements for reporting information about operating segments. The
Company has determined that under SFAS No. 131, it operates in one segment of
service and its customers and operations are within the United States.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No. 133"), which was originally effective for fiscal years
beginning after June 15, 1999, was deferred to June 15, 2000 by the publishing
of Statement of Financial Accounting Standards No. 137. SFAS No. 133 establishes
accounting and reporting standards for derivative instruments and hedging
activities. This Statement requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial condition and measure
those instruments at fair value. The accounting for changes in the fair value of
a derivative instrument depends on its intended use and the resulting
designation. The Company does not expect that the adoption of this standard will
have a material impact on its financial statements.

NEW ACCOUNTING PRONOUNCEMENTS - In September 2000, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 140,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities" ("SFAS 140"). SFAS 140 revised the standard for accounting for
securitization transactions and other transfers and requires additional
disclosures. SFAS 140 is effective for all transfers and servicing of financial
assets occurring after March 31, 2001, however, the expanded disclosure
requirements of SFAS 140 are effective for financial statements for fiscal years
ending after December 15, 2000. The Company does not expect the adoption of SFAS
140 to have a material impact on its financial position, results of operations
or cash flows.



                                     F - 9
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following at December 31, 2000:

          ---------------------------------- -------------- --------------------
                                                             Estimated Useful
                                                                   Lives
                                                 Amount
          ---------------------------------- -------------- --------------------

          ----------------------------------
          Furniture and fixtures             $     71,078          7 years
          ----------------------------------
          Computer equipment                      135,893          5 years
          ----------------------------------
          Telephone equipment                      25,292          5 years
          ----------------------------------
          Other office equipment                   58,132          5 years
          ----------------------------------
          Computer software                        62,612          3 years
          ----------------------------------
          Information system in process           320,009
          ---------------------------------- -------------- --------------------
          Less: accumulated depreciation         (163,843)
          ---------------------------------- -------------- --------------------

          ----------------------------------
          Property and equipment, net        $    509,173
          ---------------------------------- -------------- --------------------


Depreciation expense for the years ended December 31, 2000 and 1999 amounted to
$52,736 and $38,741, respectively.




                                     F - 10
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 3 - INTANGIBLE ASSETS

Intangible assets at December 31, 2000 consists of the following:

         --------------------------------- ------------ ----------------------
                                                          Estimated Useful
                                                                Lives
                                             Amount
         --------------------------------- ------------ ----------------------
         --------------------------------- ------------ ----------------------

         ---------------------------------
         Goodwill                          $  141,125          20 years
         ---------------------------------
         Customer lists                        19,000           5 years
         ---------------------------------
         Non-competition covenant               5,313           3 years
         --------------------------------- ------------ ----------------------
                                              165,438
         ---------------------------------
         Less: accumulated amortization       (20,483)
         --------------------------------- ------------ ----------------------

         ---------------------------------
         Intangible assets, net            $  144,955
         --------------------------------- ------------ ----------------------


Amortization expense for the years ended December 31, 2000 and 1999 amounted to
$12,677 and $5,589, respectively.


NOTE 4 - LINE OF CREDIT

The Company has a $75,000 line of credit with a bank through June 30, 2001. The
line bears interest at prime plus 2%, is secured by substantially all of the
assets of the Company and is personally guaranteed by a stockholder of the
Company. The Company had $54,471 outstanding on the line of credit at December
31, 2000.

The Company also has a $25,000 business checking line of credit with a bank. The
credit line bears interest at prime plus 6% and is secured by substantially all
of the assets of the Company. The Company had $4,293 outstanding at December 31,
2000.


NOTE 5 - LOAN PAYABLE TO STOCKHOLDER

Loan payable to stockholder represents advances made by a stockholder of the
Company through the normal course of business. Such advances are non-interest
bearing with no definitive repayment terms. The Company had $31,280 outstanding
at December 31, 2000.


                                     F - 11
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 6 - STOCKHOLDERS' EQUITY

On September 15, 1998, as part of a placement offering pursuant to Rule 504 of
Regulation D of the Securities Act of 1933, the Company offered to sell a
minimum of 25,000 shares and a maximum of 500,000 shares of the Company's $.01
par value common stock at an offering price of $2.00 per share (the "Offering").
The Offering was completed on December 18, 1998 whereby 125,000 shares were sold
and 375,000 shares were subscribed for. The stock subscriptions in the amount of
$750,000 were received during 1999 and the 375,000 shares of common stock were
issued.

On October 13, 1999, the Company issued 177,471 shares of its $.01 par value
common stock in connection with the acquisition of Maglio and for entering into
a non-competition agreement with a stockholder of Maglio (see Note 1).


NOTE 7 - 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 differences.



                                     F - 12
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 7 - INCOME TAXES (CONTINUED)

The income tax expense (benefit) for the years ended December 31, 2000 and 1999
consists of the following:

         ---------------- ------------- -------------
                               2000          1999
         ---------------- ------------- -------------
         Current          $     12,100  $     5,620
         Deferred                1,600      (41,600)
         ---------------- ------------- -------------

                          $     13,700  $   (35,980)
         ---------------- ------------- -------------


The components of the deferred tax asset at December 31, 2000 consist of the
following:

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

         Cash basis accounting adjustment           $    31,000

         Tax basis depreciation                          (1,000)
         Net operating loss carryforward                115,000
          ------------------------------------------ -------------
                                                        145,000
         Less: valuation allowance                     (145,000)
         ------------------------------------------ -------------
         Net deferred tax asset                     $        -
         ------------------------------------------ -------------

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

       ----------------------------------------- -------------- -------------
                                                      2000           1999
       ----------------------------------------- -------------- -------------
       Income tax (benefit) computed at federal
           statutory rate                        $   (120,000)   $   (73,000)
       State income tax, net of federal
           tax benefit                                (18,000)       (20,000)
       NOL utilization                                (56,000)             -
       Conversion from accrual to cash
           method for taxes                           205,000         57,000
       Permanent differences                            5,000              -
       Other                                          (2,000)              -
       ----------------------------------------- -------------- -------------
                                                 $    14,000    $    (36,000)
       ----------------------------------------- -------------- -------------


                                     F - 13
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 7 - INCOME TAXES (CONTINUED)

At December 31, 2000, based upon tax returns filed and to be filed, the Company
has net operating loss carryforwards for federal tax purposes of approximately
$294,000 which will expire in the year 2019.


NOTE 8 - 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, 2000 is as follows:

         ----------------------------------------- ------------
         ----------------------------------------  $ 40,266
         Computer equipment
         -----------------------------------------
         Telephone equipment                         21,677
         ----------------------------------------- ------------
                                                     61,943
         -----------------------------------------
         Less accumulated depreciation                (14,668)
         ----------------------------------------- ------------
                                                     $ 47,275
         ----------------------------------------- ------------


Future minimum lease payments under capital leases as of December 31, 2000 are
as follows:

         ------------------------ -------------- -------------- -------------
         For the Year Ending
            December 31,            Principal      Interest        Total
         ------------------------ -------------- -------------- -------------

         ------------------------
                2001              $       9,889  $       7,046  $     16,935
         ------------------------
                2002                      9,961          5,369        15,330
         ------------------------
                2003                     11,594          3,737        15,330
         ------------------------
                2004                     11,197          1,794        12,991
         ------------------------
                2005                      3,270            194         3,464
         ------------------------ -------------- -------------- -------------
                Total             $      45,911  $      18,140  $     64,050
         ------------------------ -------------- -------------- -------------


                                     F - 14
<PAGE>


                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 8 - COMMITMENTS (CONTINUED)

Interest rates on the capitalized leases range from 9.0% to 23.4%, respectively,
and 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 expiring March 2003 and July 2003. Rent
expense for the years ended December 31, 2000 and 1999 was $97,286 and $43,090,
respectively.

Future minimum rental payments under the above noncancelable operating leases as
of December 31, 2000 are as follows:

                   ----------------------------- -----------
                        For the Year Ended           Amount
                           December 31,
                   ----------------------------- -----------

                   -----------------------------
                               2001               $  90,884
                   -----------------------------
                               2002                  92,187
                   -----------------------------
                               2003                  45,075
                   ----------------------------- -----------
                                                  $ 228,146
                   ----------------------------- -----------


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 $200,000 per annum. At December 31, 2000, total future minimum
commitments under these two agreements are $533,000.

On October 11, 1999, the company entered into a three-year employment agreement
with an executive whereby the Company will pay a total salary of $75,000 per
annum plus stock options and the possibility of a bonus based on certain levels
of profits. At December 31, 2000, total future minimum commitments under this
agreement are $131,000.


                                     F - 15
<PAGE>



                    ACCUFACTS PRE-EMPLOYMENT SCREENING, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


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

NOTE 9 - STOCK OPTIONS

In October 1999, the Company granted options to an executive to purchase 50,000
shares of its common stock at an exercise price of $2.50 per share. These
options will be exercisable on the first anniversary of the grant date and they
expire on the third anniversary of the grant date.

Pro forma information regarding net income and earnings per share is required by
SFAS 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of SFAS 123. The fair market
value for these options was estimated at the date of grant using a Black-Scholes
option-pricing model and amounted to $1.53 per share with the following
weighted-average assumptions as of the date of grant:

                           Expected volatility           1.014
                           Dividend yield                   --
                           Risk-free rate                 5.87%
                           Average life                 3 year

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.


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