SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2002
Commission File No. 0-25675
COMBINED PROFESSIONAL SERVICES, INC. .
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(Exact name of registrant as specified in its charter)
NEVADA 88-0346441
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(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
433 PLAZA REAL, SUITE 275, BOCA RATON, FL 33432
PLAZA REAL, SUITE 275, BOCA RATON, FL 33432
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(Address and principal executive offices)
(561) 962-4194
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required 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 the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 6,687,200 shares as of September 30,
2002.
Transitional Small Business Format: NO
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Registrant's Financial Statements are filed herewith following the signature
page.
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with the generally
accepted accounting principles have been omitted. However, in the opinion of
management, all adjustments (which include only normal recurring accruals)
necessary to present fairly the financial position and results of operations for
the period presented have been made. The results for interim periods are not
necessarily indicative of trends or of results to be expected for the full year.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 10-KSB for the
fiscal year ended December 31, 2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATION
On September 27, 2002 we executed an agreement to acquire Patron Systems, Inc.,
a developmental stage company which was formed in April 2002 to provide
comprehensive, end to end information security solutions to global corporations
and government institutions. If we are successful in closing this acquisition,
we anticipate furthers acquisitions in this industry which are in negotiation by
Patron Systems, Inc. Although we anticipate the closing of the Patron
acquisition in October 2002, there can be no assurance that we will complete
this acquisition or any others. We are seeking to control our expenses during
our search for an acquisition candidate.
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
SALE OF UNREGISTERED SECURITIES.
On August 12, 2002 we issued to Jeff Spanier, our president and director,
4,000,000 shares of common for serving as president and director for two years.
Such shares are subject to return to the company if Mr. Spanier does not not
meet certain employment or acquisition requirements. The shares were issued
without registration under the Securities Act of 1993 pursuant to an exemption
from registration under Rule 506 of Regulation D. As an officer and director of
the issuer Mr. Spanier is an accredited investor. The share certificate
contained a legend restricting transfer without registration under such Act or
pursuant to an exemption from registration and Mr. Spanier agreed to such
restrictions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
10 Share Exchange Agreement among Registrant,
Patron Systems, Inc. and the shareholders of
Patron Systems, Inc.
99.1 Certification by CEO pursuant to Section 906
of Sarbanes-Oxley Act of 2002.
99.2 Certification by CFO pursuant to Section 906
of Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
On July 8, 2002 Registrant filed Form 8-K (Amendment No. 1) reporting the
dismissal of Kurt D. Saliger, CPA as Registrant's Independent Accountant and
engagement of Grassano Accounting, P.A. as Registrant's new Independent
Accountant.
On August 14, 2002, Registrant filed Form 8-K reporting change of control on
Item 1 and Exhibit filed under Item 7.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
COMBINED PROFESSIONAL SERVICES, INC.
October 4, 2002 By: /s/ JEFF SPANIER
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Jeff Spanier, President
(Principal Executive,
Financial and Accounting
Officer)
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COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Enterprise)
BALANCE SHEETS
September 30,
2002 December 31,
(Unaudited) 2001
------------- -------------
ASSETS
CURRENT ASSETS
Prepaid Expense $ 186 $ --
Deferred Officer Compensation-Current Portion 200,000 --
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TOTAL CURRENT ASSETS 200,186 --
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OTHER ASSETS
Investment - Held-to-Maturity Security 3,320 3,320
Deferred Officer Compensation-Less Current Portion 159,508 --
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TOTAL OTHER ASSETS 162,828 3,320
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TOTAL ASSETS $ 363,014 $ 3,320
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 16,447 $ 2,213
Due to Officer -- 600
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TOTAL CURRENT LIABILITIES 16,447 2,813
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STOCKHOLDERS' EQUITY
Common Stock, $.001 par value authorized
50,000,000 shares; 6,687,200 shares
issued and outstanding at 2002
and 9,300,000 shares issued and outstanding at 2001 6,687 9,300
Additional Paid in Capital 418,195 4,975
Deficit Accumulated During
Development Stage (78,315) (13,768)
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TOTAL STOCKHOLDERS' EQUITY 346,567 507
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 363,014 $ 3,320
========= =========
See accompanying notes to financial statements
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COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(UNAUDITED)
October 11, 1995
Three Months Ended Nine Months Ended (Inception)
Sept. 30, Sept. 30, Sept. 30, Sept. 30, to Sept. 30,
2002 2001 2002 2001 2002
----------- ----------- ----------- ----------- -----------------
INCOME
Revenue $ 0 $ 0 $ 0 $ 0 $ 10,609
----------- ----------- ----------- ----------- -----------
TOTAL INCOME 0 0 0 0 10,609
----------- ----------- ----------- ----------- -----------
EXPENSES
General and Administrative 19,141 1,013 24,055 -- 59,323
Officer Compensation 40,492 -- 40,492 -- 40,492
----------- ----------- ----------- ----------- -----------
TOTAL EXPENSES 59,633 1,013 64,547 0 99,815
----------- ----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS (59,633) (1,013) (64,547) 0 (89,206)
OTHER INCOME 0 0 0 0 10,891
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (59,633) $ (1,013) $ (64,547) $ 0 $ (78,315)
=========== =========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE $ (0.01) $ (0.00) $ (0.01) $ 0.00 $ (0.01)
=========== =========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON STOCK
OUTSTANDING 7,198,400 4,650,000 8,591,769 4,074,542 5,428,536
=========== =========== =========== =========== ===========
See accompanying notes to financial statements
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COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
October 11, 1995
Nine Months Ended (Inception)
Sept. 30, Sept. 30, to Sept. 30,
2002 2001 2002
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CASH FLOWS FROM
OPERATING ACTIVITIES
Net (Loss) $(64,547) $(1,013) $(78,315)
Officer Compensation 40,492 -- 40,492
Prepaid Expense (186) -- (186)
Accounts Payable 14,234 -- 16,447
Due to Officer (600) 1,013 --
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NET CASH USED IN
OPERATING ACTIVITIES (10,607) 0 (21,562)
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CASH FLOWS FROM
INVESTING ACTIVITIES 0 0 0
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CASH FLOWS FROM
FINANCING ACTIVITIES
Contributions from Officers 10,607 -- 10,607
Issue Common Stock -- -- 11,100
Purchase Treasury Stock -- -- (145)
-------- ------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 10,607 0 21,562
-------- ------- --------
Net increase
(decrease) in cash -- -- --
Cash, Beginning of Period -- 296 --
-------- ------- --------
Cash, End of Period $ -- $ 296 $ --
======== ======= ========
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
On July 18, 2002, the Company issued 4,000,000 shares of common stock to its
President as compensation for two years. The stock was valued at $400,000.
See accompanying notes to financial statements
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COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and with the instructions to Form
10-QSB and Regulation S-B of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements and should be read in conjunction with Notes to
Financial Statements contained in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2001. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 2002 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2002.
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. Related Party Transactions
During the nine months ended September 30, 2002, the Company's two
presidents have paid all of the administrative expenses for the Company. This
total amount of $10,421 has been contributed to the Company and added to
additional paid in capital.
3. Stock Transactions
On July 18, 2002, the Company elected a new director and president. On that
same day, the Company cancelled the outgoing president's 4,500,000 shares of
common stock and issued 4,000,000 shares to the new president. The 4,000,000
shares represent compensation to the president over the next two years and are
valued at $0.10 per share. Such shares are restricted and are subject to return
to the Company under certain circumstances.
4. Going Concern
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has sustained recurring
operating losses and has minimal assets. These factors raise substantial doubt
as to the Company's ability to continue as a going concern. The future of the
Company is dependent upon its ability to raise additional working capital and to
seek potential merger candidates.
5. Subsequent Event
On September 27, 2002, the Company executed a share exchange agreement with
Patron Systems, Inc. (a Delaware privately-owned corporation) and the
shareholders of Patron Systems, Inc. Patron Systems, Inc. is a development stage
corporation which has been organized to provide information security solutions.
The agreement is scheduled to close during early October 2002.
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