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. . ------------------------------------------------------ (Exact name of registrant as specified in its charter) NEVADA 88-0346441 ----------------------------- ----------------- (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 ------------------------------------------------------ (Address and principal executive offices) (561) 962-4194 ------------------------------------------------------ (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. 2 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. 3 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 ------------------------------- Jeff Spanier, President (Principal Executive, Financial and Accounting Officer) 4 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 -- --------- --------- TOTAL CURRENT ASSETS 200,186 -- --------- --------- OTHER ASSETS Investment - Held-to-Maturity Security 3,320 3,320 Deferred Officer Compensation-Less Current Portion 159,508 -- --------- --------- TOTAL OTHER ASSETS 162,828 3,320 --------- --------- TOTAL ASSETS $ 363,014 $ 3,320 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable $ 16,447 $ 2,213 Due to Officer -- 600 --------- --------- TOTAL CURRENT LIABILITIES 16,447 2,813 --------- --------- 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) --------- --------- TOTAL STOCKHOLDERS' EQUITY 346,567 507 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 363,014 $ 3,320 ========= ========= See accompanying notes to financial statements 5 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 6 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 ------------ ---------- ---------------- 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 -- -------- ------- -------- NET CASH USED IN OPERATING ACTIVITIES (10,607) 0 (21,562) -------- ------- -------- CASH FLOWS FROM INVESTING ACTIVITIES 0 0 0 -------- ------- -------- 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 7 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. 8