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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 000-25675
COMBINED PROFESSIONAL SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 88-0346441
(State of Organization) (I.R.S. Employer Identification No.)
1004 Coral Isle, Las Vegas, NV 89108
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (702) 217-1921
Check whether the issuer: (1) has 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 [ ]
(*) As of the time of this filing.
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filings. (See
definition of affiliate in Rule 405)
The aggregate market value of the voting stock held by non-affiliates of the
registrant is $__________.
Note: If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense, the
aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this form.
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filings. (See
definition of affiliate in Rule 405)
The aggregate market value of the voting stock held by non-affiliates of the
registrant is $__________.
Note: If a determination as to whether a particular person or entity is an
affiliate cannot be made without involving unreasonable effort and expense, the
aggregate market value of the common stock held by non-affiliates may be
calculated on the basis of assumptions reasonable under the circumstances,
provided that the assumptions are set forth in this form.
2,200,000 Common Shares, $0.001 Par Value, Issued and Outstanding
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I
Item 1. Business
The Company was originally developed to provide secretarial services to other
companies. The Company was unable to secure financing to complete this endeavor,
and its original
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business plan was abandoned. The primary activity of the Company currently
involves seeking a company or companies that it can acquire or with whom it can
merge. The Company has not selected any company as an acquisition target or
merger partner and does not intend to limit potential candidates to any
particular field or industry, but does retain the right to limit candidates, if
it so chooses, to a particular field or industry. The Company's plans are in the
conceptual stage only.
The Board of Directors has elected to begin implementing the Company's principal
business purpose, described in Item 2 of the Second Amended Registration
Statement. As such, the Company can be defined as a "shell" company, whose sole
purpose at this time is to locate and consummate a merger or acquisition with a
private entity.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules, and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan. The Company's business is subject to
numerous risk factors, including the following: NO OPERATING HISTORY OR REVENUE
AND MINIMAL ASSETS. The Company has had no operating history and has received no
revenues or earnings from operations. The Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues, at least until it completes a business
combination. This may result in the Company incurring a net operating loss which
will increase continuously until the Company completes a business combination
with a profitable business opportunity. There is no assurance that the Company
will identify a business opportunity or complete a business combination.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success of the
Company's proposed plan of operation will depend to a great extent on the
operations, financial condition, and management of the identified business
opportunity. While management intends to seek business combinations with
entities having established operating histories, it cannot assure that the
Company will successfully locate candidates meeting such criteria. In the event
the Company completes a business combination, the success of the Company's
operations may be dependent upon management of the successor firm or venture
partner firm together with numerous other factors beyond the Company's control.
Item 2. Properties
The Company neither owns nor leases any real property at this time. The Company
does have the use of a limited amount of office space provided by Ms. Souers, a
director and officer, at no cost to the Company, and Management expects this
arrangement to continue. The Company pays its own charges for long distance
telephone calls and other miscellaneous secretarial, photocopying, and similar
expenses. This is a verbal agreement between Ms. Souers, a director and officer,
and the Board of Directors.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
None
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Item 6. Management's Discussion and Analysis or Plan of Operation
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and forward looking
statements as that terms is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). All statements that are included
in this 10-KSB, including statements of historical fact, are forward looking
statements. Although Management believes that the expectations reflected in
these forward looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors could cause
actual results to differ materially from the expectations disclosed in this
statement, including without limitation, in conjunction with those forward
looking statements contained in this statement.
The Company's plan is to seek, investigate, and if such investigation warrants,
acquire an interest in one or more business opportunities presented to it by
persons or firms desiring the perceived advantages of a publicly held
corporation. At this time, the Company has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any specific business or
company, and the Company has not identified any specific business or company for
investigation and evaluation. No member of Management or any promoter of the
Company, or an affiliate of either, has had any material discussions with any
other company with respect to any acquisition of that company. The Company will
not restrict its search to any specific business, industry, or geographical
location, and may participate in business ventures of virtually any kind or
nature. Discussion of the proposed business under this caption and throughout
this Registration Statement is purposefully general and is not meant to restrict
the Company's virtually unlimited discretion to search for and enter into a
business combination.
The Company may seek a combination with a firm which only recently commenced
operations, or a developing company in need of additional funds to expand into
new products or markets or seeking to develop a new product or service, or an
established business which may be experiencing financial or operating
difficulties and needs additional capital which is perceived to be easier to
raise by a public company. In some instances, a business opportunity may involve
acquiring or merging with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly-owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because of
general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity (subject to restrictions of applicable statues) for all
shareholders, and other items. Potentially available business opportunities may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Management believes that the Company may be able to benefit from the use of
"leverage" to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available funds
to acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities. The borrowing involved in a leveraged transaction will
ordinarily be secured
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by the assets of the acquired business. If that business is not able to generate
sufficient revenues to make payments on the debt incurred by the Company to
acquire that business, the lender would be able to exercise the remedies
provided by law or by contract. These leveraging techniques, while reducing the
amount of funds that the Company must commit to acquire a business, may
correspondingly increase the risk of loss to the Company. No assurance can be
given as to the terms or availability of financing for any acquisition by the
Company. During periods when interest rates are relatively high, the benefits of
leveraging are not as great as during periods of lower interest rates, because
the investment in the business held on a leveraged basis will only be profitable
if it generates sufficient revenues to cover the related debt and other costs of
the financing. Lenders from which the Company may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future borrowing, distribution,
and operating policies of the Company. It is not possible at this time to
predict the restrictions, if any, which lenders may impose, or the impact
thereof on the Company.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the Company
will offer owners of businesses the opportunity to acquire a controlling
ownership interest in a public company at substantially less cost than is
required to conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their shares for subsequent
sale. The Company will also incur significant legal and accounting costs in
connection with the acquisition of a business opportunity, including the costs
of preparing post-effective amendments, Forms 8-K, agreements, and related
reports and documents. Nevertheless, the officers and directors of the Company
have not conducted market research and are not aware of statistical data which
would support the perceived benefits of a merger or acquisition transaction for
the owners of a businesses. The Company does not intend to make any loans to any
prospective merger or acquisition candidates or to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition. The Company also has
no plans to conduct any offerings under Regulation S.
Management, while not especially experienced in matters relating to the new
business of the Company, will rely upon their own efforts and, to a much lesser
extent, the efforts of the Company's shareholders, in accomplishing the business
purposes of the Company. Other than Mr. May, it is not anticipated that any
outside consultants or advisors will be utilized by the Company to effectuate
its business purposes described herein. However, if the Company does retain such
an outside consultant or advisor, any cash fee earned by such party will need to
be paid by the prospective merger/acquisition candidate, as the Company has no
cash assets with which to pay such obligation. There have been no discussions,
understandings, contracts or agreements with any outside consultants and none
are anticipated in the future. In the past, the Company's management has never
used outside consultants or advisors in connection with a merger or acquisition.
As is customary in the industry, the Company may pay a finder's fee for locating
an acquisition prospect. If any such fee is paid, it will be approved by the
Company's Board of Directors and will be in accordance with the industry
standards. Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a finder's fee
or real estate brokerage fee could, in certain
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circumstances, be paid to any employee, officer, director or 5% shareholder of
the Company, if such person plays a material role in bringing a transaction to
the Company.
The Company will not have sufficient funds to undertake any significant
development, marketing, and manufacturing of any products which may be acquired.
Accordingly, if it acquires the rights to a product, rather than entering into a
merger or acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for which the
Company would probably be required to give up a substantial portion of its
interest in any acquired product. There is no assurance that the Company will be
able either to obtain additional financing or to interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
EVALUATION OF OPPORTUNITIES
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors of the Company (see Item 5).
Management intends to concentrate on identifying prospective business
opportunities which may be brought to its attention through present associations
with management. In analyzing prospective business opportunities, management
will consider, among other factors, such matters as;
1. the available technical, financial and managerial resources
2. working capital and other financial requirements
3. history of operation, if any
4. prospects for the future
5. present and expected competition
6. the quality and experience of management services which may be available
and the depth of that management
7. the potential for further research, development or exploration
8. specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company
9. the potential for growth or expansion
10. the potential for profit
11. the perceived public recognition or acceptance of products, services or
trades
12. name identification
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be
obtained.
Opportunities in which the Company participates will present certain risks, many
of which cannot be identified adequately prior to selecting a specific
opportunity. The Company's shareholders must, therefore, depend on Management to
identify and evaluate such risks. Promoters of some opportunities may have been
unable to develop a going concern or may present a business in its development
stage (in that it has not generated significant revenues from its principal
business activities prior to the Company's participation.) Even after the
Company's participation, there is a risk that the combined enterprise may not
become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by the Company and,
therefore, its shareholders.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require
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substantial management time and attention as well as substantial costs for
accountants, attorneys, and others. If a decision is made not to participate in
a specific business opportunity the costs incurred in the related investigation
would not be recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss by the Company of the related costs incurred.
There is the additional risk that the Company will not find a suitable target.
Management does not believe the Company will generate revenue without finding
and completing a transaction with a suitable target company. If no such target
is found, therefore, no return on an investment in the Company will be realized,
and there will not, most likely, be a market for the Company's stock.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a transaction is
complete, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all of
the Company's officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors without a vote
of the Company's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the Company's
Common Stock may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such event, the shareholders of the
Company, including investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.
As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis or verification of certain
information provided, check references of management and key personnel, and take
other reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise.
The manner in which the Company participates in an opportunity with a target
company will depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the management of the opportunity, and
the relative negotiating strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their shares in the
target company. Depending upon, among other things, the target company's assets
and liabilities, the Company's shareholders will, in all likelihood, hold a
lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to
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significant reduction in the event the Company acquires a target company with
substantial assets. Any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of shares held
by the Company's then shareholders, including purchasers in this offering.
Management has advanced, and will continue to advance, funds which shall be used
by the Company in identifying and pursuing agreements with target companies.
Management anticipates that these funds will be repaid from the proceeds of any
agreement with the target company, and that any such agreement may, in fact, be
contingent upon the repayment of those funds.
Item 7. Financial Statements
See Independent Auditors Report, Balance Sheet, Statement of Operations,
Statement of Stockholders' Equity, Statement of Cash Flows and Notes to
Financial Statements.
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
The members of the Board of Directors of the Company serve until the next annual
meeting of the stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors.
There are no agreements for any officer or director to resign at the request of
any other person, and none of the officers or directors named below are acting
on behalf of, or at the direction of, any other person. The Company's officers
and directors will devote their time to the business on an "as-needed" basis,
which is expected to require 5-10 hours per month.
Information as to the directors and executive officers of the Company is as
follows:
<TABLE>
<CAPTION>
Name/Address Age Position
<S> <C> <C>
Cathy Souers 47 President
1004 Coral Isle
Las Vegas, NV 89109
Diana C. Hewitt 54 Secretary
1004 Coral Isle
Las Vegas, NV 89109
</TABLE>
Cathy Souers; President/Treasurer/Director
Cathy Souers has been with the company since inception. She has A B. S. degree
in Education and a B.A. degree in Accounting. She taught in public and private
schools for many years, operated her own small business and is currently
President of Gehrig Ironite, Inc., a business consulting services company that
offers the following services: Articles of Incorporation, Resident Agent
Services and Secretarial Services.
WORK EXPERIENCE
3-95 to present
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President of Gehrig Ironite, Inc.
Las Vegas, NV 89108
Gehrig Ironite, Inc. is a professional resident agent and incorporation service
in the State of Nevada.
Nevada Cooperative Extension
Las Vegas, Nevada
5-92 to 2-95
Vocational Education Instructor. Taught independent living skills to foster
youth ages 15 1/2 and up. Volunteer coordinator for Foster Mentor Program.
Recruit, train, screen, monitor and match volunteers from the community with
adolescent foster youth to help with independent living skills.
Hebrew Academy
Las Vegas, Nevada
8-91 to 5-92
Spanish Teacher (K-8).
Clark County School District
Las Vegas, Nevada
8-90 to 8-91
Substitute school teacher.
Gadsden Independent School District
Gadsden, New Mexico
8-89 to 8-90
Teacher, 9th grade language arts for under-achievers (Title II program).
Assistant baseball coach.
Charter Hospital
Santa Teresa, New Mexico
6-88 to 8-89
Teacher. Secondary math with emotionally disturbed and/or chemically-dependent
adolescents.
Clinton Independent School District
Clinton, Texas
8-85 to 5-88
Teacher, 6th and 7th grade English.
Upper Valley Package Store
El Paso, Texas
1978 to 7-85
Owner/operator.
Diana C. Hewitt; Secretary/Director
Diana C. Hewitt has also been with the company since inception. From 1996 to
1998, she was the manager of the pit clerical department that deals with gaming
audit and cash compliance at the Mirage Hotel & casino. In 1998, she transferred
to the newly opened Bellagio Hotel & Casino as the manager of the pit clerical
department.
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INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Jose F. Garcia, individually, is the owner and holder of 60,000 shares, or 2.73%
of the Company's common stock. Vilma Garcia, the wife of Jose F. Garcia, is the
owner and holder of 100,000 shares, or 4.55% of the Company's common stock.
Together, Mr. and Mrs. Garcia possess 160,000 shares, or 7.27% of the Company's
common stock.
On or about June 9, 1998, the United States Securities and Exchange Commission
filed an enforcement proceeding in San Diego California against Global Timber
Corporation, Stephen J. Sand, Jose F. Garcia, Jonathon Bentley-Stevens, David A.
Kirk, and Pamela J. Vega. The Commission alleged that, from at least November
1995 through December 1996, Global Timber Corporation and certain officers and
directors misrepresented to the public that Global Timber had the right to
harvest certain timber located in the Philippines. By this misrepresentation,
Global Timber grossly overstated its financial condition.
The Commission asked the Federal Court to permanently enjoin the Defendants from
future violations of Section 10(b) of the Securities Exchange Act of 1934 and
Commission Rule 10b-5, and impose a civil penalty against Sand, Garcia, Stevens,
Kirk and Vega.
Mr. Jose F. Garcia consented, without admitting or denying the allegations in
the complaint, to the entry of a judgment of permanent injunction enjoining him
from future violations of Section 10(b) of the Exchange Act and Rule 10b-5
thereunder and imposing a civil penalty of $25,000.00.
BLANK CHECK EXPERIENCE
Neither of the officers or directors have any experience with blank check
companies. There is no family relationship between any of the officers and
directors of the Company. The Company's Board of Directors has not established
any committees.
MR. JOSE F. GARCIA
Mr. Jose F. Garcia, a minority shareholder, has been involved as an officer
,director, resident agent and/or shareholder with five other blank check
companies which have completed some form of corporate reorganization. Such
companies are Tee-Rifik, Inc., Jo-Lee Corporation, Nevada Commercial Management,
Inc., Abercrombie, Inc., and Essential Technologies, Inc.
Tee-Rifik, Inc. Mr. Garcia acted as Resident Agent and was a minority
shareholder of 120,000 shares (less than 5% of the issued and outstanding
shares). The company became public through Rule 144(k). In 1998, the company
completed a reverse merger with Shop TV, Inc., a television and Internet
shopping company based in Boca Raton, Florida. The combined company, upon
information and belief, currently trades on the OTC Bulletin Board.
Jo-Lee Corporation. Mr. Garcia acted as Secretary and a Director who, at one
time, held 1,135,000 shares or 12.1% of the then issued and outstanding common
shares. The company became public through Rule 144(k). In 1995, the company
acquired certain lumber assets. At that time, the name of the company was
changed to Global Timber Corporation. Mr. Garcia resigned from the company in
1997. Upon information and belief, shares of Global Timber Corporation are no
longer traded.
Nevada Commercial Management, Inc. Mr. Garcia acted as Resident Agent for Nevada
Commercial Management, Inc. In 1998, the company completed a reverse merger with
Aviation Industries, Inc. Upon information and belief, shares of Aviation
Industries, Inc., are currently traded on the OTC Bulletin Board.
Abercrombie, Inc. Mr. Garcia held 100,000 or 4.5% of the issued and outstanding
common shares of Abercrombie, Inc. The company became public through Rule
144(k). In 1995, the company completed a reverse merger with Spectre Motor Cars,
a company based in the United Kingdom. Upon information and belief, shares of
the company are currently traded on the OTC Bulletin Board.
<PAGE> 10
Essential Technologies, Inc. Mr. Garcia held 270,000 or 1.4% of the issued and
outstanding shares of Essential Technologies, Inc. The company underwent a
reverse merger and changed its name to Forbidden City, Inc. Later, another name
change occurred and the surviving entity became known as Quill Industries, Inc.
The common shares of Quill Industries, Inc., upon information and belief, are
currently traded on the OTC Bulletin Board.
Additional information with respect to the above entities is not readily
available to Mr. Garcia, as Mr. Garcia is no longer affiliated, in any way, with
such entities and does not have access to their books and records. Further, Mr.
Garcia has had additional experience with other public companies, that were not
blank check companies, that were involved in mergers and/or acquisitions.
MR. RAYMOND M. GIRARD
Mr. Raymond M. Girard, a minority shareholder, has been involved as an officer,
director, resident agent and/or shareholder with four other blank check
companies which have completed some form of corporate reorganization. Such
companies are Jo-Lee Corporation, Sedgewicke Business Alliance, Inc.,
Abercrombie, Inc., and Essential Technologies, Inc.
Jo-Lee Corporation. Mr. Girard acted as Resident Agent and at one time held
236,250 or 2.5% of the then issued and outstanding common shares. Jo-Lee
Corporation became public through Rule 144(k). In 1995, the company acquired
certain lumber assets. At that time, the name of the company was changed to
Global Timber Corporation. Upon information and belief, shares of Global Timber
Corporation are no longer traded.
Sedgewicke Business Alliance, Inc. Mr. Girard acted as Resident Agent,
President, and as a Director of the company. At one time, Mr. Girard owned
100,000 or 5% of the then issued and outstanding common shares. The company
become public through Rule 144(k). In 1995, the company completed a reverse
merger with American Casinos International, Inc. At that time, Mr. Girard
resigned as an Officer and Director of the company. The company has since
changed its name to Enterprise Solutions, Inc. Upon information and belief, the
company is currently traded on the OTC Bulletin Board.
Abercrombie, Inc. Mr. Girard held 100,000 or 4.5% of the issued and outstanding
common shares of Abercrombie, Inc. The company became public through Rule
144(k). In 1995, the company completed a reverse merger with Spectre Motor Cars,
a company based in the United Kingdom. Upon information and belief, shares of
the company are currently traded on the OTC Bulletin Board.
Essential Technologies, Inc. Mr. Girard was the Resident Agent, Secretary and a
Director of the company. At one time, Mr. Girard owned 408,331 or 2% of the then
issued and outstanding common shares. The company become public through Rule
144(k). Essential Technologies, Inc., underwent a reverse merger and changed its
name to Forbidden City, Inc. At that time, Mr. Girard resigned as an Officer and
Director. Later, Forbidden City, Inc., changed its name to Life Industries.
Subsequently, Life Industries changed its name to Quill Industries. Upon
information and belief, shares of Quill Industries are currently traded on the
OTC Bulletin Board.
Additional information with respect to the above entities is not readily
available to Mr. Girard, as Mr. Girard is no longer affiliated, in any way, with
such entities and does not have access to their books and records. Further, Mr.
Girard has had additional experience with other public companies, that were not
blank check companies, that were involved in mergers and/or acquisitions.
Item 10. Executive Compensation
None of the Company's officers and/or directors receive any compensation for
their respective services rendered to the Company, nor have they received such
compensation in the past. They have agreed to act without compensation until
authorized by the Board of
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Directors, which is not expected to occur until the Registrant has generated
revenues from operations after consummation of a merger or acquisition. As of
the date of this registration statement, the Company has no funds available to
pay directors. Further, none of the directors are accruing any compensation
pursuant to any agreement with the Company.
It is possible that, after the Company successfully consummates a merger or
acquisition with an unaffiliated entity, that entity may desire to employ or
retain one or more members of the Company's management for the purposes of
providing services to the surviving entity, or otherwise provide other
compensation to such persons. However, the Company has adopted a policy whereby
the offer of any post-transaction remuneration to members of management will not
be a consideration in the Company's decision to undertake any proposed
transaction. Each member of management has agreed to disclose to the Company's
Board of Directors any discussions concerning possible compensation to be paid
to them by any entity which proposes to undertake a transaction with the Company
and further, to abstain from voting on such transaction. Therefore, as a
practical matter, if each member of the Company's Board of Directors is offered
compensation in any form from any prospective merger or acquisition candidate,
the proposed transaction will not be approved by the Company's Board of
Directors as a result of the inability of the Board to affirmatively approve
such a transaction.
It is possible that persons associated with management may refer a prospective
merger or acquisition candidate to the Company. In the event the Company
consummates a transaction with any entity referred by associates of management,
it is possible that such an associate will be compensated for their referral in
the form of a finder's fee. It is anticipated that this fee will be either in
the form of restricted common stock issued by the Company as part of the terms
of the proposed transaction, or will be in the form of cash consideration.
However, if such compensation is in the form of cash, such payment will be
tendered by the acquisition or merger candidate, because the Company has
insufficient cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to be
comparable to consideration normally paid in like transactions. No member of
management of the Company will receive any finders fee, either directly or
indirectly, as a result of their respective efforts to implement the Company's
business plan outlined herein. Persons "associated" with management is meant to
refer to persons with whom management may have had other business dealings, but
who are not affiliated with or relatives of management.
No retirement, pension, profit sharing, stock option or insurance programs or
other similar programs have been adopted by the Registrant for the benefit of
its employees.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth each person known to the Company, as of August
31, 1998, to be a beneficial owner of five percent (5%) or more of the Company's
common stock, by the Company's directors individually, and by all of the
Company's directors and executive officers as a group. Except as noted, each
person has sole voting and investment power with respect to the shares shown.
Note that Cathy Souers is the beneficial owner of 200,000 shares issued to
Gehrig Ironite, Inc., a company in which she is the president and sole
shareholder, and another 5,000 shares that are owned by Mandy Souers, her
daughter. Beneficial Owners of Five Percent of More
<TABLE>
<CAPTION>
Title of Class Name/Address Shares Percentage
of Owner Beneficially Owned Ownership
<S> <C> <C> <C>
Common Jose F. and Vilma Garcia 160,000 7.27%
3655 Campbell
Las Vegas, NV 89129
Common Ray and Netta Girard 184,400 8.38%
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
3153 Bel Air Dr.
Las Vegas, NV 89109
Common Cathy Souers 247,800 11.26%
1004 Coral Isle Way
Las Vegas, NV 89108
Common Diana C. Hewitt 50,000 2.27%
530 Delfern Lane
Las Vegas, NV 89108
Common Total owned by officers and 297,800 13.54%
directors (2 individuals)
</TABLE>
Beneficial Ownership by Management
<TABLE>
<CAPTION>
Title of Class Name/Address Shares Percentage
of Owner Beneficially Owned Ownership
<S> <C> <C> <C>
Common Cathy Souers 247,800 11.26%
1004 Coral Isle Way
Las Vegas, NV 89108
Common Diana C. Hewitt 50,000 2.27%
530 Delfern Lane
Las Vegas, NV 89108
</TABLE>
Item 12. Relationships and Related Transactions
The Board of Directors has passed a resolution which contains a policy that the
Company will not seek an acquisition or merger with any entity in which any of
the Company's Officers, Directors, principal shareholders or their affiliates or
associates serve as officer or director or hold any ownership interest.
Management is not aware of any circumstances under which this policy may be
changed through their own initiative.
The proposed business activities described herein classify the Company as a
"blank check" company. Many states have enacted statutes, rules and regulations
limiting the sale of securities of "blank check" companies in their respective
jurisdictions. Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as the Company has
successfully implemented its business plan described herein.
As is customary in the industry, the Company may pay a finder's fee for locating
an acquisition prospect. If any such fee is paid, it will be approved by the
Company's Board of Directors and will be in accordance with the industry
standards. Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction ratably down to 1% in a
$4,000,000 transaction. Management has adopted a policy that such a finder's fee
or real estate brokerage fee could, in certain circumstances, be paid to any
employee, officer, director or 5% shareholder of the Company, if such person
plays a material role in bringing a transaction to the Company.
On July 13, 1998, the Company purchased 19,500 shares from Cathy Souers and
9,500 shares from Diana Hewitt. The such 29,000 shares were purchased for a
total of $145.
On July 17, 1998, Gehrig Ironite, Inc., purchased 200,000 shares of common stock
from the Company for $10,000.00 Ms. Souers is the President of Gehrig Ironite,
Inc., and an officer and director of the Company.
Rule 405 of Regulation C defines a promoter as follows:
<PAGE> 13
Any person who, acting alone or in conjunction with one or more
other persons, directly or indirectly, takes initiative in
founding and organizing the business or enterprise of an issuer;
or
Any person who, in connection with the founding and organizing of
the business or enterprise of an issuer, directly or indirectly
receives in consideration of services or property, or both
services or property, 10 percent or more of any class of
securities of the issuer or 10 percent or more of the proceeds
from the sale of any class of such securities. However, a person
who receives such securities or proceeds either solely as
underwriting commissions or solely in consideration of property
shall not be deemed a promoter within the meaning of this
paragraph if such person does not otherwise take part in founding
and organizing the enterprise.
Further, Item 404(d) of Regulation S-B provides as follows:
Transactions with promoters: Issuers organized within the past five
years shall:
1. State the names of the promoters, the nature and amount of
anything of value (including money, property, contracts, options
or rights of any kind) received or to be received by each
promoter, directly or indirectly, from the issuer and the nature
and amount of any assets, services or other consideration
therefore received or to be received by the registrant; and
2. As to any assets acquired or to be acquired from a promoter,
state the amount at which the assets were acquired or are to be
acquired and the principle followed or to be followed in
determining such amount and identify the persons making the
determination and their relationship, if any, with the registrant
or any promoter. If the assets were acquired by the promoter
within two years prior to their transfer to the issuer, also
state the cost thereof to the promoter.
The instructions to item 404 provide further, in pertinent part, that:
A person does not have a material indirect interest in a
transaction within the meaning of this item where the interest
arises only:
From such person's position as a director of another corporation
or organization which is a party to the transaction and/or
From the total ownership (direct or indirect) by all specified
persons of less than a 10% equity interest in another person
which is a party to the transaction ...
Via a subscription agreement executed on October 26, 1995, Mr. Raymond
M. Girard purchased 1000 common shares of the Company for $50.00. At such time,
Mr. Girard's interest amounted to 2.04%.
Via a subscription agreement executed on October 19, 1995, Netta Girard
(the spouse of Mr. Raymond M. Girard) purchased 1000 common shares of the
Company for $50.00. At such time, Mrs. Girard's interest amounted to 2.04%.
At this time, Mr. And Mrs. Raymond M. Girard possessed a combined
interest in the amount of 4.08%.
Via a subscription agreement executed on October 19, 1995, Mr. Jose F.
Garcia purchased 1000 common shares of the Company for $50.00. At such time, Mr.
Garcia's interest amounted to 2.04%.
Via a subscription agreement executed on October 19, 1995, Vilma Garcia
(the spouse of Mr. Jose F. Garcia) purchased 1000 common shares of the Company
for $50.00. At such
<PAGE> 14
time, Vilma Garcia's interest amounted to 2.04%.
At this time, Mr. and Mrs. Jose F. Garcia possessed a combined interest
in the amount of 4.08%.
In July 1998, the Company repurchased some founders from Ms. Souers and
Hewitt. Ms. Souers sold to the Company 19,500 shares for the sum of $97.50. Ms.
Hewitt sold to the Company 9,500 shares for the sum of $47.50. Thereafter, each
retained 500 shares. At this time, Ms. Souers retained an ownership interest in
500 of 20,000 issued and outstanding shares. Such amount equating 2.5%. Further,
Ms. Hewitt retained an ownership interest in 500 of 20,000 issued and
outstanding shares. Such amount equating 2.5%.
Concomitant with the share repurchase, the Company authorized a 100 to 1
forward stock split. Then, as part of a series of transactions authorized and
executed on the same day, Gehrig Ironite, an entity controlled by Ms. Souers
(Ms. Souers is the sole shareholder, officer and director of Gehrig Ironite),
purchased 200,000 common shares of the Company for $10,000.
The rationale for this series of transactions is simplistic. The Company
was in need of operating capital. Ms. Souers, through Gehrig Ironite, was able
to make a capital contribution to the Company. Ms. Hewitt, at this time, was
unable to make an additional contribution, and as such, consented to the
additional moderate dilution of her interest. Both Ms. Souers and Ms. Hewitt
recognized that any additional capital contribution, absent the forgoing, would
have had a dramatic dilutive effect on the Private Purchasers. Accordingly, to
foster the best interest of the Company and the not deprive the Private
Purchasers of any potential or actual shareholder value, Ms. Souers and Hewitt
agreed to: (a) have the Company repurchase all but 500 of their founders'
shares; (b) resolve a 100 to 1 forward split; and (c) allow the investment of
necessary capital by Gehrig Ironite. Such agreement is reflected in the Minutes
of a Special Meeting of Stockholders of the Company dated July 27, 1998.
Subsequent to the share repurchase, forward split and capital infusion,
the interests of the Girards (individually and jointly) and the Garcias
(individually and jointly) were impacted as follows:
<TABLE>
<CAPTION>
Pre-Events Post-Events*
---------- ------------
<S> <C> <C>
Raymond M. Girard 2.04% 3.8%
Netta Girard 2.04% 4.5%
Joint Interest 4.08% 8.3%
Jose F. Garcia 2.04% 2.7%
Vilma Garcia 2.04% 4.5%
Joint Interest 4.08% 7.2%
</TABLE>
*On July 23, 1998, Raymond M. Girard gifted a total of 15,600 shares to
five (5) individuals. On July 28, 1998, Jose F. Garcia gifted a total of 40,000
shares to four (4) individuals.
Via various subscription agreements, all other Private Purchasers
purchased 1000 common shares of the Company for $50.00. Subsequent to the share
repurchase, forward split and capital infusion, the interests of all other
Private Purchasers were impacted as follows:
<TABLE>
<CAPTION>
Pre-Events Post-Events*
---------- ------------
<S> <C>
2.04% 4.5%
</TABLE>
The increased percentages of the Girard and Garcia interests were
identical to the increased interest percentage of all Private Purchasers.
<PAGE> 15
Item 13. Exhibits and Reports of Form 8-K
None
Item 14. Other
None
<PAGE> 16
Member American Institute Member Nevada Society
of Certified Public Accountants of Certified Public Accountants
KURT D. SALIGER, C.P.A.
Certified Public Accountant
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Combined Professional Services, Inc.
Las Vegas, Nevada
I have audited the accompanying balance sheet of Combined Professional
Services, Inc. (a development stage company), as of December 31, 1999; and the
related statement of operations, stockholders' equity and cash flows for the
year ended December 31, 1999. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Combined
Professional Services, Inc. at December 31, 1999; and the results of operations
and their cash flows for the year ended December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has had no operations and has no established
source of revenue. This raises substantial doubt about its ability to continue
as a going concern. Management's plan in regard to these matters are also
described in Note 3. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/
Kurt D. Saliger C.P.A.
Las Vegas, Nevada
February 10, 2000
5000 W. Oakey o Suite A-4 o Las Vegas, Nevada 89146
Phone: (702) 367-1988 Fax: (702) 870-8388
<PAGE> 17
COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 542
Accounts Receivable $ 0
--------
TOTAL CURRENT ASSETS $ 542
--------
TOTAL ASSETS $ 542
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 4,815
--------
TOTAL CURRENT LIABILITIES $ 4,815
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value
authorized 50,000,000 shares;
issued and outstanding at
December 31, 1999 2,200,000 shares $ 220
Additional Paid In Capital $ 10,735
Deficit Accumulated During
Development Stage ($15,228)
--------
TOTAL STOCKHOLDERS' EQUITY ($ 4,273)
--------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 542
========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
January 1, 1999 to December 31, 1999
<TABLE>
<CAPTION>
October 11, 1995
(Inception)
to December
31, 1999
-----------------
<S> <C> <C>
INCOME
Revenue $ 0 $ 10,609
----------- -----------
TOTAL INCOME $ 0 $ 10,609
EXPENSES
General and
Administrative $ 4,309 $ 25,837
----------- -----------
TOTAL EXPENSES $ 4,309 $ 25,837
----------- -----------
NET PROFIT (LOSS) $ (4,309) $ (15,228)
=========== ===========
NET PROFIT (LOSS)
PER SHARE $ (0.0020) $ (0.0069)
=========== ===========
AVERAGE NUMBER OF
SHARES OF COMMON
STOCK OUTSTANDING 2,200,000 2,200,000
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 19
COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
December 31, 1999
<TABLE>
<CAPTION>
Common Stock (Deficit)
------------ Accumulated
Number Additional During
of Paid In Development
Shares Amount Capital Stage
----------- ------ ---------- -----------
<S> <C> <C> <C> <C>
October 1995
issued for cash (Note 2) 49,000 $ 49 $ 1,051
Net Income, 10--11--95
(inception) to 12--31--95 $ 0
----------- ----- -------- --------
Balance, Dec. 31, 1995 49,000 $ 49 $ 1,051 $ 0
Net (Loss), 12--31--96 $ (1,100)
----------- ----- -------- --------
Balance, Dec. 31, 1996 49,000 $ 49 $ 1,051 $ (1,100)
Net Income, 12--31--97 $ 0
----------- ----- -------- --------
Balance, Dec. 31, 1997 49,000 $ 49 $ 1,051 $ (1,100)
July 13, 1998
Treasury Stock (29,000) $ (29) $ (116)
July 20, 1998
Forward Stock Split 100:1 2,000,000
August 11, 1998
Issued For Cash 200,000 $ 200 $ 9,800
Net (Loss), 12--31--98 $ (9,819)
Net (Loss), 12--31--99 $ (4,309)
Balance December -- -- -- --
31, 1999 2,200,000 $ 220 $ 10,735 $(15,228)
=========== ===== ======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 20
COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Jan. 1, Oct. 11, 1995
1999 to (inception)
December to December
31, 1999 31, 1999
------- --------
<S> <C> <C>
CASH FLOWS FROM
FROM OPERATING ACTIVITIES
Net (Loss) $(4,309) $(15,228)
Accounts Receivable $ 3,000 $ 0
Accounts Payable $ 1,765 $ 4,815
CASH FLOWS FROM
FROM OPERATING ACTIVITIES
Issue common stock $ 0 $ 11,100
Treasury stock $ 0 $ (145)
------- --------
Net increase
(decrease) in cash $ 456 $ 542
Cash, Beginning
of Period $ 86 $ 0
------- --------
Cash, End
of Period $ 542 $ 542
======= ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 21
COMBINED PROFESSIONAL SERVICES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
October 11, 1995 (inception) to December 31, 1999
NOTE 1 - ORGANIZATION AND ACCOUNTING POLICIES
The Company was incorporated October 11, 1995 under the laws of the
State of Nevada. The Company was organized to engage in any lawful activity. The
Company currently has no operations and, in accordance with SFAS #7, is
considered a development stage company.
The Company has not determined its accounting policies and procedures,
except as follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
NOTE 2 - ISSUANCE OF COMMON STOCK
The Company issued 49,000 shares of common stock for cash of $1,100 in
October, 1995. The Company also issued 200,000 shares of common stock for cash
of $10,000 in August 1998.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern.
NOTE 4 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
As a certified Public Accountant, I hereby consent to the inclusion of
my report dated February 10, 2000, in the Form 10-KSB filed by Combined
Professional Services, Inc., including all references to my reports to the
extent they are concurrent therewith and contained in the Form 10-KSB.
Kurt D. Saliger, C.P.A.
-----------------------
Dated: February 22, 2000
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Combined Professional Services, Inc.,
By: Cathy Souers
------------------------------------
President and Director
Dated: February 22, 2000
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Combined Professional Services, Inc.,
By: Diana Hewitt
------------------------------------
Secretary-Treasurer and
Director
Dated: February 22, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 542
<SECURITIES> 0
<RECEIVABLES> 3,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 542
<CURRENT-LIABILITIES> 4,815
<BONDS> 0
0
0
<COMMON> 220
<OTHER-SE> 10,735
<TOTAL-LIABILITY-AND-EQUITY> 542
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,309
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,309)
<EPS-BASIC> (.002)
<EPS-DILUTED> (.002)
</TABLE>
