What about this? No employees, assets, plans = $61M
COMBINED PROFESSIONAL SERVICES, INC. (OTCBB: CPFS) – SOMETHING SHELL-Y’S GOING ON July 31, 2002
How much is a company worth if it has no cash, no revenues, no business, and no immediate prospects? If that company is Combined Professional Services, Inc. (OTCBB: CPFS), the answer is more than $61 million as of the close of business on July 30, 2002.
Combined Professional Services owns no licenses, patents or technology, and has no products to manufacture or market. And, as far as we can tell, Combined Professional Services hasn’t issued any recent press releases announcing future plans or acquisitions. The future isn’t even a glimmer in its corporate eye.
So why is the Company’s stock trading at $6.63 a share? And why were more than 52,000 shares traded on July 30, 2002?
It’s a puzzlement.
Shell’s Bells
By its own admission, the Company is merely a shell, awaiting a suitor and a business. It has no employees, and its expenses are being funded by its sole officer and director, Marc Baker. And, while Combined Professional Services is seeking a “target company” to acquire, according to the Company’s most recent Form 10-Q (for the period ended March 31, 2002), it has not “engaged in any negotiations with any specific entity regarding the possibility of a transaction, nor engaged the services of any independent third party for such purpose.”
That would seem to suggest that there are no immediate prospects – and no logical rationale for the Company’s stock price.
The sole assets of this $61 million company are certain “held to maturity securities” valued at $3,320. Understandably, the Company’s auditors have expressed “substantial doubt” about its ability to continue as a going concern.
Despite this unpromising picture, the Company’s stock price has been creeping upward, and trading volume has been active, and sometimes very active. During the first six months of 2002, the Company traded more than 3.2 million shares, with market maker Paragon Capital Markets accounting for almost 2.2 million shares of that volume. More than 340,000 more shares changed hands during the first thirty days of July. Of course, we don’t know who has been selling those shares, or why anyone was buying.
Perhaps some investors simply were looking for an uncomplicated company, far removed from the corporate shenanigans and accounting controversies that have been plaguing Wall Street. Combined Professional Services, with its blank balance sheet and empty offices, might seem to fill that bill, but the Company has managed to create a modest accounting drama of its own.
Lost and Found
On March 18, 2002, the Company dismissed its independent auditor, Kurt D. Saliger. Mr. Saliger had issued qualified going concern opinions for the Company for the years ended December 31, 1999 and 2000. Combined Professional Services claims that, in connection with those annual audits, there were no disagreements with Mr. Saliger that should have been noted on its financial statements. As of July 8th, however, it had not been able to obtain a letter from Mr. Saliger confirming that fact. In fact, Combined Professional Services recently filed a Form 8-K stating that “all attempts to locate [Mr. Saliger] have been fruitless.”
They may want to try calling his office - at the telephone number provided on the “Independent Auditor’s Reports” that Mr. Saliger prepared for the Company before he was relieved of that function. We did, and although we were informed that Mr. Saliger was still at that location, we were told he was “not interested in talking” to Stock Patrol.
Mr. Saliger may not be talking to us, but he apparently still is preparing financial statements – even if Combined Professional Services is no longer a client. On April 26, 2002 he provided the “Independent Auditor’s Report” and accompanying audited annual financial statements for Music Etc, Inc. for the years ended December 31, 2000 and December 31, 2001.
Music Etc., a Nevada corporation, says that it wants to offer music lessons over the Internet. So far, however, Music Etc. has no assets, no revenues and no operations. Despite that bleak picture, on May 30th, Music Etc. filed an Amended Form SB-2 with the Securities and Exchange Commission in order to register approximately six million shares for sale to the public, almost half of which is being sold by a group of selling shareholders.
Indeed, Mr. Saliger has been far from invisible in recent months. On May 14, 2002, he provided the “Independent Auditor’s Report,” and accompanying audited financial statements for the periods ended March 31, 2001 and March 31, 2002, for Pure Country, another Nevada corporation. Pure Country has a great deal in common with Music Etc (and, for that matter, Combined Professional Services), in addition to its relationship with Mr. Saliger. It has no business, no assets, and no revenues. The Company says that it wants to establish a “hub” for artisans and craftsmen to market their products, but so far it is hubless.
Pure Country has even more in common with Music Etc. On May 21, 2002, Pure Country filed an Amended Form SB-2 Registration Statement with the SEC, seeking to register approximately six million shares of its common stock. Once again, almost half of those shares were being registered for a group of selling shareholders.
There’s another element to this common thread. Pure Country and Music Etc. have submitted virtually identical lists of selling shareholders.
There is at least one more similarity between Pure Country and Music Etc. Both Companies are represented by the law firm of Chapman and Flanagan, Ltd. Readers of Stock Patrol have become familiar with Chapman and Flanagan, which has served as legal counsel to such companies as Bach-Hauser, Inc. and Infotopia, Inc. As we have noted, the lawyers at Chapman and Flanagan received registered shares of those companies in compensation for their services. See Bach-Hauser, Inc. – A Haus Full Of Consultants; Update: Bach-Hauser, Inc. – The First Thing We Do, Let’s Give Stock To All The Lawyers; Update: Bach-Hauser, Inc. – Everyone Makes Misteaks; Infotopia, Inc. – Bye Bye Shares; Update: Infotopia, Inc. – The Professionals - Demise Of A Consultant; Update: Infotopia, Inc. – The Professionals - A Familiar Ring.
Chapman and Flanagan seem able to find Mr. Saliger. Why then is Combined Professional Services having so much trouble? Is the Company unable to locate him at his office, or is he just “not interested” in talking to Combined Professional Services either?
If they ever find the accountant we can think of a host of questions they might want to pose. How, we would have asked him, is this Company possibly worth $61 million? And who is selling those shares?
©2002 Stock Patrol.com. All rights reserved.
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