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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For Quarter Ended                      September 30, 2002                      

Commission File Number           0-14063          

BARRISTER GLOBAL SERVICES NETWORK, INC.
(Exact name of Registrant as specified in its charter)

Registrant’s telephone number, including area code (716) 845-5010

Not Applicable

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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            

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BARRISTER GLOBAL SERVICES NETWORK, INC.

INDEX

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PART I. FINANCIAL INFORMATION

See accompanying notes to financial statements

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BARRISTER GLOBAL SERVICES NETWORK, INC.

See accompanying notes to financial statements.

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BARRISTER GLOBAL SERVICES NETWORK, INC.

Common stock – 11,901,326 and 11,844,963 shares outstanding at September 30, 2002 and March 31, 2002 respectively.

See accompanying notes to financial statements.

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BARRISTER GLOBAL SERVICES NETWORK, INC.

See accompanying notes to financial statements.

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BARRISTER GLOBAL SERVICES NETWORK, INC.

1.     Barrister Global Services Network, Inc. (the “Company”) provides equipment maintenance for multi-vendor equipment including personal computers and related equipment generally attached to LAN’s. This comprehensive maintenance and warranty service is done on a contractual and time and materials basis. These services are provided through a network of service locations throughout the United States.

     In the opinion of Management, the accompanying financial statements present fairly the financial position, results of operations and cash flows for the periods shown. The second quarter results for each year represent operations for the quarters ended September 30, 2002 and September 30, 2001. The financial data included herein was compiled in accordance with the same accounting policies applied to the Company’s audited annual financial statements. Any adjustments made were of a normal recurring nature.

     The results of operations for the six month period ended September 30, 2002 are not necessarily indicative of the results to be expected for the full year.

2.     Cash and equivalents consist of cash and liquid debt instruments with maturity of three months or less from the date of purchase. Cash and equivalents are stated at cost plus accrued interest, which approximates market value. Short-term investments contain both held-to-maturity securities of $511,000, based on the Company’s ability and intent to hold the securities until maturity and available-for-sale securities of $78,000, held primarily for sale. The held-to-maturity securities are recorded at amortized cost adjusted for the accretion of discounts or cost plus accrued interest. Available-for-sale securities are carried at fair value, based on quoted market prices. The net unrealized gains or losses, if any, on these securities are reported as a separate component of stockholders’ equity, net of tax. Short-term investments consist of corporate debt instruments. Marketable securities are classified as held-to-maturity securities and consist of mortgage-backed securities which are expected to mature in less than two years.

3.     On July 15, 2002, the Company acquired all of the outstanding stock of Advantage Innovation, Inc. (“Advantage”) for $1,200,000 in cash and future consideration of two contingent payments. The contingent payments are due on the first and second anniversaries of the closing, in an amount based upon the amount of earnings before interest, taxes, depreciation and amortization achieved by Advantage in each of the two years. Based on the results of Advantage as of September 30, 2002, $750,000 of the first contingent payment has been earned and therefore this amount has been recorded on the balance sheet as additional goodwill and as a current liability. This amount has been treated as a non cash investing activity in the statement of cash flows. Advantage was a privately held technical and computer services firm located in New Orleans, Louisiana performing services nationwide generally in the consumer market. The acquisition has been accounted for as a purchase and, accordingly, the operating results of Advantage have been included in the Company’s financial statements since the date of acquisition. The assets acquired and liabilities assumed were recorded at estimated fair values as determined by the Company’s management based on information currently available. The Company also had an independent valuation performed for the intangible assets associated with the acquisition. These assets were valued at $219,000 and are included in other assets on the balance sheet. The excess of the aggregate purchase price over the fair value of the net assets acquired is accounted for as goodwill. The pro forma results for the six month periods ending September 30, 2002 and September 30, 2001, had the acquisition occurred at the beginning of the period, are as follows: Revenues of $8,042,000 and $7,619,000 respectively; Net loss of $ (77,000) and $ (82,000) respectively; and Net loss per common share, basic and diluted of $ (.01) for both periods. The pro forma amounts do not

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purport to be indicative of the actual results that would have occurred had the transaction been consummated on April 1, 2001 or of the future results of operations which will be obtained as a result of the consummation of the transaction.

4.     Income taxes recorded in each of the comparable quarters and six-month periods approximated the statutory tax rate. No additional tax benefits were established in the statements of operations for the comparable periods, since the Company has fully reserved for the tax effect of net deductible temporary differences and loss carryforwards. These benefits will be recorded in future periods as they are realized or as their realization becomes predictable.

5.     The Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations”, SFAS No. 142, “Goodwill and Other Intangible Assets” and SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” on April 1, 2002. SFAS No. 141 requires that the purchase method be used for all business combinations initiated after June 30, 2001. SFAS No. 142 changes the accounting for goodwill and intangible assets with indefinite lives from an amortization method to an impairment approach. SFAS No. 144 establishes a single accounting model for long-lived assets to be disposed of by sale and it expands the presentation of discontinued operations to include more disposal transactions. SFAS No. 141 and No. 144 did not have an impact on the financial statements. Goodwill and other intangible assets subject to SFAS No. 142 were approximately $1,709,000 as of September 30, 2002 attributed to the purchase of Advantage on July 15, 2002. No goodwill existed prior to the acquisition of Advantage.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

     For the quarter ended September 30, 2002, revenues increased 26.2% from the same quarter in 2001. For the six-month period ended September 30, 2002, revenues increased 14.3% compared with the first six months of the prior year. These increases resulted from growth in services provided on a time and materials basis, which increased by 108.7% for the comparable second quarters to a total of $1,578,000 and by 58.6% for the comparable six- month periods to a total of $2,381,000. The principal reason for these increases were revenues generated from the business acquired on July 15, 2002 from Advantage Innovation, Inc. (“Advantage”). Advantage performs technical and computer services nationwide on a time and materials basis primarily for a fixed price per call. Revenues from hardware maintenance contracts remained at approximately $2.3 million for the comparative second quarters and at $4.6 million for the comparative six-month periods.

     The cost of services decreased as a percentage of revenues from 74.5% in the second quarter of the prior year to 72.7% in the second quarter of the current year. This improvement resulted from a lower cost of services associated with the business acquired from Advantage. For the comparative six-month periods, these expenses increased from 74.6% of revenues to 75.4% of revenues. The principal reason for this increase was higher call volumes provided on a large contract, which started in September of 2001. This resulted in higher expenses being incurred for outsourced services and parts-related costs to service this contract.

     The Company has been notified by one of its long-time business partners that their above-noted large contract was not being renewed as of September 30, 2002. This contract generated approximately $574,000 in revenues in the second quarter of the current year, which represented 14.7% of revenues in that quarter. As noted, the cost of services associated with this contract were significant, based on high call volumes. The Company has taken action to eliminate these costs and, as a result, expects to reduce the impact of the loss of this contract to its operating margins. The Company believes that its current reserve for inventory obsolescence is sufficient to cover any inventory adjustments associated with the non renewal of this contract. The Company is currently working with this partner on a large opportunity that would replace this lost revenue. If successful, this new contract is expected to commence in the Company’s fourth quarter.

     Selling, general and administrative expenses as a percentage of revenues were reduced from 30.3% to 27.0% for the comparable second quarters and from 29.7% to 28.3% for the comparable six-month periods. These improvements resulted from leveraging certain fixed expenses over a larger revenue base and the reduction of various expenses incurred by Advantage prior to the acquisition that were no longer required after the acquisition.

     The decrease in interest income for the comparable second quarters and six-month periods resulted from a drop in interest rates, which impacted earnings from the Company’s investments and from a reduction in the amount invested, primarily from the initial payment of $1,200,000 to acquire the stock of Advantage.

     Income taxes recorded in each of the comparable quarters and six-month periods approximated the statutory tax rate. No additional tax benefits were established in the statements of operations for the comparable periods, since the Company has fully reserved for the tax effect of net deductible temporary differences and loss carryforwards. These benefits

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will be recorded in future periods as they are realized or as their realization becomes predictable.

Financial Condition

     Cash and equivalents, short-term investments and marketable securities totaled $2,102,000 at September 30, 2002 and $3,992,000 at March 31, 2002. The net decrease of $1,890,000 was primarily a result of cash used for the initial payment to acquire the stock of Advantage, which net of cash received amounted to $713,000, net cash used by operating activities of $848,000, debt repayments of $226,000 and additions to equipment and leasehold improvements of $74,000. The net cash used by operating activities was principally a result of reductions in accounts payable and accrued compensation and benefits. Certain of these reductions were based on the use of a portion of the cash acquired from Advantage to pay a portion of the accrued compensation recorded on their books at the date of acquisition.

     On June 18, 2002, the Company signed an operating lease agreement to move its headquarters’ offices and operations center into a new facility. This move is expected to occur toward the beginning of the fourth quarter. The Company expects to obtain financing for any significant capital expenditures in relation to the new facility.

     In addition to the initial cash payment made to Advantage, the principal cash requirements expected for fiscal 2003 are debt repayments of $307,000 and additions to equipment and leasehold improvements. The Company’s cash and investments will be sufficient to cover working capital, capital expenditure requirements and debt repayments in fiscal 2003.

Forward-Looking Statement

     When used in this report, the words “expects”, “believes” and “intends” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrences of unanticipated events. Readers are also urged to carefully review and consider the various disclosures made by the Company which attempt to advise interested parties of the factors which affect the Company’s business in the Company’s periodic reports on Form 10K and 10Q filed with the Securities and Exchange Commission.

Item 4. Evaluation of Disclosure Controls and Procedures

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PART II. OTHER INFORMATION

               Item 4. Submission of Matters to a Vote of Security Holders

               Item 6. Exhibits and Reports on Form 8-K

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Pursuant to the requirements 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.

BARRISTER GLOBAL SERVICES NETWORK, INC.

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CERTIFICATIONS

I, William O. Bray, certify that:

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CERTIFICATIONS

I, Richard P. Beyer, certify that:

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