10KSB 1 concierge10ksb063007.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2007 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Concierge Technologies, Inc. (Exact name of registrant as specified in its charter) Nevada 333-38838 95-4442384 ------ --------- ---------- (state of (Commission File Number) (IRS Employer incorporation) I.D. Number) 22048 Sherman Way, Suite 301 Canoga Park, CA 91303 (818) 610-0310 ---------------------------------------------------- (Address and telephone number of registrant's principal executive offices and principal place of business) Securities registered under Section 12(b) of the Exchange Act: Title of each class: None. Name of each exchange on which registered: None. Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value (Title of class) 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 [ ] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ X ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes [X] No [ ] State issuer's revenues for its most recent fiscal year: None. State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $1,423,420 computed by reference to the $0.0115 average of the bid and asked price of the Company's Common Stock on September 27, 2007. State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 177,322,777 shares of Common Stock, $0.001 par value, on September 12, 2007. DOCUMENTS INCORPORATED BY REFERENCE If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (3) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The list documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990). None. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] TABLE OF CONTENTS Page ---- Item 1. Description of Business .................................... 1 Business Development ....................................... 1 Business of Concierge ...................................... 2 Number of Employees ........................................ 3 Item 2. Description of Property .................................... 3 Facilities ................................................. 4 Item 3. Legal Proceedings .......................................... 4 Item 4. Submission of Matters to a Vote of Security Holders ........................................... 4 Item 5. Market for Common Equity and Related Stockholder Matters ........................................... 5 Holders .................................................... 5 Dividends .................................................. 5 Penny Stock Regulations .................................... 6 The Penny Stock Suitability Rule .................. 6 The Penny Stock Disclosure Rule ................... 7 Effects of the Rule ............................... 8 Recent Sales of Unregistered Securities .................... 8 Item 6. Management's Discussion and Analysis or Plan of Operations .................................9 Plan of Operations for the Next Twelve Months................9 Liquidity ..................................................10 Off-Balance Sheet Arrangements..............................11 Item 7. Financial Statements .......................................12 Item 8. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure ...............34 Item 8A. Controls and Procedures ....................................34 Item 8B. Other Information ..........................................34 Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act .................34 Audit Committee and Audit Committee Financial Expert ..................................36 Code of Ethics .............................................36 Compliance with Section 16(a) of the Exchange Act ..........37 Item 10. Executive Compensation .....................................37 Long-Term Compensation .....................................38 Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.....38 i Item 12. Certain Relationships and Related Transactions .............39 Item 13. Exhibits ...................................................39 Item 14. Principal Accountant Fees and Services .....................40 Signatures ...................................................................42 ii PART I ITEM 1. DESCRIPTION OF BUSINESS Business Development Concierge Technologies, Inc. was incorporated in California on August 18, 1993 as "Fanfest, Inc." On August 29, 1995 its name was changed to Starfest, Inc., and on March 20, 2002 its name was changed to "Concierge Technologies, Inc." Pursuant to a Stock Purchase Agreement (the "Purchase Agreement") dated March 6, 2000 between MAS Capital, Inc., an Indiana corporation, the controlling shareholder of MAS Acquisition XX Corp. ("MAS XX"), an Indiana corporation, and Starfest, approximately 96.83 percent (8,250,000 shares) of the outstanding shares of common stock of MAS Acquisition XX Corp. were exchanged for $100,000 and 150,000 shares of common stock of Starfest in a transaction in which Starfest became the parent corporation of MAS XX. At the time of this transaction, the market price of Starfest's common stock was $1.50 bid at closing on March 7, 2000 on the OTC Bulletin Board. Accordingly, the consideration Starfest paid for the 96.83 percent interest was valued at $325,000. Concierge loaned to Starfest the $100,000 cash portion of the consideration evidenced by a no-interest, demand note. Michael Huemmer, the president of Starfest, loaned to Starfest the 150,000 shares of common stock of Starfest that was the stock portion of the consideration. Upon execution of the Purchase Agreement and the subsequent delivery of $100,000 cash and 150,000 shares of common stock of Starfest on March 7, 2000, to MAS Capital Inc., pursuant to Rule 12g-3(a) of the General Rules and Regulations of the Securities and Exchange Commission, Starfest became the successor issuer to MAS Acquisition XX Corp. for reporting purposes under the Securities and Exchange Act of 1934 and elected to report under the Act effective March 7, 2000. MAS XX had no business, no assets, and no liabilities at the time of the transaction. Starfest entered into the transaction solely for the purpose of becoming the successor issuer to MAS Acquisition XX Corp. for reporting purposes under the 1934 Exchange Act. Prior to this transaction, Starfest was preparing to register its common stock with the Commission in order to avoid being delisted by the OTC Bulletin Board. By engaging in the Rule 12g-3(a) transaction, Starfest avoided the possibility that its planned registration statement with the Commission would not be fully reviewed by the Commission's staff before an April 2000 deadline, which would result in Starfest's common stock being delisted on the OTC Bulletin Board. An agreement of merger was entered into between Starfest and Concierge, Inc., a Nevada corporation, on January 26, 2000. The proposed merger was submitted to the shareholders of each of Starfest and Concierge pursuant to a Form S-4 Prospectus-Proxy Statement filed with the Commission. 1 As described in Starfest's Form 8-K filed on April 2, 2002 with the Commission (Commission File No. 000-29913), the shareholders of Starfest and Concierge did approve the merger, and the merger was legally effected on March 20, 2002. Pursuant to the agreement of merger between Starfest and Concierge, o Starfest was the surviving corporation, o The shareholders of Concierge received pro rata for their shares of common stock of Concierge, 99,957,713 shares of common stock of Starfest in the merger, and all shares of capital stock of Concierge were cancelled, o The fiscal year-end of the corporation was changed to June 30, o The officers and directors of Concierge became the officers and directors of Starfest, and o The name of Starfest was changed to "Concierge Technologies, Inc." Business of Concierge Technologies Concierge had developed a software application designed to retrieve and "read" email utilizing a text-to-speech routine that was branded as the Personal Communications Attendant or "PCA". During the past year the Company has abandoned its efforts to market the PCA and has elected to enter the field of wireless communications and, more specifically, broadband high-speed Internet access based on unlicensed wireless fidelity, or "WiFi" technologies. On May 5, 2004 we acquired all of the outstanding and issued shares of Planet Halo, a privately held Nevada corporation. Planet Halo's assets include intellectual property related to the industrial design, mechanical design, operation and know-how to market a wireless, hand-held, cellular phone with integrated QWERTY keypad, color screen and voice activation software. The device, known as the "Halo", had been advanced to the beta-test phase and there exists four working prototypes. In addition to the Halo, Planet Halo also has an exclusive North American license to exploit a wireless gateway that acts as the interface between wireless devices, including the Halo, and the Internet. The gateway, branded as "Halomail", uses secure socket layer technology for encrypted financial transactions, email access, desktop synchronization, HTML, XML, SHTML, WAP and other Web-based functions that are enabled on devices running the Halomail software client. Through its subsidiary, Planet Halo, Concierge has begun its strategy of designing, constructing and operating wireless networks. As the infrastructure is placed into operation the Company plans to exploit its Halomail application license by deploying the service across its wireless networks. On June 5, 2007 Planet Halo launched its first wireless broadband network designed for subscription access to the Internet. Planet Halo intends to construct and operate additional networks initially in California and Ohio utilizing a MESH network technology. 2 Governmental Approval of Principal Products. No governmental approval is required in the U.S. for Concierge's products. Government Regulations. There are governmental regulations in the U.S. that apply to Concierge's use of the electromagnetic spectrum, however no license or approvals are required. Dependence on Major Customers and Suppliers. Concierge does not anticipate that it will be dependent on any major customers or suppliers. Seasonality. There should be no seasonal aspect to Concierge's business other than possible increased sales anticipated in the summer months associated with increased vacation travel and the desire for remote communications by Internet users. Research and Development. Concierge expended no funds on research and development in 2007. Environmental Controls. Concierge is subject to no environmental controls or restrictions that require the outlay of capital or the obtaining of a permit in order to engage in business. Patents, Trademarks, Copyrights and Intellectual Property. Concierge has trademarked its Personal Communications Attendant. It has no patents on the product. Planet Halo has trademarked the names "Halo", "Halomail", and "Planet Halo". Patent applications are pending on certain aspects of the Halo device and software applications that enable certain of its functionality. The know-how centered around the programming, low-level drivers, key board matrix, operating system interface and certain other aspects of the Halo device, including its industrial design, are considered a valued intellectual property of Planet Halo. Number of Employees On June 30, 2007, we employed no persons full time and no persons part time. ITEM 2. DESCRIPTION OF PROPERTY We own no plants or real property. Investment in the wireless infrastructure equipment of Planet Halo is approximately $30,000. 3 Facilities Our office facilities are co-located with those of our chief executive officer, David Neibert, at 22048 Sherman Way, Suite 301, Canoga Park, CA 91303. We have no lease and currently pay no rent. In the event we are able to secure the additional funds required to further our business plan, the shared office space consisting of approximately 880 square feet, including furniture and fixtures, can be leased by us for the amount of $1,235 per month on a one-year lease. Should additional space be needed, there is ample office space available in the vicinity at competitive prices. Planet Halo has no separate office facilities. ITEM 3. LEGAL PROCEEDINGS On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd against, jointly and severally, our company, Allen E. Kahn, and The Whitehall Companies in the amount of $135,000 plus interest and legal fees. Concierge did not defend against the complaint by Brookside, which alleged that Brookside was entitled to a refund of its investment as a result of a breach of contract. Brookside had entered into a subscription agreement with Concierge, Inc. that called for, among other things, the pending merger between Starfest and Concierge to be completed within 180 days of the investment. The merger was not completed within 180 days and Brookside sought a refund of its investment, which Concierge was unable to provide. As of September 12, 2007, Brookside has not attempted to enforce its judgment. As of September 12, 2007, we are unable to pay the amount of the judgment and have no assets available to Brookside for liquidation in settlement of the judgment. Neither Concierge Technologies nor any of its property is the subject of any other pending legal proceedings or any proceeding that a governmental authority is contemplating. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS In an effort to improve the corporate vehicle to better accommodate a merger or acquisition, the decision was made by the directors to re-domesticate the corporation in the State of Nevada. During the month of May 2005 a vote regarding the move to Nevada was solicited from a group of shareholders comprising a majority. A majority vote in favor was received and an Information Statement was subsequently sent to all shareholders detailing the action. On October 5, 2006 the Articles of Merger were filed with the State of California and Concierge Technologies, Inc., a California corporation, merged with a wholly-owned subsidiary, also named Concierge Technologies, Inc., a Nevada corporation. The Nevada corporation is the surviving corporation in the merger. The charters of the two corporations are essentially identical, and the transaction was effected as no more than a change of domicile from California to Nevada.. There are no changes to the bylaws, the number of shares outstanding, or the restrictions applicable to trading in the company stock that would not otherwise exist as if the company had not completed its move to Nevada. 4 PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our Common Stock presently trades on the OTC Bulletin Board. The high and low bid prices, as reported by the OTC Bulletin Board, are as follows for fiscal years ended June 30, 2006 and 2007. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. High Low ---- --- Calendar 2005: 3rd Qtr. 0.019 0.0006 4th Qtr 0.010 0.0005 Calendar 2006 1st Qtr. 0.012 0.006 2nd Qtr. 0.016 0.010 3rd Qtr. 0.011 0.005 4th Qtr 0.019 0.005 Calendar 2007 1st Qtr. 0.015 0.005 2nd Qtr. 0.021 0.002 3rd Qtr. 0.022 0.006 Holders On June 30, 2007 there were approximately 334 holders of record of our common stock. Dividends We have had no earnings and have declared no dividends on our capital stock. Under California law, a company - such as our company - can pay dividends only o from retained earnings, or o if after the dividend is made, o its tangible assets would equal at least 11/4 times its liabilities, and o its current assets would at least equal its current liabilities, or o if the average of its earnings before income taxes and before interest expenses for the last two years was less than the average of its interest expenses for the last two years, then its current assets must be equal to at least 11/4 times its current liabilities. 5 The directors' strategy on dividends is to declare and pay dividends only from retained earnings and when the directors deem it prudent and in the best interests of the company to declare and pay dividends. Penny Stock Regulations Our common stock trades on the OTC Bulletin Board at a price less than $5 a share and is subject to the rules governing "penny stocks." A "penny stock" is any stock that: o sells for less than $5 a share. o is not listed on an exchange or authorized for quotation on The Nasdaq Stock Market, and o is not a stock of a "substantial issuer." We are not now a "substantial issuer" and cannot become one until we have net tangible assets of at least $2 million. There are statutes and regulations of the Securities and Exchange Commission (the "Commission") that impose a strict regimen on brokers that recommend penny stocks. The Penny Stock Suitability Rule -------------------------------- Before a broker-dealer can recommend and sell a penny stock to a new customer who is not an institutional accredited investor, the broker-dealer must obtain from the customer information concerning the person's financial situation, investment experience and investment objectives. Then, the broker-dealer must "reasonably determine" (1) that transactions in penny stocks are suitable for the person and (2) that the person, or his advisor, is capable of evaluating the risks in penny stocks. After making this determination, the broker-dealer must furnish the customer with a written statement setting forth the basis for this suitability determination. The customer must sign and date a copy of the written statement and return it to the broker-dealer. Finally the broker-dealer must also obtain from the customer a written agreement to purchase the penny stock, identifying the stock and the number of shares to be purchased. The above exercise delays a proposed transaction. It causes many broker-dealer firms to adopt a policy of not allowing their representatives to recommend penny stocks to their customers. The Penny Stock Suitability Rule, described above, and the Penny Stock Disclosure Rule, described below, do not apply to the following: 6 o transactions not recommended by the broker-dealer, o sales to institutional accredited investors, o transactions in which the customer is a director, officer, general partner, or direct or indirect beneficial owner of more than 5 percent of any class of equity security of the issuer of the penny stock that is the subject of the transaction, and o transactions in penny stocks by broker-dealers whose income from penny stock activities does not exceed five percent of their total income during certain defined periods. The Penny Stock Disclosure Rule ------------------------------- Another Commission rule - the Penny stock Disclosure Rule - requires a broker-dealer, who recommends the sale of a penny stock to a customer in a transaction not exempt from the suitability rule described above, to furnish the customer with a "risk disclosure document." This document is set forth in a federal regulation and contains the following information: o A statement that penny stocks can be very risky, that investors often cannot sell a penny stock back to the dealer that sold them the stock, o A warning that salespersons of penny stocks are not impartial advisers but are paid to sell the stock, o The statement that federal law requires the salesperson to tell the potential investor in a penny stock - o the "offer" and the "bid" on the stock, and o the compensation the salesperson and his firm will receive for the trade, o An explanation that the offer price and the bid price are the wholesale prices at which dealers are willing to sell and buy the stock from other dealers, and that in its trade with a customer the dealer may add a retail charge to these wholesale prices, o A warning that a large spread between the bid and the offer price can make the resale of the stock very costly, o Telephone numbers a person can call if he or she is a victim of fraud, o Admonitions - o to use caution when investing in penny stocks, o to understand the risky nature of penny stocks, 7
o to know the brokerage firm and the salespeople with whom one is dealing, and o to be cautious if ones salesperson leaves the firm. Finally, the customer must be furnished with a monthly statement including prescribed information relating to market and price information concerning the penny stocks held in the customer's account. Effects of the Rule ------------------- The above penny stock regulatory scheme is a response by the Congress and the Commission to known abuses in the telemarketing of low-priced securities by "boiler shop" operators. The scheme imposes market impediments on the sale and trading of penny stocks. It has a limiting effect on a stockholder's ability to resell a penny stock. Our shares likely will trade below $5 a share on the OTC Bulletin Board and be, for some time at least, shares of a "penny stock" subject to the trading market impediments described above. Recent Sales of Unregistered Securities; Outstanding Stock Options Our company sold the following shares of its common stock during the last three years without registering the shares: ------------------------ ------------------ --------------------------- --------------------------- ------------------ Value of Date No. of Shares Name of Purchaser Type of Consideration Consideration ------------------------ ------------------ --------------------------- --------------------------- ------------------ November 1, 2006 5,000,000 Ryan Consult Ltd Services $ 25,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Marc Angell Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Douglas Angell Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Paul Angell Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Ryan Angell Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Michael Phelps Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Jacquie Carter Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Ryan White Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Wiles Trust Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 Starmaker Products LLC Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------ June 22, 2007 3,003,003 920280 Alberta Ltd Cash $ 10,000 ------------------------ ------------------ --------------------------- --------------------------- ------------------
All of the above sales were made pursuant to the exemption from registration provided by the Commission's Regulation D, Rule 506. All purchasers were either accredited investors or, if not, were provided copies of the company's recent filings with the Commission including financial statements meeting the requirements of the Commission's Item 310 of Regulation S-B. All purchasers were provided the opportunity to ask questions of Concierge's management. No equity of Concierge is subject to outstanding options or warrants to purchase, or securities convertible into, equity of the company. 8 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The following discussion and analysis should be read in conjunction with the financial statements and the accompanying notes thereto and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere. See "Financial Statements." Plan of Operation for the Next Twelve Months Our plan of operation for the next twelve months is to expand the business of Planet Halo by doing the following: o constructing additional wireless networks, implementing an advertising campaign, and acquiring paying subscribers to the service, o develop and maintain a comprehensive web presence through an Internet-based portal designed for social networking and local advertising, o partner with synergistic companies engaged in exploitation of wireless services using similar technologies, o engage the assistance of our directors and outside consultants to aggressively pursue financing options and possible acquisition targets in the field of wireless communications. On April 6, 2004, our company signed a definitive agreement to acquire the privately-held company, Planet Halo, in a cash-free stock transaction. On April 20, 2004 the companies completed the necessary documentation to effect the acquisition. On May 5, 2004 Concierge Technologies instructed its transfer agent to issue the purchase price in shares of common stock to the shareholders of Planet Halo. The transaction was officially closed and the shares considered issued as of May 5, 2004. Planet Halo is a development-stage company that has developed a prototype, hand-held, wireless Internet appliance named the "Halo". In addition to the Halo device Planet Halo also has an exclusive license to deploy a proprietary wireless gateway in North America. The gateway, named "Halomail", provides a secure interface for wireless access to the Internet, and to the worldwide web. Users of the Halo or other wireless devices may use Halomail as their email client, a secure connection for monetary transactions, browse the worldwide web, connect to their own Intranets, and essentially use the gateway as a secure on-ramp to the Internet in much the same way as a wired connection operates. Planet Halo currently lacks the funds to put either of these two devices into commercial application. Therefore, the Company has elected to pursue a wireless Internet access opportunity with its available funds, thereby leaving the possibility of deploying the Halomail gateway over its proprietary infrastructure at some point in the future. Planet Halo operates its wireless network in Marina del Rey through a service agreement with Ohio based Wireless Village. Wireless Village provides technical support, customer service, subscription billing service and strategic 9 planning consultation. In addition, Wireless Village and Planet Halo have partnered on a web portal designed for Internet users local to a specific area, notably Marina del Rey, CA. Each of the future Planet Halo markets will have their own local portal for social networking. The portals offer chat rooms, games, local news, local advertising, local events and postings by local businesses intended only for residents and visitors to the area. Planet Halo hopes to gain advertising revenue from the portal as well as increased awareness in the community that translates into heightened subscription levels. On June 17, 2002, David W. Neibert became our President and Chief Operations Officer. Upon assuming that role, he moved the general accounting and administrative offices of our company to a co-location with his firm, The Wallen Group. On April 18, 2007 Mr. Neibert accepted the position of chief executive officer. We do not currently pay rent and have no lease for the facilities being provided by Mr. Neibert. As of June 30, 2007, we had no employees and no significant fixed overhead other than leased wireline circuits, consulting fees paid for services provided to Planet Halo, the variable cost of web hosting, legal and professional fees, fees charged by our transfer agent and minimum tax payments. We have a limited amount of office fixtures, furniture and computer equipment acquired with the Planet Halo transaction. We have deployed approximately $30,000 worth of radio and computer infrastructure equipment to remote locations as required to operate the Planet Halo wireless network. Our CEO, the president of Planet Halo, and our directors are continuing to provide services without cash compensation; however, on July 19, 2006 Chairman Allen Kahn polled the directors and received a unanimous vote in favor of issuing Five Million (5,000,000) shares of stock to compensate Ryan Consultants Ltd, a Jersey, UK corporation, which has provided the services of David Neibert for the previous two years, incurred expenses on our behalf without seeking reimbursement, and performed other supportive roles in our fund raising efforts. On November 1, 2006 the shares were issued to Ryan Consultants. The stock issuance was not deemed to be in payment for any specific fee, reimbursement for any specific expense, or in creation of any specific obligation for performance, but rather an acknowledgement of support and continuing efforts for the indeterminate future. There are no guarantees that Mr. Neibert will continue to act as our Chief Operating Officer, or that Ryan Consultants will continue to compensate Mr. Neibert if he chooses to continue to perform his fiduciary duties, or that he will continue in his capacity without compensation. Liquidity Our primary source of operating capital has been funding sourced through insiders or shareholders under the terms of unsecured promissory notes. In several instances we have sold shares of our common stock in exchange for cash. The amount of borrowed funds and funds from equity sales has been sufficient to pay the cost of legal and accounting fees as necessary to maintain a current reporting status with the Securities and Exchange Commission. However, sufficient funds have been unavailable to significantly pay down other commercial and vendor accounts payable. We have also been unable to pay salaries to our officers and several of our outside consultants who had performed services during the past and present fiscal years. 10
Although our management is continuing to provide services to the Company for the near term without cash compensation, we will still require additional funding to maintain the corporation. With the acquisition of Planet Halo there are added demands for operating capital if we are to continue to construct the wireless networks. The Company has been aggressively pursuing financing for the funding of the wireless project. Until such time as definitive agreements are reached with investors, any form of financing remains speculative. If the financing is not available, Planet Halo may not be able to proceed with its planned development of wireless networks. In the event financing is not completed, our funds will be exhausted at some point and continuing operations may be impossible without increased operating profits from the existing wireless network infrastructure. Off-Balance Sheet Arrangements Our company has not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under which we have o an obligation under a guarantee contract, o a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets, o an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or o an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging, or research and development services with, us. Contractual obligations The following table sets forth, as of the end of the latest fiscal year-end balance sheet, information with respect to our known contractual obligations. ----------------------------------- ------------------------------------------------------------------------------------- Payments Due-by Period ----------------------------------- ------------------------------------------------------------------------------------- Contractual Less Than More Than Obligations Total 1 Year 1-3 Years 3-5 Years 5 Years ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- Long-Term Debt Obligations None ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- Capital Lease Obligations None ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- Operating Lease Obligations None ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- Other Long-Term Liabilities Reflected on Our Balance Sheet under GAAP None ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- ----------------------------------- ---------------- ------------------ ---------------- ---------------- --------------- Total None ----------------------------------- ---------------- ------------------ ---------------- ---------------- ---------------
11 ITEM 7. FINANCIAL STATEMENTS INDEX The financial statements of the company appear as follows: Report of Independent Registered Public Accounting Firm .............13 Consolidated Balance Sheet, June 30, 2007 ...........................14 Consolidated Statements of Operations, Years Ended June 30, 2007 and 2006 and the Period from September 20, 1996 (Inception) to June 30, 2007 ............15 Statements of Changes in Stockholders' Equity (Deficit), September 20, 1996 (Inception) to June 30, 2007 ............16 Consolidated Statements of Cash Flows, Years Ended June 30, 2007 and 2006 and the Period from September 20, 1996 (Inception) to June 30, 2007 ............20 Notes to Financial Statements .......................................21 12 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors Concierge Technologies, Inc. We have audited the accompanying consolidated balance sheet of Concierge Technologies, Inc. and subsidiary (a development stage company) as of June 30, 2007 and the related statements of operations, stockholders' deficit and cash flows for each of the two years in the period ended June 30, 2007 and for the period from September 20, 1996 (inception), to June 30, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we 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. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Concierge Technologies, Inc., and subsidiary as of June 30, 2007 and the results of its operations, stockholders deficit and cash flows for each of the two years in the period ended June 30, 2007 and from September 20, 1996 (inception), to June 30, 2007, in conformity with accounting principles generally accepted in the United States of America. The Company's consolidated 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. The Company's has not earned any revenue since its inception and has accumulated deficit of $3,871,095 at June 30, 2007 including a net income of $38,214 during the year ended June 30, 2007. These factors as discussed in Note 4 to the financial statements, raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Kabani & Company, Inc. -------------------------- KABANI & COMPANY, INC. CERTIFIED PUBLIC ACCOUNTANTS Los Angeles, California September 26, 2007 13 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED BALANCE SHEET June 30, 2007 ASSETS CURRENT ASSETS: Cash & cash equivalents $ 15,060 Due from related party 23,350 ----------- Total current assets 38,411 Property and Equipment, net 30,163 ----------- Total Assets $ 68,573 =========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 258,506 Notes payable - related parties 142,500 ----------- Total current liabilities 401,007 STOCKHOLDERS' DEFICIT: Preferred stock, par value $.001 per share; 10,000,000 shares authorized; none issued -- Common stock, $.001 par value; 190,000,000 shares authorized; issued and outstanding 177,322,777 177,323 Additional paid in capital 3,361,337 Deficit accumulated during the development stage (3,871,095) ----------- Total stockholders' deficit (332,434) ----------- $ 68,573 =========== The accompanying notes are an integral part of these audited financial statements 14
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 For The Period From September 20, 1996 For the Years Ended June 30, (Inception) to June 30, 2007 2006 2007 ------------- ------------- ------------- NET REVENUE $ -- $ -- $ -- COSTS AND EXPENSES Product Launch Expenses -- -- 1,077,785 Impairment of Assets -- -- 988,443 General & Administrative Expenses 88,129 42,980 1,559,999 ------------- ------------- ------------- TOTAL COSTS AND EXPENSES 88,129 42,980 3,626,227 ------------- ------------- ------------- OTHER INCOME (EXPENSES) Income 54 28 167 Adjustment of over accrued expenses 150,123 -- 150,123 Settlement Income/(Loss) -- -- 52,600 Loss on debt settlement (23,033) -- (23,033) Litigation Settlement -- -- (135,000) ------------- ------------- ------------- TOTAL OTHER INCOME 127,144 28 44,857 ------------- ------------- ------------- INCOME (LOSS) BEFORE INCOME TAXES 39,014 (42,952) (3,581,371) Provision of Income Taxes 800 1,600 11,200 ------------- ------------- ------------- NET INCOME (LOSS) $ 38,214 $ (44,552) $ (3,592,571) ============= ============= ============= WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 146,252,309 142,292,747 ============= ============= *BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ 0.00 $ (0.00) ============= =============
The accompanying notes are an integral part of these audited financial statements * Weighted average number of shares used to compute basic and diluted loss per share is the same as the effect of dilutive securities are anti dilutive. 15
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 Common Stock -------------------------------------------- Number of Par Additional Shares Accumulated shares value paid in capital to be isssued Deficit ------------ ------------ ------------ ------------ ------------ Common Stock issued for cash through June 30, 1997 176,306 $ 1,763 $ 106,162 -- $ -- Common stock issued for services through June 30, 1997 621,545 6,215 -- -- -- Net loss through June 30, 1997 -- -- -- -- (96,933) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 1997 797,851 7,978 106,162 -- (96,933) Common Stock issued for cash in the year ended June 30, 1998 137,475 1,375 194,650 -- -- Common stock issued for services in the year ended June 30, 1998 22,550 226 -- -- -- Net loss for the year ended June 30, 1998 -- -- -- -- (283,891) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 1998 957,876 9,579 300,812 -- (380,824) Common Stock issued for cash in the year ended June 30, 1999 208,000 -- -- -- -- Common stock issued for services in the year ended June 30, 1999 450 -- -- -- -- Net loss for the year ended June 30, 1999 -- -- -- -- (89,919) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 1999 1,166,326 9,579 300,812 -- (470,743) Acquisition and retirement of Common shares (262,000) (2,620) -- -- -- Common Stock issued for cash in the year ended June 30, 2000 117,184 -- -- -- -- Common stock issued for services in the year ended June 30, 2000 354,870 -- -- -- -- Post acquisition stock subscription funds received net of costs & expenses of $79,710 -- -- -- -- -- Net loss for the year ended June 30, 2000 -- -- -- -- (986,986) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2000 1,376,380 6,959 300,812 -- (1,457,729) Post acquisition stock subscription funds received -- -- -- -- -- Net loss for the year ended June 30, 2001 -- -- -- -- (544,080) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2001 1,376,380 6,959 300,812 -- (2,001,809) 16 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 (continued) Common Stock Stockholders' Advance Subject to deficit Subscriptions Contingency ------------ ------------ ------------ Common Stock issued for cash through June 30, 1997 $ 107,925 $ -- $ -- Common stock issued for services through June 30, 1997 6,215 -- -- Net loss through June 30, 1997 (96,933) -- -- ------------ ------------ ------------ Balance at June 30, 1997 17,207 -- -- Common Stock issued for cash in the year ended June 30, 1998 196,025 -- -- Common stock issued for services in the year ended June 30, 1998 226 -- -- Net loss for the year ended June 30, 1998 (283,891) -- -- ------------ ------------ ------------ Balance at June 30, 1998 (70,433) -- -- Common Stock issued for cash in the year ended June 30, 1999 -- -- 60,996 Common stock issued for services in the year ended June 30, 1999 -- -- 4 Net loss for the year ended June 30, 1999 (89,919) -- -- ------------ ------------ ------------ Balance at June 30, 1999 (160,352) -- 61,000 Acquisition and retirement of Common shares (2,620) -- -- Common Stock issued for cash in the year ended June 30, 2000 -- -- 202,061 Common stock issued for services in the year ended June 30, 2000 -- -- 3,549 Post acquisition stock subscription funds received net of costs & expenses of $79,710 -- 1,175,790 -- Net loss for the year ended June 30, 2000 (986,986) -- -- ------------ ------------ ------------ Balance at June 30, 2000 (1,149,958) 1,175,790 266,610 Post acquisition stock subscription funds received -- 487,500 -- Net loss for the year ended June 30, 2001 (544,080) -- -- ------------ ------------ ------------ Balance at June 30, 2001 (1,694,038) 1,663,290 266,610 17 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 (continued) Common Stock -------------------------------------------- Number of Par Additional Shares Accumulated shares value paid in capital to be isssued Deficit ------------ ------------ ------------ ------------ ------------ Recapitalization upon merger 118,681,333 113,099 (300,812) -- (278,527) Stock subscription received for 500,000 shares -- -- -- 29,983 -- Stock issued for services 2,532,581 119,031 -- -- -- Stock to be issued for services- 3,275,472 shares -- -- -- 153,947 -- Adjustment to paid in capital on merger -- (116,499) 116,499 -- -- Net loss for the year ended June 30, 2002 -- -- -- -- (478,229) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2002 122,590,294 122,590 116,499 183,930 (2,758,565) Stock issued for subscription received in prior year 500,000 500 29,483 (29,983) -- Stock issued for services included in the prior year 3,275,472 3,275 150,672 (153,947) -- Forfeiture of stock subscription -- -- 10,000 -- -- Cancellation of over issued shares on recapitalization (73,017) -- -- -- -- Net loss for the year ended June 30, 2003 -- -- -- -- (47,272) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2003 126,292,749 126,365 306,654 -- (2,805,837) Adjustment to par value -- (72) 72 -- -- Issuance of shares for cash 2,000,000 2,000 18,000 -- -- Issuance of shares for services 4,000,000 4,000 212,000 -- -- Issuance of shares for acquisition of Planet Halo 9,999,998 10,000 490,000 -- -- Net loss for the year ended June 30, 2004 -- -- -- -- (514,639) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2004 142,292,747 142,293 1,026,726 -- (3,320,476) Reclassify contingent liabilities to Additional Paid In-Capital -- -- 1,929,900 -- -- Net loss for the year ended June 30, 2005 -- -- -- -- (544,284) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2005 142,292,747 142,293 2,956,626 -- (3,864,761) Loans converted to Paid in Capital -- -- 281,708 -- -- Net loss for the year ended June 30, 2006 -- -- -- -- (44,552) ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2006 142,292,747 142,293 3,238,334 -- (3,909,313) Issuance of shares for services 5,000,000 5,000 30,000 -- -- Issuance of shares for cash 27,027,027 27,027 62,973 -- -- Issuance of shares for debt settlement 3,003,003 3,003 30,030 -- -- Net income for the year ended June 30, 2007 -- -- -- -- 38,214 ------------ ------------ ------------ ------------ ------------ Balance at June 30, 2007 177,322,777 $ 177,323 $ 3,361,337 -- $ (3,871,095) ============ ============ ============ ============ ============ 18 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 (continued) Common Stock Stockholders' Advance Subject to deficit Subscriptions Contingency ------------ ------------ ------------ Recapitalization upon merger (466,240) -- -- Stock subscription received for 500,000 shares 29,983 -- -- Stock issued for services 119,031 -- -- Stock to be issued for services- 3,275,472 shares 153,947 -- -- Adjustment to paid in capital on merger -- -- -- Net loss for the year ended June 30, 2002 (478,229) -- -- ------------ ------------ ------------ Balance at June 30, 2002 (2,335,546) 1,663,290 266,610 Stock issued for subscription received in prior year -- -- -- Stock issued for services included in the prior year -- -- -- Forfeiture of stock subscription 10,000 -- -- Cancellation of over issued shares on recapitalization -- -- -- Net loss for the year ended June 30, 2003 (47,272) -- -- ------------ ------------ ------------ Balance at June 30, 2003 (2,372,818) 1,663,290 266,610 Adjustment to par value -- -- -- Issuance of shares for cash 20,000 -- -- Issuance of shares for services 216,000 -- -- Issuance of shares for acquisition of Planet Halo 500,000 -- -- Net loss for the year ended June 30, 2004 (514,639) -- -- ------------ ------------ ------------ Balance at June 30, 2004 (2,151,457) 1,663,290 266,610 Reclassify contingent liabilities to Additional Paid In-Capital 1,929,900 (1,663,290) (266,610) Net loss for the year ended June 30, 2005 (544,284) -- -- ------------ ------------ ------------ Balance at June 30, 2005 (765,841) -- -- Loans converted to Paid in Capital 281,708 -- -- Net loss for the year ended June 30, 2006 (44,552) -- -- ------------ ------------ ------------ Balance at June 30, 2006 (528,686) -- -- Issuance of shares for services 35,000 -- -- Issuance of shares for cash 90,000 -- -- Issuance of shares for debt settlement 33,033 -- -- Net income for the year ended June 30, 2007 38,214 -- -- ------------ ------------ ------------ Balance at June 30, 2007 $ (332,434) $ -- $ -- ============ ============ ============
The accompanying notes are an integral part of these audited financial statements 19
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2007 AND 2006 AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2007 September 20, 1996 June 30, June 30, (inception) to 2007 2006 June 30, 2007 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 38,214 $ (44,552) $(3,592,571) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of asset -- -- 742,643 Depreciation and amortization 308 -- 13,463 Stock issued for services 35,000 -- 531,352 Loss on settlement of debts 23,033 -- 23,033 Adjustment of over accrued expenses (150,123) -- (150,123) Decrease in current assets: Prepaid expense -- -- (245,800) Increase (decrease) in current liabilities: Accrued expenses 5,653 6,005 324,097 ---------- ---------- ---------- Net cash used in operating activities (47,915) (38,547) (2,353,906) ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Cash received on acquisition of subsidiary -- -- 2,912 Note receivable - related party -- -- (100,000) Acquisition of equipment (30,471) -- (43,381) ---------- ---------- ---------- Net cash used in investing activities (30,471) -- (140,469) ---------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Due from related party (23,190) 3,531 (23,350) Proceeds from Issuance of Shares 90,000 -- 677,007 Proceeds from stock subscription forfeited -- -- 10,000 Proceeds from advance subscriptions -- -- 1,772,983 Costs and expenses of advance subscriptions -- -- (79,710) Proceeds from (payments to) related party loans 22,749 38,251 152,500 ---------- ---------- ---------- Net cash provided by financing activities 89,559 41,782 2,509,430 ---------- ---------- ---------- NET INCREASE IN CASH & CASH EQUIVALENTS 11,178 3,235 15,060 CASH & CASH EQUIVALENTS, BEGINNING BALANCE 3,882 648 -- ---------- ---------- ---------- CASH & CASH EQUIVALENTS, ENDING BALANCE $ 15,060 $ 3,882 $ 15,060 ========== ========== ==========
The accompanying notes are an integral part of these audited financial statements 20 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Concierge Technologies, Inc., (the "Company"), a California corporation, was incorporated on August 18, 1993 as Fanfest, Inc. In August 1995 the Company changed its name to Starfest, Inc. During 1998, the Company was inactive, just having minimal administrative expenses. During 1999 the Company attempted to pursue operations in the online adult entertainment field. There were no revenues from this endeavor. On March 20, 2002, the Company changed its name to Concierge Technologies, Inc. In March 2000, the Company acquired approximately 96.83 percent (8,250,000 shares) of the common stock of MAS Acquisition XX Corp. (MAS XX) for $314,688. This amount was expensed in March 2000 as at the time of the acquisition, MAS XX had no assets or liabilities and was inactive. On March 21, 2002, the Company consummated a merger with Concierge, Inc. Concierge, Inc. ("CI") was a development stage enterprise incorporated in the state of Nevada on September 20, 1996. The CI had undertaken the development and marketing of a new technology, a unified messaging product "The Personal Communications Attendant" ("PCA(TM)"). "PCA(TM)" will provide a means by which the user of Internet e-mail can have e-mail messages spoken to him/her over any touch-tone telephone or wireless phone in the world. To-date, the Company has not earned any revenue. On April 6, 2004 the Company entered into a Stock Purchase Agreement with Planet Halo, Inc. (PHI) whereby, the Company purchased all of the outstanding and issued shares of PHI in exchange for 10 million shares of the Company's common stock valued at $500,000. On May 5, 2004 the Company issued the shares on a ratio of 8.232 shares of its common stock to each share of PHI stock to the former shareholders of PHI. The existing PHI shares were then retired and cancelled. The Company is now the sole shareholder of PHI, a Nevada corporation. On May 5, 2004 the President of PHI was officially appointed to the Board of Directors of the Company along with one other PHI named appointee (Note 12). PHI is a development stage company in the wireless telecommunications industry and plans to design, construct, and operate wireless networks providing subscribers with access to the Internet and related services. Planet Halo also retains an exclusive North America license to a proprietary integrated wireless gateway interface to the Internet named "Halomail", which the company plans to implement across its developing wireless networks. During the 4th quarter of the fiscal year 2007 Planet Halo was provided funding by Concierge in order to begin operations as a wireless Internet service provider. Planet Halo purchased network infrastructure equipment, entered into a lease agreement for radio site locations, entered into a consulting agreement with a third party vendor providing technical support and services, installed equipment and began operations on June 5, 2007 in Marina del Rey, California. The accounting policies of the Company are in accordance with generally accepted accounting principles and conform to the standards applicable to development stage companies. 21 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The accompanying condensed consolidated financial statements include the accounts of Concierge Technologies, Inc. (parent) and its wholly owned subsidiary, Planet Halo, Inc. All significant inter-company transactions and accounts have been eliminated in consolidation. CASH AND CASH EQUIVALENTS The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. USE OF ESTIMATES The preparation of financial statements is in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. PROPERTY & EQUIPMENT Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over useful lives of 3 years. The cost of assets sold or retired and the related amounts of accumulated depreciation are removed from the accounts in the year of disposal. Any resulting gain or loss is reflected in current operations. Expenditures for maintenance and repairs are charged to expense as incurred. IMPAIRMENT OF LONG LIVED-ASSETS Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and the accounting and reporting provisions of APB Opinion No. 30, "Reporting the Results of Operations for a Disposal of a Segment of a Business." The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of June 30, 2007, there were no significant impairments of its long-lived assets used in operations. 22 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCOME TAXES The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. BASIS AND DILUTED NET LOSS PER SHARES Net loss per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. STOCK-BASED COMPENSATION Effective July 1, 2006, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 123-R, "Share-Based Payment" ("SFAS 123-R"), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including stock options based on their fair values. SFAS 123-R supersedes Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), which the Company previously followed in accounting for stock-based awards. FAIR VALUE OF FINANCIAL INSTRUMENTS Statement of financial accounting standard No. 107, Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value. 23 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL USE The Company accounts for the costs of computer software developed or obtained for internal use in accordance with Statement of Position 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use." The Company capitalizes costs of materials, consultants, and payroll and payroll-related costs for employees incurred in developing internal-use computer software. These costs are included with "Computer equipment and software." Costs incurred during the preliminary project and post-implementation stages are charged to general and administrative expense. RESEARCH AND DEVELOPMENT Expenditures for software development costs and research are expensed as incurred. Such costs are required to be expensed until the point that technological feasibility is established. The period between achieving technological feasibility and the general availability of such software has been short. Consequently, costs otherwise capitalizable after technological feasibility is achieved are generally expensed because they are insignificant. REVENUE RECOGNITION Revenue is recognized when earned. The Company's revenue recognition policies are in compliance with all applicable accounting regulations, including American Institute of Certified Public Accountants (AICPA) Statement of Position (SOP) 97-2, Software Revenue Recognition, SOP 98-9, Modification of SOP 97-2 and Staff accounting bulletin (SAB) 104. Revenue from license programs is recorded when the software has been delivered and the customer is invoiced. Revenue from packaged product sales to and through distributors and resellers is recorded when related products are shipped. The Company does not charge monthly service fee, instead charges only one-time purchase price and the option of buying upgrades at a fixed fee based on fair value of the upgrade. When the revenue recognition criteria required for distributor and reseller arrangements are not met, revenue is recognized as payments are received. Costs related to insignificant obligations, which include telephone support for certain products, are accrued. Provisions are recorded for returns, concessions and bad debts. Cost of revenue includes direct costs to produce and distribute product and direct costs to provide online services, consulting, product support, and training and certification of system integrators. Research and development costs are expensed as incurred. The company did not earn any revenue in the years ended June 30, 2007 and 2006. ADVERTISING The Company expenses advertising costs as incurred. RECLASSIFICATIONS Certain prior period amounts have been reclassified to conform to the current period presentation. 24 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. RECENT PRONOUNCEMENTS In February 2006, FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments". SFAS No. 155 amends SFAS No 133, "Accounting for Derivative Instruments and Hedging Activities", and SFAF No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". SFAS No. 155, permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133, establishes a requirement to evaluate interest in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and amends SFAS No. 140 to eliminate the prohibition on the qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This statement is effective for all financial instruments acquired or issued after the beginning of the Company's first fiscal year that begins after September 15, 2006. Management is currently evaluating the effect of adoption of this statement on the financial statements. In March 2006 FASB issued SFAS 156 'Accounting for Servicing of Financial Assets' this Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement: 1. Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract. 2. Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable. 3. Permits an entity to choose 'Amortization method' or 'Fair value measurement method' for each class of separately recognized servicing assets and servicing liabilities. 4. At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity's exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value. 5. Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities. This Statement is effective as of the beginning of the Company's first fiscal year that begins after September 15, 2006. Management is currently evaluating the effect of adoption of this statement on the financial statements. 25 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In September 2006, FASB issued SFAS 157 `Fair Value Measurements'. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The management is currently evaluating the effect of this pronouncement on financial statements. In September 2006, FASB issued SFAS 158 `Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans--an amendment of FASB Statements No. 87, 88, 106, and 132(R)' This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements: a. A brief description of the provisions of this Statement b. The date that adoption is required c. The date the employer plans to adopt the recognition provisions of this Statement, if earlier. The requirement to measure plan assets and benefit obligations as of the date of the employer's fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The management is currently evaluating the effect of this pronouncement on financial statements. In February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements. 26 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The management is currently evaluating the effect of this pronouncement on financial statements. 4. GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going concern. However, the Company did not earn any revenue during the year ended June 30, 2007. The Company has accumulated deficit of $3,871,095 and a net income of $38,214 during the year ended June 30, 2007. The continuing losses have adversely affected the liquidity of the Company. Losses are expected to continue for the immediate future. The Company faces continuing significant business risks, which includes but not limited to, its ability to maintain vendor and supplier relationships by making timely payments when due. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. Management devoted considerable effort from inception through the year ended June 30, 2007, towards (i) obtaining additional equity (ii) management of accrued expenses and accounts payable (iii) initiation of the business strategies of the Planet Halo subsidiary and (vi) searching for a suitable strategic partner. Management believes that the above actions will allow the Company to continue operations through the next fiscal year. 5. DUE FROM RELATED PARTY Concierge Technologies, Inc. has no bank account in its own name. Wallen Group, a consulting company headed by the C.E.O. and director of the Company, maintains an administrative account for the Company. A balance due from Wallen Group was $23,350 as of June 30, 2007. 27 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Following is the summary of accounts payable and accrued expenses as of June 30, 2007. Accounts payable $ 86,646 Accrued interest 34,560 Accrued litigation 135,000 Other Accrual 1,500 Provision for income tax 800 --------- Total $ 258,506 During the year ended June 30, 2007, the Company adjusted over accrued expenses amounting $150,123 and recorded it under other income. 7. NOTES PAYABLE - RELATED PARTIES Notes payable consisted of the following at June 30, 2007 ---- Notes payable to shareholder, interest rate of 8%, unsecured and payable on October 1, 2006 (past due) 35,000 Notes payable to director/shareholder, non-interest bearing unsecured and payable on demand 8,500 Notes payable to shareholder, interest rate of 10%, unsecured, and payable on July 31, 2004 (past due) 5,000 Notes payable to shareholder, interest rate of 10%, unsecured and payable on October 1, 2004 (past due) 28,000 Notes payable to shareholder, interest rate of 8%, unsecured and payable on October 1, 2004 (past due) 14,000 Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on September 1, 2004 (past due) 3,500 Notes payable to shareholder, interest rate of 8%, unsecured and payable on October 1, 2005 (past due) 20,000 Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on February 1, 2006 (past due) 5,000 28 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on June 1, 2006 (past due) 5,000 Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on February 1, 2006 (past due) 2,500 Notes payable to director/shareholder, interest rate of 6%, Unsecured and payable on September 1, 2007 1,000 Notes payable to shareholder, interest rate of 8%, unsecured and payable on November 1, 2007 15,000 -------- Total Notes Payable $142,500 ======== The Company has recorded interest expenses, amounting to $11,024 and $9,652 for the years ended June 30, 2007 and 2006, respectively. 8. INCOME TAXES No provision was made for Federal income tax since the Company has significant net operating loss carry forward. Through June 30, 2007, the Company incurred net operating losses for tax purposes of approximately $3,591,000. The net operating loss carry forward may be used to reduce taxable income through the year 2026. Net operating loss for carry forwards for the State of California is generally available to reduce taxable income through the year 2016. The availability of the Company's net operating loss carryforward is subject to limitation if there is a 50% or more positive change in the ownership of the Company's stock. The net deferred tax asset balance, due to net operating income/loss carryforwards as of June 30, 2007 and 2006 were approximately $1,436,000 and $1,452,000 respectively. A 100% valuation allowance has been established against the deferred tax assets, as the utilization of the loss carryforwards cannot reasonably be assured. The components of the net deferred tax asset are summarized below: June 30, 2007 June 30, 2006 ------------- ------------- Deferred tax asset $1,436,000 $1,452,000 Valuation allowance (1,436,000) (1,452,000) ----------- ----------- $ - $ - 29 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following is a reconciliation of the provision for income taxes at the U.S. federal income tax rate to the income taxes reflected in the Consolidated Statements of Operations: June 30, June 30, 2007 2006 -------- -------- Tax expense (credit) at statutory rate - federal 34% (34)% State tax expense net of federal tax 6 (6) Changes in valuation allowance (40) 40 Tax expense at actual rate -- -- Income tax expense consisted of the following: June 30, 2007 June 30, 2006 -------- -------- Current tax expense: Federal $ -- $ -- State 800 1,600 -------- -------- Total current $ 800 $ 1,600 Deferred tax: Federal $(13,300) $ 14,600 State (2,300) 2,500 -------- -------- Total deferred tax asset $(15,600) $ 17,100 Valuation allowance 15,600 (17,100) Net deferred tax asset -- -- -------- -------- Tax expense $ 800 $ 1,600 9. COMMON STOCK There were no issuances of common stock during the year ended June 30, 2006. The Company issued Five Million (5,000,000) shares of common stock to Ryan Consultants Ltd, a Jersey, UK corporation, on November 1, 2006. Ryan Consultants Ltd provided various services on behalf of Concierge, including due diligence for Planet Halo and its planned wireless network in the U.K. The Compensation expense amounting $35,000 was calculated based upon the fair market value of the freely trading shares as quoted on OTCBB. During December 2006 the board of directors agreed to sell shares of common stock at a price of $0.00333 per share to a group of individuals known to Marc Angell. There was no commission paid and no public solicitation for the investment. Pursuant to the board instructions, and the executed subscription agreements, $100,000 was raised in increments of $10,000 for each of 9 investors and one conversion of an outstanding note for $10,000. The investors resided in the states of California, Washington, and Virginia where the company filed the appropriate form D. $50,000 of the funds were raised in the 3rd quarter and recorded as advanced subscriptions, with the remaining $40,000 raised during the 30 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4th quarter. The initial $50,000 booked in advanced subscriptions was converted to equity along with the remaining $50,000 during June 2007. Subsequently, 27,027,027 shares of common stock were issued to investors collectively. The newly issued shares are unregistered and are subject to the restrictions under rule 144 and rule 145. On June 22, 2007, the Company issued 3,003,003 shares of common stock to settle $10,000 Notes payable to Jacquie Carter. The shares were recorded at fair value on the date of settlement. 10. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS The Company prepares its statements of cash flows using the indirect method as defined under the Financial Accounting Standard No. 95. The Company paid $0 for interest and $0 for income tax during the year ended June 30, 2007. The Company settled note payable of $10,000 by issuing 3,003,003 shares excluded from the statement of cash flows. During the twelve months ended June 30, 2006, the Company paid all tax liabilities outstanding with the Franchise Tax Board of the State of California for the fiscal years ended June 30, 2003, 2004 and 2005, including all calculated penalties and interest, totaling $3,322.97. The amount reserved for income tax in the accompanying financial statements as been appropriately adjusted to reflect the current status. 11. LITIGATION On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd against, jointly and severally, Concierge, Inc, Allen E. Kahn, and The Whitehall Companies in the amount of $135,000 plus legal fees. The Company did not defend against the complaint by Brookside, which alleged that Brookside was entitled to a refund of their investment as a result of a breach of contract. Brookside had entered into a subscription agreement with Concierge, Inc., which called for, among other things, the pending merger between Starfest and Concierge to be completed within 180 days of the investment. The merger was not completed within 180 days and Brookside sought a refund of their investment, which Concierge was unable to provide. The Company has accrued the judgment amount of $135,000 in the year 2002 as litigation settlement in the accompanying financial statements. This amount is included in accrued expenses as of June 30, 2007. 31 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. ACQUISITION & IMPAIRMENT OF INTANGIBLE ASSET On April 6, 2004 the Company and Planet Halo entered into Stock Purchase agreement whereby, when consummated, the Company would purchase all of the outstanding and issued shares of Planet Halo in exchange for 10 Million shares of the Company's common stock valued at $500,000. On April 20, 2004 all of the conditions of the acquisition were met apart from the issuance of the shares. On May 5, 2004, the Company issued the shares on a ratio of 8.232 shares of the Company to each share of Planet Halo stock. The shares were issued directly to the shareholders of Planet Halo. The existing Planet Halo shares were retired and cancelled. The Company is now a sole shareholder of Planet Halo, a Nevada corporation. On May 5, 2004 the President of Planet Halo was officially appointed to the Board of Directors of the Company along with one other Planet Halo named appointee. Planet Halo is a development stage company involved in the wireless telecommunications industry through the design, manufacture, sale and distribution of hardware and services that include a hand-held wireless Internet appliance/cell phone known as the "Halo", and an integrated wireless gateway interface to the Internet named "Halomail." The purchase price was determined in arms-length negotiations between the parties. The assets acquired in this acquisition include without limitation computer hardware and goodwill. A summary of the Planet Halo assets acquired and consideration for is as follows: Allocated amount ---------------- Cash $ 2,912 Equipment, net 245 Goodwill 496,843 ---------- $ 500,000 Consideration paid ------------------ 10,000,000 shares of common stock $ 500,000 ========== The Company evaluates intangible assets, goodwill and other long-lived assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets and, goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. Potential impairment of goodwill is being evaluated in accordance with SFAS No. 142. The SFAS No. 142 is applicable to the financial statements of the Company beginning July 1, 2002. 32 CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On December 31, 2004, the Company evaluated the valuation of goodwill based upon the performance and market value of the acquisition. The Company determined the goodwill is impaired and recorded the impairment of $496,843 in the accompanying financial statements. The Company evaluated value of its prepaid expenses during the year ended June 30, 2004 and based upon uncertainness surrounding the utilization of its software for the "PCA" development, the Company has recorded an impairment of the prepaid expense amounting $245,800. 13. FORMATION OF NEVADA SUBSIDIARY On April 20, 2005, the Company formed a subsidiary corporation under the laws of the State of Nevada. The subsidiary corporation, Concierge Technologies, Inc. (Nevada) was formed for the purpose of re-domesticating the Company stock in the State of Nevada and dissolving the California Corporation. The action was taken pursuant to a vote in favor by a majority of shareholders of the Company. On March 2, 2006, the Company filed articles of merger with the Secretary of State in Nevada effectuating the merger of Concierge Technologies, Inc. of California into the Nevada subsidiary. In order to consummate the merger, the Secretary of State in California requires a Certificate of Tax Clearance from the Franchise Tax Board. The delay in acquiring the tax clearance caused for the Nevada Corporation to become inactive. On September 22, 2006 the Franchise Tax Board issued the tax clearance certificate. On October 6, 2006 the tax clearance certificate from California, and the other documents necessary to reactivate Concierge Technologies, Inc. in Nevada, were filed in the respective states. The Secretary of State of California has acknowledged receipt of the tax clearance certificate and the merger documents and the Articles of Merger were filed with the State of California on October 5, 2006. Concierge Technologies, Inc. is now a Nevada corporation. 14. SUBSEQUENT EVENTS On September 15, 2007 Concierge entered into a binding Memorandum of Understanding with privately held Wireless Village wherein the terms and conditions were set forth providing for the purchase of Wireless Village by Concierge in a stock-for-stock exchange. The proposed transaction is subject to final definitive documentation, successful completion of due diligence, approvals of the respective boards of directors and regulatory approval. 33 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The principal independent accountant of the company or any significant subsidiary has not resigned, declined to stand for re-election, or been dismissed by the company during the periods for which financial statements are included herein. ITEM 8A. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective and provide reasonable assurances that the information the Company is required to disclose in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period required by the Commission's rules and forms. Further, the Company's officers concluded that its disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting. ITEM 8B. OTHER INFORMATION On October 5, 2006 the registrant, Concierge Technologies, Inc., a California corporation, merged with a wholly-owned subsidiary, also named Concierge Technologies, Inc., a Nevada corporation. The Nevada corporation is the surviving corporation in the merger. The charters of the two corporations are essentially identical, and the transaction was effected as no more than a change of domicile from California to Nevada. The Articles of Incorporation of the Nevada corporation and the Articles of Merger were filed as Exhibits 3.7 and 3.8 to Form 10-KSB FYE 06-30-06. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Set forth below are the names, and terms of office of each of the directors, executive officers and significant employees of Concierge Technologies at June 30, 2007 and a description of the business experience of each. 34 ------------------------------------------------------------------------------- Office Held Term of Person Offices Since Office ------------------ -------------------------------------- ----------- --------- ------------------ -------------------------------------- ----------- --------- David W. Neibert C.E.O. and Director 2007 2008 ------------------ -------------------------------------- ----------- --------- James E. Kirk Secretary and Director 1996 2008 ------------------ -------------------------------------- ----------- --------- Samuel Wu Director 2002 2008 ------------------ -------------------------------------- ----------- --------- Allen E. Kahn Chairman, CFO and Director 1996 2008 ------------------ -------------------------------------- ----------- --------- Patrick Flaherty Director 2002 2008 ------------------ -------------------------------------- ----------- --------- Marc Angell Director and President of Planet Halo 2004 2008 ------------------ -------------------------------------- ----------- --------- Pat Rodden Director 2004 2008 ------------------ -------------------------------------- ----------- --------- Allen E. Kahn: Mr. Kahn entered the computer industry as a Systems Engineer with IBM and subsequently held a series of technical, sales, marketing and management positions with other multi-billion dollar corporations before becoming President and CEO of two companies marketing data communications hardware and software. He has extensive experience in voice technology, optical character recognition, data communications and other technical elements of the PCA, which he conceived. Mr. Kahn is an honors graduate of the University of Texas at El Paso and pursued postgraduate studies in Business Administration at UTEP and California State University, Long Beach. David W. Neibert: Mr. Neibert has been the President and a director of Concierge Technologies since June 17, 2002 and CEO of Concierge since April 2007. Mr. Neibert is also the president of The Wallen Group, a general partnership providing consulting services to wireless communications companies and other high technology firms in development stages. Prior to founding The Wallen Group, Mr. Neibert served as the president of Roamer One and as a director and executive vice president of business development of their publicly traded parent company Intek Global Corporation. Intek Global Corporation manufactured, sold and distributed radio products (under the names "Midland", "Securicor Wireless", "Linear Modulation Technologies", and others) globally to the consumer, government and commercial markets and operated a nationwide land mobile radio network in the U.S. known as Roamer One. Intek Global Corporation was subsequently acquired by its majority shareholder, Securicor plc of Sutton Surrey, England. Mr. Neibert reported to offices located in Los Angeles, CA, Kansas City, MO, New York City, NY, and Sutton Surrey, England during period from 1992 - 1998 before locating The Wallen Group in Canoga Park, CA. Patrick Flaherty: Mr. Flaherty has been in the technology related business for over 30 years. During the last five years, he has been president of Manhattan Resources, a consulting company specializing in Network Communications and Storage Management. In late 1999 he became Senior Vice President of Concierge, Inc, and served in this position until March of 2002. Since April 2002, he has resumed his consulting business and was elected to the board of Concierge Technologies, Inc in September of 2002. James E. Kirk, Esq.: Mr. Kirk is Corporate Secretary and General Counsel and has served as a Director of Concierge, Inc. since inception. He is a graduate of Wichita State University and holds LLB and JD degrees from the law school of Washburn University. Mr. Kirk is an attorney in private practice in Albuquerque, New Mexico. 35 Samuel C.H. Wu: With nearly 20 years of experience in engineering, banking and finance; Mr. Wu has played a pivotal role in developing and managing national and international business activity relationships for organizations in the public and private sectors. He was a senior marketing/credit officer with the Bank of America -World Banking Division in Tokyo, London and Hong Kong before founding Woodsford Shipping & Trading Co., Ltd. Under Mr. Wu's guidance, Woodsford has become a preeminent firm in the area's import/export and financial markets. He has been actively involved in the affairs of Concierge since its inception. Mr. Wu is fluent in English, Japanese and a number of Chinese dialects. He is a graduate of the University of California, Berkeley, where he received his BSEE in electronics and computer sciences and MBA. He has also taken advanced studies in manufacturing, quality assurance and community medicine. Marc Angell: Mr. Angell is the founder and President of Planet Halo and has operated the company since its inception in 2000. Prior to founding Planet Halo, and from the period 1997 through 1999, Mr. Angell was the founder, majority shareholder and CEO of Angellcom, a supplier and distributor of one-way paging devices in the U.S. During the early 1990s Mr. Angell was also involved in the land mobile radio business as a license holder and manager of 220MHz radio systems. Mr. Angell conceptualized, designed and marketed both the one-way pagers for Angellcom and the Halo device for Planet Halo. He was elected to the board of directors of Concierge simultaneous with the acquisition of Planet Halo. Pat Rodden: Mr. Rodden has nearly two decades of unique experience developing products and strategies for leading consumer, sports, recreation and electronics companies. Rodden is a founding partner, director and head of operations for Fiori whose expertise has built the company into a leading consumer technology research and design firm that has garnered more than 25 international awards over the past three years alone, many on behalf of Fortune 500 companies. Prior to founding Fiori in 1994, Mr. Rodden held various product development and program director positions at Virtual Vision, Precor, Paccar and Hughes. He graduated from California State University, Chico in 1984 with a B.S. in Mechanical Engineering. There are no family relationships between the directors and officers. There are no significant employees of Concierge who are not described above. Audit Committee and Audit Committee Financial Expert Our directors serve as our audit committee. There is no financial expert serving on the audit committee. We have no financial expert serving on the audit committee, because we have no assets of substantial value and have had only limited business activities during the current year. Code of Ethics We have adopted a Code of Ethics that applies to our chief executive officer, chief financial officer, and - should we acquire such - principal accounting officer or controller or persons performing similar functions. A copy 36 of the Code of Ethics was filed as an exhibit to the Form 10-KSB annual report for FY 06-30-2004. Compliance with Section 16 (a) of the Exchange Act Section 16(a) Beneficial Ownership Reporting Compliance. Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us with respect to our fiscal year ended June 30, 2007 and written representations furnished to us from persons subject to Section 16(a) filing requirements, there are two persons that have failed to file, or have filed late, the necessary forms as required for such period, as follows: --------------- -------------- --------------------- ------------------ No. of Late No. of Transactions Failures to File a Person Reports Not Timely Reported Required Form --------------- -------------- --------------------- ------------------ --------------- -------------- --------------------- ------------------ Allen Kahn 4 3 --------------- -------------- --------------------- ------------------ Marc Angell 3 3 --------------- -------------- --------------------- ------------------ ITEM 10. EXECUTIVE COMPENSATION The following information concerns the compensation of our chief executive officer and our chief operations officers for the last three completed fiscal years. No other executive officers or individuals received total annual salary and bonus that exceeded $100,000 during the last three completed fiscal years. Name of Chief Shares of Executive Officer Year Cash Salary Common Stock Awarded David Neibert 2007 0 0 Allen Kahn 2007 0 0 David Neibert 2006 0 0 Allen Kahn 2006 0 0 David Neibert 2005 0 0 Allen Kahn 2005 0 0 Other than as stated above, no cash or stock compensation, deferred compensation or long-term incentive plan awards were issued or granted to our management during or with respect to the period ended June 30, 2007. Further, no member of management has been granted any option or stock appreciation rights; accordingly, no tables relating to such items have been included within this Item. There are no employment contracts, compensatory plans or arrangements with respect to any director or executive officer which would in any way result in payments to any such person because of his or her resignation, retirement or other termination of employment, any change in control, or a change in the person's responsibilities following a change in control. 37 Long-Term Compensation We have no long-term compensation plans or employment agreements with any of our officers or directors. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The table below sets forth the ownership, as of September 12, 2007 of each individual known to management to be the beneficial owner of more than five percent of the company's common stock, by all directors, and named executive officers, individually and as a group. Name and Address of Amount Percent of Beneficial Owner Owned Class ------------------------------------ ----------------------- ------------------ Allen E. Kahn 14,766,902 8.3% 7547 W. Manchester Ave., No. 325 Los Angeles, CA 90045 Samuel C.H. Wu 20,855,437 11.8% 1202 Tower 1, Admiralty Centre 18 Harcourt Road Hong Kong, China Polly Force Co., Ltd. 10,805,680 (1) 6.1% 1202 Tower 1, Admiralty Centre 18 Harcourt Road Hong Kong, China Marc Angell 9,214,003 5.2% 1575 Spinnaker Dr Suite 204A Ventura, CA 93001 Fiori Product Development 411,612 (2) (2) 411 SW Second Ave. Third Floor Portland, OR 97204 F. Patrick Flaherty 3,376,775 (4) 1.9% 637 29th Street Manhattan Beach, CA 90266 James E. Kirk 3,383,291 1.9% 1401 Kirby, N.E. Albuquerque, NM 87112 David W. Neibert 1,539,100 (3) 24028 Clarington Drive West Hills, CA 91304 Officers and Directors as a Group (7 persons) 53,547,120 30.2% 38 (1) Mr. Samuel C. H. Wu is the beneficial owner of these shares and 1,620,852 shares held by Link Sense through his presence on their respective Boards of Directors. (2) Mr. Rodden is a beneficial owner of these shares through his presence on the Board of Directors and his shareholdings in Fiori Product Development, Inc. These shares represent less than one percent. (3) Less than one percent. (4) Mr. Flaherty had earlier reported beneficial ownership of 1,350,710 shares originally issued to his adult children for which he now disclaims beneficial ownership. There are no agreements between or among any of the shareholders that would restrict the issuance of shares in a manner that would cause any change in control of the company. There are no voting trusts, pooling arrangements or similar agreements in the place between or among any of the shareholders, nor do the shareholders anticipate the implementation of such an agreement in the near future. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS There were no transactions during the past two years, or proposed transactions, to which Concierge Technologies was or is to be a party, in which any director, executive officer, nominee for election as a director, any security holder named in Item 10 above and any immediate family member of any of the foregoing persons had or is to have a direct or indirect material interest. ITEM 13. EXHIBITS The following exhibits are filed as part of this Form 10-KSB: Exhibit No. Description ----------- ----------- 2 - Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.* 3.1 - Certificate of Amendment of Articles of Incorporation of Starfest, Inc. and its earlier articles of incorporation.* 3.2 - Bylaws of Concierge, Inc., which became the Bylaws of Concierge Technologies upon its merger with Starfest, Inc. on March 20, 2002.* 3.5 - Articles of Merger of Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of Nevada on March 1, 2002.** 3.6 - Agreement of Merger between Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of California on March 20, 2002.** 3.7 - Articles of Incorporation of Concierge Technologies, Inc. filed with the Secretary of State of Nevada on April 20, 2005.+ 39 3.8 - Articles of Merger between Concierge Technologies, Inc., a California corporation, and Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on March 2, 2006 and the Secretary of State of California on October 5, 2006.+ 10.1 - Agreement of Merger between Starfest, Inc. and Concierge, Inc.* 14 - Code of Ethics for CEO and Senior Financial Officers.*** 31 - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.1 - Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.1 - Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *Previously filed with Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913, incorporated herein. **Previously filed with Form 8-K on April 2, 2002; Commission File No. 000-29913, incorporated herein. ***Previously filed with Form 10-KSB on October 13, 2004; Commission File No. 000-29913, incorporated herein. +Previously filed with Form 10-KSB FYE 06-30-06 on October 13, 2006; Commission File No. 000-29913, incorporated herein. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for its professional services rendered for the audit of our annual financial statements and review of financial statements included in our Form 10-QSB reports or other services normally provided in connection with statutory and regulatory filings or engagements for those two fiscal years: 40 Fiscal Year ended June 30, 2007 $27,500 Fiscal Year ended June 30, 2006 $25,000 Audit-Related Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for assurance and related services reasonably related to the performance of the audit or review of our financial statements and not reported above under "Audit Fees": Fiscal Year ended June 30, 2007 $-0- Fiscal Year ended June 30, 2006 $-0- Tax Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for professional services rendered for tax compliance, tax advice and tax planning: Fiscal Year ended June 30, 2007 $-0- Fiscal Year ended June 30, 2006 $-0- All Other Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for products and services provided by it, other than the services reported in the above three categories: Fiscal Year ended June 30, 2007 $-0- Fiscal Year ended June 30, 2006 $-0- Pre-Approval of Audit and Non-Audit Services. The Audit Committee requires that it pre-approve all audit, review and attest services and non-audit services before such services are engaged. 41 SIGNATURES In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONCIERGE TECHNOLOGIES, INC. Date: October 10, 2007 By /s/ David W. Neibert ---------------------------------- David W. Neibert, President In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: October 10, 2007 /s/ David W. Neibert -------------------------------------- David W. Neibert, C.E.O. and Director Date: October 10, 2007 /s/ Allen E. Kahn -------------------------------------- Allen E. Kahn, Chief Financial Officer and Director Date: October 10, 2007 /s/ F.P. Flaherty -------------------------------------- F. Patrick Flaherty, Director Date: October 10, 2007 /s/ James E. Kirk -------------------------------------- James E. Kirk, Secretary and Director Date: October 10, 2007 /s/ Samuel C.H. Wu -------------------------------------- Samuel C.H. Wu, Director Date: October 10, 2007 /s/ Marc Angell -------------------------------------- Marc Angell, Director Date: October 10, 2007 /s/ Pat Rodden -------------------------------------- Pat Rodden, Director 42 CONCIERGE TECHNOLOGIES, INC. Commission File No. 000-29913 Index to Exhibits to Form 10-KSB 06-30-07 The following exhibits are filed, by incorporation by reference, as part of this Form 10-KSB: Exhibit No. Description ----------- ----------- 2 - Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.* 3.1 - Certificate of Amendment of Articles of Incorporation of Starfest, Inc. and its earlier articles of incorporation.* 3.2 - Bylaws of Concierge, Inc., which became the Bylaws of Concierge Technologies upon its merger with Starfest, Inc. on March 20, 2002.* 3.5 - Articles of Merger of Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of Nevada on March 1, 2002.** 3.6 - Agreement of Merger between Starfest, Inc. and Concierge, Inc. filed with the Secretary of State of California on March 20, 2002.** 3.7 - Articles of Incorporation of Concierge Technologies, Inc. filed with the Secretary of State of Nevada on April 20, 2005.+ 3.8 - Articles of Merger between Concierge Technologies, Inc., a California corporation, and Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on March 2, 2006 and the Secretary of State of California on October 5, 2006.+ 10.1 - Agreement of Merger between Starfest, Inc. and Concierge, Inc.* 14 - Code of Ethics for CEO and Senior Financial Officers.*** 31 - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 1 31.1 - Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.1 - Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *Previously filed with Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913, incorporated herein. **Previously filed with Form 8-K on April 2, 2002; Commission File No. 000-29913, incorporated herein. ***Previously filed with Form 10-KSB on October 13, 2004; Commission File No. 000-29913, incorporated herein. +Previously filed with Form 10-KSB FYE 06-30-06 on October 13, 2006; Commission File No. 000-29913, incorporated herein. 2