10QSB 1 concierge10qsb93003.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ CONCIERGE TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Commission File No. 000-29913 State of Incorporation: California IRS Employer I.D. Number: 95-4442384 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) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of November 12, 2003, there were 127,292,749 shares of the Registrant's Common Stock, $0.001 par value, outstanding. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] PART I - FINANCIAL INFORMATION Item 1. Financial Statements Page ---- Balance Sheet September 30, 2003 (Unaudited) 3 Statements of Operations Three Month Period Ended September 30, 2003 and 2002 and the Period from September 20, 1996 (Inception) to September 30, 2003 (Unaudited) 4 Statements of Cash Flows Periods Ended September 30, 2003 and 2002 and the Period from September 20, 1996 (Inception) to September 30, 2003 (Unaudited) 5 Notes to Unaudited Financial Statements 6 2 CONCIERGE TECHNOLOGIES, INC. (A development stage company) BALANCE SHEET SEPTEMBER 30, 2003 (Unaudited) ASSETS ------
CURRENT ASSETS: Cash & cash equivalents $ 5,705 ----------- PREPAID EXPENSES 245,800 ----------- $ 251,505 =========== LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- CURRENT LIABILITIES: Accrued expenses $ 360,973 Loans Payable-Shareholders 340,708 ----------- Total current liabilities 701,681 SUBSCRIPTIONS RECEIVED FOR COMMON STOCK SUBJECT TO CONTINGENCY 1,663,290 COMMON STOCK ISSUED SUBJECT TO CONTINGENCY 266,610 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 126,292,749 126,293 Additional paid in capital 296,726 Shares to be issued 10,000 Deficit accumulated during the development stage (2,813,095) ----------- Total stockholders' deficit (2,380,076) ----------- $ 251,505 ===========
The accompanying notes are an integral part of these financial statements. 3 CONCIERGE TECHNOLOGIES, INC. (A development stage company) STATEMENTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002 AND THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO SEPTEMBER 30, 2003 (Unaudited)
Three month periods ended September 20, September 30, September 30, 1996 (Inception) 2003 2002 to Sept. 30, 2003 ------------- -------------- ----------------- REVENUE $ - $ - $ - COSTS AND EXPENSES Product launch Expenses - - 1,077,785 General & Administrative Expenses 6,458 13,923 1,367,983 ------------ -------------- ------------- TOTAL COSTS AND EXPENSES 6,458 13,923 2,445,768 OTHER INCOME/(EXPENSES) Settlement income, net - - 52,600 Litigation settlement - - (135,000) ------------ -------------- ------------- TOTAL OTHER INCOME/(EXPENSES) - - (82,400) ------------ -------------- ------------- NET LOSS BEFORE INCOME TAXES (6,458) (13,923) (2,528,168) Provision of Income Taxes 800 800 6,400 ------------ -------------- ------------- NET LOSS $ (7,258) $ (14,723) $ (2,534,568) =========== ============== ============= WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 126,292,749 124,602,498 ============ ============== BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00) =========== ==============
The accompanying notes are an integral part of these financial statements. 4 CONCIERGE TECHNOLOGIES, INC. (A development stage company) STATEMENTS OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2003 AND 2002 AND THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO SEPTEMBER 30, 2003 (Unaudited)
September 20, 1996 September 30, September 30, (Inception) to 2003 2002 Sept. 30, 2003 ------------- -------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (7,258) $ (14,723) $(2,534,568) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization - 417 12,910 Stock issued for services - - 126,405 Stock to be issued for services - - 153,947 Increase in current liabilities: Accrued expenses (2,474) 6,964 276,441 ----------- ------------- ----------- Net cash used in operating activities (9,732) (7,342) (1,964,865) ----------- ------------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Increase in prepaid expense - - (245,800) Note receivable - related party - - (100,000) Acquisition of property & equipment - - (12,910) ----------- ------------- ----------- Net cash used in investing activities - - (358,710) ----------- ------------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Issuance of Shares - - 567,007 Proceeds from stock to be issued for cash 10,000 Proceeds from advance subscriptions - - 1,772,983 Costs and expenses of advance subscriptions - - (79,710) Proceeds from (repayments of) related party loans 14,000 9,000 59,000 ----------- ------------- ----------- Net cash provided by financing activities 14,000 9,000 2,329,280 ----------- ------------- ----------- NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS 4,268 1,658 5,705 CASH & CASH EQUIVALENTS, BEGINNING BALANCE 1,437 655 - ----------- ------------- ----------- CASH & CASH EQUIVALENTS, ENDING BALANCE $ 5,705 $ 2,313 $ 5,705 =========== ============= ===========
The accompanying notes are an integral part of these financial statements. 5 CONCIERGE TECHNOLOGIES, INC. (A development stage company) NOTES TO UNAUDITED 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. (see note 10). 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 "). "PCA " 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. The accounting policies of the Company are in accordance with generally accepted accounting principles and conform to the standards applicable to development stage companies. Basis of Preparation The accompanying Interim Condensed Financial Statements are prepared in accordance with rules set forth in Retaliation SB of the Securities and Exchange Commission. As said, these statements do not include all disclosures required under generally accepted principles and should be read in conjunction with the audited financial statements for the year ended June 30, 2003. In the opinion of management, all adjustments consisting of normal reoccurring accruals have been made to the financial statements. The results of operation for the three months ended September 30, 2003 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2004. Reclassifications Certain prior period amounts have been reclassified to conform with the current period presentation. 2. RECENT PRONOUNCEMENTS On April 30, 2003, the FASB issued FASB Statement No. 149 ("SFAS 149"), "Amendment of Statement 133 on Derivative Instruments and Hedging Activities". FAS 149 amends and clarifies the accounting guidance on (1) derivative instruments (including certain derivative instruments embedded in other contracts) and (2) hedging activities that fall within the scope of FASB Statement No. 133 ("SFAS 133"), Accounting for Derivative Instruments and Hedging Activities. SFAS 149 also amends certain other existing pronouncements, which will result in more consistent reporting of contracts that are derivatives in their entirety or that contain embedded derivatives that warrant separate accounting. SFAS 149 is effective (1) for contracts entered into or modified after June 30, 2003, with certain exceptions, and (2) for hedging relationships designated after June 30, 2003. The guidance is to be applied prospectively. The adoption of SFAS No. 149 does not have a material impact on the Company's financial position or results of operations or cash flows. 6 CONCIERGE TECHNOLOGIES, INC. (A development stage company) NOTES TO UNAUDITED FINANCIAL STATEMENTS On May 15 2003, the FASB issued FASB Statement No. 150 ("SFAS 150"), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS 150 changes the accounting for certain financial instruments that, under previous guidance, could be classified as equity or "mezzanine" equity, by now requiring those instruments to be classified as liabilities (or assets in some circumstances) in the statement of financial position. Further, SFAS 150 requires disclosure regarding the terms of those instruments and settlement alternatives. SFAS 150 affects an entity's classification of the following freestanding instruments: a) Mandatorily redeemable instruments b) Financial instruments to repurchase an entity's own equity instruments c) Financial instruments embodying obligations that the issuer must or could choose to settle by issuing a variable number of its shares or other equity instruments based solely on (i) a fixed monetary amount known at inception or (ii) something other than changes in its own equity instruments d) SFAS 150 does not apply to features embedded in a financial instrument that is not a derivative in its entirety. The guidance in SFAS 150 is generally effective for all financial instruments entered into or modified after May 31, 2003, and is otherwise effective at the beginning of the first interim period beginning after June 15, 2003. For private companies, mandatorily redeemable financial instruments are subject to the provisions of SFAS 150 for the fiscal period beginning after December 15, 2003. The adoption of SFAS No. 149 does not have a material impact on the Company's financial position or results of operations or cash flows. 3. 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's did not earn any revenue through the period ended September 30, 2003 and at September 30, 2003, the Company has accumulated deficit of $2,813,095 including a net loss of $7,258 during the three month period ended September 30, 2003. 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, including 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 period ended September 30, 2003, towards (i) obtaining additional financing (ii) management of accrued expenses and accounts payable (iii) Development of the software "PCA " and (vi) evaluation of its distribution and marketing methods. Management believes that the above actions will allow the Company to continue operations through the next twelve months. 4. PREPAID EXPENSES The Company entered into software license agreements with two Delaware Corporations. One Corporation granted permission to the Company to utilize its 7 CONCIERGE TECHNOLOGIES, INC. (A development stage company) NOTES TO UNAUDITED FINANCIAL STATEMENTS software for the "PCA " development. The corporation was paid $202,500 as initial non-refundable license fee and was considered to be pre-paid royalties. The agreement calls for Concierge, Inc. to pay a royalty of $1.00 for the first million units sold and $.75 for units greater than 1,000,000. The second software license agreement granted the Company the rights to incorporate its software in the Company's personal communication attendant e-mail device. The corporation was paid $42,500 by Concierge, Inc. as a non-refundable, advance royalty payment. The agreement calls for the Company to pay a royalty of $1.10 for the first 100,000 units, thereafter $.85 per unit. The Company amortizes the prepaid royalties by the amount which is the greater of the amount computed using (a) the ratio that current gross revenues bear to the total of current and anticipated future gross revenues or (b) the straight-line method over the remaining estimated economic life. Per the guideline under SFAS 86 "Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed", amortization shall start when the product is available for general release to customers. The term of licenses is five years from the date the Company begins shipping of its product. The prepaid royalties will be amortized based on straight-line method over five-year period from the date shipping begins. 5. LOANS PAYABLE - RELATED PARTIES Current: The Company has notes payable amounting $290,208 payable to shareholders. The notes are non-interest bearing, unsecured and due on demand. Long term - Payable in the fiscal year ended June 30, 2005: The Company has a loan payable to shareholder amounting $5,000 plus interest that was due on September 30, 2002. The due date for this loan was extended to July 31, 2004 with the same interest rate of 10% per annum. The Company also has four separate loans payable to a shareholder and related party, related by common shareholder, amounting in the aggregate to $42,000 including accrued interest of $14,000 at 8% per annum. The loans are due on demand. In addition, the Company has a loan payable to a director/shareholder amounting to $3,500 plus interest due on September 1, 2004 with an interest rate of 8% per annum. 6. INCOME TAXES No provision was made for Federal income tax since the Company has significant net operating loss carryforward. Through September 30, 2003, the Company incurred net operating losses for tax purposes of approximately $2,530,000. Differences between financial statement and tax losses consist primarily of amortization allowance, was immaterial at September 30, 2003. The net operating loss carryforward may be used to reduce taxable income through the year 2023. 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 provision for income taxes consists of the state minimum tax imposed on corporations. The net deferred tax asset balance, due to net operating loss carryforwards, as of September 30, 2003 and 2002 were approximately $1,012,000 and $1,108,000, 8 CONCIERGE TECHNOLOGIES, INC. (A development stage company) NOTES TO UNAUDITED FINANCIAL STATEMENTS respectively. A 100% valuation allowance has been established against the deferred tax assets, as the utilization of the loss carrytforwards cannot reasonably be assured. 7. SHARES OF CONCIERGE, INC. ISSUED SUBJECT TO CONTINGENCY Concierge, Inc. (CI) issued 117,184 shares for cash totaling $202,061 and 354,870 shares for services of $3,549 during the year ended June 30, 2000. Since December 1998, CI sold securities to persons in six states in the U. S. CI did not file Form D or other filings in any of the states or with the SEC for such shares and did not properly follow the requirements for complying with available exemptions in each state. Accordingly, all such shares are subject to the contingency that they may have been issued without the availability of an exemption from registration under the Securities Act of 1933 and under the securities laws of each of the six states. Therefore, CI has treated all such shares issued since December 1998, as Common stock issued subject to contingency. Total 680,504 shares were issued subject to contingency through March 31, 2003 for cash and services amounting $266,610. 8. SUBSCRIPTIONS RECEIVED FOR COMMON STOCK SUBJECT TO CONTINGENCY Concierge, Inc. (CI) entered into subscription agreements to issue "post merger" shares in exchange for cash. Through December 31, 2000, CI had received advance subscriptions for a gross amount of $1,255,500 before deducting associated costs of $79,710, for 5,928,750 post merger shares. In the event the merger between CI and the Company is not completed prior to November 31, 2000, the obligation of the Company under this agreement may be satisfied by the issuance of shares in the Company equivalent on a pro-rata basis to the number of shares in "post merger" Corporation that are subject to this agreement. As mentioned in Note 10, CI merged with the Company on March 20, 2002. The Company filed a registration statement with the Securities and Exchange Commission ("the Commission") on June 8, 2000 related to the proposed merger, naming CI as the entity proposed to be merged into the Company. From July 1, 2000 through September 15, 2000, CI received additionally $487,500 as advance subscription for 2,127,500 post merger shares in an offering intended to be exempt from registration pursuant to the provisions of Section 4(2) of the Securities Act of 1933 and of Regulation D, Rule 506 of the Commission. It is possible, but not certain, that the filing of the registration statement by the Company and the manner in which CI conducted the sale of the 2,127,500 post merger shares of common stock constituted "general advertising or general solicitation" by CI. General advertising and general solicitation are activities that are prohibited when conducted in connection with an offering intended to be exempt from registration pursuant to the provisions of Regulation D, Rule 506 of the Commission. CI does not concede that there was no exemption from registration available for this offering. Nevertheless, should the aforementioned circumstances have constituted general advertising or general solicitation, CI would be denied the availability of Regulation D, Rule 506 as an exemption from the registration requirements of the Securities Act of 1933 when it sold the 2,127,500 post merger shares of common stock after June 8, 2000. Should no exemption from registration have been available with respect to the sale of these shares, the persons who bought them would be entitled, under the Securities Act of 1933, to the return of their subscription amounts if actions to recover such monies should be filed within one year after the sales in question. Accordingly, the amounts received by CI from the sale of these shares are set apart from Stockholders' Equity as "Subscription received for common stock subject to contingency" to indicate this contingency. The total contingent liabilities related to such shares amounted to $1,929,900 ($2,009,610 less cost and expenses of $79,710) as of September 30, 2003. 9 CONCIERGE TECHNOLOGIES, INC. (A development stage company) NOTES TO UNAUDITED FINANCIAL STATEMENTS 9. COMMON STOCK - SUBSEQUENT EVENT On October 7, 2003 the Company entered into a subscription agreement with an investor who would receive 1,000,000 shares of common stock, restricted under Rule 144, in exchange for $10,000 in cash. The funds were accepted on October 9, 2003. 10. MERGER AGREEMENT On January 26, 2000 the Company entered into an agreement of merger with Concierge, Inc. (CI), a California Corporation. Under the agreement, the outstanding 1,376,380 share of common stock of the CI were converted into 96,957,713 common stock of the Company on the basis of 70.444 shares of the Company for each share outstanding of the CI. The 96,957,713 post merger shares were distributed to the shareholders of CI on a pro-rata basis. For accounting purposes, the transaction was treated as a recapitalization of the CI, with CI as the accounting acquirer (reverse acquisition), and was accounted for in a manner similar to a pooling of interests. The operations of the Company have been included with those of the CI from the acquisition date. The Company had minimal assets before the merger and did not have significant operations prior to the merger. The merger was subject to approval by shareholders of both companies and Securities and Exchange Commission. The merger was consummated on March 20, 2002. 11. 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 income tax in the three month periods ended September 30, 2003 and 2002. The Company paid $0 for interest during the three month periods ended September 30, 2003 and 2002. 12. COMMITMENT The Company sub-leases office space in Los Angeles, California from Ardent, Ltd. The term of the lease was 26 months with monthly payments of $1,542. The lease expired on August 31, 2002. The Company is currently co-located with the president of the Company and pays no rent. 14. LITIGATIONS Concierge, Inc. filed a complaint against Emerald-Delaware, Inc. (ED), in the superior court for the County of Contra Costa on March 9, 2001 for breach of contract, negligence, fraud etc in relation to development of its products PCA. ED filed a cross complaint in the same court. The parties reached a settlement on October 9, 2001, whereby ED agreed to compensate CI by $50,000. The settlement amount was received during the year ended June 30, 2002 and has been reflected as settlement income. 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 as litigation settlement in the accompanying financial statements. 10 Item 2. Plan of Operation Our plan of operation for the next twelve months involves three strategic initiatives. (1) We hope to source and secure a development partner to upgrade the PCA to modern operating systems, including a server-based multi-user platform. The final nature of the proposed relationship between us and any development partner is yet to be determined. (2) We are also attempting to sell our remaining inventory of approximately 14,000 PCAs via a rejuvenation of our website presence and a link to eBay and PayPal. If successful, a sale of this inventory is expected to result in an infusion of approximately Two Hundred Fifty Thousand dollars ($250,000). (3) We are aggressively looking for development stage companies in the personal communications space with whom we can align ourselves via either a merger, cross channel marketing scheme, or other synergistic business combination. Through a combination of product offerings including hardware, wireless airtime, wireless Internet access, software offerings (such as the upgraded PCA product), and subscription services, we hope to build a vertically integrated company able to respond in timely fashion to the consumer demand for communications services. In preparation for this next phase of anticipated restructuring and possible refinancing, it is management's intention to resolve outstanding issues of debt and other liabilities through sale of our existing inventory. If the strategy proves successful, management believes such a vertically integrated company will be worth, as a whole, more than the sum of the otherwise separate entities. As such, we anticipate a resulting consolidated company may be a more attractive investment opportunity for the financial community in general. Leveraging the expertise of its management and directors, who have provided their time without cash compensation, we have established contact with several likely strategic partners. Should we be successful in our negotiations, management hopes to be able to acquire control of certain of these targeted companies through an equity exchange. Management is not seeking a transaction that would result in a change of control; however, it is likely that, if the transactions being contemplated by management are to be carried through to conclusion, our current shareholders would suffer some dilution. Further dilution to current shareholders is also possible, and likely, to occur simultaneous with a successful financing effort. The financing commitment will be a prerequisite to concluding any of the aforementioned acquisitions. 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 the company to co-location with his firm, The Wallen Group. We do not currently pay rent and have no lease for the facilities being provided by Mr. Neibert. As of September 30, 2003, we had no employees and no fixed overhead other than the variable cost of web hosting, legal and professional fees, fees charged by our transfer agent and minimum tax payments. We own no office fixtures, furniture or appliances. Our president, CEO and directors have been providing their services without cash compensation; however, there is no certainty as to how long such an arrangement may continue. Furthermore, although we have not accrued any ongoing salary or employee expenses and there is no arrangement to 11 do so, we expect that upon conclusion of a successful funding exercise that some compensation shall be agreed upon for our officers. Further, the company may find it more reasonable to compensate its directors and officers with shares of common stock in lieu of cash for past performance. Liquidity Our primary source of operating capital has been funding sourced through insiders or shareholders under the terms of unsecured promissory notes. The amount of borrowed funds have 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 pay down 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. Although our management will continue to provide service to the Company for the near term without pay, we will still require additional funding to maintain the corporation and market the remaining inventory of the PCA product. Management hopes to source the needed funds through a bulk sale of the PCA to one customer, who in turn will mass market the product for their own benefit. Debt financing of the acquisitions targeted for this year may also be possible; however, until such time as definitive documentation is agreed upon, such a financing remains speculative. If the financing is not available, the acquisitions themselves will also not be completed. In the event either the financing or the proposed acquisitions are not completed, our funds and inventory assets will be exhausted at some point and continuing operations may be impossible. On October 9, 2003 the company engaged the services of a financial advisor to assist with sourcing capital to be used for the acquisition strategy. An upfront fee of Ten Thousand dollars ($10,000) was negotiated and paid by the Company to the advisor. A success fee equal to 5% of the gross amount of money raised shall be due to the financial advisor should his efforts prove successful. As of November 12, 2003 we do not have a firm commitment for financing and there can be no assurances that our financial advisor will ultimately be successful. Item 3. Controls and Procedures Evaluation of disclosure controls and procedures. We maintain controls and procedures designed to ensure that information required to be disclosed in this report is recorded, processed, accumulated and communicated to our management, including our chief executive officer and our chief financial officer, to allow timely decisions regarding the required disclosure. Within the 90 days prior to the filing date of this report, our management, with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of the design and operation of these disclosure controls and procedures. Our chief executive officer and chief financial officer concluded, as of fifteen days prior to the filing date of this report, that these disclosure controls and procedures are effective. 12 Changes in internal controls. Subsequent to the date of the above evaluation, we made no significant changes in our internal controls or in other factors that could significantly affect these controls, nor did we take any corrective action, as the evaluation revealed no significant deficiencies or material weaknesses. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following exhibits are filed, by incorporation by reference, as part of this Form 10-QSB: Exhibit Item ------- ---- 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.** 10.1 - Agreement of Merger between Starfest, Inc. and Concierge, Inc.* 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. 13 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. (b) Forms 8-K None SIGNATURES Pursuant to the requirements of the Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: November 12, 2003 CONCIERGE TECHNOLOGIES, INC. By:/s/ David W. Neibert ------------------------------------ David W. Neibert, President 14 CONCIERGE TECHNOLOGIES, INC. Commission File No. 000-29913 Index to Exhibits to Form 10-QSB 09-30-03 The following exhibits are filed, by incorporation by reference, as part of this Form 10-QSB: Exhibit Item ------- ---- 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.** 10.1 - Agreement of Merger between Starfest, Inc. and Concierge, Inc.* 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. 1 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. 2