-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FJ8ntyoqUaQCQiXM8QZl1wOs3KmOj32r3aG+2BKg/Bs534ff8n1qR9YeYnva+uEc Z/Tq0CwmXRJO57Dq3shhPg== 0001060830-04-000145.txt : 20040517 0001060830-04-000145.hdr.sgml : 20040517 20040517161949 ACCESSION NUMBER: 0001060830-04-000145 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040331 FILED AS OF DATE: 20040517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCIERGE TECHNOLOGIES INC CENTRAL INDEX KEY: 0001005101 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 954442384 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-29913 FILM NUMBER: 04812690 BUSINESS ADDRESS: STREET 1: 22048 SHERMAN WAY STREET 2: SUITE 303 CITY: CANOGA PARK STATE: CA ZIP: 91303 BUSINESS PHONE: 8186100310 MAIL ADDRESS: STREET 1: 22048 SHERMAN WAY STREET 2: SUITE 303 CITY: CANOGA PARK STATE: CA ZIP: 91303 FORMER COMPANY: FORMER CONFORMED NAME: STARFEST INC DATE OF NAME CHANGE: 20000310 10QSB 1 concierge10qsb331-4.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 March 31, 2004 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 May 10, 2004, there were 141,292,749 shares of the Registrant's Common Stock, $0.001 par value, outstanding. Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] 1 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Page ---- Balance Sheet March 31, 2004 (Unaudited) 3 Statements of Operations Three Month Period Ended March 31, 2004 and 2003 and the Period from September 20, 1996 (Inception) to March 31, 2004 (Unaudited) 4 Statements of Cash Flows Periods Ended March 31, 2004 and 2003 and the Period from September 20, 1996 (Inception) to March 31, 2004 (Unaudited) 5 Notes to Unaudited Financial Statements 6 2 CONCIERGE TECHNOLOGIES, INC. (A development stage company) BALANCE SHEET MARCH 31, 2004 (Unaudited) ASSETS ------
CURRENT ASSETS: Cash & cash equivalents $ 5,573 ----------- $ 5,573 =========== LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- CURRENT LIABILITIES: Accrued expenses $ 366,794 Loans Payable-Shareholders 340,708 ----------- Total current liabilities 707,502 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 132,292,749 132,365 Additional paid in capital 536,654 Deficit accumulated during the development stage (3,300,848) ----------- Total stockholders' deficit (2,631,829) ----------- $ 5,573 ===========
The accompanying notes are an integral part of these unaudited financial statements. 3 CONCIERGE TECHNOLOGIES, INC. (A development stage company) STATEMENTS OF OPERATIONS THREE MONTH AND NINE MONTH PERIODS ENDED MARCH 31, 2004 AND 2003 AND THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO MARCH 31, 2004 (Unaudited)
Three month periods ended Nine month periods ended September 20, March 31, March 31, March 31, March 31, 1996 (Inception) 2004 2003 2004 2003 to March 31, 2004 ------------ ------------- ------------ ------------ ------------------ REVENUE $ - $ - $ - $ - $ - COSTS AND EXPENSES Product launch Expenses - - - - 1,077,785 General & Administrative Expenses 472,004 6,499 494,211 37,332 1,855,736 ------------ ------------- ------------ ------------ ------------ TOTAL COSTS AND EXPENSES 472,004 6,499 494,211 37,332 2,933,521 OTHER INCOME/(EXPENSES) Settlement income, net - - - - 52,600 Litigation settlement - - - - (135,000) ------------ ------------- ------------ ------------ ------------ TOTAL OTHER INCOME/(EXPENSES) - - - - (82,400) ------------ ------------- ------------ ------------ ------------ NET LOSS BEFORE INCOME TAXES (472,004) (6,499) (494,211) (37,332) (3,015,921) Provision of Income Taxes - - 800 800 6,400 ------------ ------------- ------------ ------------ ------------ NET INCOME (LOSS) $ (472,004) $ (6,499) $ (495,011) $ (38,132) $ (3,022,321) ============ ============= ============ ============ ============ WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 127,885,157 126,292,749 128,398,204 125,725,219 ============ ============= ============ ============ BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00) ============ ============= ============ ============
The accompanying notes are an integral part of these unaudited financial statements. 4 CONCIERGE TECHNOLOGIES, INC. (A development stage company) STATEMENTS OF CASH FLOWS NINE MONTH PERIODS ENDED MARCH 31, 2004 AND 2003 AND THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO MARCH 31, 2004 (Unaudited)
September 20, March 31, March 31, 1996 (Inception) 2004 2003 to March 31, 2004 ---------- ---------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(495,011) $ (38,132) $(3,022,321) Adjustments to reconcile net loss to net cash used in operating activities: Issuance of shares for services 216,000 - 216,000 Impairment of asset 245,800 - 245,800 Depreciation and amortization - 903 12,910 Stock issued for services - - 280,352 Increase in current assets: Prepaid expense - - (245,800) Increase (decrease) in current liabilities: Accrued expenses 3,347 7,618 282,262 --------- ---------- ----------- Net cash used in operating activities (29,864) (29,611) (2,230,797) --------- ---------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Note receivable - related party - - (100,000) Acquisition of property & equipment - - (12,910) --------- ---------- ----------- Net cash used in investing activities - - (112,910) --------- ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Issuance of Shares 20,000 - 587,007 Proceed from stock to be issued - 10,000 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 19,000 59,000 --------- ---------- ----------- Net cash provided by financing activities 34,000 29,000 2,349,280 --------- ---------- ----------- NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 4,136 (611) 5,573 CASH & CASH EQUIVALENTS, BEGINNING BALANCE 1,437 655 - --------- ---------- ----------- CASH & CASH EQUIVALENTS, ENDING BALANCE $ 5,573 $ 44 $ 5,573 ========= ========== ===========
The accompanying notes are an integral part of these unaudited 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 nine months ended March 31, 2004 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 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 6 CONCIERGE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED FINANCIAL STATEMENTS 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. In December 2003, the Financial Accounting Standards Board (FASB) issued a revised Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46R). FIN 46R addresses consolidation by business enterprises of variable interest entities and significantly changes the consolidation application of consolidation policies to variable interest entities and, thus improves comparability between enterprises engaged in similar activities when those activities are conducted through variable interest entities. The Company does not hold any variable interest entities. 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 March 31, the Company has accumulated deficit of $3,300,848 including a net loss of $495,011 during the nine month period ended March 31, 2004. 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 March 31, 2004, 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 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 called 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. 7 CONCIERGE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED FINANCIAL STATEMENTS 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. The Company evaluated value of its prepaid expenses at March 31, 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 at March 31, 2004. The impairment of expense has been included with General and administrative expenses in the accompanying financial statements. 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. 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. The Company has recorded interest expense of $3,525 and 2,122 for the nine month period ended March 31, 2004 and 2003, respectively. 6. INCOME TAXES No provision was made for Federal income tax since the Company has significant net operating loss carryforward. Through March 31, 2004, the Company incurred net operating losses for tax purposes of approximately $3,020,000. Differences between financial statement and tax losses consist primarily of amortization allowance, was immaterial at March 31, 2004. The net operating loss carryforward may be used to reduce taxable income through the year 2024. 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 March 31, 2004 was approximately $1,026,000. A 100% valuation allowance has been established against the deferred tax assets, as the utilization of the loss carrytforwards cannot reasonably be assured. 8 CONCIERGE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED FINANCIAL STATEMENTS 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 March 31, 2004. 9. COMMON STOCK 9 CONCIERGE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED FINANCIAL STATEMENTS In October 2003, the Company issued 1,000,000 shares of common stock, restricted under Rule 144, in exchange for $10,000 in cash per subscription agreement. On January 5, 2004, the Company issued 1,000,000 shares of common stock, restricted under Rule 144, in exchange for $10,000 in cash to a former officer of an entity acquired by the Company subsequent to March 31, 2004. Subsequently, the former officer of the acquired entity was appointed to the Board of directors of the Company. On January 5, 2004 the company issued 4 million shares of its common stock to Ryan Consultants Ltd. of St. Helier Jersey, U.K. The shares were issued in settlement of an invoice in the amount of $80,000. The invoice was tendered by Ryan Consultants for the services performed by the president of the Company on behalf of Ryan Consultants through March 31, 2004. The president of the Company is retained by Ryan Consultants as an agent in the U.S. to oversee their investments and other activities. Ryan Consultants has also agreed to pursue financing in Europe for Concierge Technologies and Planet Halo. The shares are unregistered and their sale is restricted under SEC Rule 144. The president of the Company disclaims any beneficial ownership in the shares. The stocks were valued at the average fair market value of the shares of the Company as quoted on OTCBB on the date of issuance. The Company has recorded issuance of shares valued at $216,000 as consulting expense, as a part of General and administrative expense in the accompanying financials statements. 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 nine month periods ended March 31, 2004 and 2003. The Company paid $0 for interest during the nine month periods ended March 31, 2004 and 2003. 12. COMMITMENT The Company sub-leased 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. 13. LITIGATION 10 CONCIERGE TECHNOLOGIES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO UNAUDITED FINANCIAL STATEMENTS 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. 14. SUBSEQUENT EVENT 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 then retired and cancelled. The Company is now the 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 ----------------- Property and equipment $ 15,541 Goodwill 484,459 --------- $ 500,000 ========= Consideration paid Amount -------------------- ------ 10,000,000 shares of common stock $ 500,000 =========
Unaudited Pro-forma revenue, net loss and loss per share assuming the transaction had been completed at the beginning of the periods reported, on pro-forma financial results would be as follows:
For the nine month periods ended March 31, 2004 March 31, 2003 -------------- -------------- (Unaudited) (Unaudited) Revenue $ - $ - Net loss for the period $ 505,510 $ 61,325 Net loss per share $ 0.00 $ 0.00
11 Item 2. Plan of Operation Our plan of operation for the next twelve months is to do the following: - exploit the opportunities afforded us through our acquisition of Planet Halo by implementing the continued development of the "Halo" device and its subsequent production, - source the needed capital for the Halo development through an equity offering, or a debenture instrument convertible into equity, - seek other synergistic companies suitable for partnering with the distribution of the Halo and its operation on Wi-Fi networks, - sell for approximately $250,000 our remaining inventory of approximately 14,000 PCAs via a rejuvenation of our website presence and a link to eBay and PayPal. Through a combination of product offerings including the Halo Internet appliance/cellular telephone device, the Halomail wireless gateway, broadband 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. Critical to this endeavor will be our ability to resolve outstanding issues of debt and other liabilities through the sale of our existing inventory. 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". The Halo is able to send and receive email, short messages, run applications such as address book, calculator, scheduler, etc and operates as a fully functional cellular telephone. 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. Concierge plans to move the Halo device into production readiness and to seek partners for the launch of the Halomail gateway on service provider networks. 12 Planet Halo will continue to be operated from offices located in Ventura, California, and as a wholly-owned subsidiary of Concierge Technologies. Marc Angell is the President of Planet Halo and is also responsible for administering the operating budget, which is approved by the Board of Directors of Concierge Technologies. In an effort to improve the level of expertise on the Board of Directors, and to provide representation for Planet Halo, Marc Angell (the founder and C.E.O. of Planet Halo) and Pat Rodden (a shareholder and officer with Fiori Industrial Design, a vendor of Planet Halo) have been elected to the Board of Directors of Concierge. The directors of Planet Halo include Marc Angell, David Neibert and Sherry Sparks. The term of office for the new directors shall continue in accordance with our bylaws and pending approval of our shareholders at the next meeting of shareholders. Our primary website presence at the domain name "conciergetech.com" has been discontinued effective February 1, 2004 due to a dispute with our former consultant, Dave Cook. Mr. Cook is claiming ownership of the domain name and has rendered it inactive. The Company believes that it owns the domain name; however, until the dispute is resolved the Company has reverted to another of its registered domain names - "pcahome.com" - for the hosting of its website. It is uncertain what effects, if any, the change of domain names will have on the results of prior marketing efforts promoting the "conciergetech.com" site. 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. We do not currently pay rent and have no lease for the facilities being provided by Mr. Neibert. As of May 5, 2004, 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 to this point; however, our President was unable to continue in his capacity without compensation for past and future services. The Company has negotiated a payment to Mr. Neibert that secures his services for the period commencing with his presidency in 2002 and continuing through June 30, 2004. Other officers have not been compensated as of May 5, 2004 and are continuing to provide their services for the indeterminate future. There is no assurance that they will continue without compensation, or that Mr. Neibert will continue his service after June 30, 2004. Liquidity Our primary source of operating capital has been funding sourced through insiders or shareholders under the terms of unsecured promissory notes. In two instances we have sold shares of our common stock in exchange for cash. The amount of borrowed funds and funds from equity sales have been sufficient to pay 13 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 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 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 and market the remaining inventory of the PCA product. With the acquisition of Planet Halo there are added demands for operating capital. As part of the conditions for the closing of the acquisition, Marc Angell has agreed to loan the amount of money required to fund the approved Planet Halo operating budget for at least the next 6 months. The Company has been aggressively pursuing financing for the funding of the Halo device project targeted for this year and has retained a financial advisor to assist with the effort. Until such time as definitive agreements are reached with investors, such a financing remains speculative. If the financing is not available, the Halo may not be put into production. In the event the financing is not completed, our funds and inventory assets will be exhausted at some point and continuing operations may be impossible. 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. 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: 14 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. 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. 15 (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: May 13, 2004 CONCIERGE TECHNOLOGIES, INC. By:/s/ David W. Neibert -------------------------------------- David W. Neibert, President 16 CONCIERGE TECHNOLOGIES, INC. Commission File No. 000-29913 Index to Exhibits to Form 10-QSB 03-31-04 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 EX-31 2 doc2.txt CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) I, Allen E. Kahn, Chief Executive Officer of the registrant, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Concierge Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 13, 2004 /s/ Allen E. Kahn --------------------------------------- Allen E. Kahn Chief Executive Officer Exhibit 31 Page 1 of 1 Page EX-31.1 3 doc3.txt CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) I, Allen E. Kahn, Chief Financial Officer of the registrant, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Concierge Technologies, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies and material weaknesses in the design or operation of internal control which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 13, 2004 /s/ Allen E. Kahn -------------------------------------------------- Allen E. Kahn Chief Financial Officer Exhibit 31.1 Page 1 of 1 Page EX-32 4 doc4.txt CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the accompanying Quarterly Report of Concierge Technologies, Inc. (the "Company") on Form 10-QSB for the period ended March 31, 2004 (the "Report"), I, Allen E. Kahn, Chief Executive Officer of the Company, hereby certify that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 13, 2004 /s/ Allen E. Kahn -------------------------------------------------- Allen E. Kahn Chairman and Chief Executive Officer The above certification is furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of the Form 10-QSB or as a separate disclosure document. Exhibit 32 Page 1 of 1 Page EX-32.1 5 doc5.txt CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the accompanying Quarterly Report of Concierge Technologies, Inc. (the "Company") on Form 10-QSB for the period ended March 31, 2004 (the "Report"), I, Allen E. Kahn, Chief Financial Officer of the Company, hereby certify that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: May 13, 2004 /s/ Allen E. Kahn -------------------------------------------------- Allen E. Kahn Chief Financial Officer The above certification is furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) and is not being filed as part of the Form 10-QSB or as a separate disclosure document. Exhibit 32.1 Page 1 of 1 Page -----END PRIVACY-ENHANCED MESSAGE-----