NOTE

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Accounting Principles

The Company has prepared the accompanying financial statements on a consolidated basis. In the opinion of management, the accompanying consolidated balance sheets and related statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation, prepared on an accrual basis, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information included in this Form

-Q should be read in conjunction with information included in the Company’s

2018

Form

-K filed on

September 28, 2018

with the U.S. Securities and Exchange Commission.

Principles of Consolidation

The accompanying condensed consolidated financial statements, which are referred to herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Original Sprout.

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements are in conformity with U.S. GAAP which 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.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid debt instruments with original maturities of

three

months or less. The Company maintains its cash and cash equivalents in financial institutions in the United States, Canada, and New Zealand. Accounts in the United States are insured by the Federal Deposit Insurance Corporation up to

$250,000

per depositor, and accounts in Canada are insured by the Canada Deposit Insurance Corporation up to

CD$100,000

per depositor. Accounts in New Zealand are uninsured. The Company has, at times, held deposits in excess of insured amounts, but the Company does

not

expect any losses in such accounts.

Accounts Receivable, net and Accounts Receivable - Related Parties

Accounts receivable, net, consist of receivables from the Brigadier, Gourmet Foods and Original Sprout businesses. The Company does

not

currently maintain an allowance for doubtful accounts as it believes all accounts are collectible. Management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes in customer payment patterns to determine whether or

not

an account should be deemed uncollectible. Reserves, if any, are recorded on a specific identification basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of

March 31, 2019

and

June 30, 2018,

the Company had

nil

and

$51,747,

respectively, listed as doubtful accounts.

Accounts receivable - related parties, consist of fund asset management fees receivable from the Wainwright business. Management fees receivable generally consist of

one

month of management fees which are collected in the month after they are earned. As of

March 31, 2019,

and

June 30, 2018,

there is

allowance for doubtful accounts as all amounts are deemed collectible.

Major Customers & Suppliers – Concentration of Credit Risk

Concierge, through Brigadier, is dependent upon its contractual relationship with an alarm monitoring company who pays Brigadier for supplying and installing alarm systems and continues to remit monthly recurring revenues in exchange for customer service and support functions. Sales to the largest customer, which includes system installations and recurring monthly payments, totaled

46%

of the total revenues for the

three

months ended

March 31, 2019

and

52%

for the

nine

months ended

March 31, 2019

as compared to

51%

of the total revenues for the

three

month period ended

March 31, 2018

and

39%

for the

nine

month period ended

March 31, 2018,

respectively, while accounting for approximately

31%

and

35%

of accounts receivable as of

March 31, 2019

and

June 30, 2018,

respectively. Another large customer for the

three

months ended

March 31, 2019

accounted for

12%

of the total revenues and

23%

of the accounts receivable while being insignificant in total sales for the

nine

month period ending

March 31, 2019.

third

significant customer for the

three

months ended

March 31, 2019

accounted for

10%

of total revenues and

16%

of accounts receivable. Neither of the later

two

customers had significant sales totals for the

three

nine

month periods ended

March 31, 2019.

Concierge, through Gourmet Foods, has

three

major customer groups comprising the gross revenues to Gourmet Foods;

) grocery,

) gasoline convenience stores, and

) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are

long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the

three

months ended

March 31, 2019

and

2018,

our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately

19%

and

22%,

respectively, of our gross sales revenues as compared to

21%

and

20%,

respectively, for the

nine

months ended

March 31, 2019

and

2018.

The same customer accounted for

25%

and

33%

of our accounts receivable for as of

March 31, 2019

and

June 30, 2018,

respectively. The

second

largest customer in the grocery industry accounted for approximately

11%

and

12%

of our gross revenues for the

three

and

nine

month periods ended

March 31, 2019,

respectively, as compared to

12%

and

11%

of gross revenues for the

three

and

nine

month periods ended

March 31, 2018.

The same customer accounted for

16%

of our accounts receivable as of

March 31, 2019

compared to

16%

as of

June 30, 2018.

In the gasoline convenience store market we supply

two

major channels. The largest is a marketing consortium of gasoline dealers who, for the

three

and

nine

months ended

March 31, 2019

accounted for approximately

46%

and

44%,

respectively, of our gross sales revenues as compared to

42%

and

42%

for the

three

and

nine

months ended

March 31, 2018.

single member of the consortium is responsible for a significant portion of our accounts receivable. The

second

largest are independent operators accounting for less than

10%

of gross sales however

single independent operator is responsible for a significant portion of our accounts receivable. The

third

category of independent retailers and cafes accounted for the balance of our gross sales revenue however the group is fragmented and

one

customer accounts for a significant portion of our revenues or accounts receivable. Gourmet Foods is

not

dependent upon any

one

major supplier as many alternative sources are available in the local market place should the need arise.

Concierge, through Original Sprout, has thousands of customers and, from time to time, certain of them become significant during specific reporting periods, but

may

not

be significant during other periods. Original Sprout had

significant customers for the

three

month period ended

March 31, 2019,

accounting for

13%

of total revenues each. Neither of these customers had significant sales for the

three

month period ended

March 31, 2018.

One of these customers also accounted for

11%

of the total revenues for the

nine

month period ended

March 31, 2019.

Because the current business only commenced on

December 18, 2017,

there is

meaningful comparison data for the

nine

month period ending

March 31, 2018.

One of these same customers accounted for

22%

of accounts receivable at

March 31, 2019

and

10%

June 30, 2018,

while the other was insignificant. Original Sprout is dependent upon its relationship with a product packaging company who, at the direction of Original Sprout, manufactures the products, packages them in appropriate containers, and delivers the finished goods to Original Sprout for distribution to its customers. All of Original Sprout’s products are currently produced by this packaging company, although if this relationship were to fail there are other similar packaging companies available to Original Sprout at competitive pricing.

For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated

three

and

nine

month revenues as of

March 31, 2019

and

March 31, 2018

along with the accounts receivable at

March 31, 2019

as compared with

June 30, 2018

as depicted below.

	Three Months Ended March 31, 201 9				Three Months Ended March 31, 201 8
	Revenue				Revenue
Fund
USO	$	1,803,427	51	%	$	2,187,506	50	%
USCI		912,419	25	%		1,038,924	24	%
UNG		432,915	12	%		648,691	15	%
All Others		418,941	12	%		470,113	11	%
Total	$	3,567,702	100	%	$	4,345,234	100	%

	Nine Months Ended March 31, 201 9				Nine Months Ended March 31, 201 8
	Revenue				Revenue
Fund
USO	$	5,641,829	48	%	$	7,630,965	53	%
USCI		3,262,108	28	%		2,996,917	21	%
UNG		1,510,303	13	%		2,220,710	16	%
All Others		1,315,449	11	%		1,500,214	10	%
Total	$	11,729,689	100	%	$	14,348,806	100	%

	March 31, 201 9				June 30, 201 8
	Accounts Receivable				Accounts Receivable
Fund
USO	$	598,810	49	%	$	674,535	46	%
USCI		309,916	26	%		431,288	30	%
UNG		142,351	12	%		182,399	12	%
All Others		156,284	13	%		169,937	12	%
Total	$	1,207,361	100	%	$	1,458,159	100	%

Inventories

Inventories, consisting primarily of food products and packaging in New Zealand, hair and skin care finished products and components in the U.S. and security system hardware in Canada, are valued at the lower of cost (determined on a FIFO basis) or net realizable value. Inventories include product cost, inbound freight and warehousing costs where applicable. Management compares the cost of inventories with the net realizable value and an allowance is made for writing down the inventories to their net realizable value, if lower. For the

nine

months ended

March 31, 2019

and

2018

impairment to inventory value was recorded as

and

$0,

respectively. An assessment is made at the end of each fiscal year to determine what inventory items have remained in stock from the close of the previous fiscal year. If such items exist, either a reserve is established to reduce inventory value by the value of these items, or these items are removed from the inventory valuation and recorded as an expense. For the

three

and

nine

month periods ended

March 31, 2019

and

March 31, 2018,

the expense for slow moving or obsolete inventory was

for each. As of

March 31, 2019

and

June 30, 2018

there was

reserve established for slow moving inventory valuation.

Property and Equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and leasehold improvements are capitalized. Office furniture and equipment include office fixtures, computers, printers and other office equipment plus software and applicable packaging designs. Leasehold improvements, which are included in plant and equipment, are depreciated over the shorter of the useful life of the improvement and the length of the lease. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed using the straight-line method over the estimated useful life of the asset (see Note

to the Financial Statements).

Category	Estimated Useful Life (in years)
Plant and equipment:	5	to	10
Furniture and office equipment:	3	to	5
Vehicles	3	to	5

Intangible Assets

Intangible assets consist of brand names, domain names, recipes, non-compete agreements and customer lists. Intangible assets with finite lives are amortized over the estimated useful life and are evaluated for impairment at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value

may

not

be recoverable. The Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the discounted expected future cash flows. If the future discounted cash flows are less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. There was

impairment recorded for the

nine

months ended

March 31, 2019

2018.

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase businesses combination. Goodwill is tested for impairment on an annual basis during the

fourth

quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill

may

be impaired. The goodwill impairment test is a

two

-step test. Under the

first

step, the fair value of the reporting unit is compared with its carrying value including goodwill. If the fair value of the reporting unit exceeds its carrying value, step

two

does

not

need to be performed. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step

two

of the impairment test. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. There was

impairment recorded for the

nine

months ended

March 31, 2019

2018.

Impairment of Long-Lived Assets

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. There was

impairment recorded for the

three

nine

months ended

March 31, 2019

March 31, 2018.

Investments and Fair Value of Financial Instruments

Investments are classified as available-for-sale securities. The Company measures the investments at fair value at period end with any changes in fair value reflected as unrealized gains or (losses) on the condensed consolidated statements of comprehensive income. The Company values its investments in accordance with Accounting Standards Codification ("ASC")

820

–

Fair Value Measurements and Disclosures

(“ASC

820”

). ASC

820

defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurement. The changes to past practice resulting from the application of ASC

820

relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurement. ASC

820

establishes a fair value hierarchy that distinguishes between: (

) market participant assumptions developed based on market data obtained from sources independent of the Company (observable inputs) and (

) The Company’s own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The

three

levels defined by the ASC

820

hierarchy are as follows:

Level

– Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level

– Inputs other than quoted prices included within Level

that are observable for the asset or liability, either directly or indirectly. Level

assets include the following: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are

not

active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level

– Unobservable pricing input at the measurement date for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are

not

available.

In some instances, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level that is significant to the fair value measurement in its entirety. There were

transfers between levels during the

nine

months ended

March 31, 2019

and

2018.

Revenue Recognition

Revenue consists of fees earned through management of investment funds, sale of gourmet meat pies and related bakery confections in New Zealand, security alarm system installation and maintenance services in Canada, and wholesale distribution of hair and skin care products. Revenue is accounted for net of sales taxes, sales returns, trade discounts. Product is considered delivered to the customer once it has been shipped and title, risk of loss and rewards of ownership have been transferred. For most of the Company’s product sales or services, these criteria are met at the time the product is shipped, the subscription period commences, or the management fees are accrued. For our Brigadier subsidiary in Canada, the Company operates under contract with an alarm monitoring company that pays a percentage of their recurring monitoring fee to Brigadier in exchange for continued customer service and support functions with respect to each customer maintained under contract by the monitoring company.

Recently Adopted Accounting Pronouncements -

May 2014,

the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that set forth a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted this new standard and its related amendments as of

July 1, 2018

using the modified retrospective transition method, whereby the cumulative effect of initially applying the new standard recognized as an adjustment to the opening balance of stockholders equity. Results for reporting periods commencing on or after

July 1, 2018

are presented under the new standard, while prior period amounts are

not

adjusted and continue to be reported under the accounting standards in effect for that prior period. The impact of adoption did

not

have a material effect on our financial results. The adoption of the new standard impacted the identification of separate obligations for certain sales of security systems and related monitoring sales. The Company generates revenue, in part, through contractual monthly recurring fees received for providing ongoing customer support services to monitoring company clientele. The

five

-step process governing contract revenue reporting includes:

Identifying the contract(s) with customers

Identifying the performance obligations in the contract

Determining the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when or as the performance obligation is satisfied

Transactions involve security systems that are sold outright to the customer where the Company's performance obligations include customer support services and the sale and installation of the security systems. For such arrangements, the Company allocates a portion of the transaction price to each performance obligation based on a relative stand-alone selling price. Revenue associated with the sale and installation of security systems is recognized once installation is complete, and is reflected as security alarm revenue in the Condensed Consolidated Statements of Operations. Revenue associated with customer support services is recognized as those services are provided, and is included as a component of security alarm revenue in the Condensed Consolidated Statements of Operations, which for the

three

and

nine

months ended

March 31, 2019,

were approximately

$181

thousand and

$545

thousand, respectively, or approximately

22%

and

23%,

of the total security alarm revenues. These revenues for the

three

and

nine

months ended

March 31, 2019

account for approximately

and

3%,

respectively, of total consolidated revenues.

None

of the other subsidiaries of the Company generate revenues from long term contracts.

Because the Company has

contract with the end user, and the monthly payments for customer support services are made to the Company by the monitoring company who has a contract with the end user, and end user customers are subject to cancellation through

control of the Company; therefore,

deferred revenues or contingent liability reserves have been established with respect to these contracts. The services are deemed delivered as the obligation is acknowledged on a monthly basis. Other impacts due to adoption of the new standard include a reclassification of certain expenses from selling, general and administrative expense to cost of goods sold. These reclassifications applied to all expenses that are incurred due to receipt of revenues or recording of a sales invoice and included such items as sales commissions, credit card processing fees, technician wages for warranty services, out-bound shipping, and customer support functions. The overall effect was a slight increase to cost of goods sold and an equal reduction in selling, general and administrative expenses with

change in operating income. These reclassifications were applied to all subsidiary companies and had

material effect on a consolidated basis to our condensed consolidated statements of operations.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than

not

that these items will either expire before the Company is able to realize their benefits or if future deductibility is uncertain.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than

not

that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are

not

offset or aggregated with other positions. Tax positions that meet the more-likely-than-

not

recognition threshold are measured as the largest amount of tax benefit that is more than

percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

Marketing and Advertising Costs

The Company expenses the cost of marketing and advertising as incurred. Marketing and advertising costs for the

three

and

nine

months ended

March 31, 2019

were approximately

$0.7

million and

$2.3

million, respectively, as compared to approximately

$1.0

million and

$2.7

million for the

three

and

nine

month periods ended

March 31, 2018.

Other Comprehensive Income (Loss)

Foreign Currency Translation

We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC

830

30,

Foreign Currency Translation

. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier Security System use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the weighted average exchange rate throughout the period. Foreign currency transaction gains and (losses) can also occur if a transaction is settled in a currency other than the entity's functional currency. Accumulated currency translation gains and (losses) are classified as an item of accumulated other comprehensive income (loss) in the stockholders’ equity section of the consolidated balance sheet.

Short-Term Investment Valuation

January 2016,

the FASB issued authoritative guidance related to the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. Under the new guidance, equity investments with readily determinable fair values, except those accounted for under the equity method, will be measured at fair value with changes in fair value recognized in earnings rather than other comprehensive income (loss). In addition, this update clarifies the guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from the unrealized losses on certain debt securities. The Company adopted this guidance effective on

July 1, 2018.

See Recent Accounting Pronouncements below related to

July 1, 2018

reclassification of accumulated other comprehensive income to retained earnings. Besides this reclassification there was

material impact to Consolidated Financial Statements as a result of the adoption.

Segment Reporting

The Company defines operating segments as components about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performances. The Company allocates its resources and assesses the performance of its sales activities based on the geographic locations of its subsidiaries (Refer to Note

of the Financial Statements).

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are

not

limited to, future expected cash flows from acquired users, acquired trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results

may

differ from estimates. During the measurement period, which is

one

year from the acquisition date, we

may

record adjustments to the assets acquired and liabilities assumed. For the each of the

three

and

nine

months ended

March 31, 2019

and

2018,

a determination was made that

adjustments were necessary, except for the amount provisionally recorded to goodwill as related to the purchase of assets by Original Sprout. After the results of an independent valuation of the identifiable intangible assets were known, the Company's subsidiary Original Sprout restated its purchase price allocation in accordance with the table found in Note

to these financial statements.

Recent Accounting Pronouncements

July 1, 2018

the Company adopted ASU

2016

Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities

and Accounting Standards Codification ("ASC")

606

Revenue from Contracts with Customers

("ASC

606"

). A summary of the effects of the initial adoption of ASU

2016

and ASC

606

follows:

	ASU 2016-01			ASC 606		Total
Increase (decrease):
Assets	$	-		$	-	$	-
Liabilities	$	-		$	-	$	-
Accumulated other comprehensive income	$	(279,951	)	$	-	$	(279,951	)
Retained earnings	$	279,951		$	-	$	279,951

The above (“ASU

2016

01”

) entry reclasses accumulated gains from changes in short-term investment valuations previously recorded in comprehensive income to retained earnings. ASU

2016

requires that unrealized gains and losses arising from changes in market values of our investments in equity securities be recorded in the condensed consolidated statements of operations rather than in accumulated other comprehensive income (loss) on the balance sheet. Prior to

July 1-

2018,

investment gains and losses related to equity securities were reflected on the condensed consolidated statements of comprehensive income.

The Company has reviewed new accounting pronouncements issued between

September 28, 2018,

the filing date of our most recent prior Annual Report on Form

-K, and the filing date of this Quarterly Report on Form

-Q and has determined that

new pronouncements issued are relevant to the Company, and/or have, or will have, a material impact on the Company’s consolidated financial position, results of operations or disclosure requirements.