NOTE

13.

BUSINESS COMBINATIONS

Acquisition of the assets of The Original Sprout, LLC

Kahnalytics, Inc., a wholly owned subsidiary of Concierge Technologies domiciled in California, was founded during

May 2015

for the purpose of carrying on the residual business from the disposal of Concierge Technologies' former subsidiary, Wireless Village dba/Janus Cam. As that business segment slowly wound down over the ensuing

two

years, management began a search for another business opportunity for Kahnalytics. Accordingly, on

December 18, 2017,

Kahnalytics acquired all of the assets of The Original Sprout, LLC, a California limited liability company. Simultaneous with the acquisition, Kahnalytics registered a "doing business as" (or "dba") name of “Original Sprout” and transitioned its business to the manufacture, warehousing and wholesale distribution of non-toxic, vegan, hair and skin care products under the brand name Original Sprout. The acquisition by Kahnalytics was financed through a non-interest bearing note from Concierge Technologies. The purchase price was approximately

$3.5

million with payments to be made over the course of a

twelve

-month period and per the estimated allocation as depicted in the following table.

Item	Amount
Inventory	$	371,866
Accounts receivable		288,804
Furniture, fixtures and equipment		1,734
Pre-payments of inventory		8,775
Discount on installment payments**		64,176
Intangible assets*		2,330,000
Goodwill		416,817
Total Purchase Price	$	3,482,172

*See Note

for further detail of intangible assets acquired

**This amount represents a discount on installment payments and is charged to interest expense as incurred.

On the closing date of the transaction,

December 18, 2017,

Kahnalytics paid

$982,172

in cash towards the purchase price and deposited an additional

$1,250,000

in an attorney-held client trust account which was released to the sellers, after downward adjustments due to changes in acquired accounts receivable, on

May 18, 2018.

The balance of the purchase price,

$1,250,000,

subject to downward adjustment for prior payments, resulted in a balance of

$1,160,000

which was paid on

January 5, 2019.

Supplemental Pro Forma Information

The following unaudited supplemental pro forma information for the

three

and

nine

month periods ending

March 31, 2019

and

2018,

assumes the acquisition of the Original Sprout LLC assets had occurred as of

July 1, 2017,

giving effect on a pro forma basis to purchase accounting adjustments such as depreciation of property and equipment, amortization of intangible assets, and acquisition related costs. The pro forma data is for informational purposes only and

may

not

necessarily reflect the actual results of operations had the assets of Original Sprout LLC been operated as part of the company since

July 1, 2017.

Furthermore, the pro forma results do

not

intend to predict the future results of operations of the Company.

The following table presents consolidated unaudited results of operations for the

three

and

nine

month periods ended

March 31, 2019

and

2018

assuming the acquisition of the Original Sprout LLC assets had occurred as of

July 1, 2017.

	Nine Months Ended		Nine Months Ended
	March 31, 201 9		March 31, 201 8
	Actual		Pro Forma (1)
Net Revenues	$	20,129,560	$	23,467,041
Net Income	$	424,551	$	1,436,402
Basic Earnings per Share	$	0.01	$	0.05
Diluted Earnings per Share	$	0.01	$	0.04

(

)

Includes the operation of the assets acquired from Original Sprout on a consolidated basis and the estimated transaction costs, amortization of intangible assets, and estimated income tax.