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0001654954-16-001392.txt : 20160811 0001654954-16-001392.hdr.sgml : 20160811 20160811132935 ACCESSION NUMBER: 0001654954-16-001392 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20160602 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160811 DATE AS OF CHANGE: 20160811 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: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-29913 FILM NUMBER: 161823904 BUSINESS ADDRESS: STREET 1: 29115 VALLEY CENTER RD. K-206 CITY: VALLEY CENTER STATE: CA ZIP: 92082 BUSINESS PHONE: 866-800-2978 MAIL ADDRESS: STREET 1: 29115 VALLEY CENTER RD. K-206 CITY: VALLEY CENTER STATE: CA ZIP: 92082 FORMER COMPANY: FORMER CONFORMED NAME: STARFEST INC DATE OF NAME CHANGE: 20000310 8-K/A 1 cncg_8ka.htm PRIMARY DOCUMENT Blueprint

U.S. SECURITIES AND EXCHANGE

COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 2, 2016

Concierge Technologies, Inc.

(Exact name of registrant as specified in its charter)

Nevada	000-29913	95-4442384
(state of I.D. Number)	(Commission File Number)	(IRS Employerincorporation)

----------------------------------------------------

(Address and telephone number of registrant's principal

executive offices and principal place of business)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

This Form 8-K/A (this “Amendment”) amends the Current Report on Form 8-K of Concierge Technologies, Inc. (the “Company”) filed on June 8, 2016 (the “Original 8-K”), regarding the stock purchase agreement (the “Stock Purchase Agreement”), entered into on May 27, 2016, by and among the Company, Brigadier Security Systems (2000) Ltd. (“Brigadier”), and each of the shareholders of preferred and common stock of Brigadier. The Stock Purchase Agreement closed on June 2, 2016.

The sole purpose of this Amendment is to provide the financial statements and pro forma information required by Item 9.01 of Form 8-K, which were excluded from the Original 8-K in reliance on paragraphs (a)(4) and (b)(2) of Item 9.01 of Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The financial statements required by this item are contained in Exhibit 99.1 and 99.2 to this Amendment and are incorporated herein by reference.

(b) Pro forma financial information.

The pro forma financial information required by this item is contained in Exhibit 99.3 to this Amendment and is incorporated herein by reference.

(d) Exhibits.

Exhibit No.	Description
99.1	Financial Statements of Brigadier Security Systems (2000) Ltd. For the Years Ended October 31, 2015 and October 31, 2014.
99.2	Condensed Interim Financial Statements of Brigadier Security Systems (2000) Ltd. For the Three and Six Months Period Ended April 30, 2016.
99.3	Pro Forma Financial Information of Concierge Technologies, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Concierge Technologies, Inc.

Date: August 11, 2016	By:	/s/ Nicholas Gerber,
		Nicholas Gerber, Chief Executive Officer

EX-99.1 2 cncg_ex991.htm ADDITIONAL EXHIBITS Blueprint

Exhibit 99.1

Brigadier Security Systems (2000) Ltd.

Financial Statements

October 31, 2015 and October 31, 2014

Brigadier Security Systems (2000) Ltd.

Contents

For the years ended October 31, 2015 and October 31, 2014

	Page
Management's Responsibility
Auditors' Report
Financial Statements
Statements of Financial Position	1
Statements of Comprehensive Income	2
Statement of Changes in Equity	3
Statements of Cash Flows	4
Notes to the Financial Statements	5

Management's Responsibility

To the Shareholders of Brigadier Security Systems (2000) Ltd.:

Management is responsible for the preparation and presentation of the accompanying financial statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of financial statements.

MNP LLP is appointed by the shareholders to audit the financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Board and management to discuss their audit findings.

May 6, 2016

“Pat Thompson”

Pat Thompson, General Manager

Independent Auditors’ Report

To the Shareholders of Brigadier Security Systems (2000) Ltd.:

We have audited the accompanying financial statements of Brigadier Security Systems (2000) Ltd., which comprise the statements of financial position as at October 31, 2015, October 31, 2014 and November 1, 2013, and the statements of comprehensive income, changes in equity and cash flows for the years ended October 31, 2015 and October 31, 2014 and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Brigadier Security Systems (2000) Ltd. as at October 31, 2015, October 31, 2014 and November 1, 2013 and its financial performance and its cash flows for the years ended October 31, 2015 and October 31, 2014 in accordance with International Financial Reporting Standards.

Saskatoon, Saskatchewan
May 6, 2016	Chartered Professional Accountants

119 4th Ave South, Suite 800, Saskatoon, Saskatchewan, S7K 5X2, Phone: (306) 665-6766, 1 (877)500-0778

Brigadier Security Systems (2000) Ltd.

Statements of Financial Position

As at October 31, 2015 and October 31, 2014

	October 31	October 31	November 1
	2015	2014	2013
		(Note 4)	(Note 4)

Assets
Current
Cash and cash equivalents	297,542	125,953	452,538
Trade and other receivables (Note 6)	827,199	798,692	565,156
Income taxes recoverable	28,797	4,977	16,345
Inventories (Note 7)	219,730	318,807	282,369
Prepaid expenses and deposits	6,859	15,611	13,344

	1,380,127	1,264,040	1,329,752

Non-current
Property, plant and equipment (Note 8)	37,286	54,113	107,096
Goodwill	60,000	60,000	60,000
Advances to related parties (Note 9)	-	434,351	36,095

	1,477,413	1,812,504	1,532,943

Liabilities
Current
Trade and other payables (Note 11)	384,081	331,617	298,677
Bonuses payable	100,000	100,000	100,000
Customer deposits	11,202	13,938	-
Payable to shareholders (Note 12)	32,021	29,021	38,581
Advances from related parties (Note 13)	200,000	-	-

	727,304	474,576	437,258
Non-current
Deferred income taxes (Note 15)	5,488	5,407	7,295
Retractable and redeemable preferred shares (Note 14)	867,217	867,217	867,217

	1,600,009	1,347,200	1,311,770

Events after the reporting period (Note 20)

Equity
Share capital (Note 14)	121	121	121
(Deficit) retained earnings	(122,717)	465,183	221,052

	(122,596)	465,304	221,173

	1,477,413	1,812,504	1,532,943

Approved on behalf of the Board

“Pat Thompson”
Director

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Statements of Comprehensive Income

For the years ended October 31, 2015 and October 31, 2014

	2015	2014
		(Note 4)

Revenue
Commercial	2,273,729	2,146,097
Contract	1,223,524	1,142,839
Monitoring	482,988	482,935
Dog detection	112,780	106,546
Commission	1,249	1,090

	4,094,270	3,879,507
Cost of sales	1,370,441	1,113,941

Gross margin	2,723,829	2,765,566

Gross margin as a percentage of revenue	66.5%	71.3%
Expenses
Advertising and promotion	58,881	75,618
Automotive	194,222	201,912
Bad debts	985	1,277
Business taxes and licences	39,217	40,763
Commissions	219,008	196,568
Computer maintenance	31,092	30,956
Contract work	150,507	59,937
Custom fees	3,931	2,608
Depreciation	18,614	22,200
Guard service	88,221	80,453
Interest and bank charges	16,937	13,249
Management salary (Note 16)	332,078	325,100
Meals and entertainment	11,444	12,054
Professional fees	20,121	15,896
Rental	76,349	71,762
Repairs and maintenance	22,444	21,249
Salaries, wages and benefits	1,236,120	1,227,511
Supplies	36,087	37,918
Telephone, fax and internet	31,539	31,318
Training and education	8,441	1,165
Travel and entertainment	4,483	1,915

	2,600,721	2,471,429

Operating income	123,108	294,137

Other income (expense)
Interest	449	2,217
Loss on disposal of property, plant and equipment	-	(14,843)

	449	(12,626)

Income before income taxes	123,557	281,511

Provision for (recovery of) income taxes (Note 15)
Current	16,725	39,268
Deferred	81	(1,888)

	16,806	37,380

Comprehensive income	106,751	244,131

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Statement of Changes in Equity

	Share capital	Retained earnings (deficit)	Total equity

Balance November 1, 2013	121	221,052	221,173
Comprehensive income	-	244,131	244,131
Balance October 31, 2014	121	465,183	465,304
Comprehensive income	-	106,751	106,751
Dividends	-	(700,898)	(700,898)
Refundable dividend taxes paid	-	6,247	6,247
Balance October 31, 2015	121	(122,717)	(122,596)

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Statements of Cash Flows

For the years ended October 31, 2015 and October 31, 2014

	2015	2014

Cash provided by (used for) the following activities
Operating activities
Comprehensive income	106,751	244,131
Depreciation	18,614	22,200
Deferred income taxes	81	(1,888)
Loss on disposal of property, plant and equipment	-	14,843
Changes in working capital accounts
Trade and other receivables	(28,506)	(233,536)
Income taxes recoverable	(23,820)	11,368
Inventories	99,077	(36,438)
Prepaid expenses and deposits	8,752	(2,267)
Trade and other payables	52,463	32,940
Customer deposits	(2,736)	13,938

Cash provided by operating activities	230,676	65,291

Financing activities
Amounts advanced (repayments to) shareholders	21,256	(27,816)
Amounts advanced from related parties	616,095	-
Repayments to related parties	-	(380,000)
Dividends	(700,898)	-
Refundable dividend tax credit	6,247	-

Cash used in financing activities	(57,300)	(407,816)

Investing activities
Purchases of property, plant and equipment	(1,787)	(18,537)
Proceeds from disposal of property, plant and equipment	-	34,477

Cash (used in) provided by investing activities	(1,787)	15,940

Increase (decrease) in cash and cash equivalents	171,589	(326,585)
Cash and cash equivalents, beginning of year	125,953	452,538

Cash and cash equivalents, end of year	297,542	125,953

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

1. Reporting entity

Brigadier Security Systems (2000) Ltd. (the “Company”) was incorporated under the Province of Saskatchewan on September 28, 1998. The Company is domiciled in Canada. The Company supplies, installs and monitors security systems in residential and commercial locations in Saskatoon and Regina.

The address of the Company’s registered office is 116 Avenue H North, Saskatoon, Saskatchewan.

The financial statements were approved by those charged with governance and authorized for issue on May 6, 2016.

2. Statement of compliance

The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC") in effect on November 1, 2014. This is the first time the Company has prepared its financial statements in accordance with IFRS, having previously prepared its financial statements in accordance with Accounting Standards for Private Enterprise (“ASPE”). IFRS 1 First Time Adoption of International Financial Reporting Standards (“IFRS 1”) has been applied in preparing these financial statements.

The effects of the transition from ASPE to IFRS on the Company’s reported financial position, financial performance and cash flows, are set out in Note 4.

3. Basis of preparation

Basis of measurement

The financial statements have been prepared in the historical basis. The principal accounting policies are set out in Note 5.

Functional and presentation currency

These financial statements are presented in Canadian dollars, which is the Company’s functional currency.

Significant accounting judgments, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainties about these assumptions and estimates could result in outcomes that would require a material adjustment to the carrying amount of the asset or liability affected in the future.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amount recognized in the financial statements are described in the following notes:

●

Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts is provided where considered necessary;

●

The calculation of deferred tax is based on assumptions, which are subject to uncertainty as to timing and which tax rates are expected to apply when temporary differences reverse. Deferred tax recorded is also subject to uncertainty regarding the magnitude on the balances in various tax pools. By their nature, these estimates are subject to measurement uncertainty;

●

Depreciation is based on the estimated useful lives of property, plant and equipment;

●

Impairment of property, plant and equipment is based on the estimated recoverable amounts of the assets; and

●

The estimated fair value of financial assets and liabilities, by their very nature, are subject to measurement uncertainty.

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

3. Basis of preparation (Continued from previous page)

Impairment of non-financial assets

The Company assesses non-financial assets for impairment at the end of each reporting period. If impairment indicators exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Goodwill acquired in a business combination, intangible assets with indefinite useful lives, and intangible assets not yet available for use are tested for impairment at least annually or whenever impairment indicators exist.

The recoverable amount is the higher of fair value less costs to sell and value in use. Value in use is the present value of estimated future cash flows discounted using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units. Otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

If the recoverable amount of an asset or cash-generating unit is less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss unless the relevant asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease. An impairment loss for a cash-generating unit to which goodwill was allocated, first reduces the goodwill and is then allocated pro rata to the other asset in the cash-generating unit.

An impairment loss in respect of goodwill is not reversed. For other assets, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in profit or loss unless that asset is carried at a revaluated amount in which case an impairment reversal is treated as a revaluation increase.

4. Adoption of International Financial Reporting Standards

As stated in Note 2, these are the Company’s first financials statements prepared in accordance with IFRSs. There was no impact to the Company's statements of comprehensive income or statements of cash flows.

The accounting policies in Note 5 have been applied in preparing the financial statements for the year ended October 31, 2015, the comparative information for the year ended October 31, 2014, and the opening IFRS balance sheet as at November 1, 2013 (the Company’s date of transition to IFRS).

Reconciliations and explanatory notes on how the transition to IFRS has affected the reported financial position previously reported under ASPE are provided below.

Reconciliation of equity at November 1, 2013

	ASPE	Adjustments	IFRS
Equity
Retained earnings	1,088,269	(867,217)	221,052

Non-current liabilities
Retractable and redeemable preferred shares	-	867,217	867,217

Total net assets and equity	1,088,269	-	1,088,269

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

4. Adoption of International Financial Reporting Standards (Continued from previous page)

Under previous accounting standards, preferred shares were classified as equity as a result of the shares issued in a tax planning arrangement. Adoption of IFRS requires the preferred shares to be classified as a liability as no exemption to equity classification is applicable under the new accounting standards. In preparing these financial statements, the Company has elected not to apply IFRS 3 Business combinations retrospectively to business combinations occurring prior to November 1, 2013.

5. Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and deposits with banks.

Inventories

Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. Cost comprises all costs of purchases, costs of conversion and other costs incurred in bringing inventories to their present location and condition. Cost of items of inventories that are segregated for specific projects is assigned by using specific identification of their individual costs. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling costs.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset.

All assets having limited useful lives are depreciated using the declining balance method over their estimated useful lives.

The methods of depreciation and depreciation rates applicable for each class of asset during the current and comparative period are as follows:

		Rate
Automotive	declining balance	30%
Computer equipment	declining balance	30-55%
Furniture and fixtures	declining balance	20%

Gains or losses on the disposal of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the asset, and recognised in net income as other income (expense).

Goodwill

Goodwill arising in a business combination is recognized as an asset at the date of control (acquisition date). Goodwill is not amortized and is tested for impairment annually. Goodwill is measured as the excess of the cost of the acquisition over the Company’s interests in the net fair value of the identifiable net assets, liabilities and contingent liabilities of the acquiree recognized at the date of acquisition.

Retractable and redeemable preferred shares

The Company’s retractable and redeemable preferred shares issued are recorded as financial liabilities and are classified as financial liabilities measured at amortized cost. These financial instruments are initially measured at their fair value. Subsequent measurement of the shares is at amortized cost, with gains recognized in profit (loss) upon derecognition of the liability.

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

5. Summary of significant accounting policies (Continued from previous page)

Revenue recognition

Contract and commercial revenues are recognized when the installation is complete and collection is reasonably assured.

Monitoring revenues, commission revenue and dog detection income are recognized as the service is provided and collection is reasonably assured.

Interest income is recorded on an accrual basis with income recognized as incurred by the effective interest method, using an effective interest rate which exactly discounts estimated future cash receipts to the net carrying amount of the financial asset over the asset’s expected life.

Income taxes

Taxation on the profit or loss for the year comprises of current and deferred tax.

Taxation is recognized in profit or loss except to the extent that the tax arises from a transaction or event which is recognized either in other comprehensive income or directly in equity, or a business combination.

Deferred taxes

Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. Deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Where an asset has no deductible or depreciable amount for income tax purposes, but has a deductible amount on sale or abandonment for capital gains purposes, the amount is included in the determination of temporary differences.

Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realization, provided they are enacted or substantially enacted by the end of the reporting period.

Operating segments

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components. All operating segments' operating results are reviewed regularly by the Company's management to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Company has determined that there are no separate operating segments of the Company. The distinct operations of the Company are highly integrated, requiring management and resource allocation decisions as well as performance measurements to be done on a consolidated basis. Decisions about continuing or disposing of assets are made at the consolidated level, as the operations of the Company are fully integrated and the business that the Company conducts would need to be significantly different if the assets were not intertwined.

Financial instruments

All financial instruments are initially recognized at fair value at acquisition. Measurement in subsequent periods depends on whether the financial instrument has been classified as fair value through profit or loss, available-for-sale, held-to-maturity, loans and receivables, or other financial liabilities as described below. Fair value is approximated by the instrument's initial cost in a transaction between unrelated parties. Transactions to purchase or sell these items are recorded on the trade date. During the year, there has been no reclassification of financial instruments.

Loans and receivables:

The Company has classified the following financial assets as loans and receivables: cash and cash equivalents and accounts receivable.

Loans and receivables are subsequently measured at their amortized cost, using the effective interest method. Under this method, estimated future cash receipts are exactly discounted over the asset’s expected life, or other appropriate period, to its net carrying value. Amortized cost is the amount at which the financial asset is measured at initial recognition less principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, and less any reduction for impairment or uncollectability. Net gains and losses arising from changes in fair value are recognized in profit (loss) upon derecognition or impairment.

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

5. Summary of significant accounting policies (Continued from previous page)

Financial liabilities measured at amortized cost:

The Company has classified the following financial liabilities as financial liabilities measured at amortized cost: accounts payable and accruals preferred shares and payable to shareholders and related parties.

Financial liabilities measured at amortized cost are subsequently measured at amortized cost using the effective interest method. Under this method, estimated future cash payments are exactly discounted over the liability’s expected life, or other appropriate period, to its net carrying value. Amortized cost is the amount at which the financial liability is measured at initial recognition less principal repayments, and plus or minus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount. Net gains and losses arising from changes in fair value are recognized in profit upon derecognition.

Financial asset impairment

The Company assesses impairment of all its financial assets, except those classified at fair value through profit (loss). Management considers whether there has been a breach in contract, such as a default or delinquency in interest or principal payments in determining whether objective evidence of impairment exists. Impairment is measured as the difference between the asset’s carrying value and its fair value. Any impairment, which is not considered temporary, is included in current year profit.

The Company reverses impairment losses on debt instruments classified as available-for-sale or loans and receivables when an increase in fair value can be objectively related to an event occurring after the impairment loss was recognized.

Fair value measurements

The Company classifies fair value measurements recognized in the statements of financial position using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

●

Level 1: Quoted prices (unadjusted) are available in active markets for identical assets or liabilities;

●

Level 2: Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly; and

●

Level 3: Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions.

Fair value measurements are classified in the fair value hierarchy based on the lowest level input that is significant to that fair value measurement. This assessment requires judgment, considering factors specific to an asset or a liability and may affect placement within the fair value hierarchy.

Standards issued but not yet effective

The Company has not yet applied the following new standards, interpretations and amendments to standards that have been issued as at October 31, 2015 but are not yet effective. Unless otherwise stated, the Company does not plan to early adopt any of these new or amended standards and interpretations.

IFRS 9 Financial instruments

The final version of IFRS 9 (2014) was issued in July 2014 as a complete standard including the requirements for classification and measurement of financial instruments, the new expected loss impairment model and the new hedge accounting model. IFRS 9 (2014) will replace IAS 39 Financial instruments: recognition and measurement. IFRS 9 (2014) is effective for reporting periods beginning on or after January 1, 2018. The Company is currently assessing the impact of the standard on its financial statements.

IFRS 15 Revenue from contracts with customers

IFRS 15, issued in May 2014, will specify how and when entities recognize, measure, and disclose revenue. The standard will supersede all current standards dealing with revenue recognition, including IAS 11 Construction contracts, IAS 18 Revenue, IFRIC 13 Customer loyalty programmes, IFRIC 15 Agreements for the construction of real estate, IFRIC 18 Transfers of assets from customers, and SIC 31 Revenue – barter transactions involving advertising services.

IFRS 15 is effective for annual periods beginning on or after January 1, 2018.

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

5. Summary of significant accounting policies (Continued from previous page)

IAS 1 Presentation of Financial Statements

Amendments to IAS 1, issued in December 2014, provide clarification on presentation and disclosure requirements and ensure entities are able to use judgment when preparing their financial statements. The amendments are summarized below:

Materiality:

●

Clarify that entities shall not aggregate or disaggregate information in a manner that obscures useful information;

●

Clarify that materiality requirements apply to the statements of profit or loss and other comprehensive income, statement of financial position, statement of cash flows and statements of changes in equity, and to the notes; and

●

Clarify when a standard requires a specific disclosure, the resulting information shall be assessed to determine whether it is material and consequently whether presentation or disclosure of that information is warranted.

Presentation of statements of financial position and profit or loss and other comprehensive income:

●

Clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and additional guidance on subtotals in these statements; and

●

Clarification that an entity’s share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will be subsequently reclassified to profit or loss.

Notes:

●

Clarify that entities have flexibility as to the order in which they present the notes, but also emphasize that understandability and comparability should be considered by an entity when deciding that order; and

●

Remove potentially unhelpful guidance in IAS 1 for identifying a significant accounting policy.

The amendments only affect financial statement presentation and disclosure and are effective for annual periods beginning on or after January 1, 2016.

IFRS 16 Leases

Amendments to IFRS 16, issued In January 2016, provide clarification surrounding the accounting treatment of leases including changes to recognition, measurement, presentation, and disclosure guidance. Under these amendments, operating leases and finance leases will no longer exist. A lease will be classified by whether a significant portion of the benefits of the leased asset are transferred to the lessee (e.g. Type A and Type B leases). Type B leases will typically be property leases or other cases where the lessee benefits from "a less than significant" portion of the underlying asset.

The amendment also introduces detailed disclosure requirements for the lessee and lessor including a maturity analysis of payments over the lease contract, reconciliation of lease asset and liability accounts and qualitative disclosure about the leases.

The amendments are effective for annual periods beginning on or after January 1, 2019. The Company has not yet determined the impact of these amendments on its financial statements.

6. Trade and other receivables

	October 31	October 31	November 1
	2015	2014	2013
Trade receivables	828,063	810,271	578,644
Less: Allowance for doubtful accounts	864	11,579	13,488

	827,199	798,692	565,156

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

7. Inventories

	October 31	October 31	November 1
	2015	2014	2013
Inventory	219,730	318,807	282,369

The cost of inventories recognized as an expense and included in cost of sales amounted to $1,365,146 (2014 – $1,108,729).

8. Property, plant and equipment

	Computer equipment	Automotive	Furniture and fixtures	Total

Cost
Balance at November 1, 2013	64,476	167,199	71,734	303,409
Additions	15,502	-	3,035	18,537
Disposals	-	(76,886)	-	(76,886)
Balance at October 31, 2014	79,978	90,313	74,769	245,060

Additions	1,787	-	-	1,787
Balance at October 31, 2015	81,765	90,313	74,769	246,847

Accumulated depreciation
Balance at November 1, 2013	53,790	93,083	49,440	196,313
Depreciation	10,005	7,429	4,766	22,200
Disposals	-	(27,566)	-	(27,566)
Balance at October 31, 2014	63,795	72,946	54,206	190,947
Depreciation	9,296	5,201	4,117	18,614
Balance at October 31, 2015	73,091	78,147	58,323	209,561

Net book value
November 1, 2013	10,686	74,116	22,294	107,096
At October 31, 2014	16,183	17,367	20,563	54,113
At October 31, 2015	8,674	12,166	16,446	37,286

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

9. Advances to related parties

	October 31	October 31	November 1
	2015	2014	2013
Lukbak Technologies	-	416,095	36,095
Bob Freberg	-	18,256	-

	-	434,351	36,095

The balance due from relates parties are non-interest bearing, collectible on demand with no fixed term of repayment. The related parties are shareholders of the Company.

10. Bank indebtedness

The Company has an authorized line of credit at the Bank of Montreal with a maximum authorized amount of $100,000. The amount is unsecured and bears interest at 4.75% annually. The line of credit is used to meet short term needs. As at October 31, 2015 $nil (2014 and November 1, 2013 - $nil) was drawn on the line of credit.

11. Trade and other payables

	October 31	October 31	November 1
	2015	2014	2013
Trade accounts payable	296,738	228,653	232,847
Goods and Services Tax payable	12,848	24,541	10,056
Vacation payable	61,062	60,511	47,174
Provincial sales tax payable	13,433	17,912	8,600

	384,081	331,617	298,677

12. Payable to shareholders

	October 31	October 31	November 1
	2015	2014	2013
Pat Thompson	32,021	29,021	26,116
Bob Freberg	-	-	12,465

	32,021	29,021	38,581

The balance payable to shareholder is non-interest bearing, repayable on demand with no fixed term of repayment.

13. Advances from related party

	October 31	October 31	November 1
	2015	2014	2013
Lukbak Technologies	200,000	-	-

The advances from related party is non-interest bearing, repayable on demand with no fixed term of repayment.

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

14. Share capital

	October 31	October 31	November 1
	2015	2014	2013
Authorized and issued
10,000 Class B common voting shares	79	79	79
597,218 Class F non-voting, redeemable, non-participating	597,239	597,239	597,239
269,999 Class H non-voting, redeemable, non-participating	270,020	270,020	270,020

	867,338	867,338	867,338
597,218 Class F shares reflected as a liability	(597,218)	(597,218)	(597,218)
269,999 Class H shares reflected as a liability	(269,999)	(269,999)	(269,999)

	(867,217)	(867,217)	(867,217)

	121	121	121

Due to the redemption rights and properties of the 597,218 Class F and 269,999 Class H shares, they have been presented as a long-term liability on the statement of financial position of the Company. The liability that has been recorded is based on the original stated capital of the shares issued.

During the year, dividends in the amount of $700,898 were paid to shareholders of the Class B common shares.

15. Deferred income taxes

Income tax expense recognized in profit (loss)

	October 31	October 31	November 1
	2015	2014	2013
Current tax expense
Current year	16,725	39,268	-

Deferred tax expense (recovery)
Relating to the origination and reversal of temporary differences	81	(1,888)	-

The applicable tax rate is the aggregate of the federal income tax rate of 13% (2014 - 13%) and the provincial tax rate of 2% (2014 - 2%).

Deferred income tax expense recognized in profit (loss)

The deferred income tax expense (recovery) recognized in profit (loss) for the current year is a result of the following changes:

	October 31	October 31	November 1
	2015	2014	2013
Deferred tax liability
Property, plant and equipment	(5,488)	(5,407)	(7,295)

Deferred tax liability is reflected in the balance sheet as follows
Deferred tax liabilities	5,488	5,407	7,295

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

16. Related party transactions

Key management compensation of the Company

Key management of the Company are the Regional Manager, General Manager and President. Key management personnel remuneration includes the following expenses:

	2015	2014
Salaries, including bonuses	332,078	325,100

Transactions with related parties of the Company

	2015	2014
Purchase of equipment	3,250	62,951
Rent paid	38,576	38,576
Automotive	90,000	83,250

	131,826	184,777

During the year ended December 31, 2015 the Company purchased inventory in the amount of $3,250 (2014 - $62,950) from a company that is a shareholder in the Company.

Related party transactions were conducted in the normal course of operations and measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

17. Financial instruments

The Company as part of its operations carries a number of financial instruments. The fair value of financial instruments approximates its carrying value due to the short-term nature of the instruments. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments except as otherwise disclosed.

Credit risk

Credit risk is the risk of financial loss because a counter party to a financial instrument fails to discharge its contractual obligations.

A credit concentration exists relating to trade accounts receivable. As at October 31, 2015, 4 customers accounted for 47% (October 31, 2014 – one customer for 15%) of the accounts receivable.

The Company’s normal credit terms are 30 days. The trade receivables are past due but are not impaired because payment terms are in place or the balance has been subsequently collected. As at October 31, 2015, the aging of this financial asset is as follows:

	Less than one month past due	One month to less than three months past due	Three months to less than one year past due	One year to less than five years past due	Thereafter	Total
Trade receivables	455,220	228,831	144,012	-	-	828,063

As at October 31, 2014, the aging of this financial asset was as follows:

	Less than one month past due	One month to less than three months past due	Three months to less than one year past due	One year to less than five years past due	Thereafter	Total
Trade receivables	633,630	136,181	40,460	-	-	810,271

Brigadier Security Systems (2000) Ltd.

Notes to the Financial Statements

For the years ended October 31, 2015 and October 31, 2014

17. Financial instruments (Continued from previous page)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivery of cash or another financial asset. The Company enters into transactions to purchase goods for which repayment is required at various maturity dates.

The Company manages the liquidity risk resulting from its accounts payable by monitoring its operating requirements to ensure it has sufficient funds to fulfil its obligations.

Foreign currency risk

The Company enters into transactions to purchase equipment denominated in various foreign currencies for which the expenses and accounts payable balances are subject to exchange rate fluctuations. The Company does not hedge with foreign currency contracts and therefore the balances translated into Canadian dollars at the rate of the exchange in effect on transaction date.

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

18. Capital management

The Company’s objective when managing capital is to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.

The Company sets the amount of capital in proportion to risk and manages the capital structure and makes adjustments to it in light of changes to economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, or sell assets.

The Company has no externally imposed capital requirement.

The Company manages the following as capital:

	October 31	October 31	November 1
	2015	2014	2013
Retained earnings (deficit)	(122,717)	465,183	221,052

19. Economic dependence

The Company's primary source of income is the sale of monitoring equipment and installations, pursuant to an agreement to act as an authorized dealer of SaskTel. The agreement can be cancelled if the Company does not observe certain established guidelines. The Company's ability to continue viable operations is dependent upon maintaining its right to act as an authorized dealer. As at the date of these financial statements the Company believes that it is in compliance with the guidelines.

20. Events after the reporting period

Subsequent to year-end, the shareholders of the Company have signed a letter of intent to negotiate the sale of all issued and outstanding shares of the Company to a third party. The transaction did not have an impact on the financial position or its operations for the years ended October 31, 2015 and October 31, 2014.

EX-99.2 3 cncg_ex992.htm ADDITIONAL EXHIBITS Blueprint

Exhibit 99.2

Brigadier Security Systems (2000) Ltd.

Condensed Interim Financial Statements

For the three and six months ended April 30, 2016 and 2015

(Unaudited)

Brigadier Security Systems (2000) Ltd.

Contents

For the three and six months period ended April 30, 2016

(Unaudited)

	Page
Condensed Interim Financial Statements
Unaudited Condensed Interim Statement of Financial Position	1
Unaudited Condensed Interim Statement of Comprehensive Income (Loss)	2
Unaudited Condensed Interim Statement of Changes in Equity (Deficit)	3
Unaudited Condensed Interim Statement of Cash Flows	4
Notes to the Condensed Interim Financial Statements	5
Schedule 1 – Schedule of Operating Expenses 666	9

Brigadier Security Systems (2000) Ltd.

Condensed Interim Statement of Financial Position

(Unaudited - Expressed in Canadian Dollars)

	April 30, 2016 (unaudited)	October 31, 2015 (audited)

Assets
Current
Cash and cash equivalents	375,863	297,542
Trade and other receivables (Note 6)	639,674	827,199
Income taxes recoverable	-	28,797
Inventories	204,497	219,730
Prepaid expenses and deposits	19,579	6,859
Receivable from shareholder	458	-

	1,240,071	1,380,127
Non-current
Property, plant and equipment (Note 4)	27,646	37,286
Goodwill	60,000	60,000

	1,327,717	1,477,413

Liabilities
Current
Trade and other payables	267,604	384,081
Bonuses payables	-	100,000
Customer deposits	-	11,202
Income taxes payable	15,247	-
Payable to shareholders	-	32,021
Advances from related party	-	200,000

	282,851	727,304
Non-current
Deferred income taxes	5,488	5,488
Retractable and redeemable preferred shares	867,217	867,217

	1,155,556	1,600,009

Events after the reporting period (Note 8)

Equity
Share capital (Note 5)	121	121

Retained earnings (deficit)	172,040	(122,717)

	172,161	(122,596)

	1,327,717	1,477,413

Approved on behalf of the Board

Nicole Robinson
Director

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Condensed Interim Statement of Comprehensive Income (Loss)

(Unaudited - Expressed in Canadian Dollars)

	For the Three-Month Period Ending April 30,		For the Six-Month Period Ending April 30,
	2016	2015	2016	2015

Revenue
Commercial	603,307	512,377	1,243,795	1,030,288
Contract	256,951	259,447	560,582	607,682
Monitoring	120,965	121,224	241,271	241,771
Dog detection	27,434	33,573	57,634	67,635
Commission	301	281	677	656

	1,008,958	926,902	2,103,959	1,948,032
Cost of Sales	265,221	431,236	517,506	633,963

Gross margin	743,737	495,666	1,586,453	1,314,069

Gross margin as a percentage of revenue	73.7%	53.5%	75.4%	67.5%

Operating expenses (Schedule 1)	559,696	691,512	1,250,088	1,371,107

Earnings (loss) from operations	184,041	(195,846)	336,365	(57,038)

Other income (expense)
Interest	51	79	107	146
Gain on sale of property, plant and equipment	2,329	-	2,329	-
Rental	(600)	-	-	-

	1,780	79	2,436	146

Income (loss) before income taxes	185,821	(195,767)	338,801	(56,892)

Provision for income taxes	20,252	4,182	44,044	8,363

Comprehensive income (loss)	165,569	(199,949)	294,757	(65,255)

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Condensed Interim Statement of Changes in Equity (Deficit)

(Unaudited - Expressed in Canadian Dollars)

	Share capital	Retained earnings (deficit)	Total equity (deficit)

Balance November 1, 2014	121	465,183	465,304
Comprehensive income for the year	-	106,751	106,751
Dividends	-	(700,898)	(700,898)
Refundable dividend taxes paid	-	6,247	6,247

Balance October 31, 2015	121	(122,717)	(122,596)
Comprehensive income for the period	-	294,757	294,757

Balance April 30, 2016	121	172,040	172,161

Brigadier Security Systems (2000) Ltd.

Condensed Interim Statement of Cash Flows

(Unaudited - Expressed in Canadian Dollars)

	For the Six-Month Period Ending April 30,
	2016	2015

Cash provided by (used for) the following activites
Operating activites
Comprehensive income	294,757	(65,255)
Depreciation	9,329	11,100
Gain on sale of property, plant and equipment	(2,329)	-

Changes in working capital accounts
Trade and other receivables	187,525	149,326
Income taxes recoverable	44,044	8,363
Inventories	15,233	(41,067)
Prepaid expenses and deposits	(12,720)	15,611
Trade and other payables	(116,475)	48,965
Bonus payable	(100,000)	(100,000)
Customer deposits	(11,202)	-

Cash provided by operating activities	308,162	27,043

Financing activities
Amounts advanced from (repayments to) shareholders	(32,479)	454
Advances from (repayment to) related party	(200,000)	180,000

Cash (used in) provided by finacing activities	(232,479)	180,454

Investing activities
Proceeds from sale of property, plant and equipment	2,638	-

Increase in cash and cash equivalents	78,321	207,497

Cash and cash equivalents, beginning of period	297,542	125,953

Cash and cash equivalents, end of period	375,863	333,450

The accompanying notes are an integral part of these financial statements

Brigadier Security Systems (2000) Ltd.

Notes to the Condensed Interim Financial Statements

For the three and six months period ended April 30, 2016 and 2015

(Unaudited)

1. Reporting entity

The address of the Company’s registered office is 116 Avenue H North, Saskatoon, Saskatchewan.

2. Statement of compliance

The condensed interim financial statements for the period ended April 30, 2016 have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) including IAS 34, Interim financial reporting, as issued by the International Accounting Standards Board (“IASB”).

The condensed interim financial statements are not intended to include all of the information and disclosure required for the annual financial statement presentation and should be read in conjunction with the most recent audited annual financial statements.

These condensed interim financial statements were approved by the Board of Directors on August 9, 2016.

3. Summary of significant accounting policies

These condensed interim financial statements have been prepared in accordance with accounting policies consistent with those used and described in the Company's annual financial statements. Reader's wishing additional information on the Company's accounting policies should refer to the most recent audited financial statements.

4. Property, plant and equipment

	Computer equipment	Automotive	Furniture and fixtures	Total
Cost
Balance at November 1, 2014	79,978	90,313	74,769	245,060
Additions	1,787	-	-	-
Balance at October 31, 2015	81,765	90,313	74,769	246,847

Disposals	(114)	(6,356)	-	(6,470)
Balance at April 30, 2016	81,651	83,957	74,769	240,377

Accumulated depreciation
Balance at November 1, 2014	63,795	72,946	54,206	190,947
Depreciation	9,296	5,201	4,117	18,614
Balance at October 31, 2015	73,091	78,147	58,323	209,561
Depreciation	4,650	2,621	2,058	9,329
Disposals	-	(6,159)	-	(6,159)
Balance at April 30, 2016	77,741	74,609	60,381	212,731

Net book value
At October 31, 2015	8,674	12,166	16,446	37,286
At April 30, 2016	3,910	9,348	14,388	27,646

5. Share capital

	April 30,	October 31,
	2016 (unaudited)	2015 (audited)

Authorized and issued
10,000 Class B common voting shares	79	79
597,218 Class F non-voting, redeemable, non-participating	597,239	597,239
269,999 Class H non-voting, redeemable, non-participating	270,020	270,020

	867,338	867,338
597,218 Class F shares reflected as a liability	(597,218)	(597,218)
269,999 Class H shares reflected as a liability	(269,999)	(269,999)

	(867,217)	(867,217)

	121	121

Brigadier Security Systems (2000) Ltd.

Notes to the Condensed Interim Financial Statements

For the three and six months period ended April 30, 2016 and 2015

(Unaudited)

6. Financial instruments

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Credit risk

Credit risk is the risk of financial loss because a counter party to a financial instrument fails to discharge its contractual obligations.

A credit concentration exists relating to trade accounts receivable. As at April 30, 2016, 1 customers accounted for 14% (October 31, 2015 – 3 customers for 49%) of the condensed interim accounts receivable.

The Company’s normal credit terms are 30 days. The trade receivables are past due but are not impaired because payment terms are in place or the balance has been subsequently collected. As at April 30, 2016, the aging of this financial asset is as follows:

	Less than one month past due	One month to less than three months past due	Three months to less than one year past due	One year to less than five years past due	Thereafter	Total
Trade receivables	354,790	188,710	96,174	-	-	639,674

As at October 31, 2015, the aging of this financial asset was as follows:

	Less than one month past due	One month to less than three months past due	Three months to less than one year past due	One year to less than five years past due	Thereafter	Total
Trade receivables	454,356	228,831	144,012	-	-	827,199

Liquidity risk

The Company manages the liquidity risk resulting from its accounts payable by monitoring its operating requirements to ensure it has sufficient funds to fulfil its obligations. Liabilities are settled in one year or less due to the short-term nature of the Company's financial obligations.

7. Capital management

The Company has no externally imposed capital requirement.

The Company manages the following as capital:

	April 30	October 31
	2016	2015
	(unaudited)	(audited)

Retained earnings (deficit)172,040	(122,717)

8. Events after the reporting period

Subsequent to year-end, the shareholders of the Company have signed a letter of intent to negotiate the sale of all issued and outstanding shares of the Company to a third party. The transaction closed on June 2, 2016 but did not have an impact on the financial position or its operations for the six month period ended April 30, 2016.

	For the Three-Month Period Ending April 30,		For the Six-Month Period Ending April 30,
	2016	2015	2016	2015

Operating expenses
Salaries, wages and benefits	378,099	368,650	709,462	699,146
Automotive	47,440	49,550	94,372	96,653
Commissions	30,445	46,125	104,157	105,170
Professional fees	22,587	7,727	28,087	13,752
Advertising and promotion	21,550	23,129	48,238	30,691
Rental	20,971	18,285	38,745	36,174
Security	10,234	19,492	25,248	44,705
Telephone, fax and internet	7,481	8,185	16,660	16,084
Contract work	6,899	28,080	18,117	52,119
Travel and entertainment	5,714	1,896	6,807	3,283
Repairs and maintenance	5,491	5,489	10,888	10,881
Supplies	5,417	5,519	13,880	17,468
Depreciation	4,676	5,550	9,329	11,100
Computer maintenance	4,631	4,637	14,981	13,065
Bad debt (recovery)	4,204	-	4,204	-
Interest and bank charges	3,704	3,911	8,256	8,908
Meals and entertainment	3,095	4,163	4,588	5,916
Custom fees	534	1,516	915	2,338
Training and education	514	3,492	514	4,352
Business taxes and licenses (income)	(7,670)	99	22,737	29,447
Management salary (recovery)	(16,320)	86,017	69,903	169,855

	559,696	691,512	1,250,088	1,371,107

EX-99.3 4 cncg_ex993.htm ADDITIONAL EXHIBITS Blueprint

EXHIBIT 99.3

UNAUDITED CONDENSED COMBINED PRO FORMA FINANCIAL STATEMENTS

Concierge Technologies, Inc. (the Company or “CTI”) acquired Gourmet Foods Limited (“GFL”) for total cash consideration of approximately $1,753,428 on August 11, 2015, with an effective date of August 1, 2015. The Company financed the acquisition by issuing new common shares & preferred stock shares during the year ended June 30, 2015.

The Company acquired Brigadier Security Systems (2000) LTD. (“Brigadier”) for total cash consideration of approximately $1,550,633 on June 1, 2016. This transaction was funded by a series of convertible promissory notes during the period January 1, 2016, through May 25, 2016.

The following unaudited condensed combined pro forma financial statements for the fiscal year ended June 30, 2015, are based upon the previously filed pro forma financial statements with regards to the acquisition of GFL as of and for the year ended June 30, 2015 (incorporated herewith by reference to the Form 8-K/A filed by the Company on November 10, 2015) and the historical financial statements of Brigadier as of and for the year ended July 31, 2015. The unaudited pro forma condensed combined balance sheet as of June 30, 2015, give effect to these transactions as though they had occurred on June 30, 2015. The unaudited pro forma condensed combined statement of operations for the year ended June 30, 2015 give effect to these transactions as if they had occurred on July 1, 2014.

The following unaudited condensed combined pro forma financial statements for the nine months period ended March 31, 2016, are based upon the historical financial statements of CTI as of and for the nine months period ended March 31, 2016, and the historical financial statements of Brigadier as of and for the nine months period ended April 30, 2016. The unaudited pro forma condensed combined balance sheet as of March 31, 2016, give effect to these transactions as though they had occurred on March 31, 2016. The unaudited pro forma condensed combined statement of operations for the nine months period ended March 31, 2016, give effect to these transactions as if they had occurred on July 1, 2015.

The historical information contained in the unaudited pro forma condensed combined financial statements has been adjusted where events are directly attributable to the acquisition, or are likely to have a continuing effect on the consolidated financial statements of CTI. The unaudited pro forma condensed combined financial statements should only be read in conjunction with the notes to the unaudited pro forma condensed combined financial statements appearing below and with reference to historical financial statements on file for CTI.

The unaudited pro forma condensed consolidated financial statements are based on estimates and assumptions and are presented for illustrative purposes only and are not necessarily indicative of what the consolidated company’s results of operations actually would have been had the acquisition been completed as of the dates indicated. Additionally, the unaudited pro forma condensed consolidated financial information are not necessarily indicative of the condensed consolidated financial position or results of operations in future periods or the results that actually would have been realized if the acquisition had been completed as of the dates indicated. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition of GFL or Brigadier as a result of restructuring activities and other planned cost savings initiatives following the completion of the business combination.

INDEX

	Page


Unaudited Pro-Forma Condensed Combined Balance Sheet as of June 30, 2015	F-3

Unaudited Pro-Forma Condensed Combined Statement of Operations for the year ended June 30, 2015	F-4

Unaudited Pro-Forma Condensed Combined Balance Sheet as of March 31, 2016	F-5

Unaudited Pro-Forma Condensed Combined Statement of Operations for the nine-month period ended March 31, 2016	F-6

Notes to unaudited Pro-Forma Condensed Combined Financial Statements	F-7

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2015

	Concierge Pro Forma Financial Statements (adjusted for the acquisition of Gourmet Foods Ltd.)	Brigadier Security Systems	Pro Forma Adjustments	Notes	Pro Forma Combined
ASSETS
CURRENT ASSETS:
Cash & cash equivalents	$455,612	641,002	(710,174)	a,b,c,d	$386,439
Accounts receivable	$306,451	373,099			$679,550
Inventory, net	$395,000	244,038			$639,038
Other current assets	$53,985	5,020			$59,004
Total current assets	1,211,047	1,263,158	(710,174)		1,764,031

Deposit	$-				$-
Property and equipment, net	$1,276,940	42,789			$1,319,728
Pro forma Goodwill	$202,499	45,928	960,667	e	$1,209,095
Total assets	$2,690,486	$1,351,875	$250,493		$4,292,854

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$625,729	339,616	52,000	f	$1,017,345
Debentures payable - related parties	$-		1,300,000	g	$1,300,000
Notes payable - related parties	$8,500				$8,500
Notes payable	$8,500				$8,500
Shareholder advance	$(0)	8,587			$8,587
Total liabilities	$642,729	$348,203	$1,352,000		$2,342,932

COMMITMENT & CONTINGENCY

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock	-	93	(93)	h	$-
Series B	37,543				$37,543
Common stock	679,537				$679,537
Additional paid-in capital	7,680,248				$7,680,248
Accumulated earnings (deficit)	(6,349,570)	1,003,579	(1,101,415)	e,f	$(6,447,406)
Total Stockholders' equity (deficit)	2,047,758	1,003,672	(1,101,508)		1,949,922
Total liabilities and Stockholders' equity (deficit)	$2,690,487	$1,351,875	$250,492		$4,292,854

F-3

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the Year Ended June 30, 2015

	Concierge Pro Forma Financial Statements (adjusted for the acquisition of Gourmet Foods Ltd.)	Brigadier Security Systems	Pro Forma Adjustments	Notes	Pro Forma Combined
Net revenue	$4,983,135	$3,577,671			$8,560,806

Cost of revenue	3,626,303	1,106,816			4,733,119

Gross profit	1,356,832	2,470,855	-		3,827,687


Operating expense
General & administrative expense	1,528,315	2,239,631	97,928	e,f	3,865,874
Operating Income (Loss)	(171,483)	231,224	(97,928)		(38,187)

Other income (expense)
Other income (expense)	12,170	(13,391)			(1,222)
Interest income (expense)	(60,645)	701			(59,945)
Total other income (expense)	(48,476)	(12,691)	-		(61,166)

Net Income (Loss) before income taxes	(219,958)	218,533	(97,928)		(99,353)

Provision of income taxes	(8,037)	29,054			21,017

Net Income (Loss)	$(211,922)	$189,480	$(97,928)		$(120,370)

Weighted average shares of common stock *
Basic & Diluted	472,293,364				472,293,364
Diluted	849,749,735				849,749,735

Net loss per common share - continuing operations
Basic & Diluted	$(0.00)				$(0.00)

F-4

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

As of March 31, 2016

	Concierge Technologies	Bridgadier Security Systems	Pro Forma Adjustments	Notes	Pro Forma Combined
ASSETS
CURRENT ASSETS:
Cash & cash equivalents	$878,981	$299,375	$(834,127)	a,b,c,d	$344,229
Accounts receivable, net	177,266	509,500			686,767
Inventory, net	295,329	162,882			458,211
Pre Payments	-	15,595			15,595
Other current assets	12,331	365			12,695
Total current assets	1,363,906	987,717	(834,127)		1,517,496

Deposits	172,857		(150,333)	i	22,524
Property and equipment, net	1,257,340	22,020			1,279,360
Goodwill	268,431	47,790	958,805	e	1,275,026
Total assets	$3,062,535	$1,057,527	$(25,655)		$4,094,407

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses	$638,302	$225,291	39,000	f	902,593
Convertible Promissory Note payable - related parties, net	450,000		850,000	g	1,300,000
Notes payable - related parties	8,500				8,500
Notes payable	8,500				8,500
Other current liabilities	-	4,371			4,371
Retractable and redeemable preferred shares		690,738	(690,738)		-
Total liabilities	1,105,302	920,400	198,262		2,223,964

COMMITMENT & CONTINGENCY

STOCKHOLDERS' EQUITY
Preferred stock, 50,000,000 authorized par $0.001
Series B: 3,754,355 issued and outstanding at March 31, 2016 and June 30, 2015	3,755	96	(96)	h	3,755
Common stock, $0.001 par value; 900,000,000 shares authorized; 67,953,870 shares issued and outstanding at March 31, 2016 and at June 30, 2015	67,954				67,954
Additional paid-in capital	8,325,620				8,325,620
Accumulated other comprehensive income (loss)	(1,083)				(1,083)
Accumulated deficit	(6,439,012)	137,030	(223,820)	e,f	(6,525,802)
Total Stockholders' equity	1,957,233	137,126	(223,916)		1,870,443
Total liabilities and Stockholders' equity	$3,062,535	$1,057,527	$(25,655)		$4,094,407

F-5

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the nine months ended March 31, 2016

	Concierge Technologies	Brigadier Security Systems	Pro Forma Adjustments	Notes	Pro Forma Combined
Net revenue	$2,706,364	$2,566,448			$5,272,813
	-
Cost of revenue	1,937,876	831,049			2,768,925

Gross profit	768,488	1,735,399			2,503,888

Operating expense
General & administrative expense	840,843	1,571,476			2,412,319

Operating Income (Loss)	(72,355)	163,923			91,568

Other income (expense)
Other income (expense)	10,555	-			10,555
Interest income (expense)	385	232	(86,790)	e,f	(86,173)
Total other income (expense)	10,940	232			(75,618)

Net Income (Loss) before income taxes	(61,414)	164,155			15,950

Provision of income taxes	28,028	19,688			47,716

Net Income (Loss)	$(89,442)	$144,467			$(31,765)

Other Comprehensive Income (Loss)
Foreign currency translation gain (loss)	(1,083)				$(1,083)
Comprehensive Income (Loss)	$(90,525)	$144,467			$(32,848)


Weighted average shares of common stock *
Basic & Diluted	67,953,870				67,953,870
Diluted	67,953,870				67,953,870

F-6

Concierge Technologies, Inc. and Subsidiaries

Notes to Unaudited Pro-Forma Condensed

Combined Financial Statements

Note 1 – Description of the Transactions

On June 2, 2016, the Company completed a stock purchase agreement (the “Purchase Agreement”), dated as of May 27, 2016, with Brigadier Security Systems (2000) Ltd., a Canadian limited corporation in the business of alarm monitoring and installations, (“Brigadier”) and each of the shareholders of preferred and common stock of Brigadier (collectively, the “Sellers”), pursuant to which the Sellers agreed to sell, and the Company agreed to purchase (i) 10,000 Class B Shares of Brigadier, (ii) 597,218 Class F Shares of Brigadier, and (iii) 269,999 Class H shares of Brigadier (collectively, the “Shares”), which represents all the issued and outstanding preferred and common stock of Brigadier, in exchange for $1,733,000 Canadian Dollars (“CDN”) (the “Brigadier Transaction”), subject to certain adjustments as explained below and provided for in the Purchase Agreement. The Purchase Agreement and related agreements described below are collectively referred to herein as the “Brigadier Transaction Documents”.

The Brigadier Transaction closed on June 2, 2016 (the “Closing Date”). On the Closing Date, the Company paid $1,000,000 CDN against the delivery of the Shares to the Company. The remaining balance of $733,000 CDN (the “Remaining Balance”) shall be delivered to the Sellers on the 183rd day following the Closing Date if certain sales goals are achieved. If the sales goals are not achieved, then the Remaining Balance shall be delivered to the Sellers on the 365th day following the Closing Date. Furthermore, the purchase price for the Shares included $418,000 CDN in transferred net working capital (“TNWC”) which was adjusted to $977,333 CDN as of the Closing Date. Per the terms of the Purchase Agreement, a final TNWC calculation will be determined within 90 days from the Closing Date, and any surplus in the TNWC calculation shall be due and payable to Sellers (or refunded to the Company in the event of a deficit) within 120 days of the Closing Date. On August 8, 2016, the Company arrived at a final TNWC calculation of $710,723 CDN establishing the surplus amount to be paid to the sellers on or before September 30, 2016, of $292,723 CDN. The total purchase consideration to be paid in the Brigadier Transaction is $2,025,723 CDN (approximately US$1,550,633).

The Company financed the purchase by funding a series of convertible debentures totaling $1,300,000 in the aggregate as follows. The Company entered into a convertible promissory note with Wainwright Holdings, an affiliate of CEO Nicholas Gerber, in the amount of $450,000 on January 27, 2016. Under the terms of the note, interest accrues at the rate of 4% per annum on the unpaid principal amount. The total amount of principal and accrued interest may be converted to shares of common stock in the Company at the conversion rate of $.10 per share after 180 days have elapsed from the date of funding. On April 8, 2016, the Company entered into a convertible promissory note in the amount of $350,000 with Gerber Family Trust, an affiliate of CEO Nicholas Gerber, which accrues interest on the unpaid principal at the rate of 4%. The total amount of unpaid principal and accrued interest can be converted to shares of common stock of the Company after 180 days have elapsed from the date of funding at the conversion rate of $0.13 per share. On May 25, 2016 the Company entered into two convertible promissory notes in the amount of $250,000 each, and each accruing interest on the unpaid principal amount at the rate of 4% per annum. The first note was funded by Wainwright Holdings, an affiliate of CEO Nicholas Gerber, and the second note was funded by the Schoenberger Family Trust, an affiliate of director Scott Schoenberger. Each note may be converted to shares of common stock of the Company after 180 days have elapsed from the date of funding at the conversion rate of $.13 per share. Each of the above promissory notes matures and is due and payable on their respective 5th year anniversary date.

Note 2 – Basis of Presentation

The unaudited condensed combined pro forma financial statements for the fiscal year ended June 30, 2015, are based upon the previously filed pro forma financial statements with regards to the acquisition of Gourmet Foods Limited as of and for the year ended June 30, 2015, (incorporated herewith by reference to the Form 8-K/A filed by the Company on November 10, 2015) and the financial statements of Brigadier for the twelve month period ended July 31, 2015. The unaudited pro forma condensed combined financial information was prepared under United States Generally Accepted Accounting Principles (“GAAP”).

The acquisition is accounted for under the acquisition method of accounting in accordance with the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under the acquisition method of accounting, the total purchase price, calculated as described in Note 4 to these unaudited pro forma condensed combined financial statements, is allocated to the net tangible and intangible assets acquired and liabilities assumed of Brigadier based on their preliminarily estimated fair values with the excess recorded as pro forma goodwill. The Company believes the preliminarily estimated fair values assigned to the assets acquired and liabilities assumed are based on reasonable assumptions. The fair value estimates for the purchase consideration allocation may change if additional information becomes available.

The accounts of Brigadier use Canadian dollars as the functional currency. Revenues and expenses of operations are translated to U.S. dollars using average exchange rates while assets and liabilities are translated into U.S. Dollars using exchange rates at the balance sheet date. Other entries, such as the purchase price, were reflective of the actual dollars expended by the Company in order to complete the transaction.

Note 3 – Accounting Policies

Because Brigadier is located in Canada and adheres to local accounting customs and guidance, hence, there are differences in the accounting policies between the Company and Brigadier. In order to resolve these differences, the Company expended considerable effort to convert all accounting records to the standards required under US GAAP. Independent auditors were retained for Brigadier who performed an independent audit of the operations of Brigadier covering the periods between November 1, 2013, through October 31, 2015, and made such adjustments as necessary for the accounting records to conform to those of US GAAP. Independent auditors were also retained to review the operations of Brigadier for the six-month period ending April 30, 2016. It is these conforming financial statements of Brigadier that are used to construct the unaudited pro forma condensed combined financial statements.

F-7

Note 4 – Preliminary Purchase Price Allocation

The total consideration to be paid by the Company to purchase all of the issued and outstanding shares of Brigadier will be US$1,550,633 to be paid in cash. US$1,326,794 has been paid in cash, either to the sellers or into a trust account to be held for the sellers’ benefit, and US$223,839 remains pending the due date for adjustments of TNWC as contained in the Purchase Agreement and described in Note 1 above.

Under the acquisition method of accounting, the total purchase consideration is allocated to Brigadier net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase consideration over the fair value of assets acquired and liabilities assumed was allocated to pro forma goodwill. For purposes of presentation in the unaudited pro forma condensed combined financial information the following table summarizes the preliminary fair value estimate of the net assets acquired as of the acquisition date:

Assets
Cash	80,377
Trade and other receivables	443,414
Inventory	238,107
Prepaid expenses	8,165
Pro forma goodwill	1,006,595
Furniture, fixtures and equipment	20,451
Total Assets	1,797,109

Liabilities
Trade and other payables	183,692
Income tax, net	60,145
Customer deposits	2,639
Total Liabilities	246,476
Net Assets Acquired	1,550,633

Note 5 – Unaudited Pro Forma Adjustments

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. Pro forma adjustments are necessary to reflect the total purchase price of Brigadier.

Adjustments included under the column headings “Pro Forma Adjustments” represent the following:

To reduce cash by the amount of the purchase price paid, $1,550,633, in the acquisition of Brigadier

To reduce cash by $641,002 in order to reconcile with the cash acquired at the closing date

To increase cash by $1,300,000 sourced from funding of convertible promissory notes that were required to consummate the Brigadier Transaction and to add the amount of cash, $80,377, acquired in the Brigadier Transaction

To adjust cash to recognize payment of liabilities prior to closing, but after the balance sheet date, that is necessary to balance the amount of Transferred Net Working Capital realized per the Purchase Agreement as the excess of current assets over liabilities equaling approximately $710,723

To recognize Pro forma goodwill as the excess of the purchase price over the fair value of the net assets being acquired in the Brigadier Transaction as shown in Note 4 to be $1,006,595 and to reduce the historical goodwill recorded in the accounts of Brigadier

To record additional interest that would have accrued on the convertible promissory notes required to fund the Brigadier Transaction

To record the liability associated with the convertible promissory notes that would be required to fund the purchase price for the acquisition of Brigadier

Reflects the elimination of Brigadier capital stock in consolidation with the Company.

To adjust the initial deposit paid towards the acquisition as it was included in the total purchase price paid at closing in a) above

F-8

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