U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
CONCIERGE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 000-29913
State of Incorporation: California
IRS Employer I.D. Number: 95-4442384
22048 Sherman Way, Suite 301
Canoga Park, CA 91303
818-610-0310
-------------------------------------------------------
(Address and telephone number of registrant's principal
executive offices and principal place of business)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of May 16, 2005, there were 142,292,749 shares of the Registrant's
Common Stock, $0.001 par value, outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
1
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION 3
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis or Plan of Operation 13
Item 3. Controls and Procedures 15
PART II - OTHER INFORMATION 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 16
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page
Balance Sheet March 31, 2005 (Unaudited) 4
Statements of Operations Three Month Period Ended
March 31, 2005 and 2004 and the
Period from September 20, 1996 (Inception) to
March 31, 2005 (Unaudited) 5
Statements of Cash Flows Periods Ended March 31, 2005
and 2004 and the Period from September 20, 1996
(Inception) to March 31, 2005 (Unaudited) 6
Notes to Unaudited Financial Statements 7
3
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
CONSOLIDATED BALANCE SHEET
MARCH 31, 2005
(Unaudited)
ASSETS
------
CURRENT ASSETS:
Cash & cash equivalents $ 1,317
-----------
$ 1,317
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accrued expenses $ 400,248
Note Payable 20,000
Loans Payable-Shareholders 345,709
-----------
Total current liabilities 765,957
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $.001 per share; 10,000,000
shares authorized; none issued --
Common stock, $.001 par value; 190,000,000 shares
authorized; issued and outstanding 142,292,747 142,293
Additional paid in capital 2,956,626
Shares to be issued
Deficit accumulated during the development stage (3,863,559)
-----------
Total stockholders' deficit (764,640)
-----------
$ 1,317
===========
The accompanying notes are an integral part of these financial statements
4
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
STATEMENTS OF OPERATIONS
THREE MONTH AND NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 AND
THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO MARCH 31, 2005
(Unaudited)
Three month periods ended Nine month periods ended September 20,
March 31, March 31, 1996 (Inception)
2005 2004 2005 2004 to March 31, 2005
----------------- ----------------- ----------------- ----------------- -----------------
REVENUE $ -- $ -- $ -- $ -- $ --
COSTS AND EXPENSES
Product launch Expenses -- -- -- -- 1,077,785
Impairment of asset -- -- 496,843 -- 742,643
General & Administrative Expenses 9,973 472,004 44,640 494,211 1,673,404
----------------- ----------------- ----------------- ----------------- -----------------
TOTAL COSTS AND EXPENSES 9,973 472,004 541,483 494,211 3,493,832
OTHER INCOME/(EXPENSES)
Settlement income, net -- -- -- -- 52,600
Litigation settlement -- -- -- -- (135,000)
----------------- ----------------- ----------------- ----------------- -----------------
TOTAL OTHER INCOME/(EXPENSES) -- -- -- -- (82,400)
----------------- ----------------- ----------------- ----------------- -----------------
NET LOSS BEFORE INCOME TAXES (9,973) (472,004) (541,483) (494,211) (3,576,232)
Provision of Income Taxes -- -- 1600 800 8,800
----------------- ----------------- ----------------- ----------------- -----------------
NET LOSS $ (9,973) $ (472,004) $ (543,083) $ (495,011) $ (3,585,032)
================ ================ ================= ================= =================
WEIGHTED AVERAGE SHARES OF COMMON
STOCK OUTSTANDING, BASIC
AND DILUTED 142,292,747 130,346,695 142,292,747 128,398,204
================= ================= ================= =================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00)
================= ================= ================= =================
The accompanying notes are an integral part of these financial statements
5
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
STATEMENTS OF CASH FLOWS
NINE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004 AND
THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO MARCH 31, 2005
(Unaudited)
September 20, 1996
(inception) to
2005 2004 March 31, 2005
------------------ ------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (543,083) $ (495,011) $ (3,585,032)
Adjustments to reconcile net loss to net cash used in
operating activities:
Impairment of asset 496,843 245,800 742,643
Depreciation and amortization 245 -- 13,155
Stock issued for services -- 216,000 496,352
Increase in current assets:
Prepaid expense -- -- (245,800)
Increase in current liabilities:
Accrued expenses 18,546 3,347 315,717
------------------ ------------------ ------------------
Net cash used in operating activities (27,449) (29,864) (2,262,965)
------------------ ------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash received on acquisition of subsidiary -- -- 2,912
Note receivable - related party -- -- (100,000)
Acquisition of property & equipment -- -- (12,910)
------------------ ------------------ ------------------
Net cash used in investing activities -- -- (109,998)
------------------ ------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Shares -- 20,000 587,007
Proceed from stock to issued for cash -- -- 10,000
Proceeds from advance subscriptions -- -- 1,772,983
Costs and expenses of advance subscriptions -- -- (79,710)
Proceeds from (repayments of) related party loans (75,000) 14,000 84,000
------------------ ------------------ ------------------
Net cash provided by (used in) financing activities (75,000) 34,000 2,374,280
------------------ ------------------ ------------------
NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (102,449) 4,136 1,317
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 103,766 1,437 --
------------------ ------------------ ------------------
CASH & CASH EQUIVALENTS, ENDING BALANCE $ 1,317 $ 5,573 $ 1,317
================== ================== ==================
The accompanying notes are an integral part of these financial statements
6
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Concierge Technologies, Inc. (the "Company"), a California corporation, was
incorporated on August 18, 1993 as Fanfest, Inc. In August 1995 the Company
changed its name to Starfest, Inc. During 1998, the Company was inactive, just
having minimal administr ative expenses. During 1999 the Company attempted to
pursue operations in the online adult entertainment field. There were no
revenues from this endeavor. On March 20, 2002, the Company changed its name to
Concierge Technologies, Inc.
In March 2000, the Company acquired approximately 96.83 percent (8,250,000
shares) of the common stock of MAS Acquisition XX Corp. (MAS XX) for $314,688.
This amount was expensed in March 2000, as at the time of the acquisition MAS XX
had no assets or liabilities and was inactive. On March 21, 2002, the Company
consummated a merger with Concierge, Inc. (see note 10).
Concierge, Inc. ("CI") was a development stage enterprise incorporated in the
state of Nevada on September 20, 1996. The CI had undertaken the development and
marketing of a new technology, a unified messaging product "The Personal
Communications Attendant" ("PCA(TM)"). "PCA(TM)" will provide a means by which
the user of Internet e-mail can have e-mail messages spoken to him/her over any
touch-tone telephone or wireless phone in the world. To-date, the Company has
not earned any revenue.
The accounting policies of the Company are in accordance with generally accepted
accounting principles and conform to the standards applicable to development
stage companies.
Basis of Preparation
The accompanying Interim Condensed Financial Statements are prepared in
accordance with rules set forth in Retaliation SB of the Securities and Exchange
Commission. As said, these statements do not include all disclosures required
under generally accepted principles and should be read in conjunction with the
audited financial statements for the year ended June 30, 2004. In the opinion of
management, all adjustments consisting of normal reoccurring accruals have been
made to the financial statements. The results of operation for the nine months
ended March 31, 2005 are not necessarily indicative of the results to be
expected for the fiscal year ending June 30, 2005.
Reclassifications
Certain prior period amounts have been reclassified to conform with the current
period presentation.
2. RECENT PRONOUNCEMENTS
In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
companies to recognize in the statement of operations the grant- date fair value
of stock options and other equity-based compensation issued to employees. FAS
No. 123R is effective beginning in the Company's second quarter of fiscal 2006.
The Company believes that the adoption of this standard will have no material
impact on its financial statements.
7
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of
Nonmonetary Assets." The Statement is an amendment of APB Opinion No. 29 to
eliminate the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of nonmonetary assets
that do not have commercial substance. The Company believes that the adoption of
this standard will have no material impact on its financial statements. In March
2004, the Emerging Issues Task Force ("EITF") reached a consensus on Issue No.
03-1, "The Meaning of Other-Than-Temporary Impairment and its Application to
Certain Investments." The EITF reached a consensus about the criteria that
should be used to determine when an investment is considered impaired, whether
that impairment is other-than-temporary, and the measurement of an impairment
loss and how that criteria should be applied to investments accounted for under
SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES."
EITF 03-01 also included accounting considerations subsequent to the recognition
of an other-than-temporary impairment and requires certain disclosures about
unrealized losses that have not been recognized as other-than-temporary
impairments. Additionally, EITF 03-01 includes new disclosure requirements for
investments that are deemed to be temporarily impaired. In September 2004, the
Financial Accounting Standards Board (FASB) delayed the accounting provisions of
EITF 03-01; however the disclosure requirements remain effective for annual
reports ending after June 15, 2004. The Company will evaluate the impact of EITF
03-01 once final guidance is issued.
3. GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company's did not earn any revenue
through the period ended March 31, 2005 and the Company has accumulated deficit
of $3,863,559 including a net loss of $543,083 during the nine month period
ended March 31, 2005. The continuing losses have adversely affected the
liquidity of the Company. Losses are expected to continue for the immediate
future. The Company faces continuing significant business risks, including but
not limited to, its ability to maintain vendor and supplier relationships by
making timely payments when due.
In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon continued operations of the Company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and to succeed in its future operations. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted considerable effort
from inception through the period ended March 31, 2005, towards (i) obtaining
additional financing and (ii) management of accrued expenses and accounts
payable.
Management believes that the above actions will allow the Company to continue
operations through the next twelve months.
4. NOTES PAYABLE
On September 13, 2004, the Company signed a promissory note and borrowed $20,000
from a Company based in Hong Kong. The Note is due before or on October 1, 2005.
and bears an interest rate of 8%. Upon default, the holder has the right to
foreclose or otherwise enforce all liens or security interests securing payment
hereof from the Company.
5. NOTES PAYABLE - RELATED PARTIES
Notes payable consisted of the following at March 31, 2005:
8
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
Note payable to shareholder, non interest bearing, unsecured,
and due on demand $ 290,209
Notes payable to shareholder, interest rate of 8%, unsecured,
and payable on February 1, 2006 5,000
Notes payable to shareholder, interest rate of 10%, unsecured,
and payable on July 31, 2004 (past due) 5,000
Notes payable to shareholder, bearing interest rate of 10%, unsecured
and payable on demand 28,000
Notes payable to shareholder bearing interest rate of 8%, unsecured
and payable on October 1, 2004 (past due) 14,000
Notes payable to director/shareholder bearing interest rate of 8%,
unsecured and payable on September 1, 2004 (past due) 3,500
---------
Total Notes payable $ 345,709
=========
The Company has recorded interest expense payable to related parties, amounting
$4,447 and 3,525 for the six month periods ended December 31, 2004 and 2003,
respectively.
6. SHARES OF CONCIERGE, INC. ISSUED SUBJECT TO CONTINGENCY
Concierge, Inc. (CI) issued 117,184 shares for cash totaling $202,061 and
354,870 shares for services of $3,549 during the year ended June 30, 2000. Since
December 1998, CI sold securities to persons in six states in the U. S. CI did
not file Form D or other filings in any of the states or with the SEC for such
shares and did not properly follow the requirements for complying with available
exemptions in each state. Accordingly, all such shares were subject to the
contingency that they might have been issued without the availability of an
exemption from registration under the Securities Act of 1933 and under the
securities laws of each of the six states. Therefore, CI had treated all such
shares issued since December 1998, as Common stock issued subject to
contingency. Total shares issued subject to contingency were 680,504 for cash
and services amounting to $266,610.
On January 1, 2005, the Company re-classified such shares to its equity since
the lapse of time had removed any contingencies because of applicable statutes
of limitation.
7. SUBSCRIPTIONS RECEIVED FOR COMMON STOCK SUBJECT TO CONTINGENCY
Concierge, Inc. (CI) entered into subscription agreements to issue "post merger"
shares in exchange for cash. Through December 31, 2000, CI had received advance
subscriptions for a gross amount of $1,255,500 before deducting associated costs
of $79,710, for 5,928,750 post merger shares. In the event the merger between CI
and the Company was not completed prior to November 31, 2000, the obligation of
the Company under this agreement might have been satisfied by the issuance of
shares in the Company equivalent on a pro-rata basis to the number of shares in
"post merger" Corporation that were subject to this agreement.
9
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
As mentioned in Note 8, CI merged with the Company on March 20, 2002. The
Company filed a registration statement with the Securities and Exchange
Commission ("the Commission") on June 8, 2000 related to the proposed merger,
naming CI as the entity proposed to be merged into the Company. From July 1,
2000 through September 15, 2000, CI received additionally $487,500 as advance
subscription for 2,127,500 post merger shares in an offering intended to be
exempt from registration pursuant to the provisions of Section 4(2) of the
Securities Act of 1933 and of Regulation D, Rule 506 of the Commission. It was
possible, but not certain, that the filing of the registration statement by the
Company and the manner in which CI conducted the sale of the 2,127,500 post
merger shares of common stock constituted "general advertising or general
solicitation" by CI. General advertising and general solicitation are activities
that are prohibited when conducted in connection with an offering intended to be
exempt from registration pursuant to the provisions of Regulation D, Rule 506 of
the Commission. CI did not concede that there was no exemption from registration
available for this offering. Nevertheless, had the aforementioned circumstances
constituted general advertising or general solicitation, CI would have been
denied the availability of Regulation D, Rule 506 as an exemption from the
registration requirements of the Securities Act of 1933 when it sold the
2,127,500 post merger shares of common stock after June 8, 2000. Should no
exemption from registration had been available with respect to the sale of these
shares, the persons who bought them would have been entitled, under the
Securities Act of 1933, to the return of their subscription amounts if actions
to recover such monies had been filed within one year after the sales in
question. Accordingly, the amounts received by CI from the sale of these shares
were set apart from Stockholders' Equity as "Subscription received for common
stock subject to contingency" to indicate this contingency. The total contingent
liabilities related to such shares amounted to $1,929,900 ($2,009,610 less cost
and expenses of $79,710).
On January 1, 2005, the Company re-classified such shares to its equity since
the lapse of time had removed any contingencies because of applicable statutes
of limitation.
8. COMMON STOCK
On May 5, 2004 the Company issued 9,999,998 shares of its common stock valued at
$500,000 in exchange for Planet Halo's 100% outstanding and issued shares on a
ratio of, 8.232 shares of the Company to each share of Planet Halo stock.
9. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
The Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95.
The Company paid $0 for income tax in the nine month periods ended March 31,
2005 and 2004. The Company paid $0 for interest during the nine month periods
ended March 31, 2005 and 2004.
10. COMMITMENT
The Company sub-leased office space in Los Angeles, California from Ardent, Ltd.
The term of the lease was 26 months with monthly payments of $1,542. The lease
expired on August 31, 2002. The Company is currently co-located with the
president of the Company and pays no rent.
10
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
11. LITIGATION
On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd
against, jointly and severally, Concierge, Inc, Allen E. Kahn, and The Whitehall
Companies in the amount of $135,000 plus legal fees. The Company did not defend
against the complaint by Brookside, which alleged that Brookside was entitled to
a refund of their investment as a result of a breach of contract. Brookside had
entered into a subscription agreement with Concierge, Inc., which called for,
among other things, the pending merger between Starfest and Concierge to be
completed within 180 days of the investment. The merger was not completed within
180 days and Brookside sought a refund of their investment, which Concierge was
unable to provide. The Company has accrued the judgment amount of $135,000 as
litigation settlement in the accompanying financial statements.
12. ACQUISITION & IMPAIRMENT OF INTANGIBLE ASSET
On April 6, 2004 the Company and Planet Halo entered into Stock Purchase
agreement whereby, when consummated, the Company would purchase all of the
outstanding and issued shares of Planet Halo in exchange for 10 Million shares
of the Company's common stock valued at $500,000. On April 20, 2004 all of the
conditions of the acquisition were met apart from the issuance of the shares. On
May 5, 2004, the Company issued the shares on a ratio of 8.232 shares of the
Company to each share of Planet Halo stock. The shares were issued directly to
the shareholders of Planet Halo. The existing Planet Halo shares were retired
and cancelled. The Company is now a sole shareholder of Planet Halo, a Nevada
corporation. On May 5, 2004 the President of Planet Halo was officially
appointed to the Board of Directors of the Company along with one other Planet
Halo named appointee.
Planet Halo is a development stage company involved in the wireless
telecommunications industry through the design, manufacture, sale and
distribution of hardware and services that include a hand-held wireless Internet
appliance/cell phone known as the "Halo", and an integrated wireless gateway
interface to the Internet named "Halomail."
The purchase price was determined in arms-length negotiations between the
parties. The assets acquired in this acquisition include without limitation
computer hardware and goodwill. A summary of the Planet Halo assets acquired and
consideration for is as follows:
Allocated amount
----------------
Cash $ 2,912
Equipment, net 245
Goodwill 496,843
-----------
$ 500,000
===========
Consideration paid
------------------
10,000,000 shares of common stock $ 500,000
===========
The Company evaluates intangible assets, goodwill and other long-lived assets
for impairment, at least on an annual basis and whenever events or changes in
circumstances indicate that the carrying value may not be recoverable from its
estimated future cash flows. Recoverability of intangible assets, other
long-lived assets and, goodwill is measured by comparing their net book value to
the related projected undiscounted cash flows from these assets, considering a
number of factors including past operating results, budgets, economic
projections, market trends and product development cycles. If the net book value
11
CONCIERGE TECHNOLOGIES, INC.
(A development stage company)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
of the asset exceeds the related undiscounted cash flows, the asset is
considered impaired, and a second test is performed to measure the amount of
impairment loss. Potential impairment of goodwill is being evaluated in
accordance with SFAS No. 142. The SFAS No. 142 is applicable to the financial
statements of the Company beginning July 1, 2002.
On December 31, 2004, the Company evaluated the valuation of goodwill based upon
the performance and market value of the acquisition. The Company determined the
goodwill is impaired and recorded the impairment of $496,843 in the accompanying
financial statements.
12
Item 2. Plan of Operation
Our plan of operation for the next twelve months is to do the following:
o exploit the opportunities afforded us through our acquisition of
Planet Halo by implementing a sales strategy to deploy the
wireless gateway, Halomail, on synergistic networks,
o properly position the corporation and its structure to
accommodate a business combination with a funding partner,
o continue efforts to liquidate our existing, pre-paid, inventory
of the PCA product and utilize the proceeds for working capital.
On April 6, 2004, our company signed a definitive agreement to acquire the
privately-held company, Planet Halo, in a cash-free stock transaction. On April
20, 2004 the companies completed the necessary documentation to effect the
acquisition. On May 5, 2004 Concierge Technologies instructed its transfer agent
to issue the purchase price in shares of common stock to the shareholders of
Planet Halo. The transaction was officially closed and the shares considered
issued as of May 5, 2004.
Planet Halo is a development-stage company that has developed a prototype,
hand-held, wireless Internet appliance named the "Halo". The Halo is able to
send and receive email, short messages, run applications such as address book,
calculator, scheduler, etc and operates as a fully functional cellular
telephone. In addition to the Halo device Planet Halo also has an exclusive
license to deploy a proprietary wireless gateway in North America. The gateway,
named "Halomail", provides a secure interface for wireless access to the
Internet, and to the worldwide web. Users of the Halo or other wireless devices
may use Halomail as their email client, a secure connection for monetary
transactions, browse the worldwide web, connect to their own Intranets, and
essentially use the gateway as a secure on-ramp to the Internet in much the same
way as a wired connection operates. Concierge plans to move the Halo device into
production readiness and to seek partners for the launch of the Halomail gateway
on service provider networks.
Planet Halo will continue to be operated by its President, Marc Angell,
from his offices located in Ventura, California. Concierge Technologies has not
approved an operating budget for Planet Halo and is currently reliant upon Marc
Angell to continue providing his services, including operating expenses, for the
near term. There is no assurance that this situation will endure for the long
term, or that Concierge will not be required to fund its operations in the near
future.
On June 17, 2002, David W. Neibert became our President and Chief
Operations Officer. Upon assuming that role, he moved the general accounting and
13
administrative offices of our company to a co-location with his firm, The Wallen
Group. We do not currently pay rent and have no lease for the facilities being
provided by Mr. Neibert.
As of March 31, 2005, we had no employees and no fixed overhead other than
the variable cost of web hosting, legal and professional fees, fees charged by
our transfer agent and minimum tax payments. We have a limited amount of office
fixtures, furniture and computer equipment acquired with the Planet Halo
transaction. Our president, the president of Planet Halo, our CEO and directors
are continuing to provide services without cash compensation; however, there are
no assurances that this situation will continue for the indefinite future. In
the event our President is unwilling to continue in his capacity without
compensation, we expect that our CEO and/or the President of Planet Halo will
assume those duties on behalf of the Company.
Liquidity
Our primary source of operating capital has been funding sourced through
insiders or shareholders under the terms of unsecured promissory notes. In two
instances we have sold shares of our common stock in exchange for cash. The
amount of borrowed funds and funds from equity sales has been sufficient to pay
the cost of legal and accounting fees as necessary to maintain a current
reporting status with the Securities and Exchange Commission. However,
sufficient funds have been unavailable to significantly pay down commercial and
vendor accounts payable. We have also been unable to pay salaries to our
officers and several of our outside consultants who had performed services
during the past and present fiscal years.
Although our management is continuing to provide services to the Company
for the near term without cash compensation, we will still require additional
funding to maintain the corporation and market the remaining inventory of the
PCA product. With the acquisition of Planet Halo there are added demands for
operating capital. The Company has been aggressively pursuing financing for the
funding of the Halo device project, however the financial advisor retained to
assist with the effort has not produced a satisfactory result. Until such time
as definitive agreements are reached with investors, such a financing remains
speculative. If the financing is not available, the Halo may not be put into
production. In the event the financing is not completed, our funds and inventory
assets will be exhausted at some point and continuing operations may be
impossible.
Item 3. Controls and Procedures
Evaluation of disclosure controls and procedures. The Company's
management, with the participation of the Company's Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of the Company's
disclosure controls and procedures as of March 31, 2005. Based on this
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective.
14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed, by incorporation by reference, as part of
this Form 10-QSB:
Exhibit Item
------- ----
2 - Stock Purchase Agreement of March 6, 2000 between Starfest,
Inc. and MAS Capital, Inc.*
3.1 - Certificate of Amendment of Articles of Incorporation of
Starfest, Inc. and its earlier articles of incorporation.*
3.2 - Bylaws of Concierge, Inc., which became the Bylaws of
Concierge Technologies upon its merger with Starfest, Inc.
on March 20, 2002.*
3.5 - Articles of Merger of Starfest, Inc. and Concierge, Inc.
filed with the Secretary of State of Nevada on March 1,
2002.**
3.6 - Agreement of Merger between Starfest, Inc. and Concierge,
Inc. filed with the Secretary of State of California on
March 20, 2002.**
10.1 - Agreement of Merger between Starfest, Inc. and Concierge,
Inc.*
14 - Code of Ethics for CEO and Senior Financial Officers.***
31 -
Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.1 - Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32 - Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
15
32.1 - Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
*Previously filed with Form 8-K12G3 on March 10, 2000; Commission File No.
000-29913, incorporated herein.
**Previously filed with Form 8-K on April 2, 2002; Commission File No.
000-29913, incorporated herein.
***Previously filed with Form 10-K FYE 06-30-04 on October 13, 2004;
Commission File No. 000-29913, incorporated herein.
SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the Registrant
has caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: May 18, 2005
CONCIERGE TECHNOLOGIES, INC.
By /s/ David W. Neibert
----------------------------
David W. Neibert, President
16