U.S. SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 2005
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Concierge Technologies, Inc.
(Exact name of registrant as specified in its charter)
California 333-38838 95-4442384
---------- --------- ----------
(state of (Commission File Number) (IRS Employer
incorporation) I.D. Number)
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)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class: None.
Name of each exchange on which registered: None.
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 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[ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act. Yes [X] No [ ]
State issuer's revenues for its most recent fiscal year: None.
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days: $764,003 computed by reference to the
$0.0095 average of the bid and asked price of the Company's Common Stock on
September 23, 2005.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 142,292,747 shares of Common
Stock, $0.001 par value, on September 23, 2005.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(3) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The list
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990). None.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TABLE OF CONTENTS
Page
----
Item 1. Description of Business ..................................... 1
Business Development ........................................ 1
Business of Concierge ....................................... 2
Number of Employees ......................................... 4
Item 2. Description of Property ..................................... 4
Facilities .................................................. 4
Item 3. Legal Proceedings ........................................... 4
Item 4. Submission of Matters to a Vote of Security
Holders .................................................. 5
Item 5. Market for Common Equity and Related Stockholder
Matters .................................................. 5
Holders ..................................................... 6
Dividends ................................................... 6
Penny Stock Regulations ..................................... 6
The Penny Stock Suitability Rule ......................... 7
The Penny Stock Disclosure Rule .......................... 7
Effects of the Rule ...................................... 8
Recent Sales of Unregistered Securities ..................... 8
Item 6. Management's Discussion and Analysis or
Plan of Operations ....................................... 9
Liquidity ................................................ 10
Item 7. Financial Statements ............................... 11
Item 8. Changes in and Disagreements With Accountants On
Accounting and Financial Disclosure ...................... 27
Item 8A. Controls and Procedures ..................................... 27
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with
Section 16(a) of the Exchange Act ........................ 27
Audit Committee and Audit Committee
Financial Expert ....................................... 29
Code of Ethics ........................................... 29
Section 16(a) of the Exchange Act ........................ 29
Item 10. Executive Compensation ...................................... 30
Long-Term Compensation ...................................... 30
Item 11. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters............ 30
Item 12. Certain Relationships and Related Transactions .............. 32
Item 13. Exhibits .................................................... 33
i
Item 14. Principal Accountant Fees and Services ...................... 33
Signatures ........................................................... 35
ii
PART I
ITEM 1...DESCRIPTION OF BUSINESS
Business Development
Concierge Technologies, Inc. was incorporated in California on August
18, 1993 as "Fanfest, Inc." On August 29, 1995 its name was changed to Starfest,
Inc., and on March 20, 2002 its name was changed to "Concierge Technologies,
Inc."
Pursuant to a Stock Purchase Agreement (the "Purchase Agreement") dated
March 6, 2000 between MAS Capital, Inc., an Indiana corporation, the controlling
shareholder of MAS Acquisition XX Corp. ("MAS XX"), an Indiana corporation, and
Starfest, approximately 96.83 percent (8,250,000 shares) of the outstanding
shares of common stock of MAS Acquisition XX Corp. were exchanged for $100,000
and 150,000 shares of common stock of Starfest in a transaction in which
Starfest became the parent corporation of MAS XX.
At the time of this transaction, the market price of Starfest's common
stock was $1.50 bid at closing on March 7, 2000 on the OTC Bulletin Board.
Accordingly, the consideration Starfest paid for the 96.83 percent interest was
valued at $325,000. Concierge loaned to Starfest the $100,000 cash portion of
the consideration evidenced by a no-interest, demand note. Michael Huemmer, the
president of Starfest, loaned to Starfest the 150,000 shares of common stock of
Starfest that was the stock portion of the consideration.
Upon execution of the Purchase Agreement and the subsequent delivery of
$100,000 cash and 150,000 shares of common stock of Starfest on March 7, 2000,
to MAS Capital Inc., pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Starfest became the
successor issuer to MAS Acquisition XX Corp. for reporting purposes under the
Securities and Exchange Act of 1934 and elected to report under the Act
effective March 7, 2000.
MAS XX had no business, no assets, and no liabilities at the time of
the transaction. Starfest entered into the transaction solely for the purpose of
becoming the successor issuer to MAS Acquisition XX Corp. for reporting purposes
under the 1934 Exchange Act. Prior to this transaction, Starfest was preparing
to register its common stock with the Commission in order to avoid being
delisted by the OTC Bulletin Board. By engaging in the Rule 12g-3(a)
transaction, Starfest avoided the possibility that its planned registration
statement with the Commission would not be fully reviewed by the Commission's
staff before an April 2000 deadline, which would result in Starfest's common
stock being delisted on the OTC Bulletin Board.
An agreement of merger was entered into between Starfest and Concierge,
Inc., a Nevada corporation, on January 26, 2000. The proposed merger was
submitted to the shareholders of each of Starfest and Concierge pursuant to a
Form S-4 Prospectus-Proxy Statement filed with the Commission.
1
As described in Starfest's Form 8-K filed on April 2, 2002 with the
Commission (Commission File No. 000-29913), the shareholders of Starfest and
Concierge did approve the merger, and the merger was legally effected on March
20, 2002.
Pursuant to the agreement of merger between Starfest and Concierge,
o Starfest was the surviving corporation,
o The shareholders of Concierge received pro rata for their
shares of common stock of Concierge, 99,957,713 shares of
common stock of Starfest in the merger, and all shares of
capital stock of Concierge were cancelled,
o The fiscal year-end of the corporation was changed to June 30,
o The officers and directors of Concierge became the officers
and directors of Starfest, and
o The name of Starfest was changed to "Concierge Technologies,
Inc."
Business of Concierge Technologies
The business of Concierge Technologies is to conceptualize, design,
develop, distribute and market software, hardware and services within the
personal communications industry. As of June 30, 2005, we were offering one
product, which is known by the name "Personal Communications Attendant" or the
"PCA". The PCA is in the form of a CD containing a proprietary program
application coupled with licensed voice recognition and text-to-speech software
than enables a user to retrieve email messages from any remote telephone and
have the text of the email message "read" in a computer generated voice. This
product was developed and manufactured in limited quantities prior to the
completion of the merger with Starfest. Although the product was available for
distribution, the Company was without sufficient funds to properly market the
product in timely fashion. As a result of the passing time, later introduction
of new operating systems, changes in email client code, changes in consumer
buying habits, the expanding presence of wireless Internet and email appliances,
and the declining use of dial-up voice modems have all contributed to the need
to upgrade the PCA product prior to re-engaging an aggressive marketing effort.
With the PCA in its current form, we do not expect any significant
revenues to be generated from retail sales. Until such time as the PCA can be
upgraded to a later format, we will only offer the product for sale via its
promotion on our website, www.pcahome.com. The retail price of the PCA is
$39.95. In order to expand our channels to market in an economical fashion we
intend to promote the product via cross-channel marketing on partner websites
and to list the product for sale on the commercial websites which charge a
commission for each sale rather than a payment in advance for such promotion. We
have not yet been successful with such listings as of September 14, 2005.
2
In addition to our efforts to liquidate our inventory of the PCA
product, of which we have approximately 14,700 pieces, the company is also
pursuing acquisition of synergistic products and companies that would enhance
and update our presence in the personal communications business. Pursuant to
that strategy, on May 5, 2004 we acquired all of the outstanding and issued
shares of Planet Halo, a privately held Nevada corporation. Planet Halo's assets
include intellectual property related to the industrial design, mechanical
design, operation and know-how to market a wireless, hand-held, cellular phone
with integrated QWERTY keypad, color screen and voice activation software. The
device, known as the "Halo", has been advanced to the beta-test phase and there
exists four working prototypes. In addition to the Halo, Planet Halo also has an
exclusive North American license to exploit a wireless gateway that acts as the
interface between wireless devices, including the Halo, and the Internet. The
gateway, branded as "Halomail", uses secure socket layer technology for
encrypted financial transactions, email access, desktop synchronization, HTML,
XML, SHTML, WAP and other Web-based functions that are enabled on devices
running the Halomail software client. We intend to assist Planet Halo with
placement of the Halomail into active commercial service within the near term.
The strategy of vertical integration of development stage, synergistic,
companies into Concierge remains an integral part of our long term operating
plan. We believe that should we be able to accumulate a sufficient market
potential through combined product offerings we may be more successful in
sourcing needed capital to fund the execution and expansion of our overall
business plan. Of course, we have no assurances that such a strategy will
ultimately be successful or that the addition of product lines and intellectual
properties will create the favorable environment for investors that we
anticipate; however, we plan to continue the creation of value for our
shareholders through acquisitions and partnerships. As this process continues,
we also hope to begin commercial operations with the Halomail and source a buyer
for the PCA inventory, thus generating operating revenues to, in part, offset
our cash expenditures.
Governmental Approval of Principal Products. No governmental approval
is required in the U.S. for Concierge's products.
Government Regulations. There are no governmental regulations in the
U.S. that apply to Concierge's products.
Dependence on Major Customers and Suppliers. Concierge does not
anticipate that it will be dependent on any major customers or suppliers.
Seasonality. There should be no seasonal aspect to Concierge's business
other than possible increased sales anticipated in the fourth calendar quarter
associated with the year-end holidays.
Research and Development. Concierge expended no funds on research and
development in 2005.
Environmental Controls. Concierge is subject to no environmental
controls or restrictions that require the outlay of capital or the obtaining of
a permit in order to engage in business
3
Patents, Trademarks, Copyrights and Intellectual Property. Concierge
has trademarked its Personal Communications Attendant. It has no patents on the
product. Planet Halo has trademarked the names "Halo", "Halomail", and "Planet
Halo". Patent applications are pending on certain aspects of the Halo device and
software applications that enable certain of its functionality. The know-how
centered around the programming, low-level drivers, key board matrix, operating
system interface and certain other aspects of the Halo device, including its
industrial design, are considered a valued intellectual property of Planet Halo.
Number of Employees
-------------------
On June 30, 2005, we employed no persons full time and no persons part
time.
ITEM 2. DESCRIPTION OF PROPERTY
We own no plants, real property or any significant personal property.
Facilities
Our office facilities are co-located with those of our president and
chief operations officer, David Neibert, at 22048 Sherman Way, Suite 301, Canoga
Park, CA 91303. We have no lease and currently pay no rent. In the event we are
able to secure the additional funds required to further our business plan, the
shared office space consisting of approximately 880 square feet, including
furniture and fixtures, can be leased by us for the amount of $1,235 per month
on a one-year lease. Should additional space be needed, there is ample office
space available in the vicinity at competitive prices.
Planet Halo's offices are located at 21 South California Street, Suite
306, Ventura, CA 93001. There is no office lease for Concierge. The lease is in
the name of Marc Angell, President of Planet Halo, and Mr. Angell pays the rent
and other expenses personally. Under an agreement between Marc Angell and
Concierge, Mr. Angell is able to accumulate a loan payable up to an agreed upon
budget amount that we will repay to Mr. Angell at some point in the future.
Concierge, or Mr. Angell, may terminate this office facility arrangement at any
time with a 30 day prior written notice. Neither Mr. Angell nor Concierge is
under any obligation to retain the Planet Halo office in Ventura.
ITEM 3. LEGAL PROCEEDINGS
On May 6, 2002, a default judgment was awarded to Brookside Investments
Ltd against, jointly and severally, our company, Allen E. Kahn, and The
Whitehall Companies in the amount of $135,000 plus interest and legal fees.
Concierge did not defend against the complaint by Brookside, which alleged that
Brookside was entitled to a refund of its investment as a result of a breach of
contract. Brookside had entered into a subscription agreement with Concierge,
Inc. that 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 its investment,
which Concierge was unable to provide.
4
As of September 25, 2005, Brookside has not attempted to enforce its
judgment. As of September 25, 2005, we are unable to pay the amount of the
judgment and have no assets available to Brookside for liquidation in settlement
of the judgment.
Neither Concierge Technologies nor any of its property is the subject
of any other pending legal proceedings or any proceeding that a governmental
authority is contemplating.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In an effort to improve the corporate vehicle to better accommodate a
merger or acquisition, the decision was made by the directors to re-domesticate
the corporation in the State of Nevada. During the month of May 2005 a vote
regarding the move to Nevada was solicited from a group of shareholders
comprising a majority. A majority vote in favor was received and an Information
Statement was subsequently sent to all shareholders detailing the action. The
Company formed a wholly owned subsidiary in the State of Nevada and intends to
merge into this subsidiary, thus dissolving the California corporation and
becoming a Nevada corporation. There are no assurances that a move to Nevada
will ultimately benefit the company by enticing investors or partners, however
management is concerned that, without completing such a move, finding a partner
or investor will prove unlikely at best while under California jurisdiction.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our Common Stock presently trades on the OTC Bulletin Board. The high
and low bid prices, as reported by the OTC Bulletin Board, are as follows for
fiscal years ended June 30, 2004 and 2005. The quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.
High Low
---- ---
Calendar 2003:
3rd Qtr. 0.02 0.008
4th Qtr 0.05 0.007
Calendar 2004
1st Qtr. 0.08 0.02
2nd Qtr. 0.055 0.013
3rd Qtr. 0.02 0.01
4th Qtr. 0.012 0.0075
Calendar 2005
1st Qtr. 0.012 0.006
2nd Qtr. 0.009 0.006
5
Holders
On June 30, 2005 there were approximately 325 holders of record of our
common stock.
Dividends
We have had no earnings and have declared no dividends on our capital
stock. Under California law, a company - such as our company - can pay dividends
only
o from retained earnings, or
o if after the dividend is made,
o its tangible assets would equal at least 11/4 times its
liabilities, and
o its current assets would at least equal its current
liabilities, or
o if the average of its earnings before income taxes
and before interest expenses for the last two years
was less than the average of its interest expenses
for the last two years, then its current assets must
be equal to at least 11/4 times its current
liabilities.
The directors' strategy on dividends is to declare and pay dividends
only from retained earnings and when the directors deem it prudent and in the
best interests of the company to declare and pay dividends.
Penny Stock Regulations
Our common stock trades on the OTC Bulletin Board at a price less than
$5 a share and is subject to the rules governing "penny stocks."
A "penny stock" is any stock that:
o sells for less than $5 a share.
o is not listed on an exchange or authorized for quotation on
The Nasdaq Stock Market, and
o is not a stock of a "substantial issuer." We are not now a
"substantial issuer" and cannot become one until we have net
tangible assets of at least $2 million.
There are statutes and regulations of the Securities and Exchange
Commission (the "Commission") that impose a strict regimen on brokers that
recommend penny stocks.
6
The Penny Stock Suitability Rule
--------------------------------
Before a broker-dealer can recommend and sell a penny stock to a new
customer who is not an institutional accredited investor, the broker-dealer must
obtain from the customer information concerning the person's financial
situation, investment experience and investment objectives. Then, the
broker-dealer must "reasonably determine" (1) that transactions in penny stocks
are suitable for the person and (2) that the person, or his advisor, is capable
of evaluating the risks in penny stocks.
After making this determination, the broker-dealer must furnish the
customer with a written statement setting forth the basis for this suitability
determination. The customer must sign and date a copy of the written statement
and return it to the broker-dealer.
Finally the broker-dealer must also obtain from the customer a written
agreement to purchase the penny stock, identifying the stock and the number of
shares to be purchased.
The above exercise delays a proposed transaction. It causes many
broker-dealer firms to adopt a policy of not allowing their representatives to
recommend penny stocks to their customers.
The Penny Stock Suitability Rule, described above, and the Penny Stock
Disclosure Rule, described below, do not apply to the following:
o transactions not recommended by the broker-dealer,
o sales to institutional accredited investors,
o transactions in which the customer is a director, officer,
general partner, or direct or indirect beneficial owner of
more than 5 percent of any class of equity security of the
issuer of the penny stock that is the subject of the
transaction, and
o transactions in penny stocks by broker-dealers whose income
from penny stock activities does not exceed five percent of
their total income during certain defined periods.
The Penny Stock Disclosure Rule
Another Commission rule - the Penny stock Disclosure Rule - requires a
broker-dealer, who recommends the sale of a penny stock to a customer in a
transaction not exempt from the suitability rule described above, to furnish the
customer with a "risk disclosure document." This document is set forth in a
federal regulation and contains the following information:
o A statement that penny stocks can be very risky, that
investors often cannot sell a penny stock back to the dealer
that sold them the stock,
o A warning that salespersons of penny stocks are not impartial
advisers but are paid to sell the stock,
7
o The statement that federal law requires the salesperson to
tell the potential investor in a penny stock -
o the "offer" and the "bid" on the stock, and
o the compensation the salesperson and his firm will
receive for the trade,
o An explanation that the offer price and the bid price are the
wholesale prices at which dealers are willing to sell and buy
the stock from other dealers, and that in its trade with a
customer the dealer may add a retail charge to these wholesale
prices,
o A warning that a large spread between the bid and the offer
price can make the resale of the stock very costly,
o Telephone numbers a person can call if he or she is a victim
of fraud,
o Admonitions -
o to use caution when investing in penny stocks,
o to understand the risky nature of penny stocks,
o to know the brokerage firm and the salespeople with
whom one is dealing, and
o to be cautious if ones salesperson leaves the firm.
Finally, the customer must be furnished with a monthly statement including
prescribed information relating to market and price information concerning the
penny stocks held in the customer's account.
Effects of the Rule
-------------------
The above penny stock regulatory scheme is a response by the Congress
and the Commission to known abuses in the telemarketing of low-priced securities
by "boiler shop" operators. The scheme imposes market impediments on the sale
and trading of penny stocks. It has a limiting effect on a stockholder's ability
to resell a penny stock.
Our shares likely will trade below $5 a share on the OTC Bulletin Board
and be, for some time at least, shares of a "penny stock" subject to the trading
market impediments described above.
Recent Sales of Unregistered Securities; Outstanding Stock Options
Our company sold the following shares of its common stock during the
last three years without registering the shares:
8
------------------- ---------------- -------------------------- -------------------------- ----------------
Value of
Date No. of Shares Name of Purchaser Type of Consideration Consideration
------------------- ---------------- -------------------------- -------------------------- ----------------
November 12, 2003 1,000,000 Frank Ramogida Cash $ 10,000
------------------- ---------------- -------------------------- -------------------------- ----------------
January 7, 2004 4,000,000 Ryan Consult Ltd. Services $216,000
------------------- ---------------- -------------------------- -------------------------- ----------------
February 19, 2004 1,000,000 Marc Angell Trust Cash $ 10,000
------------------- ---------------- -------------------------- -------------------------- ----------------
May 6, 2004 10,000,000 Planet Halo Shareholders Share-for-Share Exchange $500,000
------------------- ---------------- -------------------------- -------------------------- ----------------
All of the above sales were made pursuant to the exemption from
registration provided by the Commission's Regulation D, Rule 506. All purchasers
were either accredited investors or, if not, were provided copies of the
company's recent filings with the Commission including financial statements
meeting the requirements of the Commission's Item 310 of Regulation S-B. All
purchasers were provided the opportunity to ask questions of Concierge's
management.
No equity of Starfest is subject to outstanding options or warrants to
purchase, or securities convertible into, equity of the company.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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.
9
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
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 June 30, 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.
10
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 7. FINANCIAL STATEMENTS INDEX
The financial statements of the company appear as follows:
Independent Auditors' Report ...................................... 12
Consolidated Balance Sheet, June 30, 2005 ......................... 13
Consolidated Statements of Operations, Years Ended June 30,
2005 and 2004 and the Period from
September 20, 1996 (Inception) to June 30, 2005 .......... 14
Statements of Changes in Stockholders' Equity (Deficit),
September 20, 1996 (Inception) to June 30, 2005 .......... 15
Consolidated Statements of Cash Flows, Years Ended June 30,
2005 and 2004 and the Period from
September 20, 1996 (Inception) to June 30, 2005 .......... 16
Notes to Financial Statements ..................................... 17
11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Concierge Technologies, Inc.
We have audited the accompanying consolidated balance sheet of Concierge
Technologies, Inc. and subsidiary (a development stage company) as of June 30,
2005 and the related statements of operations, stockholders' equity and cash
flows for each of the two years in the period ended June 30, 2005 and for the
period from September 20, 1996 (inception), to June 30, 2005. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits of these statements in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Concierge
Technologies, Inc., and subsidiary as of June 30, 2005 and the results of its
operations and its cash flows for the period then ended and from September 20,
1996 (inception), to June 30, 2005, in conformity with accounting principles
generally accepted in the United States of America.
The Company's consolidated financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company's has not earned any revenue since its inception and has
accumulated deficit of $3,864,761 at June 30, 2005 including a net loss of
$544,284 during the year ended June 30, 2005. These factors as discussed in Note
4 to the financial statements, raises substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 4. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Kabani & Company, Inc.
KABANI & COMPANY, INC.
CERTIFIED PUBLIC ACCOUNTANTS
Los Angeles, California
September 22, 2005
12
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
CONSOLIDATED BALANCE SHEET
JUNE 30, 2005
ASSETS
------
CURRENT ASSETS:
Cash & cash equivalents $ 648
Due from related party 3,691
-----------
$ 4,339
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES:
Accrued expenses $ 396,973
Notes payable - related parties 373,208
-----------
Total current liabilities 770,181
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
Deficit accumulated during the development stage (3,864,761)
-----------
Total stockholders' deficit (765,842)
-----------
$ 4,339
===========
The accompanying notes are an integral part of these financial statements.
13
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2005 AND 2004 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2005
For the Periods
Years Ended From September 20,
JUNE 30 JUNE 30 1996 (Inception)
2005 2004 to June 30, 2005
------------------ ------------------ ------------------
COSTS AND EXPENSES
Product launch Expenses $ -- $ -- $ 1,077,785
Impairment of Assets 496,843 245,800 988,443
General & Administrative Expenses 45,926 267,239 1,428,890
------------------ ------------------ ------------------
TOTAL COSTS AND EXPENSES 542,769 513,039 3,495,118
OTHER INCOME/(EXPENSES)
Other Income 85 -- 85
Settlement income -- -- 52,600
Litigation settlement -- -- (135,000)
------------------ ------------------ ------------------
TOTAL OTHER INCOME/(EXPENSES) 85 -- (82,315)
------------------ ------------------ ------------------
NET LOSS BEFORE INCOME TAXES (542,684) (513,039) (3,577,433)
Provision of Income Taxes 1,600 800 8800
------------------ ------------------ ------------------
NET LOSS $ (544,284) $ (514,639) $ (3,586,233)
================== ================== ==================
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING, BASIC AND DILUTED 142,292,747 130,896,574
================== ==================
BASIC AND DILUTED NET LOSS PER SHARE $ (0.00) $ (0.00)
================== ==================
The accompanying notes are an integral part of these financial statements.
14
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2005
Common Stock
--------------------------------------------
Additional Stockholders'
Number of Par paid in Shares Accumulated Equity
shares value capital to be issued Deficit (deficit)
------------ ------------ ------------ ------------ ------------ ------------
Common Stock issued for cash
through June 30, 1997 176,306 1,763 $ 106,162 -- $ -- $ 107,925
Common stock issued for services
through June 30, 1997 621,545 6,215 -- -- -- 6,215
Net loss through June 30, 1997 -- -- -- -- (96,933) (96,933)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 1997 797,851 7,978 106,162 -- (96,933) 17,207
Common Stock issued for cash
in the year ended June 30, 1998 137,475 1,375 194,650 -- -- 196,025
Common stock issued for services
in the year ended June 30, 1998 22,550 226 -- -- -- 226
Net loss for the year ended
June 30, 1998 -- -- -- -- (283,891) (283,891)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 1998 957,876 9,579 300,812 -- (380,824) (70,433)
Common Stock issued for cash
in the year ended June 30, 1999 208,000 -- -- -- -- --
Common stock issued for services
in the year ended June 30, 1999 450 -- -- -- -- --
Net loss for the year ended
June 30, 1999 -- -- -- -- (89,919) (89,919)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 1999 1,166,326 9,579 300,812 -- (470,743) (160,352)
Acquisition and retirement of Common
shares (262,000) (2,620) -- -- -- (2,620)
Common Stock issued for cash
in the year ended June 30, 2000 117,184 -- -- -- -- --
Common stock issued for services
in the year ended June 30, 2000 354,870 -- -- -- -- --
Post acquisition stock subscription
funds received net of costs & expenses
of $79,710 -- -- -- -- -- --
Net loss for the year ended
June 30, 2000 -- -- -- -- (986,986) (986,986)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2000 1,376,380 6,959 300,812 -- (1,457,729) (1,149,958)
Post acquisition stock subscription
funds received -- -- -- -- -- --
Net loss for the year ended
June 30, 2001 -- -- -- -- (544,080) (544,080)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2001 1,376,380 6,959 300,812 -- (2,001,809) (1,694,038)
Recapitalization upon merger 118,681,333 113,099 (300,812) -- (278,527) (466,240)
Stock subscription received for
500,000 shares -- -- -- 29,983 -- 29,983
Stock issued for services 2,532,581 119,031 -- -- -- 119,031
Stock to be issued for services-
3,275,472 shares -- -- -- 153,947 -- 153,947
Adjustment to paid in capital on
merger -- (116,499) 116,499 -- -- --
Net loss for the year ended
June 30, 2002 -- -- -- -- (478,229) (478,229)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2002 122,590,294 122,590 116,499 183,930 (2,758,565) (2,335,546)
Stock issued for subscription
received in the prior year 500,000 500 29,483 (29,983) -- --
Stock issued for services included
in the prior period 3,275,472 3,275 150,672 (153,947) -- --
Forfeiture of stock subscription -- -- 10,000 -- -- 10,000
Cancellation of over issued shares
on recapitalization (73,017) -- -- -- -- --
Net loss for the year ended
June 30, 2003 -- -- -- -- (47,272) (47,272)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2003 126,292,749 126,365 306,654 -- (2,805,837) (2,372,818)
Adjustment to par value -- (72) 72 -- -- --
Issuance of shares for cash 2,000,000 2,000 18,000 -- -- 20,000
Issuance of shares for services 4,000,000 4,000 212,000 -- -- 216,000
Issuance of shares for acquisition
of Planet Halo 9,999,998 10,000 490,000 -- -- 500,000
Net loss for the year ended
June 30, 2004 -- -- -- -- (514,639) (514,639)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2004 142,292,747 142,293 1,026,726 -- (3,320,476) (2,151,457)
Reclassify contingent liabilities
to Additional Paid In Capital -- -- 1,929,900 -- -- 1,929,900
Net loss for the year ended
June 30, 2005 -- -- -- -- (544,284) (544,284)
------------ ------------ ------------ ------------ ------------ ------------
Balance at June 30, 2005 142,292,747 142,293 $ 2,956,626 -- $ (3,864,761) $ (765,842)
============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
15
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2005 AND 2004 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2005
Sept. 20, 1996
JUNE 30 JUNE 30 (inception) to
2005 2004 June 30, 2005
-------------- -------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (544,284) $ (514,639) $ (3,586,233)
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 (decrease) in current liabilities:
Accrued expenses 15,269 18,256 312,440
-------------- -------------- --------------
Net cash used in operating activities (31,928) (34,583) (2,267,444)
-------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash received on acquisition of subsidiary -- 2,912 2,912
Note receivable - related party -- -- (100,000)
Acquisition of equipment -- -- (12,910)
-------------- -------------- --------------
Net cash provided by (used in) investing activities -- 2,912 (109,998)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Due from related party (3,691) -- (3,691)
Proceeds from Issuance of Shares -- 20,000 587,007
Proceeds from stock subscription forfeited -- -- 10,000
Proceeds from advance subscriptions -- -- 1,772,983
Costs and expenses of advance subscriptions -- -- (79,710)
Proceeds from (Payments to) related party loans (67,500) 114,000 91,500
-------------- -------------- --------------
Net cash provided (used) by financing activities (71,191) 134,000 2,378,089
-------------- -------------- --------------
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS (103,118) 102,329 648
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 103,766 1,437 --
-------------- -------------- --------------
CASH & CASH EQUIVALENTS, ENDING BALANCE $ 648 $ 103,766 $ 648
============== ============== ==============
The accompanying notes are an integral part of these financial statements.
16
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Concierge Technologies, Inc., (the "Company"), a California corporation, was
incorporated on August 18, 1993 as Fanfest, Inc. In August 1995 the Company
changed its name to Starfest, Inc. During 1998, the Company was inactive, just
having minimal administrative expenses. During 1999 the Company attempted to
pursue operations in the online adult entertainment field. There were no
revenues from this endeavor. On March 20, 2002, the Company changed its name to
Concierge Technologies, Inc.
In March 2000, the Company acquired approximately 96.83 percent (8,250,000
shares) of the common stock of MAS Acquisition XX Corp. (MAS XX) for $314,688.
This amount was expensed in March 2000 as at the time of the acquisition, MAS XX
had no assets or liabilities and was inactive. On March 21, 2002, the Company
consummated a merger with Concierge, Inc. (Note 11).
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.
On April 6, 2004 the Company entered into a Stock Purchase Agreement with Planet
Halo, Inc. (PHI) whereby, the Company purchased all of the outstanding and
issued shares of PHI in exchange for 10 million shares of the Company's common
stock valued at $500,000. On May 5, 2004 the Company issued the shares on a
ratio of 8.232 shares of its common stock to each share of PHI stock to the
former shareholders of PHI. The existing PHI shares were then retired and
cancelled. The Company is now the sole shareholder of PHI, a Nevada corporation.
On May 5, 2004 the President of PHI was officially appointed to the Board of
Directors of the Company along with one other PHI named appointee (Note 15).
PHI is a development stage company in the wireless telecommunications industry
and plans to 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 accounting policies of the Company are in accordance with generally accepted
accounting principles and conform to the standards applicable to development
stage companies.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The accompanying condensed consolidated financial statements include the
accounts of Concierge Technologies, Inc. (parent) and its wholly owned
subsidiary, Planet Halo, Inc. All significant inter-company transactions and
accounts have been eliminated in consolidation.
Cash and cash equivalents
The Company considers all liquid investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.
17
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Use of estimates
The preparation of financial statements is in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Equipment
Equipment is carried at cost. Depreciation of equipment is provided using the
straight-line method over the estimated useful lives of the assets. Expenditures
for maintenance and repairs are charged to expense as incurred.
Income taxes
Deferred income tax assets and liabilities are computed annually for differences
between the financial statements and tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted laws
and rates applicable to the periods in which the differences are expected to
affect taxable income (loss). Valuation allowance is established when necessary
to reduce deferred tax assets to the amount expected to be realized.
Basic and diluted net loss per share
Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.
Stock-based compensation
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for stock issued to employees" (APB 25) and
related interpretations with pro forma disclosure of what net income and
earnings per share would have been had the Company adopted the new fair value
method. The company uses the intrinsic value method prescribed by APB25 and has
opted for the disclosure provisions of SFAS No.123. The implementation of this
standard did not have any material impact on the Company's financial statements.
18
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Issuance of shares for service
Valuation of shares for services is based on the estimated fair market value of
the services performed.
Fair value of financial instruments
Statement of financial accounting standard No. 107, Disclosures about fair value
of financial instruments, requires that the Company disclose estimated fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current liabilities qualifying as
financial instruments are a reasonable estimate of fair value.
Accounting for the costs of computer software developed or obtained for internal
use
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants (ASEC of AICPA) issued Statement of
position (SOP) No. 98-1, "Accounting for the costs of computer software
developed or obtained for internal use", effective for fiscal years beginning
after December 15, 1998. SOP N0. 98-1 requires that certain costs of computer
software developed or obtained for internal use be capitalized and amortized
over the useful life of the related software.
Web site development costs
In March 2000, the Emergency Issues Task Force (EITF) of FASB issued its
consensus under EITF-00-02. Per the consensus, certain costs incurred in the
development of a Web site should be capitalized. According to the EITF, those
costs incurred in developing a software program should be capitalized in
accordance with Statement of Position (SOP) 98-1, "Accounting for the costs of
Computer Software Developed or obtained for internal use". Capitalization of
software development costs begins upon the establishment of technological
feasibility. The establishment of technological feasibility and the ongoing
assessment of recoverability of capitalized software development costs require
considerable judgment by management with respect to certain external factors,
including, but not limited to, anticipated future revenues, estimated economic
life, and changes in software and hardware technologies. The Company expenses
web site development costs, which are allocated for preliminary project
development, web site general and maintenance.
Research and development
Expenditures for software development costs and research are expensed as
incurred. Such costs are required to be expensed until the point that
technological feasibility is established. The period between achieving
technological feasibility and the general availability of such software has been
short. Consequently, costs otherwise capitalizable after technological
feasibility is achieved are generally expensed because they are insignificant.
Revenue recognition
Revenue is recognized when earned. The Company's revenue recognition policies
are in compliance with all applicable accounting regulations, including American
Institute of Certified Public Accountants (AICPA) Statement of Position (SOP)
97-2, Software Revenue Recognition, SOP 98-9, Modification of SOP 97-2 and Staff
accounting bulletin (SAB) 104, With Respect to Certain Transactions. Revenue
from license programs is recorded when the software has been delivered and the
customer is invoiced. Revenue from packaged product sales to and through
distributors and resellers is recorded when related products are shipped. The
Company does not charge monthly service fee, instead charges only one-time
19
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
purchase price and the option of buying upgrades at a fixed fee based on fair
value of the upgrade. When the revenue recognition criteria required for
distributor and reseller arrangements are not met, revenue is recognized as
payments are received. Costs related to insignificant obligations, which include
telephone support for certain products, are accrued. Provisions are recorded for
returns, concessions and bad debts. Cost of revenue includes direct costs to
produce and distribute product and direct costs to provide online services,
consulting, product support, and training and certification of system
integrators. Research and development costs are expensed as incurred. The
company did not earn any revenue in the years ended June 30, 2005 and 2004.
Allowance for doubtful accounts
In determining the allowance to be maintained, management evaluates many factors
including industry and historical loss experience. The allowance for doubtful
accounts is maintained at an amount management deems adequate to cover estimated
losses. The company did not have accounts receivable or allowance for doubtful
accounts as of June 30, 2005.
Advertising
The Company expenses advertising costs as incurred.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current
period presentation.
3. 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.
In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections." This statement applies to all voluntary changes in accounting
principle and requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless this would be
impracticable. This statement also makes a distinction between "retrospective
application" of an accounting principle and the "restatement" of financial
statements to reflect the correction of an error. This statement is effective
for accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005. We are evaluating the effect the adoption of this
interpretation will have on its financial position, cash flows and results of
operations.
4. 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
during the year ended June 30, 2005, Company has accumulated deficit of
$3,864,761 including a net loss of $544,284 during the year ended June 30, 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, which includes but not limited to, its
ability to maintain vendor and supplier relationships by making timely payments
when due.
20
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 year ended June 30, 2005, towards (i) obtaining
additional equity (ii) management of accrued expenses and accounts payable (iii)
liquidation of the software "PCA(TM)" and (vi) searching for a suitable
strategic partner.
Management believes that the above actions will allow the Company to continue
operations through the next fiscal year.
5. DUE FROM RELATED PARTY
Concierge Technologies, Inc. has no bank account in its own name. Wallen Group,
a consulting company headed by David W. Neibert (the president and director of
Concierge Technologies, Inc.), maintains an administrative account for Concierge
Technologies, Inc. at Wells Fargo Bank. As of June 30, 2005, $3,691 is due from
Wallen Group.
6. EQUIPMENT
June 30, 2005
-------------
Equipment $ 26,054
Less Accumulated depreciation 26,054
-------------
$ 0
=============
7. NOTES PAYABLE - RELATED PARTIES
Notes payable consisted of the following at June 30, 2005:
Note payable to shareholder, non interest bearing, unsecured,
and due on demand $290,208
Notes payable to shareholder, interest rate of 10%, unsecured,
and payable on July 31, 2004 (past due) 5,000
Notes payable to shareholder, interest rate of 10%, unsecured
and payable on October 1, 2004 (past due) 28,000
Notes payable to shareholder, interest rate of 8%, unsecured
and payable on October 1, 2004 (past due) 14,000
21
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on September 1, 2004 (past due) 3,500
Notes payable to shareholder, interest rate of 8%, unsecured
and payable on October 1, 2005 20,000
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on February 1, 2006 5,000
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on June 1, 2006 5,000
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on February 1, 2006 2,500
--------
Total Notes payable $373,208
========
The Company has recorded interest expense payable to related parties, amounting
to $6,549 and $4,697 for the year ended June 30, 2005 and 2004, respectively.
8. INCOME TAXES
No provision was made for Federal income tax since the Company has significant
net operating loss carryforward. Through June 30, 2005, the Company incurred net
operating losses for tax purposes of approximately $3,577,433. Differences
between financial statement and tax losses consist primarily of amortization
allowance, was immaterial at June 30, 2005. The net operating loss carryforward
may be used to reduce taxable income through the year 2025. Net operating loss
for carry forwards for the State of California is generally available to reduce
taxable income through the year 2010.The availability of the Company's net
operating loss carryforward is subject to limitation if there is a 50% or more
positive change in the ownership of the Company's stock. The provision for
income taxes consists of the state minimum tax imposed on corporations.
The net deferred tax asset balance, due to net operating loss carryforwards, as
of June 30, 2005 and 2004 were approximately $1,445,000 and $1,216,000
respectively. A 100% valuation allowance has been established against the
deferred tax assets, as the utilization of the loss carryforwards cannot
reasonably be assured.
The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:
June 30, June 30,
2005 2004
-------- --------
Tax expense (credit) at statutory rate-federal (34)% (34)%
State tax expense net of federal tax ( 6) ( 6)
Changes in valuation allowance 40 40
-------- --------
Tax expense at actual rate -- --
======== ========
22
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. SHARES OF CONCIERGE, INC. ISSUED SUBJECT TO CONTINGENCY AND
SUBSCRIPTIONS RECEIVED FOR COMMON STOCK SUBJECT TO CONTINGENCY
Concierge, Inc. (CI) issued 117,184 shares for cash totaling $202,061 and
354,870 shares for services of $3,549 during the year ended June 30, 2000. Since
December 1998, CI sold securities to persons in six states in the U. S. CI did
not file Form D or other filings in any of the states or with the SEC for such
shares and did not properly follow the requirements for complying with available
exemptions in each state. Accordingly, all such shares are subject to the
contingency that they may have been issued without the availability of an
exemption from registration under the Securities Act of 1933 and under the
securities laws of each of the six states. Therefore, CI has treated all such
shares issued since December 1998, as Common stock issued subject to
contingency. Total shares issued subject to contingency through June 30, 2005,
were 680,504 for cash and services amounting to $266,610.
Concierge, Inc. (CI) entered into subscription agreements to issue "post merger"
shares in exchange for cash. Through December 31, 2000, CI had received advance
subscriptions for a gross amount of $1,255,500 before deducting associated costs
of $79,710, for 5,928,750 post merger shares. In the event the merger between CI
and the Company is not completed prior to November 31, 2000, the obligation of
the Company under this agreement may be satisfied by the issuance of shares in
the Company equivalent on a pro-rata basis to the number of shares in "post
merger" Corporation that were subject to this agreement.
As mentioned in Note 11, CI merged with the Company on March 20, 2002. The
Company filed a registration statement with the Securities and Exchange
Commission ("the Commission") on June 8, 2000 related to the proposed merger,
naming CI as the entity proposed to be merged into the Company. From July 1,
2000 through September 15, 2000, CI received additionally $487,500 as advance
subscription for 2,127,500 post merger shares in an offering intended to be
exempt from registration pursuant to the provisions of Section 4(2) of the
Securities Act of 1933 and of Regulation D, Rule 506 of the Commission. It is
possible, but not certain, that the filing of the registration statement by the
Company and the manner in which CI conducted the sale of the 2,127,500 post
merger shares of common stock constituted "general advertising or general
solicitation" by CI. General advertising and general solicitation are activities
that are prohibited when conducted in connection with an offering intended to be
exempt from registration pursuant to the provisions of Regulation D, Rule 506 of
the Commission. CI does not concede that there was no exemption from
registration available for this offering. Nevertheless, should the
aforementioned circumstances have constituted general advertising or general
solicitation, CI would be denied the availability of Regulation D, Rule 506 as
an exemption from the registration requirements of the Securities Act of 1933
when it sold the 2,127,500 post merger shares of common stock after June 8,
2000. Should no exemption from registration have been available with respect to
the sale of these shares, the persons who bought them would be entitled, under
the Securities Act of 1933, to the return of their subscription amounts if
actions to recover such monies should be filed within one year after the sales
in question. Accordingly, the amounts received by CI from the sale of these
shares are set apart from Stockholders' Equity as "Subscription received for
common stock subject to contingency" to indicate this contingency. The total
contingent liabilities related to such shares amounted to $1,929,900 ($2,009,610
less cost and expenses of $79,710).
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.
23
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. 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.
11. MERGER AGREEMENT
On January 26, 2000 the Company entered into an agreement of merger with
Concierge, Inc. (CI), a California Corporation. Under the agreement, the
outstanding 1,376,380 share of common stock of the CI were converted into
96,957,713 common stock of the Company on the basis of 70.444 shares of the
Company for each share outstanding of the CI. The 96,957,713 post merger shares
were distributed to the shareholders of CI on a pro-rata basis. For accounting
purposes, the transaction was treated as a recapitalization of the CI, with CI
as the accounting acquirer (reverse acquisition), and was accounted for in a
manner similar to a pooling of interests. The operations of the Company have
been included with those of the CI from the acquisition date. The Company had
minimal assets before the merger and did not have significant operations prior
to the merger. The merger was subject to approval by shareholders of both
companies and Securities and Exchange Commission. The merger was consummated on
March 20, 2002.
12. 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 for the years ended June 30, 2005 and 2004.
The Company paid $0 for interest for the years ended June 30, 2005 and 2004.
Total amount paid for interest from September 20, 1996 (inception) through June
30, 2005, amounted to $4,385.
13. 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 in August 31, 2002. The Company is currently co-located with the
president of the Company and pays no rent. Rent expense was $0 for the years
ended June 30, 2005 and 2004.
14. 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 in
the year 2002 as litigation settlement in the accompanying financial statements.
This amount is included in accrued expenses as of June 30, 2005.
24
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. 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
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.
The Company evaluated value of its prepaid expenses during the year ended June
30, 2004 and based upon uncertainness surrounding the utilization of its
software for the "PCA" development, the Company has recorded an impairment of
the prepaid expense amounting $245,800.
25
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. FORMATION OF NEVADA SUBSIDIARY
On April 20, 2005, the Company formed a subsidiary corporation under the laws of
the State of Nevada. The subsidiary corporation, Concierge Technologies, Inc.
(Nevada) was formed for the purpose of re-domesticating the Company stock in the
State of Nevada and dissolving the California Corporation. The action was taken
pursuant to a vote in favor by a majority of shareholders of the Company. As of
September 19, 2005, a merger of the two corporations has not yet been effected.
17. SUBSEQUENT EVENTS
On September 2, 2005, the Company signed a promissory note and borrowed $35,000
from a Company based in Hong Kong. The Note is due before or on October 1, 2006
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.
26
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The principal independent accountant of the company or any significant
subsidiary has not resigned, declined to stand for re-election, or been
dismissed by the company during the periods for which financial statements are
included herein.
ITEM 8A. 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 June 30, 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.
Changes in internal controls. There were no significant changes in
internal controls or other factors that could significantly affect our internal
controls subsequent to the date of our evaluation.
OTHER INFORMATION
There is no information that was required to be disclosed on Form 8-K
during the fourth quarter of 2005 that was not reported.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Set forth below are the names, and terms of office of each of the
directors, executive officers and significant employees of Concierge
Technologies at June 30, 2005 and a description of the business experience of
each.
------------------- --------------------------------------- ------------- ---------
Office Held Term of
Person Offices Since Office
------------------- --------------------------------------- ------------- ---------
David W. Neibert President and Director 2002 2006
------------------- --------------------------------------- ------------- ---------
James E. Kirk Secretary and Director 1996 2006
------------------- --------------------------------------- ------------- ---------
Samuel Wu Director 2002 2006
------------------- --------------------------------------- ------------- ---------
Allen E. Kahn Chairman, CEO, CFO and Director 1996 2006
------------------- --------------------------------------- ------------- ---------
Patrick Flaherty Director 2002 2006
------------------- --------------------------------------- ------------- ---------
Marc Angell Director and President of Planet Halo 2004 2006
------------------- --------------------------------------- ------------- ---------
Pat Rodden Director 2004 2006
------------------- --------------------------------------- ------------- ---------
Allen E. Kahn: Mr. Kahn entered the computer industry as a Systems Engineer with
IBM and subsequently held a series of technical, sales, marketing and management
positions with other multi-billion dollar corporations before becoming President
27
and CEO of two companies marketing data communications hardware and software. He
has extensive experience in voice technology, optical character recognition,
data communications and other technical elements of the PCA, which he conceived.
Mr. Kahn is an honors graduate of the University of Texas at El Paso and pursued
postgraduate studies in Business Administration at UTEP and California State
University, Long Beach.
David W. Neibert: Mr. Neibert has been the President of Concierge Technologies
since June 17, 2002. Prior to assuming the duties of President, Mr. Neibert was,
and remains, a director of Concierge Technologies since 1999. Mr. Neibert is
also the president of The Wallen Group, a general partnership providing
consulting services to wireless communications companies and other high
technology firms in development stages. Prior to founding The Wallen Group, Mr.
Neibert served as the president of Roamer One and Midland USA, and as a director
and executive vice president of business development of their publicly traded
parent company Intek Global Corporation. Intek Global Corporation manufactured,
sold and distributed radio products globally to the consumer, government and
commercial markets and operated a nationwide land mobile radio network in the
U.S. Intek Global Corporation was subsequently acquired by their majority
shareholder, Securicor plc of Sutton Surrey, England. Mr. Neibert reported to
offices located in Los Angeles, Ca., Kansas City, Mo. New York City, N.Y., and
Sutton Surrey, England during his tenure with Intek Global Corporation from 1992
until 1997.
Patrick Flaherty: Mr. Flaherty has been in the technology related business for
over 30 years. During the last five years, he has been president of Manhattan
Resources, a consulting company specializing in Network Communications and
Storage Management. In late 1999 he became Senior Vice President of Concierge,
Inc, and served in this position until March of 2002. Since April 2002, he has
resumed his consulting business and was elected to the board of Concierge
Technologies, Inc in September of 2002.
James E. Kirk, Esq.: Mr. Kirk is Corporate Secretary and General Counsel and has
served as a Director of Concierge, Inc. since inception. He is a graduate of
Wichita State University and holds LLB and JD degrees from the law school of
Washburn University. Mr. Kirk is an attorney in private practice in Albuquerque,
New Mexico.
Samuel C.H. Wu: With nearly 20 years of experience in engineering, banking and
finance; Mr. Wu has played a pivotal role in developing and managing national
and international business activity relationships for organizations in the
public and private sectors. He was a senior marketing/credit officer with the
Bank of America -World Banking Division in Tokyo, London and Hong Kong before
founding Woodsford Shipping & Trading Co., Ltd. Under Mr. Wu's guidance,
Woodsford has become a preeminent firm in the area's import/export and financial
markets. He has been actively involved in the affairs of Concierge since its
inception. Mr. Wu is fluent in English, Japanese and a number of Chinese
dialects. He is a graduate of the University of California, Berkeley, where he
received his BSEE in electronics and computer sciences and MBA. He has also
taken advanced studies in manufacturing, quality assurance and community
medicine.
28
Marc Angell: Mr. Angell is the founder and President of Planet Halo and has
operated the company since its inception in 2000. Prior to founding Planet Halo,
and from the period 1997 through 1999, Mr. Angell was the founder, majority
shareholder and CEO of Angellcom, a supplier and distributor of one-way paging
devices in the U.S. During the early 1990s Mr. Angell was also involved in the
land mobile radio business as a license holder and manager of 220MHz radio
systems. Mr. Angell conceptualized, designed and marketed both the one-way
pagers for Angellcom and the Halo device for Planet Halo. He was elected to the
board of directors of Concierge simultaneous with the acquisition of Planet
Halo.
Pat Rodden: Mr. Rodden has nearly two decades of unique experience developing
products and strategies for leading consumer, sports, recreation and electronics
companies. Rodden is a founding partner, director and head of operations for
Fiori whose expertise has built the company into a leading consumer technology
research and design firm that has garnered more than 25 international awards
over the past three years alone, many on behalf of Fortune 500 companies. Prior
to founding Fiori in 1994, Mr. Rodden held various product development and
program director positions at Virtual Vision, Precor, Paccar and Hughes. He
graduated from California State University, Chico in 1984 with a B.S. in
Mechanical Engineering.
There are no family relationships between the directors and officers.
There are no significant employees of Concierge who are not described above.
Audit committee and Audit Committee Financial Expert
Our directors serve as our audit committee. There is no financial
expert serving on the audit committee. We have no financial expert serving on
the audit committee, because we have no assets of substantial value and have no
ongoing business activities.
Code of Ethics
We have adopted a Code of Ethics that applies to our chief executive
officer, chief financial officer, and - should we acquire such - principal
accounting officer or controller or persons performing similar functions. A copy
of the Code of Ethics was filed as an exhibit to the Form 10-KSB annual report
for FY 06-30-2004.
Compliance with Section 16 (a) of the Exchange Act
Section 16(a) Beneficial Ownership Reporting Compliance. Based solely
upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us with
respect to our fiscal year ended June 30, 2005 and any written representations
furnished to us from a person subject to Section 16(a) filing requirements that
no Form 5 is required for such period, no person who, at any time during the
fiscal year, was a director, officer or beneficial owner of more than ten person
of our common stock failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during such fiscal year.
29
ITEM 10. EXECUTIVE COMPENSATION
The following information concerns the compensation of our chief
executive officer for the last three completed fiscal years. No other executive
officers or individuals received total annual salary and bonus that exceeded
$100,000 during the last three completed fiscal years.
Shares of
Name of Chief Executive Officer Year Cash Salary Common Stock Awarded
David Neibert 2005 0 0
Allen Kahn 2005 0 0
David Neibert 2004 0 0(1)
Allen Kahn 2004 0 0
David Neibert 2003 0 0
--------------------
(1) Mr. Neibert received no shares of stock, however Ryan Consultants Ltd
was issued 4,000,000 shares of our stock as payment for the services
provided by Mr. Neibert. Mr. Neibert disclaims beneficial ownership of
the shares.
Other than as stated above, no cash or stock compensation, deferred
compensation or long-term incentive plan awards were issued or granted to our
management during or with respect to the period ended June 30, 2005. Further, no
member of management has been granted any option or stock appreciation rights;
accordingly, no tables relating to such items have been included within this
Item.
There are no employment contracts, compensatory plans or arrangements
with respect to any director or executive officer which would in any way result
in payments to any such person because of his or her resignation, retirement or
other termination of employment, any change in control, or a change in the
person's responsibilities following a change in control.
Long-Term Compensation
We have no long-term compensation plans or employment agreements with
any of our officers or directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The table below sets forth the ownership, as of September 14, 2005 of
each individual known to management to be the beneficial owner of more than five
percent of the company's common stock, by all directors, and named executive
officers, individually and as a group.
30
Name and Address of Amount Percent of
Beneficial Owner Owned Class
------------------- ------ ----------
Allen E. Kahn 23,778,135 16.7%
7547 W. Manchester Ave., No. 325
Los Angeles, CA 90045
Samuel C.H. Wu 20,855,437 14.7%
1202 Tower 1, Admiralty Centre
18 Harcourt Road
Hong Kong, China
Polly Force Co., Ltd. 10,805,680 (1) 7.6%
1202 Tower 1, Admiralty Centre
18 Harcourt Road
Hong Kong, China
Marc Angell 7,174,181 5.04%
1575 Spinnaker Dr
Suite 204A
Ventura, CA 93001
Fiori Product Development 411,612 (2) (3)
411 SW Second Ave.
Third Floor
Portland, OR 97204
F. Patrick Flaherty 4,727,485 3.3%
637 29th Street
Manhattan Beach, CA 90266
James E. Kirk 3,383,291 2.4%
1401 Kirby, N.E.
Albuquerque, NM 87112
David W. Neibert 1,539,100 (1)
24028 Clarington Drive
West Hills, CA 91304
Officers and Directors
as a Group (7 persons) 61,869,241 43.5%
(1) Mr. Samuel C. H. Wu is the beneficial owner of these shares and
1,620,852 shares held by Link Sense through his presence on their
respective Boards of Directors.
(2) Mr. Rodden is a beneficial owner of these shares through his presence
on the Board of Directors and his shareholdings in Fiori Product
Development, Inc.
(3) Less than one percent.
There are no agreements between or among any of the shareholders that
would restrict the issuance of shares in a manner that would cause any change in
control of the company. There are no voting trusts, pooling arrangements or
similar agreements in the place between or among any of the shareholders, nor do
the shareholders anticipate the implementation of such an agreement in the near
future.
31
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions during the past two years, or proposed
transactions, to which Concierge Technologies was or is to be a party, in which
any director, executive officer, nominee for election as a director, any
security holder named in Item 10 above and any immediate family member of any of
the foregoing persons had or is to have a direct or indirect material interest.
ITEM 13. EXHIBITS
The following exhibits are filed as part of this Form 10-KSB:
Exhibit No. Description
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.
32
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-KSB on October 13, 2004; Commission
File No. 000-29913, incorporated herein.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees. Our principal independent accountant billed us, for each of
the last two fiscal years, the following aggregate fees for its professional
services rendered for the audit of our annual financial statements and review of
financial statements included in our Form 10-QSB reports or other services
normally provided in connection with statutory and regulatory filings or
engagements for those two fiscal years:
Fiscal Year ended June 30, 2005 $26,500
Fiscal Year ended June 30, 2004 $21,600
Audit-Related Fees. Our principal independent accountant billed us, for
each of the last two fiscal years, the following aggregate fees for assurance
and related services reasonably related to the performance of the audit or
review of our financial statements and not reported above under "Audit Fees":
Fiscal Year ended June 30, 2005 $-0-
Fiscal Year ended June 30, 2004 $-0-
Tax Fees. Our principal independent accountant billed us, for each of
the last two fiscal years, the following aggregate fees for professional
services rendered for tax compliance, tax advice and tax planning:
Fiscal Year ended June 30, 2005 $-0-
Fiscal Year ended June 30, 2004 $-0-
All Other Fees. Our principal independent accountant billed us, for
each of the last two fiscal years, the following aggregate fees for products and
services provided by it, other than the services reported in the above three
categories:
Fiscal Year ended June 30, 2005 $-0-
Fiscal Year ended June 30, 2004 $-0-
33
Pre-Approval of Audit and Non-Audit Services. The Audit Committee
requires that it pre-approve all audit, review and attest services and non-audit
services before such services are engaged.
34
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONCIERGE TECHNOLOGIES, INC.
Date: October 3, 2005 By /s/ David W. Neibert
--------------------------------------
David W. Neibert, President
In accordance with the Exchange Act, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Date: October 3, 2005 /s/ David W. Neibert
----------------------------------------
David W. Neibert, President and Director
Date: October 3, 2005 /s/ Allen E. Kahn
----------------------------------------
Allen E. Kahn, Chief Financial Officer
and Director
Date: October 3, 2005 /s/ F.P. Flaherty
----------------------------------------
F. Patrick Flaherty, Director
Date: October 3, 2005 /s/ James E. Kirk
----------------------------------------
James E. Kirk, Secretary and Director
Date: October 3, 2005 /s/ Samuel C.H. Wu
----------------------------------------
Samuel C.H. Wu, Director
Date: October 3, 2005 /s/ Marc Angell
----------------------------------------
Marc Angell, Director
Date: October 3, 2005 /s/ Pat Rodden
----------------------------------------
Pat Rodden, Director
35
CONCIERGE TECHNOLOGIES, INC.
Commission File No. 000-29913
Index to Exhibits to Form 10-KSB 06-30-05
The following exhibits are filed, by incorporation by reference, as part of this
Form 10-KSB:
Exhibit No. Description
----------- -----------
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.
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.
1
*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-KSB on October 13, 2004; Commission
File No. 000-29913, incorporated herein.
2