U.S.
UNITED STATES
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 DECEMBER 31, 2000 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 333-38838 STARFEST, INC. (Name10-K———————
X | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE |
ACT OF 1934 | |
For the fiscal year ended: June 30, 2008 | |
or | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE | |
ACT OF 1934 | |
For the transition period from: _____________ to _____________ | |
———————
Concierge Technologies, Inc.
(Exact name of small business issuerregistrant as specified in its charter)
California 95-4442384
---------- ----------
4602 East Palo Brea Lane, Cave Creek, AZ 85331 (Address
———————
Nevada | 333-38838 | 95-4442384 |
(State or Other Jurisdiction | (Commission | (I.R.S. Employer |
of Incorporation or Organization) | File Number) | Identification No.) |
3615 Superior Ave., Suite 3100A
Cleveland, OH 44144
Tel: 866.921.9434
Fax: 818.564.4875
(Address and telephone number of registrant's principal
executive offices and principal executive offices)
480-551-8280
-------------------------
(Issuer's Telephone Number)
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]
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: $2,367,750 computed by reference to the
$0.1025 average of the bid and asked price of the Company's Common Stock on
March 24, 2001.
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 23,100,000 shares of
Common Stock, $0.001 par value.
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]
2
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | ||||||||
Yes | ü | No | ||||||
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. | ||||||||
Yes | ü | No | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the | ||||||||
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ü | Yes | No | |||||
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this | ||||||||
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this | ||||||||
Form 10-K. | ü | |||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. | ||||||||
Large accelerated filer | Accelerated filer | |||||||
Non-accelerated filer | Smaller reporting company | |||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | Yes | ü | No | |||||
State issuer's revenues for its most recent fiscal year: $14,194. | ||||||||
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: $683,274 computed by reference to the $0.006 average of the bid and asked price of the Company's Common Stock on September 22, 2008. | ||||||||
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 listed 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¨ Noý | ||||||||
Concierge Technologies, Inc.
TABLE OF CONTENTS
Page
Item 1. Description of
PART I
ITEM 1
Business ......................................1
Business Development .........................................1
Business of Starfest .........................................2
Plan of Operation .....................................3
Number of Employees ..........................................4
Item 2. Description of Property ......................................4
Facilities ...................................................4
Item 3.
1
ITEM 2
Properties
4
ITEM 3
Legal Proceedings ............................................4
Item 4.
4
ITEM 4
Submission of Matters to a Vote of Security Holders ...............................................4
Item 5.
4
PART II
ITEM 5
Market for Registrant’s Common Equity, and Related Stockholder Matters ...............................................4
Holders ......................................................5
Rule 144and
Issuer Purchases of Equity Securities
5
ITEM 7
Management’s Discussion and Rule 145 Restrictions on Trading ................5
Dividends ....................................................7
Penny Stock Regulations ......................................8
The Penny Stock Suitability Rule ......................8
The Penny Stock Disclosure Rule .......................9
EffectsAnalysis of the Rule ...................................10
Recent SalesFinancial Condition and
Results of Unregistered Securities ......................10
Item 6. Plan of Operations ...........................................11
Information About Concierge, Inc..............................13
Overview .....................................................13
Concierge's Plan of Operation .........................13
Description of the PCATM ..............................14
The Market ............................................16
Competition............................................17
Distribution Methods ..................................17
Production Costs ......................................18
Government Approval of Principal Products .............20
Government Regulations ................................21
Properties ............................................21
Dependence on Major Customers .........................21
Seasonality ...........................................21
Research and Development ..............................21
Environmental Controls ................................21
Year 2000 Computer Problems ...........................21
Number of Employees ...................................21
Venue of Sales ........................................21
Patents, Trademarks, Copyrights and
Intellectual Property ............................21
Legal Proceedings .....................................22
Concierge's Management's Plan of Operation ...................22
Liquidity .............................................22
Product Research and Development ......................23
Other Expected Developments ...........................24
Market for Common Equity and Related
Stockholder Matters .............................24
Market Information ....................................24
Holders ...............................................25
Dividends .............................................25
Changes In and Disagreements With Accountants on
Accounting and Financial Disclosures ..................25
i
Item 7.
9
ITEM 8
Financial Statements .........................................26
Item 8. and Supplementary Data
12
ITEM 9
Changes in and Disagreements Withwith Accountants Onon Accounting and
Financial Disclosure ...................74
Item 9.
30
ITEM 9A(T)
Controls and Procedures
30
ITEM 9B
Other Information
31
PART III
ITEM 10
Directors, Executive Officers Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act .....................74
Section 16(a) Beneficial Ownership
Reporting Compliance ...........................75
Item 10. Corporate Governance
31
ITEM 11
Executive Compensation .......................................75
Long-Term Compensation .......................................76
Item 11.
36
ITEM 12
Security Ownership of Certain Beneficial Owners and Management ........................................76
Item 12. and
Related Stockholder Matters
38
ITEM 13
Certain Relationships and Related Transactions, ...............78
Item 13. and Director Independence
39
ITEM 14
Principal Accounting Fees and Services
39
PART IV
ITEM 15
Exhibits, and Reports on Form 8-K .............................78
(a) Exhibits ..............................................78
(b) Reports on Form 8-K ...................................78
Signatures ..................................................................80
ii
40
PART I
ITEM 1..DESCRIPTION1.
DESCRIPTION OF BUSINESS
BUSINESS.
Business Development
Starfest,.
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.
1
A change in control
An agreement of Starfest could occur in the future, should the
shareholders ofmerger was entered into between Starfest and Concierge, Inc., a Nevada corporation, approve an
agreement of merger entered into between Starfest and Concierge on January 26, 2000. The proposed merger will bewas submitted to the shareholders of each of Starfest and Concierge pursuant to a Form S-4 Prospectus-Proxy Statement filed with the Commission.
As described in Starfest’s Form 8-K filed on April 2, 2002 with the Commission but not yet effective.
(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 will bewas the surviving corporation,
o
·
The shareholders of Concierge will receivereceived 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 will bewere cancelled,
o
·
The fiscal year-end of the corporation was changed to June 30,
·
The officers and directors of Concierge will becomebecame the officers and directors of Starfest, and
o
·
The name of Starfest will bewas changed to "Concierge Technologies, Inc."
1
Our Business of Starfest
Starfest's initial business was the production.
Concierge, through its two operating subsidiaries Planet Halo and promotion of theme
events involving numerous artists and performers and designed to attract mass
audiences of fans drawn by the theme. In 1994 and 1995 it produced "Fanfest,"
which was held at the Fairplex at the Los Angeles County Fairgrounds, and which
won the Airplay International Award as the "Country Music Event of the Year." In
1995 the event won the Country Music Associations of America's award as the
"Best Country Event of the Year." The two events lost money, however. By the end
of 1995, Starfest had a retained deficit of $1,228,703.
In 1996 the event was renamed "Starfest" and was again held in Los
Angeles.
In 1997 the event was planned but was cancelled before being held. At
the end of 1997, Starfest had no business and a retained deficit of $2,135,885.
The company was essentially dormant in 1998, losing only $2,366 for the year,
with its activities being limited to dealing with creditors and to attempting to
raise capital for the resumption of business.
2
In 1999, with no business, Starfest turned the management of the company
over to three individuals involvedWireless Village, is in the adult entertainment business - Billy
Harbour, John Whitleyof providing wireless Internet access through WiFi networks, design, installation, maintenance of wired and Pamela Millerwireless networks, web design and hosting of southwestern Virginia. Under this new
direction the company bought three websites on the Internet - www.starfest.com,
www.adultstar.com and www.adultstars.com. Starfest also purchased and paid
$12,000 for twelve additional websites on the Internet, but the written transfer
of the websites was never obtained,web sites and the right to obtainbroadcast of streaming audio over the transfer of
those websites has been soldInternet. Additionally, the Company resells wired circuits in exchange for commissions and transferred to unrelated third parties.
Stockholders owning a majorityoffers voice over Internet protocol (VoIP) telephony services.
On May 5, 2004 we acquired all of the outstanding stockand issued shares of Starfest regained
control ofPlanet Halo, a privately held Nevada corporation. Before entering the management ofwireless Internet business, Planet Halo’s original focus was to design and market a wireless, hand-held, cellular phone with integrated QWERTY keypad, color screen and voice activation software. The device, known as the company by obtaining the resignations of
directors associated with the Virginia management and having the remaining
directors elect Michael Huemmer as president and Janet Alexander as secretary of
the company. On December 31, 1999, pursuant“Halo”, had been advanced to the written consentbeta-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. Thes e assets are still in place, however the pursuit of persons
holding a majoritycommercial application has been suspended indefinitely by the Company.
On June 5, 2007 Planet Halo launched its first wireless broadband network designed for subscription access to the Internet. The second such network was completed in Ventura, California during the 2007-2008 fiscal year. Planet Halo is also exploring new opportunities as they may evolve by expanding into the area of broadcast radio. By providing audio broadcasts via satellite, WiFi networks and the Internet to the public audience, Planet Halo expects to be able to earn advertising revenues for paid “spots” occurring during the broadcasts. Although the business is in its early growth phase, management expects to devote significant resources and hopes to earn revenues from this activity during the coming year.
On January 23, 2008 we acquired all of the outstanding and issued shares of common stockWireless Village, a privately held Nevada corporation based in Cleveland, Ohio. Wireless Village’s assets include computer hardware, software, domain names, existing radio site infrastructure, and expertise in designing, operating, managing and maintaining wireless and wired networks. Wireless Village also designs and hosts web sites for third party customers and provides a billing platform for Planet Halo’s subscribers to wireless Internet access. During March 2008 Wireless Village also began hosting the Music of Your Life web site and streaming the audio broadcast over the Internet via the “Music of Your Life” website links.
By acquiring Wireless Village certain economies have been realized by elimination of outsourced network design, installation and billing functions for the Planet Halo networks. Additionally, Wireless Village operates a wireless and wired Internet access network from their location in Cleveland, Ohio providing for other sources of revenue in the future.
Governmental Approval of Principal Products. No governmental approval is required in the U.S. for Concierge's products.
Government Regulations. There are governmental regulations in the U.S. that apply to Concierge's use of the company,
Starfest sold allelectromagnetic spectrum; however, no license or approvals are required.
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 remaining assetssummer months associated with increased vacation travel and the desire for remote communications by Internet users.
Research and Development. Concierge expended no funds on research and development in 2008.
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.
2
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 company associated withHalo device and software applications that enable certain of its functionality. The know-how centered around the adult
entertainment business for $10,000. The assets consistedprogramming, low-level drivers, key board matrix, operating system interface and certain other aspects of the three adult
entertainment websites and the right to obtain the additional twelve websites.
Starfest applied this andHalo device, including its other cash assets to the paymentindustrial design, are considered a valued intellectual property of outstanding
liabilities. Starfest suffered a loss of $518,606 for the year of 1999.
On January 18, 2000, Starfest and Concierge executed a letter of intent
to submit to their stockholders a proposal to merge. The agreement of merger was
executed on January 26, 2000. Starfest will be the surviving corporation of the
merger, but the business and management of the merged companies will be that of
Concierge. Pending approval of the merger, Starfest has no business.
Starfest has employee, its president. Starfest's present management
consists of two persons, Michael Huemmer, president, and Janet Alexander,
secretary.
Plan of Operation
- -----------------
Starfest's sole plan of operation at present is to progress toward a
closing of the proposed merger with Concierge. Should the merger be consummated,
the company's plan of operation for the next twelve months shall then be the
plan of operation that Concierge's management has for its company.
Until the merger should be consummated or abandoned, Starfest has no
paid employees. Its officers and directors are contributing their time without
compensation.
Should the merger with Concierge not be consummated, Starfest's
management will seek another merger partner. Starfest does not have sufficient
cash to meet anticipated cash requirements that will arise before the merger
with Concierge is consummated. Should the merger with Concierge not be
consummated, Starfest will likely find it necessary to raise additional funds in
connection with any other merger it might negotiate with another merger partner.
It would propose to require the other party to the merger to provide such funds.
3
Number of Employees.On December 31, 2000, StarfestJune 30, 2008, we employed one personno persons full time and no persons part time.
ITEM 2. DESCRIPTION OF PROPERTY
Starfest owns
PROPERTIES.
We own no plants or real property or personal property. Investment in the wireless infrastructure equipment of Planet Halo is approximately $38,500.
Facilities
Starfest's
Our office facilities, including those of Planet Halo are now co-located with those of our subsidiary, Wireless Village, at 3615 Superior Ave., Suite 3100A, Cleveland, Ohio 44144. Although Wireless Village has a lease expiring April 30, 2010, Concierge has no separate lease arrangement. We pay no rent to Wireless Village. Should additional space be needed, there is ample office space available in the homevicinity at competitive prices.
Planet Halo has no separate office facilities.
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 president, Michael
Huemmer,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.
As ofSeptember 22, 2008, Brookside has not attempted to enforce its judgment. As of September 22, 2008, we are unable to pay the amount of the judgment and have no assets available to Brookside for liquidation in Cave Creek, Arizona, and are provided rent free.
ITEM 3. LEGAL PROCEEDINGS
settlement of the judgment.
Neither StarfestConcierge Technologies nor any of its property is the subject of any other pending legal proceedings or any proceeding of which Starfest is aware that a governmental authority is contemplating.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NoHOLDERS.
There were no matters were submitted to a vote of the security holders of our company during the fiscal year 2000.
2008 through the solicitation of proxies or otherwise.
3
PART II
ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Starfest'sAND ISSUER PURCHASES OF EQUITY SECURITIES.
Our Common Stock presently trades on the OTC Bulletin Board. The high and low bid and asked prices, as reported by the OTC Bulletin Board, are as follows for 1999fiscal years ended June 30, 2007 and 2000.2008. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
Average Daily
High Low Shares Traded
1999:
1st Qtr. 0.1000 0.0050 108,072
2nd Qtr. 0.5938 0.0200 138,705
3rd Qtr. 0.2000 0.0600 105,733
4th Qtr. 0.1050 0.0450 95,998
4
2000:
1st Qtr. 2.3125 0.075 852,552
2nd Qtr. 2.9688 0.3700 215,654
3rd Qtr. 0.7813 0.35 108,162
4th Qtr. 0.41 0.09375 186,584
The computer software industry, in which Concierge will operate, is also
volatile. For instance, the Computer Technology Index ("XCI") closed on November
16, 2000 at 1,160. During the 52 weeks prior to this date, the closing price of
this index ranged from 1,078 to 1,820. The Computer Technology Index is a widely
recognized and used index. It is compiled by the American Stock Exchange and
represents a cross section of widely-held corporations involved in various
phases of the computer industry. It is market-value weighted, based on the
aggregate market value of its 27 component stocks.
|
| High |
| Low |
|
|
|
|
|
Calendar 2006 |
|
|
|
|
3rd Qtr. |
| 0.011 |
| 0.005 |
4th Qtr |
| 0.019 |
| 0.005 |
|
|
|
|
|
Calendar 2007 |
|
|
|
|
1st Qtr. |
| 0.015 |
| 0.005 |
2nd Qtr. |
| 0.021 |
| 0.002 |
3rd Qtr. |
| 0.022 |
| 0.006 |
4th Qtr |
| 0.0135 |
| 0.006 |
|
|
|
|
|
Calendar 2008 |
|
|
|
|
1st Qtr |
| 0.013 |
| 0.006 |
2nd Qtr |
| 0.012 |
| 0.0042 |
Holders
There are
On June 30, 2008 there were approximately 96343 holders of record of Starfest'sour common stock.
Approximately 19 million shares are held in the name of "Cede & Co.," which is
the record holder for shares in numerous brokerage accounts.
Rule 144 and Rule 145 Restrictions on Trading.
Should the merger with Concierge be approved and effected, all shares of
common stock of the post-merger company issued in the merger to the stockholders
of Concierge shall
Dividends
We have been issued pursuant to registration with the
Commission. Nevertheless, there will be certain restrictions on the transfer for
value of the shares received in the merger by the affiliates of Concierge, who
may be deemed to be underwriters.
Securities and Exchange Commission rules define as "affiliates" a
corporation's executive officers, directors and other persons who, by any
manner, exercise control over the corporation's direction and policies. The
affiliates of Concierge at the time of the vote on the merger, in order to sell
their shares received in the merger, must either register them for resale or
comply with the resale provisions set forth in paragraph (d) of the Commission's
Rule 145, unless some other exemption-from-registration provision is available.
The resale provisions of paragraph (d) of Rule 145 refer to certain provisions
of the Commission's Rule 144 and require, for sales of the shares by such
affiliates, that:
o the company must have been subject to the reporting
requirements of Section 13 or Section 15(d) of the
Securities Exchange Act for at least 90 days (which is the
case, here),
5
o the company must have filed all reports with the
Commission required by such rule during the twelve months
preceding such sale (or such shorter period that the
company was required to file such reports),
o transfers for value by such affiliates can occur only
either (1) through broker transactions not involving the
solicitation of buyers or (2) directly to market-makers,
and
o each such affiliate can transfer for value, during a
90-day period, no more shares than the greater of one
percent of all issued and outstanding shares of common
stock of the company (119,957,713 shares immediately after
the merger) or the average weekly volume of trading in
such common stock reported through the automated quotation
system of Nasdaq or the Bulletin Board during the four
calendar weeks prior to placing the sell order with a
broker-dealer.
The above resale provisions of Rule 145 shall continue for such
affiliates for one year after the merger. Then, only the company's reporting
requirement shall continue. When any such affiliate has ceased to be an
affiliate of the post-merger company for at least three months, and provided at
least two years have elapsed since the date of the merger, then even the
requirement that the company file reports with the Commission will no longer be
required for such a former affiliate to sell any of the shares acquired in the
merger.
The following table allocates the post-merger company's common stock
between restricted and non-restricted stock for Concierge's and Starfest's
affiliates at the time of the merger:
Percent of No. of Shares Restricted
Post-Merger Company No. of Shares Total Issued by Rules 144 and 145
- ------------------- ------------- ------------ ------------------------
Authorized shares 190,000,000 - -
Issued and outstanding shares 119,957,713 100.0 60,353,856
----------- ----- -----------
Issued and outstanding shares to be Rule 145:
controlled by Concierge's affiliates 59,493,856 49.6 59,493,856
Issued and outstanding shares to be Rule 144:
controlled by Starfest's affiliates 860,000 0.7 860,000
6
Pre-merger restricted shares of
issued during 2000 to persons other than Rule 144:
its affiliates 1,402,001 1.2 1,402,001
Shares in the "public float,"
subject to no restrictions on
training 58,201,856 48.5 -
---------- ---- ------------
119,957,713 100.0 60,353,856
The 860,000 shares controlled by Starfest's affiliates were issued in
2000 and will continue to be "restricted" shares until they have been held for
two years. The same is true of the 1,402,001 other shares of Starfest issued in
2000. After such shares have been held for one year, they may be sold pursuant
to the provisions of Rule 144, the principal ones of which are set forth above
on pages 5 and 6 as "bullet points" in the second paragraph of this heading.
No equity of Starfest is subject to outstanding options or warrants to
purchase, or securities convertible into, equity of the company.
Dividends. Starfest has had no earnings and hashave declared no dividends on our capital stock. Concierge has never earned a profit and may not do so in
the future. Under CaliforniaNevada law, a company - such as our post-merger 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 post-merger 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.
7
Penny Stock Regulations
Starfest's
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." Starfest isWe are not now a "substantial issuer" and cannot become one until it haswe have net tangible assets of at least $2 million, which it does not now
have and will not have solely as a result of the proposed merger
with Concierge.
million.
4
There are statutes and regulations of the Securities and Exchange Commission (the "Commission") that impose a strict regimen on brokers that recommend penny stocks.
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:
8
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,
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,
9
o
·
Telephone numbers a person can call if he or she is a victim of fraud,
o
5
·
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.
Starfest's merger
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
StarfestSecurities; Outstanding Stock Options
Our company sold the following shares of its common stock withinduring the pastlast three years without registering the shares undershares:
Date |
| No. of Shares |
| Name of Purchaser |
| Type of Consideration |
| Value of Consideration |
November 1, 2006 |
| 5,000,000 |
| Ryan Consult Ltd |
| Services |
| $ 25,000 |
June 22, 2007 |
| 3,003,003 |
| Marc Angell |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Douglas Angell |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Paul Angell |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Ryan Angell |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Michael Phelps |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Jacquie Carter |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Ryan White |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Wiles Trust |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| Starmaker Products LLC |
| Cash |
| $ 10,000 |
June 22, 2007 |
| 3,003,003 |
| 920280 Alberta Ltd |
| Cash |
| $ 10,000 |
January 24, 2008 |
| 909,090 |
| Michael Phelps |
| Cash |
| $ 10,000 |
All of the Securities Act of 1933:
No equity of Concierge will be the business of Starfest.
Until the merger should be consummated or abandoned, Starfest has no
paid employees. Its officers and directors are contributing their time without
compensation. Starfest no longer has sufficient cash to meet anticipated cash
requirements that will arise before the merger with Concierge is consummated.
Until the shareholders of the two companies can vote on the proposed merger,
Starfest's president, Michael Huemmer, and legal counsel, Thomas J. Kenan, are
advancing the costs associated with registering the merger transaction shares
with the Securities and Exchange Commission.
Should the merger with Concierge not be consummated, Starfest's
management will seek another merger partner. Starfest will find it necessary to
raise additional funds in connection with any other merger it might negotiate
with another merger partner. It would propose to require the other party to the
merger to provide such funds.
Should the proposed merger be effected, Starfest's management has been
advised by the management of Concierge that Concierge's present and proposed
business is as follows:
12
INFORMATION ABOUT CONCIERGE, INC.
Overview
Concierge was incorporated in Nevada on September 20, 1996, with the
business purpose to develop personal computer software designed to read an
Internet e-mail user's e-mail messages to one over any wirelined telephonic
connection. The user may call ones computer from any telephone to initiate the
transaction. The software may also be configured by the user to automatically
call one at any telephone number when new e-mail is received from any e-mail
address entered on the user-defined "VIP list." The concept uses voice
recognition technology to allow the user to direct the interaction by voice
command. Concierge devoted almost all its efforts to the development of a usable
product, the Personal Communications Attendant ("PCA(TM)"), which was finally
completed in September, 2000. It may be purchased through the company's Web
sites at http://www.pcahome.com and http://www.conciergetech.com. As presently
constituted, the PCA is a single-user product and has a list purchase price of
$39.95. The company anticipates future sales to individual end-users, large user
groups and re-sellers and is pursuing potential opportunities in all those
channels.
Concierge's Plan of Operation
- -----------------------------
Concierge commenced marketing the PCATM in September 2000. It had
expected to bring the PCATM to market in early April, announced this expectation
in an interview on a television program and set up a toll-free line with
contract personnel available to take telephone orders. Approximately 50 orders
were received. Unfortunately, Concierge's initial marketing effort was
precipitous. The company Concierge had hired to write the programming code to
implement Concierge's design, technical specifications and program logic did not
timely meet its contractual commitments. The product was not ready. The initial
marketing effort was terminated.
On May 12, 2000 the responsibility for writing the programming code was
reassigned to Dave Cook Consulting of Mercer Island, Washington. That company's
work was overseen by Concierge. Detailed technical development of the initial
PCATM product, packaging design, documentation, field testing and attendant
tasks were completed, and the PCATM became available for direct purchase online
in September 2000.
Full scale marketing efforts have not yet commenced. Concierge has
placed evaluation units of the PCA(TM) with a number of major end-user and
reseller organizations for their assessment of the product's suitability for
their purposes. Technical problems in automatic credit card verification and
funds transfer have been resolved. The company is positioned to ship ordered
units expeditiously. Aggressive sales and marketing campaigns are planned but
are being held in abeyance pending the generation of additional funding.
13
Two hundred units were shipped between September, 2000 and January 15,
2001. Of these, only a small number were sold to individual end-users.
Approximately 120 units were sent as evaluation copies to large corporate users
and re-sellers to stimulate demand in situations representing high volume
potential. Such technical evaluations were arranged by Concierge or
intermediaries; no unsolicited evaluation units have been sent. Product
evaluations of this nature by major organizations tend to be time-consuming, and
there is no guarantee of success. Product inventory is not maintained on company
premises but was recently moved from XeTel Corp. in San Ramon, CA to Point to
Point, LLC in Mill Valley, CA from which location order fulfillment services
will be performed. Current inventory, all pre-paid, consists of 14,800 packages,
14,800 printed User's Guides and 1,800 CDs containing the PCA software itself.
Description of the PCATM. Concierge's PCATM provides a means by which
-------------------------
any user of Internet e-mail can have e-mail messages spoken to him or her over
any touch-tone telephone or wireless phone in the world.
The PCATM responds to the user's voice commands to read, verbalize and
manage e-mail traffic stored on a personal computer. The PCATM is "trained" to
respond only to the voice commands and personal voice password of the individual
user, thus guaranteeing that each user's personal messages cannot be accessed by
anyone else. Responding to spoken instructions, the PCATM can verbalize e-mail
(with future fax and voice-mail capabilities) over the phone and save or delete
those messages as directed by the user.
The PCATM software executes on a personal computer operating under
Windows 95 or Windows 98 and using Microsoft Outlook or Outlook Express as an
e-mail client. It requires 350 megabytes of available hard disk space. The
Internet connection may be effected by any standard means, including dial-up or
dedicated telephone line, cable or DSL, but voice interaction between the user
and the PCATM software requires a dial-up phone line and a voice-capable modem.
Generally, although not invariably, many available 56 KB modems are
voice-capable. The initial product being offered for sale is a stand-alone,
single-user version and is not designed to function in a LAN or WAN environment.
There are no set-up costs associated with the product other than assuring that
the minimum hardware and software requirements are present.
14
The initial product can verbalize only a user's e-mail. It is, however,
implemented with "hooks" for the addition of fax and voice-mail modules. "Hooks"
means that the programs have been written to facilitate the future inclusion of
additional features such as fax and voice-mail capabilities. The date of
availability of these features will depend upon decisions still to be made by
Concierge management regarding the assignment of priorities to product
introduction. Among future products planned are the "Pro" version, which will
enable the user to access by telephone the user's fax and voice-mail messages; a
multi-user, server-based version for corporate/enterprise users; and various
"nationalized", that is, non-English, versions. An assessment of individual
market segments and other considerations will enter into the decision of
Concierge's management as to how its available resources might best be utilized.
Expansion of the initial product's capabilities to add fax and voice-mail
retrieval capabilities will not be a major effort; however, it may or may not be
the best application of Concierge's capabilities from a strategic marketing
standpoint.
The e-mail version will retail at $39.95. With a $19.95 upgrade, the
planned pro version will monitor and collect fax, voice mail and e-mail
messages. A user's personal computer will then become a universal communications
center. All the user's incoming communications, be they fax, voice- or e-mail,
will reside on the user's own computer and will be readily accessible from any
telephone.
There will be no monthly service fee - only the one-time purchase price
and the option of buying upgrades. No device other than an ordinary telephone is
needed to access the PCATM. The PCATM also includes an auto pager that notifies
the user by phone or pager when new e-mail is received.
The underlying technology is the subject of patents, and Concierge is
required to pay royalties of $0.425 a delivered PCATM unit to Lexicus, a
subsidiary of Motorola, for its Clamor Automatic Speech Recognition software and
$1.00 a delivered unit to fonix for its text-to-speech software. Concierge has
paid advance royalties to Lexicus for 100,000 units and advance royalties to
fonix for 200,000 units.
Concierge intends to "nationalize" the product to accommodate several
foreign languages, possibly including Japanese, Korean, German, Latin American
Spanish, French and Brazilian Portuguese. fonix has advised Concierge that its
text-to-speech software will be available in up to seven foreign languages
commencing in the first quarter of 2001. "Nationalizing" the PCATM will also
require the translation of PCA-generated voice prompts, packaging for the
product and preparation of the user documentation. The voice recognition
component of the PCA is "language independent" and requires no revision - once
trained by the user, it accepts any sound as signifying any corresponding
instruction provided the sound is uttered consistently and in context.
15
Concierge anticipates that it will complete the first nationalization of
the PCATM within 45 days after it receives from fonix the nationalized
text-to-speech development materials.
The Market. In a study published May 12, 2000 and entitled
"Communications Software and Services," Donaldson Lufkin & Jenrette reported on
the past, present and future estimated users of the Internet. Referring for its
information to the International Data Corporation, a research and analysis
organization in the information technology field, DLJ reported the following
estimates of Internet users:
In Millions
-----------
No. of Users Internet
------------ --------
U.S.A.:
End of 1998 30
End of 2002 67
Global:
End of 1999 196
End of 2003 503
Every Internet user with access to a standard telephone is a potential
buyer of Concierge's PCA(TM).
In a February 2000 research report on "unified messaging,"
Jurisdoctor-LLC.com described a burgeoning cottage industry seeking to integrate
access to e-mail, voice mail, pager messaging and fax mail boxes through PC
desktops, screenphones, and voice/touch-tone telephones. Based on digital
technology and automated voice recognition technology that translates spoken
words into text format that can be edited by a common word processor, unified
messaging systems are being developed by a number of companies. The Gartner
Group, a Massachusetts-based market research firm, predicts that unified
messaging will become a $6.6 billion market this year.
16
Competition.
-----------
In August 1999 Lucent Technologies announced that it was entering the
unified messaging field and proposes to provide to Internet service providers
and to businesses a solution to bring together into a single system a company's
complete voice mail, e-mail and fax capabilities.
USWest is in the field with a unified messaging system that permits the
user to access e-mail, fax and voice messages from ones telephone or PC. It is
called "VoiceWire(TM)", and USWest markets it for $27.90 a month. Among other
entrants in the field are Jfax.com, which offers a unified messaging system at
$12.50 a month plus a $15 activation fee; Premiere Technologies, whose system is
offered at $9.95 a month plus fifteen cents a minute for phone access; and
General Magic, whose Portico system is offered at $19.95 a month and a $50 setup
fee.
Concierge believes that it has positioned itself, with its one-time
$39.95 purchase price for its PCATM with no monthly fees, to compete in a
growing market segment.
Distribution Methods. Concierge's marketing methods will include direct,
--------------------
high-volume, e-mail advertising promulgated on the Internet. Lists of e-mail
addresses are readily available for purchase. Such lists typically contain from
millions to tens of millions of valid e-mail addresses. The lists may cost from
a few hundred dollars to one or two thousand dollars, depending upon the
specificity of the target audience.
In the case of Concierge's PCATM product, any e-mail user who
communicates in English and has a need to retrieve e-mail messages while away
from his or her personal computer may legitimately be considered a prospect. The
lists to be utilized by Concierge will be unfiltered lists, generally restricted
geographically to English-speaking North America. Concierge has elected not to
use its in-house server capacity to perform the actual bulk mailings but will
employ an outside service for this function. Both list sources and mailing
services advertise extensively on the Internet and can also be easily identified
through any comprehensive search engine such as www.dogpile.com.
In addition to direct e-mail Internet marketing, Concierge's marketing
plan includes the cultivation of Internet Service Providers (ISPs) as a sales
channel for the PCATM. Under discussion are strategic alliances to provide PCAs
with personal computer systems and sales through direct marketing organizations.
Concierge has participated and will continue to participate, in radio and
television business-oriented shows designed to expose companies and their
products to a mass audience. Approximately 50 percent of Concierge's present
resources will be allocated to advertising, marketing and product promotion.
17
Production Costs. The PCATM will be manufactured and produced for
-----------------
Concierge by XeTel Corp. and Point To Point LLC of Mill Valley, CA. A service
order fulfillment contract has been executed with eAssist.com of San Diego,
California, an unaffiliated third party corporation. Dave Cook Consulting of
Mercer Island, Washington will provide product development services to implement
products designed by Concierge.
Manufacturing Services Agreements. XeTel Corporation of Austin,
----------------------------------
Texas will manufacture large orders of the PCATM software for Concierge at its
San Ramon, California plant and ship them F.O.B. San Ramon at Concierge's
direction. Because XeTel is not equipped to deal with small-volume shipments,
Concierge's existing finished goods inventory was moved - at Xetel's request -
to Point To Point in December of 2000 for future limited-quantity product runs
and order fulfillment. Should the volume of shipments exceed Point to Point's
capacity at some future date, Concierge can move production and order
fulfillment functions back to XeTel under the terms of their original agreement.
Alternative sources for these services have also been identified and may be
considered in the future.
Under Concierge's agreement with XeTel, Concierge furnishes to
XeTel the design of the PCATM and a twelve-month forecast of sales. They then
negotiate the unit price to be charged Concierge during such period based on the
forecast. Concierge also furnishes to XeTel an approved list of vendors for all
component parts of the PCA(TM).
The first four months of the twelve-month forecast must be firm
purchase orders. Each month the twelve-month forecast is updated, as are the
four months of purchase orders.
Should the actual orders fall short of those forecast for a
twelve-month period for which a price was negotiated, Concierge is subject to
XeTel's supplier billbacks. As of October 15, 2000, Concierge had prepaid
$49,890 to XeTel for PCAsTM to be manufactured for Concierge. Concierge also had
in its inventory at that date 2,000 PCAsTM manufactured for it by XeTel and paid
for.
XeTel warrants the products for 90 days after it ships them.
Should a product be defective because of Concierge's design, Concierge still
must pay XeTel the full purchase price for the product. Should a product be
defective because of XeTel's workmanship or material furnished by XeTel, XeTel
will replace the goods at its expense if the goods are returned to it within 30
days after XeTel's 90-day warranty period.
18
Either party can terminate the agreement for its convenience on
180 days' notice or for cause on 30 days' notice.
Concierge's agreement with Point To Point, for limited-quantity
product runs and order fulfillment, is for Point To Point's services at its
prevailing rates. Quoted rates bind Point To Point for only 30 days.
Service Order Fulfillment Agreement. eAssist.com will provide
------------------------------------
the bulk of Concierge's customer-relationship services. It will provide them
via the Internet. eAssist.com will provide -
o Outsourced e-mail management services and software for the
resolution of technical support questions by means of
Internet e-mail. A user of Concierge's PCA(TM) in need of
technical assistance may contact eAssist.com's help desk
by an e-mail message stating the problem and receive a
reply by e-mail.
o Chat management services and software for the resolution
of technical problems by means of interactive on-line
written communications, similar to the AOL Instant
Messenger facility.
o Voice-based call handling.
All services are to be provided 24 hours a day, 7 days a week. Concierge
management believes that after-sale support is an essential ingredient of
product success. eAssist.com agrees to provide -
o 90% of its automatic e-mail responses within 10 minutes,
o 90% of its personalized e-mail responses within 8 hours,
o 80% of its chat requests within 120 seconds, and
o 80% of calls answered within 120 seconds.
19
e-Assist.com will charge Concierge a one-time installation and
set-up services fee and then a flat-rate monthly management fee, to be
negotiated after eAssist.com's and Concierge's technical staffs have completed
the setup, implementation and integration of customized software applications,
for the above services as well as for -
o Processes for integrating Concierge's web pages directly
with eAssist.com's chat server in order that technical and
other information on Concierge's web pages will be used,
whenever possible and in the interest of consistency, to
respond to questions posed by the interactive, on-line,
written chat method, and
o Automated and personalized e-mail.
The term of the agreement is two years - March 29, 2002. Either
party can terminate the agreement on 60 days' notice.
Product Development Agreement. Dave Cook Consulting of Mercer
-------------------------------
Island, Washington provides product development consulting services to
Concierge. Payment for the services is based upon hourly charges.
After a previous consultant hired to perform program coding
implementation of Concierge's design of the PCATM failed to perform as required
by March 22, 2000, Concierge hired Dave Cook Consulting to perform the work.
Dave Cook Consulting restructured the fundamental systems architecture of the
PCATM, rewrote the basic programming code of major modules of the software
package, and revised the user interface.
Mr. Cook, together with Lisa Monte of Creative Web Works,
recommended major changes that were made in Concierge's web site
(www.pcahome.com) and helped equip the site to handle on-line entry order,
credit card verification and order fulfillment.
The intellectual property rights associated with the work product
of Dave Cook Consulting will be owned by Concierge.
The term of the March 17, 2000 agreement is one year. Concierge
can terminate the agreement without cause on 30 days' notice. Dave Cook
Consulting can terminate the agreement on 30 days' notice if Concierge
materially breaches any obligation of the agreement.
20
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.
Properties. Concierge leases approximately 1,100 square feet of office
----------
space at Suite 1278, 6033 West Century Boulevard, Los Angeles, California 90045.
The lease is a one-year lease that expires June 1, 2001. The space is deemed
adequate for the present time. Ample space is available for any needed expansion
in the vicinity of its present space and elsewhere in the Los Angeles area.
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 approximately $188,663 on
------------------------
research and development in 1998 and $50,431 in 1999. It anticipates that it
will expend approximately $150,000 on research and development in 2000 and
approximately $200,000 in 2001.
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 operations.
Year 2000 Computer Problem. Concierge has determined that it does not
---------------------------
face material costs, problems or uncertainties about the year 2000 computer
problem. This problem stems from the fact that many existing computer programs
use only two digits to identify a year in the date field and do not consider the
impact of the year 2000. Concierge presently uses off-the-shelf and easily
replaceable software programs and has determined that all software is year 2000
compliant.
Number of Employees. On October 1, 2000 Concierge employed two persons
-------------------
full time and two persons part time.
21
Venue of Sales. Concierge anticipates that some of its initial sales
--------------
will be attributable to exports to English-speaking countries.
Patents, Trademarks, Copyrights and Intellectual Property. Concierge
-----------------------------------------------------------
has trademarked its Personal Communications Attendant. It has no patents on the
product.
Legal Proceedings. Neither Concierge nor any of its property is a party
-----------------
to, or the subject of, any material pending legal proceedings other than
ordinary, routine litigation incidental to its business.
Concierge Management's Plan of Operation
- ----------------------------------------
Concierge's management proposes to devote the company's cash assets and
the time and efforts of its officers and staff for the next twelve months to the
promotion, sale and continued improvement of its Personal Communications
Attendant.
Liquidity. As of December 31, 2000, Concierge had cash assets of $3,356
---------
plus prepaid expenses of $245,800 in prepaid royalties and $49,890 in prepaid
finished goods inventory. Of 2000 copies of the compact disk containing the
PCA(TM) software that were in inventory on November 15, 2000, less than 100 had
been sold by January 15, 2001. While approximately 120 units have been sent as
evaluation copies to large corporate users and resellers who had agreed to
evaluate the product, the product evaluations are still not concluded.
Significant orders for the PCA(TM) can be fulfilled, as Concierge has on hand
14,800 of the packages and user manuals, and the 13,000 copies of the compact
disk needed to complete the 14,800 units for sale can be obtained at a cost to
Concierge of a maximum of $32,500. It is felt that the production of the
additional 13,000 CDs can be accomplished for substantially less than the
$32,500 figure quoted by XeTel.
Concierge is illiquid. It is now operating at a monthly administrative
overhead of approximately $20,000. Of this figure, a substantial portion
represents salaries due full-time employees and payments made to part-time
employees. These parties have all agreed to defer such payments until such time
as the company is in a position to meet said obligations. Concierge requires
advertising funds to create a demand for its product. It is seeking debt
financing from several private sources that have had past business relations
with directors of Concierge. One of these sources has asked that Mr. Kahn,
president of Concierge, pledge a portion of his Concierge stock holdings to the
repayment of any loan to Concierge the source might provide. Mr. Kahn has
agreed to do so.
22
Short term, Concierge requires approximately $190,000 for an aggressive
sales and marketing campaign and $60,000 for its general and administrative
overhead for the next three months. Long term, Concierge requires an additional
$180,000 just for general and administrative overhead to complete the next
twelve months. It is anticipated that ongoing requirements may be satisfied from
cash flow generated by product sales expected to result when the company's
product promotion plans are implemented. The $430,000 cash requirements
described in this paragraph for the next twelve months would require the sale of
approximately 10,763, or 73 percent, of the 14,800 PCA(TM) units now in
inventory.
Concierge has no sources of liquidity other than the persons and
entities from whom it is now seeking debt financing. While Mr. Kahn has agreed
to secure a loan to the company with his Concierge stock holdings, such action
may be insufficient to obtain the loan.
The only asset Concierge has is its PCA(TM) product. Should debt
financing not be obtained soon, the directors of Concierge propose to seek a
joint venture partner with whom the PCA(TM) can be jointly marketed and who will
bear the expenses of marketing the product. Discussions are currently underway
with prospective joint venture partners.
Concierge has a contingent liability of $2,009,610 for possible
violations of the stock registration requirements of federal and state
securities laws. The occasion of the contingent liability was Concierge's sale
of $487,500 of its common stock after the June 8, 2000 filing of the
registration statement of which this Prospectus is a part. Concierge does not
concede that no exemption from registration was available, but the contingency
exists that the purchasers of all shares of Concierge common stock from December
9, 1998 to the present - some $2,009,610 in amount - could seek - and might
prevail in seeking - rescissions of their purchases of stock and a return of
their purchase amounts plus interest and attorney fees. Should a demand for
rescission be made by the purchasers of such stock, Concierge would oppose such
a demand for rescission, and its directors would provide the expenses for the
litigation. Concierge's liquidity would not be immediately affected, due to its
directors' providing the expenses for such litigation. However, such litigation
would likely reduce the ability of Concierge to raise additional capital for its
operations and thereby affect its liquidity. And, a plaintiff's judgment in a
class action lawsuit would likely force Concierge into a voluntary chapter 11
reorganization or, possibly, liquidation.
23
Product Research and Development. Concierge's initial PCATM (audio
-----------------------------------
e-mail version) is designed to execute on a personal computer operating under
Windows 95/98 and using Microsoft Outlook or Outlook Express as an e-mail
client. Future versions are expected to operate in the same or successor
environments, although the server-based, multi-user, versions will most likely
function under Microsoft NT or its derivative, Windows 2000. The initial PCATM,
however, is available for purchase and became available on October 3, 2000.
A June 3, 2000 and other projected product release dates were predicated
upon the fulfillment of firm commitments made to Concierge by outside
contractors. Some of those contractors failed to meet their commitments, and
Concierge was forced to delay product introduction. Due to the complexity of the
PCATM product line, numerous specialized technical skills are essential to
successful implementation. However, very few of these niche skills warrant
full-time employment of qualified specialists. It has thus always been the
intention of Concierge's management to outsource narrowly-focused, technical
functions to the greatest extent possible.
Support for Eudora and other e-mail clients is expected to be available
in the next version, whose release date is yet to be determined. Since Eudora
comprises less than ten percent of the Windows-based e-mail users, it is not
considered to be a significant impediment to the market appeal of the product.
Other Expected Developments. Concierge does not expect to purchase any
----------------------------
plant or significant equipment. It outsources the implementation of product
designs for its products that it develops, through the collaboration of its
president, Allen Kahn, and outside providers.
Concierge does expect to increase the number of its employees during the
next twelve months by adding approximately three employees, which would include
administrative and executive personnel.
Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
Market Information. There is no established public trading market for
-------------------
Concierge's common stock. None of its authorized shares of common stock are subject to outstanding options or warrants to purchase, or securitiespurchase. The following shares of Series A Convertible, Voting, Preferred Stock were issued on January 28, 2008 in connection with our acquisition of Wireless Village. Each share of Series A Convertible, Voting, Preferred Stock is convertible into common stock.
24
Concierge's outstanding 1,402,1555 shares of common stock will be
convertedand carries a vote equal to 96,957,7135 shares of common stock in all matters brought before the shareholders for vote.
6
Series A Convertible, Voting, Preferred Stock
5,000,000 shares issued
Date | No. of Shares | Shareholder | ||
1/28/08 | 930,000 | Daniel Britt | ||
1/28/08 | 390,000 | David Neibert | ||
1/28/08 | 390,000 | Marc Angell | ||
1/28/08 | 206,186 | Jan A. and Gail A. Carter | ||
1/28/08 | 412,371 | Mark Triebold | ||
1/28/08 | 60,000 | Thomas Letourneau | ||
1/28/08 | 60,000 | Michael Ager | ||
1/28/08 | 103,093 | Joseph G. Gallo | ||
1/28/08 | 41,237 | Harold Armstrong | ||
1/28/08 | 206,186 | Martin Marietta | ||
1/28/08 | 1,120,928 | Harvey Trifler | ||
1/28/08 | 1,080,000 | Bill Robb |
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis should be read in conjunction with the financial statements and the accompanying notes thereto and is qualified in its entirety by the foregoing and by more detailed financial information appearing elsewhere. See "Financial Statements."
Plan of Starfest onOperation for the basisNext Twelve Months
Our plan of 69.1491operation for the next twelve months is to expand the business of Planet Halo and Wireless Village by doing the following:
·
constructing additional wireless networks, implementing an advertising campaign, and acquiring paying subscribers to the service,
·
develop and maintain a comprehensive web presence through an Internet-based portal designed for social networking and local advertising,
·
expand our involvement in the business of streaming audio over the Internet and associations with affiliate radio stations,
·
engage the assistance of our directors and outside consultants to aggressively pursue financing options and possible acquisition targets in the field of wireless communications and services offered via the Internet.
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 to Starfestof common stock to be exchangedthe shareholders of Planet Halo. The transaction was officially closed and the shares considered issued as of May 5, 2004.
On January 23, 2008, our company acquired all of the issued and outstanding shares of Wireless Village, a Nevada privately held corporation based in Cleveland, Ohio. The purchase price was paid in shares of a newly authorized Series A Convertible, Voting, Preferred stock. Wireless Village had been providing services to Planet Halo related to the design, maintenance and support of our wireless networks operating in Marina del Rey and Ventura, CA. With the acquisition of Wireless Village we now also have a wireless network operating in the Cleveland, OH area and have acquired the computer hardware, software, telecom facilities and office space required to operate the business independent of outside sources.
7
Planet Halo and Wireless Village operate their wireless networks in California and Ohio with Wireless Village providing technical support, customer service, subscription billing service and strategic planning. In addition, Wireless Village has launched web portals for each sharearea designed specifically for local Internet users. Each of Concierge common stock. All 96,957,713 sharesthe future markets will have its own local portal for social networking. The portals offer chat rooms, games, local news, local advertising, local events and postings by local businesses intended only for residents and visitors to the area. The company hopes to gain advertising revenue from the portal as well as increased awareness in the community that translates into heightened subscription levels.
On January 14, 2008, the company embarked on a new endeavor to develop a presence in the affiliate radio business by providing satellite receivers to affiliate broadcast radio stations who would air our play list format in exchange for airtime on their local stations. Wireless Village compiles the play lists, maintains the website (www.musicofyourlife.com) and provides a streaming audio via the Internet. As of June 30, 2008, we have incurred approximately $11,000 of capital expenses, accrued approximately $21,000 of equipment lease and interest expense and expended approximately 4 man-months of labor toward this business and continue to pursue its growth. As of June 1, 2008, the daily operations of the affiliate network, and their associated costs, have been handed off to a third party; however, Wireless Village continues to provide backend technical support, server space, bandw idth, and streaming audio functions to the business and invoices for their time at nominal rates. It is unclear as of June 30, 2008 if the company will be eligiblesuccessful in financing this opportunity in the near future, or will seek to sell its investment to a third party. As of June 30, 2008 no revenues have been earned from this endeavor.
On February 1, 2008, with the acquisition of Wireless Village then completed, we moved the corporate offices of our company to those of Wireless Village at 3615 Superior Ave., Suite 3100A, Cleveland, OH 44144. The Wallen Group. a general partnership headed by our Chief Executive Officer, David Neibert, handles our daily administrative tasks from its location in West Hills, CA. Although we have in the past rendered payment in the form of shares of stock for sale, butour administrative tasks, we do not currently pay rent to Wireless Village and we have no agreement in place for the 57,965,420 sharesservices being provided by Mr. Neibert or his staff.
As of June 30, 2008, Concierge had no paid employees and no fixed overhead. Our operating costs were kept at a minimum with limited commitments for telephone, the cost of web hosting, legal and professional fees, fees charged by our transfer agent and minimum tax payments. Fixed overhead of our operating subsidiaries was also kept a minimum level with rent, web hosting, telephone, Internet access, insurance and utilities being the only significant costs. We have a limited amount of office fixtures, furniture and computer equipment acquired with the Planet Halo and Wireless Village transactions. We have deployed approximately $38,500 worth of radio and computer infrastructure equipment to be distributedremote locations as required to Concierge'soperate the wireless networks in addition to what was already in place with the acquisition of Wireless Village. Our CEO, the president of Planet Halo, the officers of Wireless Village, and our directors are continuing to provide services without cash compensation. There are no guarantees that our officers and directors will be subject tocontinue in these capacities without compensation for an indefinite period of time.
Liquidity
Our primary source of operating capital has been funding sourced through insiders or shareholders under the resale provisionsterms of paragraph (d)unsecured promissory notes. In several instances we have sold shares of Rule 145 discussed above
under "Information About Starfest - Rule 144 and Rule 145 Restrictions on
trading."
Holders. There are 175 holders of record of Concierge's common stock.
-------
Dividends. Concierge has declared no cash dividends on itsour common stock ---------
since its inception. There are no restrictions that limit Concierge's abilityin exchange for cash. With the acquisition of Wireless Village we also acquired approximately $30,000 in cash. The amount of borrowed funds, cash through acquisitions, and funds from equity sales has been sufficient to pay dividends on its common stock or that are likelythe cost of legal and accounting fees as necessary to do so in the future.
Changes In and Disagreements With Accountants on Accounting and Financial
- --------------------------------------------------------------------------------
Disclosures.
- -----------
On February 28, 2001, Concierge dismissed its principal independent
accountant, Brad B. Haynes.
The reports of Brad B. Haynes on the financial statements of the Company
filedmaintain a current reporting status with the Securities and Exchange Commission contained no adverse opinions
or disclaimersCommission. However, sufficient funds have been unavailable to significantly pay down other commercial and vendor accounts payable. We have also been unable to pay salaries to our officers and several of opinion, and were not modified as to uncertainty, audit scope,
or accounting principlesour outside consultants who had performed services during the past two years or the interim periodand present fiscal years.
Although our management is continuing to February 28, 2001, the date of dismissal.
The decision to change accountants was recommended and approved by the
Board of Directors of Concierge.
During the past two years or interim periods prior to February 28, 2001,
there were no disagreements between Concierge and Brad B. Haynes, whether or not
resolved, on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to
Brad B. Haynes' satisfaction, would have caused it to make referenceprovide services to the subject matterCompany for the near term without cash compensation, we will still require additional funding to maintain the corporation. With the acquisition of Wireless Village there are added demands for operating capital if we are to continue to construct the wireless networks. The Company has been aggressively pursuing financing for the funding of the disagreements in connectionwireless project. Until such time as definitive agreements are reached with investors, any form of financing remains speculative. If the financing is not available, Planet Halo may not be able to proceed with its reports.
On March 1, 2001, Concierge engagedplanned development of broadcast radio, and Wireless Village may not be able to afford further expansion of the firm of Kabani & Company, of
Fountain Valley, California,wireless networks. In the event financing is not completed, our funds will be exhausted at some point and continuing operations may be impossible without increased operating profits from the existing wireless network infrastructure.
8
Off-Balance Sheet Arrangements
Our company has not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated with us under which we have
·
an obligation under a guarantee contract,
·
a retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as independent accountants for Concierge. Prior to
March 1, 2001, neither Concierge, nor anyone on its behalf, had consulted with
Kabani & Company concerning the application of accounting principles to any
specific completedcredit, liquidity or contemplated transaction, or the type of audit opinion
that might be rendered on Concierge's financial statements.
25
Financial Statements.
- --------------------
See "Financial Statements - Concierge, Inc." for the independent auditor's
report dated October 17, 2000 with respect to Concierge's balance sheet as of
June 30, 2000 and the related statements of operations and deficit accumulated,
changes in shareholders' deficit and cash flows for the fiscal years ended June
30, 2000 and June 30, 1999, and the notesmarket risk support to such financial statements,entity for such assets,
·
an obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, or
·
an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and the
interim balance sheet as of December 31, 2000, the related statements of
operationsmaterial to, us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging, or research and cash flows for the quarters ended December 31, 2000 and 1999 and
the period from inception (September 20, 1996) to December 31, 2000, and the
statement of changes in stockholders' deficit for the period from inception
(September 20, 1996) to December 31, 2000.
development services with, us.
ITEM 7. 8.
FINANCIAL STATEMENTS INDEX
AND SUPPLEMENTARY DATA.
The financial statements of Starfest and of Conciergethe company appear as follows:
Starfest, Inc.
Independent Auditors' Report ........................................28
Consolidated Balance Sheet
December 31, 2000 ............................................29
Consolidated Statements of Operations
Twelve Months Ended December 31,
2000
Report of Independent Registered Public Accounting Firm | 10 | |
Consolidated Balance Sheet, June 30, 2008 | 11 | |
CConsolidated Statements of Operations, Years Ended June 30, 2008 and 2007 and the | 12 | |
SStatements of Changes in Stockholders’ Equity (Deficit), September 20, 1996 | 13 | |
CConsolidated Statements of Cash Flows, Years Ended June 30, 2008 and 2007 and the | 14 | |
Notes to Financial Statements | 16 |
9
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and 1999 .................................30
Consolidated Statements of Changes in
Stockholders' Equity (Deficit)
for the period from
December 31, 1997 to December 31, 2000 .......................31
Consolidated Statements of Cash Flows
Twelve Months Ended December 31,
2000 and 1999 .................................32
Notes to Consolidated Financial Statements ..........................33
Independent Auditors' Report.........................................38
Balance Sheet as of December 31, 1999................................38
Statement of Operations for the years
ended December 31, 1999 and
December 31, 1998 ............................................40
Statement of Changes in Stockholders' Equity
(Deficit) for the period from
December 31, 1997 to December 31, 1999 .......................41
Statements of Cash Flows for the years ended
December 31, 1999 and December 31, 1998 ......................42
Notes to Financial Statements .......................................43
Concierge, Inc.
Report of Independent Auditors.......................................48
Balance Sheet as of June 30, 2000 ...................................49
26
Statement of Operations and Deficit Accumulated
for the Years Ended June 30, 2000 and
June 30, 1999 and the Period from
September 20, 1996 (Inception Date)
to June 30, 2000 .............................................50
Statement of Changes in Shareholders' Equity
for the Period from
September 20, 1996 (Inception Date)
to June 30, 2000 .............................................51
Statement of Cash Flows for the Years Ended
June 30, 2000 and June 30, 1999 and
the Period from September 20, 1996
(Inception Date) to June 30, 2000 ............................52
Notes to Financial Statements........................................53
Balance Sheet as of December 31, 2000 (Unaudited)....................62
Statement of Operations for the six-month
periods ended December 31, 1999 and
December 31, 2000 (Unaudited)...................................63
Statements of Cash Flows for the six-month
periods ended December 31, 2000 and
December 31, 1999 (Unaudited)...................................64
Notes to Financial Statements (Unaudited)............................65
27
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Starfest,
Concierge Technologies, Inc.:
We have audited the accompanying consolidated balance sheet of Starfest,Concierge Technologies, Inc. and subsidiaries (a California Corporation) (the "Company")development stage company) as of December 31, 2000,June 30,2008 and the related
consolidated statements of operations, stockholders' deficit and cash flows for each of the yeartwo years in the period ended December 31, 2000.June 30, 2008 and for the period from September 20, 1996 (inception), to June 30, 2008. 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 audit.
audits.
We conducted our auditaudits of these statements in accordance with generally accepted auditing standards.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 auditaudits 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 Starfest,Concierge Technologies, Inc., and subsidiaries as of December 31, 2000,June 30, 2008 and the results of its operations, stockholders deficit and its cash flows for each of the two years in the period ended December 31, 2000June 30, 2008 and from September 20, 1996 (inception), to June 30, 2008, 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.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue asprinciples applicable to a going concern. As shownconcern, which contemplates the realization of assets and liquidation of liabilities in the consolidated
financial statements, thenormal course of business. The Company's did not earn any revenue during the year
ended December 31, 2000 and 1999 and the Company has incurred net losses from
inception to December 31, 2000accumulated deficit of $3,055,206$4,221,961 at June 30, 2008 including a net loss of $398,349$350,866 during the year ended December 31, 2000.June 30, 2008. These factors among others, as discussed in Note 4 to the consolidated financial statements, raiseraises 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 consolidated
financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Kabani & Company, Inc.
KABANI & COMPANY,
/s/ Kabani & Company, Inc. |
CERTIFIED PUBLIC ACCOUNTANTS |
Los Angeles, California |
October 8, 2008 |
10
CONCIERGE TECHNOLOGIES, INC. CERTIFIED PUBLIC ACCOUNTANTS
Fountain Valley, California
March 21, 2001
28
Starfest, Inc. & subsidiary
Consolidated Balance Sheet
December 31, 2000
Asset
-----
Current Asset:
Cash $ 40
-----------
Total Current Asset 40
-----------
$ 40
===========
Liabilities And Shareholders' Deficit
-------------------------------------
Current Liabilities:
Accounts payable $ 37,960
Note payable to Concierge, Inc. 100,000
Payable to shareholders 269,933
-----------
Total current liabilities 407,893
Shareholders' Deficit:
Common stock, no par value,
65,000,000 shares authorized;
23,100,000 issued and outstanding 2,647,353
Accumulated Deficit (3,055,206)
-----------
Total shareholders' deficit AND SUBSIDIARIES
( 407,853)
-----------
$ 40
===========
SeeA development stage company)
CONSOLIDATED BALANCE SHEET
|
|
| June 30, |
| |
|
|
|
|
| |
ASSETS |
|
|
| ||
|
|
|
|
| |
CURRENT ASSETS: |
|
|
| ||
| Cash & cash equivalents |
| $ | 5,820 |
|
| Account Receivable |
|
| 1,339 |
|
| Inventory |
|
| 196 |
|
| Total current assets |
|
| 7,355 |
|
|
|
|
|
|
|
| Property and Equipment, net |
|
| 32,754 |
|
|
|
|
|
|
|
| Total Assets |
| $ | 40,109 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
| |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
| |
| Accounts payable and accrued expenses |
| $ | 298,595 |
|
| Advance subscription |
|
| 1,380 |
|
| Due to related party |
|
| 2,742 |
|
| Notes payable - related parties |
|
| 160,692 |
|
| Total current liabilities |
|
| 463,409 |
|
|
|
|
|
|
|
COMMITMENT |
|
|
|
| |
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT: |
|
|
|
| |
| Preferred stock, par value $.001 per share; 10,000,000 |
|
| 5,000 |
|
| Common stock, $.001 par value; 190,000,000 shares |
|
| 178,232 |
|
| Additional paid in capital |
|
| 3,615,428 |
|
| Deficit accumulated during the development stage |
|
| (4,221,961 | ) |
| Total stockholders' deficit |
|
| (423,301 | ) |
| Total Liabilities and Stockholders' Deficit |
| $ | 40,109 |
|
The accompanying notes toare an integral part of these audited financial statements.
29
Starfest, Inc. & subsidiary
Consolidated Statements
11
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2008
|
|
|
|
|
|
|
| For The Period From |
| |||
For the Twelve |
|
|
| |||||||||
June 30, |
|
| 2007 | |||||||||
NET REVENUE |
| $ | 14,198 |
|
| $ | — |
|
| $ | 14,198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUE |
|
| 38,446 |
|
|
| — |
|
|
| 38,446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS LOSS |
|
| (24,248 | ) |
|
| — |
|
|
| (24,248 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Product Launch Expenses |
|
| — |
|
|
| — |
|
|
| 1,077,785 |
|
Impairment of Goodwill |
|
| 207,940 |
|
|
| — |
|
|
| 1,196,383 |
|
General & Administrative Expenses |
|
| 106,265 |
|
|
| 77,105 |
|
|
| 1,655,240 |
|
TOTAL COSTS AND EXPENSES |
|
| 314,205 |
|
|
| 77,105 |
|
|
| 3,929,408 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSES) |
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
| 74 |
|
|
| 54 |
|
|
| 241 |
|
Interest expense |
|
| (11,688 | ) |
|
| (11,024 | ) |
|
| (22,712 | ) |
Unallocated accrued expenses reversed |
|
| — |
|
|
| 150,123 |
|
|
| 150,123 |
|
Settlement Income/(Loss) |
|
| — |
|
|
| — |
|
|
| 52,600 |
|
Loss on debt settlement |
|
| — |
|
|
| (23,033 | ) |
|
| (23,033 | ) |
Litigation Settlement |
|
| — |
|
|
| — |
|
|
| (135,000 | ) |
TOTAL OTHER INCOME (EXPENSES) |
|
| (11,614 | ) |
|
| 116,120 |
|
|
| 22,219 |
|
|
|
|
|
|
|
|
|
|
|
| — |
|
NET LOSS BEFORE INCOME TAXES |
|
| (350,066 | ) |
|
| 39,014 |
|
|
| (3,931,436 | ) |
|
|
|
|
|
|
|
|
|
|
| — |
|
Provision of Income Taxes |
|
| 800 |
|
|
| 800 |
|
|
| 12,000 |
|
|
|
|
|
|
|
|
|
|
|
| — |
|
NET LOSS |
| $ | (350,866 | ) |
| $ | 38,214 |
|
| $ | (3,943,436 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED |
|
| 188,264,248 |
|
|
| 143,950,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*BASIC AND DILUTED NET LOSS PER SHARE |
| $ | (0.00 | ) |
| $ | 0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
———————
*
Weighted average number of Operations
Twelve months Ended December 31,
2000 1999
------------- -----------
Revenues $ - $ -
Generalshares used to compute basic and Administrative
Expenses 397,549 518,606
-------------- ----------
Operating Loss ( 397,549) ( 518,606)
Provision for income
taxes 800 -
-------------- ----------
Net Loss $( 398,349) $( 518,606)
============== ===========
Net Loss Per Common
Share $ .02 $ .03
Weighted Average Common
Shares Outstanding 23,011,688 15,893,441
Seediluted loss per share is the same as the effect of dilutive securities is anti dilutive.
The accompanying notes toare an integral part of these audited financial statements.
12
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
(A development stage company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30,
Starfest, Inc. & subsidiary
Consolidated Statements2008
|
| Preferred stock |
| Common Stock |
|
|
|
|
|
|
|
|
|
| Common Stock | |||||||||||
|
| Number of |
| Par |
| Number of |
| Par |
|
| Additional |
|
| Shares |
|
| Stockholders' |
|
| Subject to | ||||||
|
| shares |
| value |
| shares |
| value |
|
| paid in capital |
|
| to be issued |
|
| deficit |
|
| Contingency | ||||||
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 |
| —- |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 1997 |
| — |
|
| — |
| 797,851 |
|
| 7,978 |
|
|
| 106,162 |
|
|
| — |
|
|
| 114,140 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 1998 |
| — |
|
| —- |
| 957,876 |
|
| 9,579 |
|
|
| 300,812 |
|
|
| — |
|
|
| 310,391 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock issued for cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in the year ended June 30, 1999 |
| — |
|
| —- |
| 208,000 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 60,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in the year ended June 30, 1999 |
| —— |
|
| — |
| 450 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 1999 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 1999 |
| — |
|
| — |
| 1,166,326 |
|
| 9,579 |
|
|
| 300,812 |
|
|
| — |
|
|
| 310,391 |
|
|
| 61,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
| — |
|
| # | — |
|
|
| — |
|
|
| — |
|
|
| 202,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in the year ended June 30, 2000 |
| — |
|
| — |
| 354,870 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post acquisition stock subscription funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
received net of costs & expenses of $79,710 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2000 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2000 |
| — |
|
| — |
| 1,376,380 |
|
| 6,959 |
|
|
| 300,812 |
|
|
| — |
|
|
| 307,771 |
|
|
| 266,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post acquisition stock subscription funds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
received |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2001 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2001 |
| — |
|
| — |
| 1,376,380 |
|
| 6,959 |
|
|
| 300,812 |
|
|
| — |
|
|
| 307,771 |
|
|
| 266,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recapitalization upon merger |
| — |
|
| — |
| 118,681,333 |
|
| 113,099 |
|
|
| (300,812 | ) |
|
| — |
|
|
| (187,713 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of changes in stockholders' equity (deficit)
Common stock Retained
Number of Amount Earnings
Shares Total (Deficit) Total
Balance December 31, 1997 6,236,323 $1,598,072 $(2,135,885) $(537,813)
Net loss for 1998 - - (2,366) (2,366)
---------- --------- ----------- ---------
Balance December 31, 1998 6,236,323 $1,598,072 $(2,138,251) $(540,179)
Shares issued for services 2,313,338 87,200 - 87,200
Shares issued for assets 2,950,000 118,000 - 118,000
Shares issued for debt
extinguishments 6,165,005 646,379 - 646,379
Shares issued for cash 4,033,333 190,000 - 190,000
Net loss for 1999 - - (518,606) (518,606)
---------- --------- ----------- ----------
Balance December 31, 1999 21,697,999 $2,639,651 $(2,656,857) $ (17,206)
Shares issued for services 1,302,001 702 - 702
Shares issued for cash 100,000 7,000 - 7,000
Net loss for 2000 - - (398,349) (398,349)
---------- --------- ----------- ----------
Balance December 31, 2000 23,100,000 $2,647,353 $(3,055,206) $(407,853)
=========== ========== ============ ==========
See notes tothese audited financial statements.
31
Starfest, Inc. & subsidiary
Consolidated Statements
13
Net loss for the year ended June 30, 2002 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2002 |
| — |
|
| — |
| 122,590,294 |
|
| 122,590 |
|
|
| 116,499 |
|
|
| 183,930 |
|
|
| 423,019 |
|
|
| 266,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2003 |
| — |
|
| — |
| 126,292,749 |
|
| 126,365 |
|
|
| 306,654 |
|
|
| — |
|
|
| 433,019 |
|
|
| 266,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2004 |
| — |
|
| — |
| 142,292,747 |
|
| 142,293 |
|
|
| 1,026,726 |
|
|
| — |
|
|
| 1,169,019 |
|
|
| 266,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassify contingent liabilities to Additional Paid In Capital |
| — |
|
| — |
| — |
|
| — |
|
|
| 1,929,900 |
|
|
| — |
|
|
| 1,929,900 |
|
|
| (266,610) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2005 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2005 |
| — |
|
| — |
| 142,292,747 |
|
| 142,293 |
|
|
| 2,956,626 |
|
|
| — |
|
|
| 3,098,919 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans converted to Paid in Capital |
| — |
|
| — |
| — |
|
| — |
|
|
| 281,708 |
|
|
| — |
|
|
| 281,708 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year ended June 30, 2006 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2006 |
| — |
|
| — |
| 142,292,747 |
|
| 142,293 |
|
|
| 3,238,334 |
|
|
| — |
|
|
| 3,380,627 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for services |
| — |
|
| — |
| 5,000,000 |
|
| 5,000 |
|
|
| 30,000 |
|
|
| — |
|
|
| 35,000 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for cash |
| — |
|
| — |
| 27,027,027 |
|
| 27,027 |
|
|
| 62,973 |
|
|
| — |
|
|
| 90,000 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of shares for debt settlement |
| — |
|
| — |
| 3,003,003 |
|
| 3,003 |
|
|
| 30,030 |
|
|
| — |
|
|
| 33,033 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the year ended June 30, 2007 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 0 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2007 |
| — |
|
| — |
| 177,322,777 |
|
| 177,323 |
|
|
| 3,361,337 |
|
|
| — |
|
|
| 3,538,664 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the periods ended June 30, 2008 |
| — |
|
| — |
| — |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash |
| — |
|
| — |
| 909,090 |
|
| 909 |
|
|
| 9,091 |
|
|
| — |
|
|
| 10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Shares for Purchase of Wireless Village |
| 5,000,000 |
|
| 5,000 |
| — |
|
| — |
|
|
| 245,000 |
|
|
| — |
|
|
| 250,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2008 |
| 5,000,000 |
| $ | 5,000 |
| 178,231,867 |
| $ | 178,232 |
|
| $ | 3,615,428 |
|
| $ | — |
|
| $ | 3,798,664 |
|
| $ | — |
The accompanying notes are an integral part of Cash Flows
Twelve months Ended December 31,
2000 1999
----------- -----------
Net Cash From
operating Activities:
Net loss $( 398,349) $( 518,606)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Shares issued for services 702 87,200
Shares issued for debt
extinguishment - 646,379
Shares issued for assets - 118,000
Changes in assets and
liabilities:
Accounts payable 20,273 ( 413,692)
Other liabilities - ( 108,800)
----------- -----------
Net cash used by
operating activities ( 377,374) ( 189,519)
Cash flows from Financing
Activities:
Loans from Concierge, Inc. 100,000 -
Advances from shareholders 269,933 -
Common stock issued for cash 7,000 190,000
----------- -----------
Net cash provided by
Financing Activities 376,933 190,000
Increase in Cash 441 481
Cash at beginning of period 481 -
----------- -----------
Cash at end of period $ 40 $ 481
=========== ===========
Supplemental cash flow information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Non cash financing transactions:
Shares for services $ 702 $ 87,200
Shares for debt extinguishment $ - $ 646,379
Shares for purchase of assets $ - $ 118,000
See notes tothese audited financial statements.
32
Starfest,
14
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2008 AND 2007
AND FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2008
|
|
|
|
|
|
|
| September 20, |
| |||
|
|
|
|
|
|
|
| (inception) to |
| |||
|
| 2008 |
|
| 2007 |
|
| June 30, 2008 |
| |||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
| |||||
Net loss |
| $ | (350,866 | ) |
| $ | 38,214 |
|
| $ | (3,943,437 | ) |
Adjustments to reconcile net loss to net cash used in |
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of Goodwill/Asset |
|
| 207,940 |
|
|
| — |
|
|
| 950,583 |
|
Depreciation and amortization |
|
| 9,140 |
|
|
| 308 |
|
|
| 22,603 |
|
Stock issued for services |
|
| — |
|
|
| 35,000 |
|
|
| 531,352 |
|
Loss on settlement of debts |
|
| — |
|
|
| 23,033 |
|
|
| 23,033 |
|
Unallocated accrued expense reversed |
|
| — |
|
|
| -150,123 |
|
|
| (150,123 | ) |
Decrease in current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
AR |
|
| (1,339 | ) |
|
|
|
|
|
| (1,339 | ) |
Inventory |
|
| (196 | ) |
|
| - |
|
|
| (245,996 | ) |
Increase (decrease) in current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Advance subscription |
|
| 1,380 |
|
|
|
|
|
|
| 1,380 |
|
Accounts payable & Accrued expense |
|
| 45,162 |
|
|
| 5,658 |
|
|
| 369,259 |
|
Net cash used in operating activities |
|
| (88,779 | ) |
|
| (47,910 | ) |
|
| (2,442,685 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
| |||
Cash received on acquisition of subsidiary |
|
| 31,509 |
|
|
| — |
|
|
| 34,421 |
|
Note receivable - related party |
|
| 18,192 |
|
|
| — |
|
|
| (81,808 | ) |
Purchase of equipment |
|
| (11,730 | ) |
|
| (30,471 | ) |
|
| (55,111 | ) |
Net cash provided by (used in) investing activities |
|
| 37,970 |
|
|
| (30,471 | ) |
|
| (102,498 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
| |||
Due from related party |
|
| 31,569 |
|
|
| (23,190 | ) |
|
| 8,218 |
|
Proceeds from Issuance of Shares |
|
| 10,000 |
|
|
| 90,000 |
|
|
| 687,007 |
|
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 |
|
| — |
|
|
| 22,749 |
|
|
| 152,500 |
|
Net cash provided by financing activities |
|
| 41,569 |
|
|
| 89,559 |
|
|
| 2,550,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE (DECREASE) IN CASH & |
|
| (9,240 | ) |
|
| 11,178 |
|
|
| 5,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH & CASH EQUIVALENTS, BEGINNING BALANCE |
|
| 15,060 |
|
|
| 3,882 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH & CASH EQUIVALENTS, ENDING BALANCE |
| $ | 5,820 |
|
| $ | 15,060 |
|
| $ | 5,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
The accompanying notes are an integral part of these audited financial statements.
15
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Concierge Technologies, Inc. & subsidiary
Notes To Consolidated Financial Statements
December 31, 2000 and 1999
Note 1 - Nature of Operations and principles of consolidation
Nature of operations
Starfest, Inc., (the Company)“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. TheOn March 20, 2002, the Company is negotiating an agreement with a company
(see Note 3). The purpose of the merger ischanged its name to effect an online communication
retrieval system such as e-mail via the telephone.
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 (MAS XX) for $
314,688.$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. StarfestOn March 21, 2002, the Company consummated a merger with Concierge, Inc.
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™”). “PCA™” 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 from this venture.
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 parentsole 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.
PHI is a development stage company in the wireless telecommunications industry and plans to design, construct, and operate wireless networks providing subscribers with access to the Internet and related services. Planet Halo also retains an exclusive North America license to a proprietary integrated wireless gateway interface to the Internet named "Halomail”, which the company plans to implement across its developing wireless networks.
On October 30, 2007 the Company entered into a definitive Stock Purchase Agreement to acquire all of the issued and outstanding shares of privately held Wireless Village, a Nevada corporation based in Cleveland, Ohio. The transaction closed and the purchase price was paid with 5,000,000 shares of MAS XX.
Principlesa new class of consolidation:
stock, Series A Convertible, Voting, Preferred Stock, $0.001 par value, issued pro-rata to the shareholders of Wireless Village on January 23, 2008.
Wireless Village is a privately held Nevada corporation based in Cleveland, Ohio and has been providing technical services to Planet Halo on an ongoing basis since May 2007. Wireless Village designs, installs, maintains and operates wireless network providing high speed Internet access to consumers and businesses. Wireless Village also hosts web sites, provides customer service and billing platforms for Planet Halo and other clientele.
The Company is a development stage company as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises.” The Company is devoting substantially all of its present efforts to establishing its new business, and its planned principal operations have not yet commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities.
16
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying condensed consolidated financial statements include the accounts of the CompanyConcierge Technologies, Inc. (parent) and its wholly owned subsidiary MAS XX have been prepared in accordance with
generally accepted accounting principles.subsidiaries, Planet Halo, Inc. and Wireless Village from the date of acquisition. All significant inter-company balancestransactions and transactionsaccounts have been eliminated in consolidation.
Note 2 - Summary of significant accounting policies
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.
Use of estimates
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.
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.
33
Starfest, Inc. & subsidiary
Notes To Consolidated Financial Statements
December 31, 2000 and 1999
Basic and diluted net loss per share
BASIC AND DILUTED NET LOSS PER SHARES
Net loss per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128), "Earnings“Earnings per share"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. As of June 30, 2008 the Company has issued and outstanding 5,000 ,000 shares of Series A Convertible, Voting, Preferred stock. These shares are convertible into 25,000,000 shares of common stock subject to certain conditions. The net loss per common sharecalculation of the weighted average number of shares outstanding takes into account these shares as though they have already been converted. There are no other dilutive securities outstanding.
REVENUE RECOGNITION
The company did not earn any revenue related to the PCA product or software since inception through June 30, 2008 and does not intend to offer the product for sale in the future. The remaining inventory of product has been restatedreduced to retroactively effect a reverse stock splitzero value on the financial statements.
The Company, through Planet Halo and Wireless Village, sells subscriptions to its wireless Internet access service in various increments, including daily, weekly, monthly and yearly. Transactions are completed online through credit card entries by the customer. Sales are recorded at the time the transaction is approved by the financial institution and revenues are earned over the life of the service term. Unearned or deferred revenues received or accounts receivable accrued, are recorded as advance subscriptions. For the 12-month periods ending June 30, 2007 and 2008, subscription sales for Planet Halo were recorded as $54 and $11,298, respectively, and unearned, advance subscriptions, as $0 and $568, respectively.
The company occasionally purchases consumer hardware for configuration prior to release to subscribers. These items are listed in inventory and, when sold, recorded as hardware sales. These amounts are expected to remain insignificant. Hardware sales for the 12-month period ending June 30, 2008 totaled $180. Inventory at the end of the period totaled $196 and is included as part of other current assets as the amount is not significant.
The Company, through Wireless Village, has also begun selling technical support services, wired circuits, web hosting and subscription to Internet access on similar terms as those of Planet Halo. Accounting for these revenues is as described for Planet Halo in the ratiopreceding paragraph within this section. Advanced, unearned, subscriptions of one shareweb hosting and Internet access were recorded at $1,380 as of June 30, 2008.
17
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
INCOME TAXES
The Company utilizes SFAS No. 109, "Accounting for ten shares.
Stock-based compensation
Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
RECLASSIFICATIONS
Certain prior period amounts have been reclassified to conform to the current period’s presentation.
3.
RECENT PRONOUNCEMENTS
In October 1995,September 2006, FASB issued SFAS 157 “Fair Value Measurements”. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The management is currently evaluating the effect of this pronouncement on financial statements.
In September 2006, FASB issued SFAS 158 “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. This Statement improves financial reporting by requiring an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined be nefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. An employer without publicly traded equity securities is required to recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after June 15, 2007. However, an employer without publicly traded equity securities is required to disclose the following information in the notes to financial statements for a fiscal year ending after December 15, 2006, but before June 16, 2007, unless it has applied the recognition provisions of this Statement in preparing those financial statements:
a.
A brief description of the provisions of this Statement
b.
The date that adoption is required
c.
The date the employer plans to adopt the recognition provisions of this Statement, if earlier.
The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position is effective for fiscal years ending after December 15, 2008. The management is currently evaluating the effect of this pronouncement on financial statements.
In February 2007, FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. FAS 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted subject to specific requirements outlined in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for their first quarter 2007 financial statements.
18
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The new Statement allows entities to choose, at specified election dates, to measure eligible financial assets and liabilities at fair value that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods must be recognized in current earnings. FAS 159 also establishes presentation and disclosure requirements designed to draw comparison between entities that elect different measurement attributes for similar assets and liabilities. The management is currently evaluating the effect of this pronouncement on financial statements.
In December 2007, the FASB issued SFAS No. 123, "Accounting141 (Revised 2007), “Business Combinations”. The objective of this statement will significantly change the accounting for Stock-Based
Compensation".business combinations. Under Statement 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition date fair value with limited exceptions. Statement 141 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 123 prescribes141R to have a material impact on the consolidated financial statements.
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-An Amendment of ARB No. 51”. The objective of this statement is to establish new accounting and reporting standards for all stock-based compensation plans, including employee stock options,
restricted stock, employee stock purchase plansthe noncontrolling interest in a subsidiary and stock appreciation
rights.for the deconsolidation of a subsidiary. Statement 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 123 requires compensation expense160 to be recorded (i) usinghave a material impact on the consolidated financial statements.
In March 19, 2008, FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new fair value method or (ii) using the existing accounting rules
prescribedstandard is intended to improve financial reporting about derivative instruments and hedging activities by Accounting Principles Board Opinion No. 25, "Accountingrequiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. It is effective for stockfinancial statements issued to employees" (APB 25)for fiscal years and related interpretationsinterim periods beginning after November 15, 2008, with proforma
disclosure of what net income and earnings per share would have been hadearly application encouraged. Currently the Company adopted the new fair value method. The Company adopted this standard
in 1998does not carry any derivative instruments and the implementationadoption of this standard didstatement may not have any effect on the financial statements.
In May 2008, FASB issued SFASB No.162, “The Hierarchy of Generally Accepted Accounting Principles”. The pronouncement mandates the GAAP hierarchy reside in the accounting literature as opposed to the audit literature. This has the practical impact onof elevating FASB Statements of Financial Accounting Concepts in the GAAP hierarchy. This pronouncement will become effective 60 days following SEC approval. The Company does not believe this pronouncement will impact its financial statements.
Fair value
In May 2008, FASB issued SFASB No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60”. The scope of the statement is limited to 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.guarantee insurance (and reinsurance) contracts. 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.
Costs of start-up activities
In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting on the costs
of start-up activities",pronouncement is effective for fiscal years beginning after December 15, 1998. SOP 98-5 requires the costs of start-up activities and organization
costs to be expensed as incurred. The Company adopted this standard in fiscal
1999 and the implementation of this standard did not have a material impact
on its financial statements.
Advertising
The Company expenses advertising costs as incurred.
Risks and Uncertainties
The Company is subject to certain risks and uncertainties in the normal
course of business.
34
Starfest, Inc. & subsidiary
Notes To Consolidated Financial Statements
December 31, 2000 and 1999
Issuance of shares for service
Valuation of services is based on the estimated fair market value of the
services performed.
Recent Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded on
the balance sheet as either an asset or liability measured at its fair value.
SFAS No. 133 requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria
are met. SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138, is
effective for fiscal quarters of fiscal years beginning after June 15, 2000.
This statement is not applicable to the Company.
In June 1999, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 136, "Transfer of
Assets to a Not-for-Profit Organization or Charitable Trust that Raises or
Holds Contributions for Others." This statement is not applicable to the
Company.
In June 1999, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 137, "Accounting for Derivative Instruments and Hedging
Activities."2008. The Company does not expect adoption of SFAS No. 137 to have a
materialbelieve this pronouncement will impact if any, on its financial position or results of operations.
In June 2000, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 138, "Accounting for Certain instruments and Certain Hedging
Activities." This statement is not applicable to the Company.
In June 2000, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 139, "Rescission of FASB Statement No. 53 and Amendments to
Statements No. 63, 89, and 121." This statement is not applicable to the
Company.
In September 2000, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities, a replacement of FASB
Statement No. 125." This statement is not applicable to the Company.
In December 1999, the Securities and Exchange Commission (the "SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes the SEC's views on the application of
GAAP to revenue recognition. In June 2000, the SEC released SAB No. 101B that
delays the implementation date of SAB 101 until no later than the fourth
fiscal quarter of fiscal years b beginning after December 15, 1999. The
Company has reviewed SAB No. 101 and believes that it is in compliance with
the SEC's interpretation of revenue recognition.
In March 2000, the FASB issued Interpretation No. 44, "Accounting for Certain
Transactions involving Stock Compensation." This Interpretation clarifies (a)
the definition of employee for purposes of applying APB Opinion No. 25, (b)
the criteria for determining whether a plan qualifies as a noncompensatory
plan, (c) the accounting consequence of various modifications
35
Starfest, Inc. & subsidiary
Notes To Consolidated Financial Statements
December 31, 2000 and 1999
Recent Pronouncements (continue)
to the terms of a previously fixed stock option or award, and (d) the
accounting for an exchange of stock compensation awards in a business
combination. The adoption of this Interpretation has not had a material
impact on the Company's financial position or operating results.
Note 3 - Merger Negotiations
On January 26, 2000 the Company entered into an agreement of merger with
Concierge, Inc., a Nevada corporation, pursuant to which, should the merger
be approved by the shareholders of both companies, 1,490,744 outstanding
shares of common stock of Concierge, Inc., (which includes 1,376,380 shares
outstanding at December 31, 2000 and 114,364 shares issued in January, 2001)
shall be converted into 96,957,713 common stock of the Company on the basis
of 65.0398 shares of the Company for each share outstanding of Concierge,
Inc. The 96,957,713 post merger shares shall be distributed to the
shareholders of Concierge, Inc. on a pro-rata basis. The transaction will be
accounted for as reverse merger and is subject to approval by shareholders of
both companies and Securities and Exchange Commission.
Note 4 - Going concern
statements.
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 incurreddid not earn significant revenue during the 12-month period ended June 30, 2008. The Company has accumulated a deficit of $4,221,961 and a net loss of $398,349 for the twelve months ended December 31, 2000. Accumulated deficit
amounted to $3,055,206 at December 31, 2000. At December 31, 2000, the
Company had shareholders' deficit of $407,853. The continuing losses have
adversely affected the liquidity of the Company. These factors, among others,
raise substantial doubt as to the Company's ability to continue as a going
concern. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or
classification and amounts of liabilities that might be necessary should the
Company be unable to continue as a going concern.
The Company's management intends to raise additional operating funds through
equity and/or debt offerings. However, there can be no assurance management
will be successful in this endeavor.
Note 5 - Income Taxes
No provision was made for Federal income tax since the Company has
significant net operating loss carryforwards. Through December 31, 2000, the
Company incurred net operating losses for tax purposes of approximately
$1,923,000. There is no significant differences between financial statement
and tax losses. The net operating loss carryforwards may be used to reduce
taxable income through the year 2015. Net operating loss for carryforwards
for the State of California are approximately $753,000 and are generally
available to reduce taxable income through the year 2006. The availability of
the Company's net operating loss carryforwards are 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.
36
Starfest, Inc. & subsidiary
Notes To Consolidated Financial Statements
December 31, 2000 and 1999
Note 5 - Income Taxes (continue)
The gross deferred tax asset balance as of December 31, 2000 was
approximately $769,000. A 100% valuation allowance has been established
against the deferred tax assets, as the utilization of the loss carryforwards
can not reasonably be assured.
Note 6 - Notes Payable-Related parties
Notes payable to shareholders are non-interest bearing, unsecured and due on
demand. Note payable to Concierge, Inc. is non-interest bearing, unsecured
and due on demand.
37
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors
Starfest, Inc.
I have audited the accompanying balance sheet of Starfest, Inc. as of December
31, 1999, and the related statements of operations, stockholders' equity
(deficit) and cash flows for the year ended December 31, 1999 and the year ended
December 31, 1998. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Starfest, Inc. as of December 31,
1999, and the results of its operations and its cash flows for the year ended
December 31, 1999 and the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring significant losses from
operations that raises substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Jaak Olesk
Beverly Hills, California
February 9, 2000 (except with respect to Note 4, as to which the date is March
7, 2000)
38
STARFEST, INC.
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Cash $ 481
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
Current Liabilities
Accounts payable $ 17,687
-----------
Total current liabilities $ 17,687
-----------
Stockholders' equity (deficit)
Common stock: no par value,
65,000,000 shares authorized;
21,697,999 shares issued and
outstanding 2,639,651
Retained earnings (deficit) (2,656,857)
------------
Total stockholders' equity (deficit) (17,206)
------------
$ 481
============
See accompanying notes to financial statements.
39
STARFEST, INC.
STATEMENT OF OPERATIONS
For the Year Ended
December 31, December 31,
1999 1998
------------ ------------
Revenues $ - $ -
----------- ------------
General and Administrative
Expenses 518,606 2,366
------------ ------------
Operating (Loss) (518,606) (2,366)
Provision for income taxes - -
------------ ------------
NET (LOSS) $ (518,606) $ (2,366)
Net (Loss)
per common share $ (.04) $ (.01)
Weighted Average Shares
Outstanding 15,893,441 8,301,323
See accompanying notes to financial statements.
40
STARFEST, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY/(DEFICIT)
Common Stock Retained
Number of Amount Earnings
Shares Total (Deficit) Total
---------- ----------- ------------- -----------
Balance,
December 31, 1997 6,236,323 $1,598,072 $(2,135,885) $ (537,813)
Net (loss) for
year ended
December 31, 1998 - - (2,366) (2,366)
---------- ----------- ------------- -----------
Balance,
December 31, 1998 6,236,323 1,598,072 (2,138,251) (540,179)
Shares issued
for services 2,313,338 87,200 - 87,200
Shares issued
for assets 2,950,000 118,000 - 118,000
Shares issued
for debt
extinguishment 6,165,005 646,379 - 646,379
Shares issued
for cash 4,033,333 190,000 - 190,000
Net (loss) for
year ended
December 31, 1999 - - (518,606) (518,606)
---------- ------------ -------------- -----------
Balance,
December 31, 1999 21,697,999 $2,639,651 $(2,656,857) $ (17,206)
See accompanying notes to financial statements.
41
STARFEST, INC.
STATEMENTS OF CASH FLOWS
Year Ended December 31,
1999 1998
Net Cash From
Operating Activities:
Net (loss) $(518,606) $ (2,366)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Shares issued for services 87,200 -
Shares issued for assets 118,000 -
Shares issued for
debt extinguishment 646,379 -
Changes in assets
and liabilities:
Accounts payable (413,692) 2,366
Other liabilities (108,800) -
--------- ---------
Net cash (used)
by operating activities (189,519) -
Investing Activities:
Net cash provided (used) by
Investing Activities - -
--------- ---------
Cash flows from Financing
Activities
Common stock issued for cash 190,000 -
--------- ---------
Net cash provided by
Financing Activities: 190,000
Increase in Cash 481 -
Cash at beginning of period - -
--------- ---------
Cash at end of period $ 481 $ -
Supplemental cash flow information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -
Non cash financing transactions:
Shares for services $ 87,200 $ -
Shares for debt extinguishment $ 646,379 $ -
Shares for assets $ 118,000 $ -
See accompanying notes to financial statements.
42
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies
Nature of Operations
Starfest, 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 the year ended December 31, 1998, the Company was
inactive, just having minimal administrative expenses. During the year ended
December 31, 1999 the Company attempted to pursue operations in the online adult
entertainment field. However, the Company was not successful in this pursuit.
Cash equivalents
Cash equivalents consist of funds invested in money market accounts and
in investments with a maturity of three months or less when purchased. There
were no cash equivalents at December 31, 1999.
Loss per share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding$350,866 during the periods presented.
Fully diluted calculations are not presented since the Company only had losses
for all periods presented (thus antidilutive).
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in financial statements and
accompanying notes. Actual results could differ from those estimates.
Issuance of Shares for Services
Valuation of shares for services is based on the estimated fair market
value of the services performed.
Income taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". (See Note 3).
43
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 1 - Summary of Significant Accounting Policies(continued)
Fair Value of Financial Instruments
Pursuant to SFAS No. 107, Disclosures about Fair Value of Financial
Instruments, the Company is required to estimate the fair value of all financial
instruments included on its balance sheet at December 31, 1999. The Company
considers the carrying value of such amounts in the consolidated financial
statements to approximate their expected realization and interest rates, which
approximate current market rates. During the periods presented and at December
31, 1999 the Company had no financial instruments.
Comprehensive Income (Loss)
In fiscal 1999, the Company adopted SFAS No. 130, Reporting
Comprehensive Income. This statement establishes standards for the reporting of
comprehensive income and its components in a financial statement that is
displayed with the same prominence as other financial statements. The adoption
of SFAS No. 130 required no additional disclosure for the Company and did not
have any effect on the Company's financial position, as there was no difference
between comprehensive loss and the net loss as reported.
Segment Disclosures
In Fiscal 1999, the Company adopted SFAS No. 131, Disclosures About
Segments of an Enterprise and Related Information. This Statement establishes
standards for the way companies report information regarding operating segments
in annual financial statements. The adoption of SFAS No. 131 required no
additional disclosure for the Company as the Company operated in one principal
business segment.
Reclassifications
Certain items in prior12-month period financial statements have been
reclassified to conform with 1999 classifications.
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern)
44
The Company's financial statements have been presented on the basis that
it is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
incurred a net loss of $518,606 for the year ended December 31, 1999. The
Company incurred a net loss of $2,366 for the year ended December 31, 1998.
45
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
NOTE 2 - Basis of presentation and considerations related to continued existence
(going concern) (continued)
These factors, among others, raise substantial doubt as to the Company's
ability to continue as a going concern.
The Company's management intends to raise additional operating funds
through equity and/or debt offerings. However, there can be no assurance
management will be successful in this endeavor.
NOTE 3 - Income Taxes
The Company records its income tax provision in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" which requires the use of the liability method of accounting for deferred
income taxes.
Since the Company did not have taxable income during the periods
presented, no provision for income taxes has been provided. At December 31,
1999, the Company did not have any significant tax net operating loss
carryforwards (tax benefits resulting from losses for tax purposes have been
fully reserved due to the uncertainty of a going concern). At December 31, 1999,
the Company did not have any significant deferred tax liabilities or deferred
tax assets.
NOTE 4 - Subsequent Events
On January 18, 2000 the Company issued 1,302,001 of its common shares
for January, 2000 services, to three shareholders.
On January 26, 2000 the Company entered into an agreement of merger with
Concierge, Inc., a Nevada corporation, pursuant to which, should the merger be
approved by the shareholders of both companies, the presently outstanding
1,376,380 shares of common stock of Concierge, Inc. will be converted into
shares of common stock of the Company on the basis of 70.444 shares of Starfest,
Inc. to be issued for each share of Concierge, Inc. Concierge, Inc. does not
have significant assets or revenues.
The proposed merger of Starfest, Inc. and Concierge, Inc. will result in
a reverse acquisition, i.e. the acquisition of Starfest, Inc. by Concierge, Inc.
as Concierge, Inc. will have the controlling voting rights of the combined
entity.
46
STARFEST, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
Pursuant to a Stock Purchase Agreement (the "Purchase Agreement") dated
March 6, 2000 between (1) MAS Capital, Inc., an Indiana corporation, the
controlling shareholder of MAS Acquisition XX Corp. ("MAS XX"), an Indiana
corporation and (2) Starfest, Inc. 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, Inc.
in a transaction in which Starfest, Inc. became the parent corporation of
MAS XX. MAS Capital, Inc. and MAS Acquisition XX Corp. do not have significant
assets or revenues.
Upon execution of the Purchase Agreement and the subsequent delivery of
$100,000 cash and 150,000 shares of common stock of Starfest, Inc. 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, Inc. 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.
The merger transaction with MAS Acquisition XX Corp. is considered to be
a capital transaction (i.e. the issuance of stock of MAS Acquisition XX Corp.
accompanied by a recapitalization).
47
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Concierge, Inc.:
We have audited the accompanying balance sheet of Concierge, Inc. (a Nevada
Corporation) (the "Company") as of June 30, 2000, and the related statements of
operations, stockholders' equity and cash flows for the years ended June 30, 2000 and 1999. 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 in accordance with generally accepted auditing
standards. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Concierge, Inc. as of June 30,
2000, and the results of its operations and its cash flows for the years ended
June 30, 2000 and 1999, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company's did not earn any revenue during the year ended June 30, 2000 and
1999 and the Company has incurred net losses from inception to June 30, 2000 of
$1,457,729 including net losses of $986,986 and $89,919 during the fiscal years
ended June 30, 2000 and 1999, respectively. These factors, among others, as
discussed in Note 3 to the financial statements, raise 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 3. 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
Fountain Valley, California
October 17, 2000
48
CONCIERGE, INC.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 2000
ASSETS
------
CURRENT ASSETS:
Cash & cash equivalents $ 85,105
Prepaid Expenses 245,800
Note Receivable-Related Party 100,000
----------
Total current assets 430,905
PREPERTY & EQUIPMENT, net 4,692
----------
$ 435,597
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accrued expenses $ 138,755
Payroll taxes payable 4,400
---------
Total current liabilities 143,155
COMMITMENTS (SEE NOTES)
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share;
10,000,000 shares authorized; issued and
outstanding 1,376,380 13,764
Additional paid in capital 560,617
Advance Subscriptions 1,175,790
Deficit accumulated during the
development stage (1,457,729)
----------
Total stockholders' equity 292,442
----------
$ 435,597
==========
The accompanying notes are an integral part of these financial statements.
49
CONCIERGE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
YEAR ENDED JUNE 30, 2000 & 1999 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2000
SEPTEMBER 20,
JUNE 30, JUNE 30, 1996 (INCEPTION)
2000 1999 TO JUNE 30, 2000
----------- ---------- ----------------
REVENUE $ - $ - $ -
COSTS AND EXPENSES
Product launch Expenses 490,078 58,607 847,544
General & Administrative Expenses 496,108 30,512 606,985
---------- ---------- ----------
TOTAL COSTS AND EXPENSES 986,186 89,119 1,454,529
NET LOSS BEFORE INCOME TAXES (986,186) (89,119) (1,454,529)
---------- --------- -----------
Provision of Income Taxes 800 800 3,200
---------- --------- -----------
NET LOSS (986,986) (89,919) (1,457,729)
========== ========= ===========
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING, BASIC AND DILUTED 1,065,960 994,077 1,166,965
========== ========= ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (0.93) $ (0.09) $ (1.25)
========== ========= ===========
The accompanying notes are an integral part of these financial statements.
50
CONCIERGE, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2000.
Common Stock
------------------
Number of Par Additional Advance Accumulated Stockholders'
shares value Paid In Capital Subscriptions Deficit Equity (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 2,080 58,916 - - 60,996
Common stock issued for services
in the year ended June 30, 1999 450 4 - - - 4
Net loss for the year ended June 30, 1999 - - - - (89,919) (89,919)
--------- ------ -------------- ------------- ----------- ---------------
Balance at June 30, 1999 1,166,326 11,663 359,728 - (470,743) (99,352)
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 1,172 200,889 - - 202,061
Common stock issued for services
in the year ended June 30, 2000 354,870 3,549 - - - 3,549
Post acquisition stock subscription funds
received net of costs & expenses of $79,710 - - - 1,175,790 - 1,175,790
Net loss for the year ended June 30, 2000 - - - - (986,986) (986,986)
--------- ------ ------------- ------------- ----------- ---------------
Balance at June 30, 2000 1,376,380$ 13,764 $ 560,617 $ 1,175,790 $(1,457,729) $ 292,442
========= ====== ============= ============= =========== ===============
The accompanying notes are an integral part of these financial statements.
51
CONCIERGE, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
YEAR ENDED JUNE 30, 2000 & 1999 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO JUNE 30, 2000
SEPTEMBER 20,
JUNE 30, JUNE 30, 1996 (INCEPTION)
2000 1999 TO JUNE 30, 2000
---------- --------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (986,986) $(89,919) $ (1,457,729)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,350 2,329 8,218
Stock issued for services 929 4 7,374
(Increase) / decrease in current assets:
Prepaid Expenses (245,000) - (245,800)
Other Assets - 1,625 -
Increase / (decrease) in current liabilities:
Accounts Payable (70,093) 5,717 -
Accrued expenses 118,537 10,784 138,755
Payroll taxes payable 4,400 - 4,400
---------- --------- -------------
Net cash used in operating activities (1,175,863) (69,460) (1,544,782)
---------- --------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Note receivable - related party (100,000) - (100,000)
Acquisition of property & equipment (1,266) - (12,910)
---------- -------- -------------
Net cash used in investing activities (101,266) - (112,910)
---------- -------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Shares 202,061 60,996 567,007
Proceeds from advance subscriptions 1,255,500 - 1,255,500
Costs and expenses of advance subscription (79,710) - (79,710)
Proceeds from (repayments of) related party loans (22,000) 10,000 -
---------- -------- ------------
Net cash provided by financing activities 1,355,851 70,996 1,742,797
---------- -------- ------------
NET INCREASE IN CASH 78,722 1,536 85,105
CASH, BEGINNING BALANCE 6,383 4,847 -
---------- --------- -------------
CASH, ENDING BALANCE $ 85,105 $ 6,383 $ 85,105
========== ========= =============
The accompanying notes are an integral part of these financial statements.
52
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Concierge, Inc. ("the Company"), is a development stage enterprise incorporated
in the state of Nevada on September 20, 1996. The Company has 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. 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
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.
Use of estimates
The preparation of financial statements 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.
Property & Equipment
Property and equipment is carried at cost. Depreciation of property and
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.
53
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
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 proforma disclosure of what net income and earnings
per share would have been had the Company adopted the new fair value method. The
Company adopted this standard in 1998 and the implementation of this standard
did not have any impact on its financial statements.
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.
Comprehensive income
Statement of financial accounting standards No. 130, Reporting comprehensive
income (SFAS No. 130), establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity, except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No. 130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
financial statements that are displayed with the same prominence as other
financial statements. The Company adopted this standard in 1998 and the
implementation of this standard did not have a material impact on its financial
statements.
Reporting segments
Statement of financial accounting standards No. 131, Disclosures about segments
of an enterprise and related information (SFAS No. 131), which superceded
statement of financial accounting standards No. 14, Financial reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises report information about operating segments in annual financial
statements and requires reporting of selected information about operating
segments in interim financial statements regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performances. The Company
adopted this standard in 1998 and the implementation of this standard did not
have a material impact on its financial statements.
54
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
Pension and other benefits
In February 1998, the Financing accounting standards board issued statement of
financial accounting standards No. 132, Employers' disclosures about pension and
other post-retirement benefits (SFAS No. 132), which standardizes the disclosure
requirements for pension and other post -retirement benefits. The Company
adopted this standard in 1998 and the implementation of this standard did not
have any impact on its financial statements.
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. The Company adopted this standard
in fiscal 1999 and the implementation of this standard did not have a material
impact on its financial statements.
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.
55
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
Costs of start-up activities
In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting on the costs of
start-up activities", effective for fiscal years beginning after December 15,
1998. SOP 98-5 requires the costs of start-up activities and organization costs
to be expensed as incurred. The Company adopted this standard in fiscal 1999 and
the implementation of this standard did not have a material impact on its
financial statements.
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 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, and SOP
98-9, Modification of SOP 97-2, 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.
Maintenance and subscription revenue is recognized ratably over the contract
period. Revenue attributable to undelivered elements, including technical
support and Internet browser technologies, is based on the average sales price
of those elements and is recognized ratably on a straight-line basis over the
product's life cycle. 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 revenue in the years ended June 30, 2000 and 1999.
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, 2000 and 1999.
56
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
Advertising
The Company expenses advertising costs as incurred.
Accounting developments
In June 1998, the FASB issued SFAS No. 133, "Accounting for derivative
instruments and hedging activities", effective for fiscal years beginning after
June 15, 1999, which has been deferred to June 30, 2000 by publishing of SFAS
No. 137. SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. This statement requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial condition and measure
those instruments at fair value. The accounting for changes in the fair value of
a derivative instrument depends on its intended use and the resulting
designation. The Company does not expect that the adoption of this standard will
have a material impact on its financial statements.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") 101, "Revenue Recognition," which outlines the basic criteria
that must be met to recognize revenue and provides guidance for presentation of
revenue and for disclosure related to revenue recognition policies in financial
statements filed with the Securities and Exchange Commission. The effective date
of this pronouncement is the fourth quarter of the fiscal year beginning after
December 15, 1999. The Company believes that adopting SAB 101 will not have a
material impact on its financial position and results of operations.
In March 2000, the FASB issued FASB Interpretation No. 44 ("FIN 44") "Accounting
for Certain Transactions involving Stock Compensation, an interpretation of APB
Opinion No. 25". FIN 44 clarifies the application of Opinion 25 for (a) the
definition of employee for purposes of applying Opinion 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence for various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain provisions cover specific events that occur after either December
15, 1998,or January 12, 2000. The adoption of certain other provisions of FIN 44
prior to March 31, 2000 did not have a material effect on the financial
statements. The Company does not expect that the adoption of the remaining
provisions will have a material effect on the financial statements.
Reclassifications
Certain prior year amounts have been reclassified to conform with the current
year presentation.
57
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
3. GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company's did not earn any revenue
during the year ended June 30, 2000 and 1999 and the Company has incurred net
losses from inception to June 30, 2000 of $1,457,729 including net losses of
$986,986 and $89,919 during the fiscal years ended June 30, 2000 and 1999,
respectively.2008. 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, includingwhich include but are not limited to, its ability to maintain vendor and supplier relationships by making timely payments when due.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company'sCompany’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
19
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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
during the fiscal years ended June 30, 2000 and 1999, towards (i) obtaining
additional equity (ii) management of accrued expenses and accounts payable (iii)
Development of the software "PCA(TM)" and (vi) evaluation of its distribution
and marketing methods.
Management believes that the above actions will allow the Company to continue
operations through the next fiscal year.
4. PROPERTY AND EQUIPMENT
June 30, 2000
----------------
Property and Equipment $12,910
Less: Accumulated depreciation 8,218
$ 4,692
===========
5. PREPAID EXPENSES
The Company entered into software license agreements with two Delaware
Corporations. One Corporation granted permission to the Company to utilize its
software for the "PCA(TM)" development. The Corporation was paid $202,500 as
initial non-refundable license fee and was considered to be pre-paid royalties.
The agreement calls for Concierge, Inc. to pay a royalty of $1.00 for the first
million units sold and $.75 for units greater than 1,000,000.
The second software license agreement granted the Company the rights to
incorporate its software in the Company's personal communication attendant
e-mail device. The Corporation was paid $42,500 by Concierge, Inc. as a
non-refundable, advance royalty payment. The agreement calls for the Company to
pay a royalty of $1.10 for the first 100,000 units, thereafter $.85 per unit.
58
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
6. NOTE RECEIVABLE - RELATED PARTY
The Company has loaned $100,000 to a Corporation with which the Company is
planning to merge (see note 9). The Note is due on demand, unsecured and is
non-interest bearing.
7. INCOME TAXES
No provision was made for Federal income tax since the Company has significant
net operating loss carryforwards. Through June 30, 2000, the Company incurred
net operating losses for tax purposes of approximately $1,450,000. Differences
between financial statement and tax losses consist primarily of amortization
allowance were immaterial at June 30, 2000. The net operating loss carryforwards
may be used to reduce taxable income through the year 2015. Net operating loss
for carryforwards for the State of California are generally available to reduce
taxable income through the year 2005. The availability of the Company's net
operating loss carryforwards are 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 as of June 30, 2000 was approximately
$580,000. A 100% valuation allowance has been established against the deferred
tax assets, as the utilization of the loss carrytforwards can not reasonably be
assured.
8. STOCKHOLDERS' EQUITY
The Company 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. During the year
ended June 30, 2000, the Company also reacquired and cancelled 262,000 shares,
previously issued for services of $2,620 in the year ended June 30, 1997.
59
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
9. ADVANCE SUBSCRIPTIONS
The Company has entered into subscription agreements to issue "post merger"
shares in exchange for cash. Through June 30, 2000, the Company has received
advanced 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 Concierge, Inc. and Starfest, Inc. is not completed prior to
November 30, 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 are subject to
this agreement. As mentioned in Note 10, the Company is involved in a proposed
merger transaction with Starfest, Inc. ("SFI"). SFI filed a registration
statement with the Securities and Exchange Commission ("the Commission") on June
8, 2000 related to the proposed merger, naming the Company as the entity
proposed to be merged into SFI. From July 1, 2000 through September 15, 2000,
the Company 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 SFI and the manner in which the
Company conducted the sale of the 2,127,500 post merger shares of common stock
constituted "general advertising or general solicitation" by the Company.
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. The Company 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, the Company 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 - as well as all persons
who bought shares of Concierge earlier under circumstances whereby their
purchases would be deemed to be part of the same offering under the Commission's
rules on the integration of securities' offerings - would be entitled, under the
Securities Act of 1933 and possibly under the securities laws of the states in
which such persons bought the securities, to the return of their subscription
amounts if actions to recover such monies should be filed within one year after
the sales in question. The financial statements for the year ended June 30,
2000, do not reflect any such amount since the Company received $487,500 as
advance subscription for 2,127,500 post merger shares after June 30, 2000.
10. MERGER AGREEMENT
On January 19, 2001 the Company entered into an amended agreement of merger with
Starfest, Inc., a California Corporation. Under the agreement, all outstanding
shares of common stock of the Company (which includes 1,376,380 shares
outstanding at September 30, 2000 and 114,364 shares issued in January, 2001)
shall be converted into 96,957,713 common stock of Starfest, Inc. on the basis
of 65.0398 shares of Starfest, Inc. for each share outstanding of the Company.
The 96,957,713 post merger shares shall be distributed to the shareholders of
the Company on a pro-rata basis. The transaction will be accounted for as
reverse merger and is subject to approval by shareholders of both companies and
Securities and Exchange Commission.
60
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
11. 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 $1,600 and $0 for income tax in the year ended June 30, 2000
and 1999, respectively. Total amount paid for income taxes from September 20,
1996 (inception) through June 30, 2000 amounted to $2,400. The Company paid $
4,227 and $0 for interest during the years ended June 30, 2000 and 1999,
respectively. Total amount paid for interest from September 20, 1996 (inception)
through June 30, 2000, amounted to $4,227.
The Cashflow statements do not include effect of issuance of 354,870 shares for
$3,549 in the year ended June 30, 2000, and 450 shares for $4 in the year ended
June 30, 1999, in exchange of services rendered to the Company. The Cash flow
statements do not include effect of acquisition and cancellation of 262,000
shares issued for services of $2,620. 737,415 shares have been issued since
inception through June 30, 2000, for services amounting $7,374. Valuation of
shares is based on the estimated fair market value of the services performed.
12. COMMITMENT
The Company sub-leases office space in Los Angeles, California from Ardent, Ltd.
The term of the lease is 26 months with monthly payments of $1541.71. The lease
expires on August 31, 2002. Rent was $7,823 and $11,560 for the year ended June
30, 2000 and 1999, respectively. Future minimum lease payments associated with
the lease is as follows:
Year ended June 30 Amount
------------------ ----------
2001 $ 18,501
2002 18,501
2003 3,083
----- ----------
Total $ 40,085
===== ==========
13. SUBSEQUENT EVENTS
In January, 2001, the Company issued 114,364 shares of common stock to persons
who had paid $1,743,000 for securities characterized as "advance subscriptions,"
which includes $1,175,790 shown as "advance subscriptions" in the financial
statements at June 30, 2000, as well as "advance subscriptions" sold after June
30, 2000. (See Note 9 above.)
61
CONCIERGE, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 2000
(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 3,356
Prepaid Expenses 245,800
Note Receivable - Related Party 100,000
------------
Total current assets 349,156
PROPERTY & EQUIPMENT, net 3,401
------------
$ 352,557
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accrued expenses $ 46,359
Loan payable-Officer 22,000
------------
Total current liabilities 68,359
COMMITMENTS (SEE NOTES)
SUBSCRIPTIONS RECEIVED FOR COMMON STOCK
SUBJECT TO CONTINGENCY 1,663,290
COMMON STOCK ISSUED SUBJECT TO CONTINGENCY 346,320
STOCKHOLDERS' DEFICIT:
Common stock, par value $.01 per share;
10,000,000 shares authorized; issued
and outstanding 1,376,380 8,558
Additional paid in capital 219,503
Deficit accumulated during the
development stage (1,953,473)
------------
Total stockholders' deficit (1,725,412)
------------
$ 352,557
============
The accompanying notes are an integral part of
these consolidated financial statements.
62
CONCIERGE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2000 & 1999 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31, 2000
(UNAUDITED)
SEPTEMBER 20, 1996
DECEMBER 31, DECEMBER 31, (INCEPTION) TO
2000 1999 DECEMBER 31, 2000
------------- ------------ ------------------
REVENUE $ - $ - $ -
COSTS AND EXPENSES
Product launch Expenses 241,928 8,780 1,089,472
General & Administrative Expenses 253,016 46,795 860,001
---------- ---------- -----------
TOTAL COSTS AND EXPENSES 494,944 55,575 1,949,473
NET LOSS BEFORE INCOME TAXES (494,944) (55,575) (1,949,473)
---------- ---------- -----------
Provision of Income Taxes 800 800 4,000
---------- ---------- -----------
NET LOSS (495,744) (56,375) (1,953,473)
========== ========== ===========
WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDING, BASIC AND DILUTED 1,376,380 984,954 1,376,380
========== ========== ===========
BASIC AND DILUTED NET LOSS PER SHARE $ (0.36) $ (0.06) $ (1.42)
========== ========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
63
CONCIERGE, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 2000 & 1999 AND THE PERIOD FROM
SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31, 2000
(UNAUDITED)
SEPTEMBER 20, 1996
SEPTEMBER 20, 1996
DECEMBER 31, DECEMBER 31, (INCEPTION) TO
2000 1999 DECEMBER 31, 2000
------------ ------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (495,744) $ (56,375) $(1,953,473)
Adjustments to reconcile net loss to net cash used
operating activities:
Depreciation and amortization 1,291 1,164 9,509
Stock issued for services - - 7,374
(Increase) / decrease in current assets:
Prepaid Expenses - - (245,800)
Increase / (decrease) in current liabilities
Accounts payable - (3,250) -
Accrued expenses (96,796) 2,543 46,359
------------ ------------ ------------
Net cash used in operating activities (591,249) (55,918) (2,136,031)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Note receivable - related party - - (100,000)
Acquisition of property & equipment - - (12,910)
------------ ------------ ------------
Net cash used in investing activities - - (112,910)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowing 22,000 (5,000) 22,000
Proceeds from Issuance of Shares - 130,918 567,007
Proceeds from advance subscriptions - - 1,255,500
Proceeds from subscriptions of common
stock subject to contingency 487,500 - 487,500
Costs and expenses of advance subscription - - (79,710)
------------ ------------ ------------
Net cash provided by financing activities 509,500 125,918 2,252,297
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH (81,749) 70,000 3,356
CASH, BEGINNING BALANCE 85,105 6,383 -
------------ ------------ ------------
CASH, ENDING BALANCE $ 3,356 $ 76,383 $ 3,356
============ ============ ============
The accompanying notes are an integral part
of the consolidated financial statements.
64
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Concierge, Inc. ("the Company"), is a development stage enterprise incorporated
in the state of Nevada on September 20, 1996. The Company has 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. 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
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.
Use of estimates
The preparation of financial statements 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.
Property & Equipment
Property and equipment is carried at cost. Depreciation of property and
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.
65
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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 proforma disclosure of what net income and earnings
per share would have been had the Company adopted the new fair value method. The
Company adopted this standard in 1998 and the implementation of this standard
did not have any impact on its financial statements.
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. The Company adopted this standard
in fiscal 1999 and the implementation of this standard did not have a material
impact on its financial statements.
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.
66
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
Costs of start-up activities
In April 1998, the ASEC of AICPA issued SOP No. 98-5, "Reporting on the costs of
start-up activities", effective for fiscal years beginning after December 15,
1998. SOP 98-5 requires the costs of start-up activities and organization costs
to be expensed as incurred. The Company adopted this standard in fiscal 1999 and
the implementation of this standard did not have a material impact on its
financial statements.
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 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, and SOP
98-9, Modification of SOP 97-2, 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.
Maintenance and subscription revenue is recognized ratably over the contract
period. Revenue attributable to undelivered elements, including technical
support and Internet browser technologies, is based on the average sales price
of those elements and is recognized ratably on a straight-line basis over the
product's life cycle. 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 revenue in the period ended December 31, 2000 and 1999.
67
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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 December 31, 2000 and 1999.
Advertising
The Company expenses advertising costs as incurred.
Accounting developments
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133 "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded on the
balance sheet as either an asset or liability measured at its fair value. SFAS
No. 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. SFAS
No. 133, as amended by SFAS No. 137 and SFAS No. 138, is effective for fiscal
quarters of fiscal years beginning after June 15, 2000. This statement is not
applicable to the Company.
In June 1999, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 136, "Transfer of Assets to a
Not-for-Profit Organization or Charitable Trust that Raises or Holds
Contributions for Others." This statement is not applicable to the Company.
In June 1999, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 137, "Accounting for Derivative Instruments and Hedging
Activities." The Company does not expect adoption of SFAS No. 137 to have a
material impact, if any, on its financial position or results of operations.
In June 2000, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 138, "Accounting for Certain Instruments and Certain Hedging
Activities." This statement is not applicable to the Company.
In June 2000, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 139, "Rescission of FASB Statement No. 53 and Amendments to
Statements No. 63, 89, and 121." This statement is not applicable to the
Company.
In September 2000, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities, a replacement of FASB Statement No. 125."
This statement is not applicable to the Company.
68
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
In December 1999, the Securities and Exchange Commission (the "SEC") issued
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes the SEC's views on the application of GAAP
to revenue recognition. In June 2000, the SEC released SAB No. 101B that delays
the implementation date of SAB 101 until no later than the fourth fiscal quarter
of fiscal years b beginning after December 15, 1999. The Company has reviewed
SAB No. 101 and believes that it is in compliance with the SEC's interpretation
of revenue recognition.
In March 2000, the FASB issued FASB Interpretation No. 44 ("FIN 44") "Accounting
for Certain Transactions involving Stock Compensation, an interpretation of APB
Opinion No. 25". FIN 44 clarifies the application of Opinion 25 for (a) the
definition of employee for purposes of applying Opinion 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence for various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain provisions cover specific events that occur after either December
15, 1998,or January 12, 2000. The adoption of certain other provisions of FIN 44
prior to March 31, 2000 did not have a material effect on the financial
statements. The Company does not expect that the adoption of the remaining
provisions will have a material effect on the financial statements.
Reclassifications
Certain prior year amounts have been reclassified to conform with the current
year presentation.
3. GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company's did not earn any revenue
during the period ended December 31, 2000 and 1999 and the Company has incurred
net losses from inception to December 31, 2000 of $1,953,473 including a net
loss of $495,741 during the periodr ended December 31, 2000. The continuing
losses have adversely affected the liquidity of the Company. Losses are expected
to continue for the immediate future. The Company faces continuing significant
business risks, including but not limited to, its ability to maintain vendor and
supplier relationships by making timely payments when due.
In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon continued operations of the Company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and to succeed in its future operations. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
69
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000 AND 1999
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 12-month period ended December 31, 2000,June 30, 2008, towards (i) obtaining additional equity, (ii) management of accrued expenses and accounts payable, (iii) Developmentinitiation of the software "PCA(TM)"business strategies of the Planet Halo and (vi) evaluation of its distributionWireless Village subsidiaries, and marketing methods.
(iv) searching for suitable synergistic partners for future business combinations that generate immediate revenues.
Management believes that the above actions will allow the Company to continue operations through the next fiscal year.
4. PROPERTY AND EQUIPMENT
December 31, 2000
-----------------
Property
5.
DUE FROM RELATED PARTY
Concierge Technologies, Inc. has no bank account in its own name. Wallen Group, a consulting company headed by the Chief Executive Officer and Equipment $ 12,910
Less: Accumulated depreciation 9,509
-----------
$ 3,401
===========
5. PREPAID EXPENSES
The Company entered into software license agreements with two Delaware
Corporations. One Corporation granted permission todirector of the Company, to utilize its
softwaremaintains an administrative account for the "PCA(TM)" development.Company. A balance is owed to Wallen Group amounting to $2,742 as of June 30, 2008. The Corporation was paid $202,500 as
initial non-refundable license fee and was consideredamount due to be pre-paid royalties.
The agreement calls for Concierge, Inc. to pay a royalty of $1.00 for the first
million units sold and $.75 for units greater than 1,000,000.
The second software license agreement granted the Company the rights to
incorporate its software in the Company's personal communication attendant
e-mail device. The Corporation was paid $42,500 by Concierge, Inc. as a
non-refundable, advance royalty payment. The agreement calls for the Company to
pay a royalty of $1.10 for the first 100,000 units, thereafter $.85 per unit.
6. NOTE RECEIVABLE - RELATED PARTY
The Company has loaned $100,000 to a Corporation with which the Company is
planning to merge (see note 9). The Noterelated party is due on demand, unsecured and is
non-interest bearing.
70
CONCIERGE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000interest free.
6.
ACCOUNTS PAYABLE AND 1999
7. INCOME TAXES
No provision was made for Federal income tax since the Company has significant
net operating loss carryforwards. Through December 31, 2000, the Company
incurred net operating losses for tax purposes of approximately $1,953,473.
Differences between financial statementACCRUED EXPENSES
Accounts payable and tax lossesaccrued expenses consist primarily of
amortization allowance, was immaterial at December 31, 2000. The net operating
loss carryforwards may be used to reduce taxable income through the year 2015.
Net operating loss for carryforwards for the State of California are generally
available to reduce taxable income through the year 2005. The availability of the Company's net operating loss carryforwards are 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 balancefollowing as of June 30, 2000 was approximately
$580,000. A 100% valuation allowance has been established against the deferred
tax assets, as the utilization2008:
Accounts payable | $ 97,727 | ||
Professional fees | 152,500 | ||
Interest payable | 45,972 | ||
Other payable | 2,396 | ||
Total | $298,595 | ||
7.
NOTES PAYABLE – RELATED PARTIES
June 30,
Notes payable consisted of the loss carrytforwards cannot reasonably be
assured.
8. STOCKHOLDERS' EQUITY
following at 2008
Notes payable to shareholder, interest rate of 8%, unsecured
and payable on October 1, 2006 (past due)
35,000
Notes payable to director/shareholder, non-interest bearing
unsecured and payable on demand
8,500
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
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 (past due)
20,000
20
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on February 1, 2006 (past due)
5,000
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on June 1, 2006 (past due)
5,000
Notes payable to director/shareholder, interest rate of 8%,
unsecured and payable on February 1, 2006 (past due)
2,500
Notes payable to director/shareholder, interest rate of 6%,
Unsecured and payable on September 1, 2007 (past due)
1,000
Notes payable to shareholder, interest rate of 8%, unsecured
and payable on November 1, 2007 (past due)
15,000
Notes payable to a director and third party, interest rate of 4%,
Secured with Intellectual Property, draw downs permitted thru
December 31, 2008 and payable on February 15, 2009
18,192
Total Notes Payable
$ 160,692
The Company issued 117,184 shareshas recorded interest expenses, amounting to $11,688 and $11,024 for cash totaling $202,061 and 354,870 shares
for services of $3,549 during the year12-month periods ended June 30, 2000. During the year
ended June 30, 2000,2008 and 2007, respectively.
8.
COMMON STOCK
On January 23, 2008 the Company also reacquired and cancelled 262,000 shares,
previously issued for services of $2,620 in the year ended June 30, 1997.
9. ADVANCE SUBSCRIPTIONS & SUBSCRIPTIONS RECEIVED FOR COMMON STOCK SUBJECT
TO CONTINGENCY
The Company has entered into subscription agreements to issue "post merger"
shares in exchange for cash. Through December 31, 2000, the Company has 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 Concierge, Inc. and Starfest, Inc. 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 are subject to
this agreement.
71
As mentioned in Note 10, the Company is involved in a proposed merger
transaction with Starfest, Inc. ("SFI"). SFI filed a registration statement with
the Securities and Exchange Commission ("the Commission") on June 8, 2000
related to the proposed merger, naming the Company as the entity proposed to be
merged into SFI. From July 1, 2000 through September 15, 2000, the Company
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 SFI and the manner in which the Company conducted
the sale of the 2,127,500 post mergersold 909,090 shares of its common stock constituted
"general advertising or general solicitation" by the Company. General
advertising and general solicitation are activities that are prohibited when
conductedto an individual accredited investor for $10,000 in connection with an offering intended to be exempt from registration
pursuant to the provisions of Regulation D, Rule 506 of the Commission. The
Company 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, the Company 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 the Company 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.
10. MERGER AGREEMENT
On January 26, 2000 the Company entered into an agreement of merger with
Starfest, Inc., a California Corporation. Under the agreement, the presently
outstanding 1,376,380 share of common stock of the Company shall be converted
into 96,957,713 common stock of Starfest, Inc. on the basis of 70.444 shares of
Starfest, Inc. for each share outstanding of the Company. The 96,957,713 post
merger shares shall be distributed to the shareholders of the Company on a
pro-rata basis. The transaction will be accounted for as reverse merger and is
subject to approval by shareholders of both companies and Securities and
Exchange Commission.
11. cash.
9.
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
The Company prepares its statements of cash flows using the indirect method as defined under the Financial Accounting Standard No. 95.
The Company paid $0 and $0amount reserved for income tax in the periodaccompanying financial statements has been appropriately adjusted to reflect the current status of Planet Halo as a foreign corporation in the state of California.
During the year ended June 30, 2008 and 2007 the Company did not pay any interest or income taxes.
10.
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 its 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 its 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, 2008.
11.
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
21
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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.
At the time, Planet Halo was 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 such assets 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 beginnin g July 1, 2002.
On December 31, 20002004, the Company evaluated the valuation of goodwill based upon the performance and 1999, respectively. Total amount paid for income taxes from September 20,
1996 (inception) through December 31, 2000 amounted to $2,400. The Company paid
$ 0 for interest during the quarters ended December 31, 2000 and 1999. Total
amount paid for interest from September 20, 1996 (inception) through December
31, 2000, amounted to $4,227.
The Cash flow statements do not include effect of acquisition and cancellation
of 262,000shares issued for services of $2,620. 737,415 shares have been issued
since inception through December 31, 2000, for services amounting $7,374.
Valuation of shares is based on the estimated fair market value of the services
performed
72
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.
12.
ACQUISITION OF WIRELESS VILLAGE
On October 30, 2007 the Company and Wireless Village, a closely held Nevada corporation, entered into a Stock Purchase Agreement wherein the Wireless Village shareholders sold to Concierge their shares in exchange for shares of Concierge Technologies. The acquisition was completed on January 23, 2008 by issuance of 5,000,000 shares of a new class of preferred stock called Series A Convertible, Voting, Preferred Stock. Each share of preferred stock could be converted into 5 shares of common stock after 270 days from issue. Each share of Series A preferred stock carries 5 votes in all matters brought up to vote by the shareholders.
The Company issued the shares on a ratio of 2999.4 shares of the Company preferred stock to each share of Wireless Village stock. The shares were issued directly to the former shareholders of Wireless Village. The Company is now a sole shareholder of Wireless Village, a Nevada corporation.
22
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000 AND 1999
12. COMMITMENT
(CONTINUED)
Wireless Village is a development stage company involved in the telecommunications industry through design, construction and operation of wide-area wireless networks providing access to the Internet, resale of wired Internet circuits, subscription sales to wireless Internet access, technical support services to wireless Internet service providers, web hosting and other related technical services. Wireless Village has been providing technical support services to the Company’s Planet Halo subsidiary since April 2007.
The purchase price was determined in arms-length negotiations between the parties. The average price per share of the Company’s common stock was $0.01. Each share of preferred stock was valued at $0.05 resulting in a purchase price of $250,000. The assets acquired in this acquisition include without limitation computer hardware and goodwill. A summary of the Wireless Village assets acquired and the consideration for such assets is as follows:
Estimated Fair Values | |
Current Assets | $ 42,984 |
Assumed Liabilities | 924 |
Net Assets Acquired | 42,060 |
Consideration Paid | 250,000 |
Goodwill | $ 207,940 |
In accordance with SFAS 142, goodwill is not amortized but is tested for impairment at least annually. The operating results of Wireless Village have been consolidated with those of the Company beginning January 23, 2008. No pro-forma financial information has been presented as the operations of Wireless Village, before the acquisition, were insignificant.
The Company sub-leases office spaceevaluates intangible assets and other long-lived assets for impairment, at a minimum, on an annual basis and whenever events or changes in Los Angeles, Californiacircumstances indicate that the carrying value may not be recoverable from Ardent, Ltd.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. The Company assessed the carrying value of goodwill in accordance with the requirements of SFAS No. 142 "Goodwill and Other Intangible Assets". Based on its assessment, the Company determined that goodwill resulting from the acquisition of Wireless Village amounted to $207,940 is fully impaired as of June 30, 2008.
13.
COMMITMENT
On January 18, 2008 the Company, through Planet Halo, entered the business of affiliate radio networking by leasing a number of digital satellite receivers from X-Digital for a term of 3 years under a standard lease agreement. Planet Halo also purchased one month of satellite service feed from Clear Channel Satellite Systems for the provision of a satellite uplink to broadcast to the affiliate network being created. Planet Halo intended to broadcast an adult standards play list of songs and shows recorded by recognized on-air personalities. The format is called “Music of Your Life”. As of June 1, 2008, Planet Halo delegated the daily operations and funding of the Music of Your Life network to a company established by Marc Angell, a member of the board of directors of Concierge Technologies. Mr. Angell has also assumed responsibility for the lease agreement with X-Digital thus limiting the risk to the Company at its current level as of June 30, 2008.
Planet Halo has funded the lease payments due for digital satellite receivers with a loan from third parties who now hold the Music of Your Life intellectual property owned by Concierge Technologies as collateral. In the event the Company is 26 months with monthly paymentsunable to fund the repayment of $1541.71.the loan it is at risk of losing the intellectual property to the note holders. As of June 30, 2008 Planet Halo owed $18,192 in principal and $276 of interest to the note holders (see section on “Notes Payable”). The lease
expires on August 31, 2002. Rent was $9,372 and $0agreement calls for the period ended December
31, 2000lenders to make monthly advances in principal of no less than $2,750 and 1999, respectively.
Future minimum lease payments associated withinterest to accrue at the leaseannual rate of 4% on the outstanding principal. The note is as follow:
Year ended December 31 Amount
---------------------- -------------
2001 $ 18,501
2002 12,334
-------------
Total $ 30,835
===== =============
73
23
ITEM 8. 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On March 8, 2000 Starfest'sDISCLOSURE.
The principal independent accountant Jaak
(Jack) Olesk, Beverly Hills, California, resigned. His reports onof 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 9A(T).
CONTROLS AND PROCEDURES.
Evaluation of disclosure controls and procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective and provide reasonable assurances that the information the Company is required to disclose in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period required by the Commission's rules and forms. Further, the Company’s officers concluded that its disclosure controls and procedures are also effec tive to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to its management, including its chief executive officer and chief financial statements from inception onward contained no adverse opinions or
disclaimers of opinions and were not modified asofficer, to uncertainty, audit scope or
accounting principles.allow timely decisions regarding required disclosure. There were no disagreementssignificant changes in the Company's internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.
Internal control over financial reporting.
Management’s annual report on internal control over financial reporting. The registrant’s management recognizes its responsibility for establishing and maintaining adequate internal control over financial reporting for the registrant. Currently, the registrant is operating as a caretaker entity, keeping the corporation alive and in good standing with Jaak (Jack) Olesk,
whether or not resolved, on any matter of accounting principles or practices,the Commission. All debit and credit transactions with the company’s bank accounts are reviewed by the officers as well as all communications with the company’s creditors. The directors meet frequently – as often as weekly – to discuss and review the financial statement disclosure, or auditing scope or procedure, which, if not
resolved to Jaak (Jack) Olesk's satisfaction, would have caused him to make
reference to the subject matterstatus of the disagreementscompany and all developments regarding its search for a reverse merger partner. All filings of reports with the Commission are reviewed before filing by all directors.
Management assesses the company’s control over financial reporting at the end of its most recent fiscal year to be effective. It detects no material weaknesses in the company’s internal control over financial reporting.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.
There has been no change in our internal control over financial reporting identified in connection with his
reports.
On November 14, 2000, the Company engagedevaluation required by Commission rules that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION.
There is no information that was required to be disclosed on Form 8-K during the firmfourth quarter of Kabani & Company,
of Fountain Valley, California, as independent accountants for the Company.
Prior to November 14, 2000, neither the Company, nor anyone on its behalf, had
consulted with Kabani & Company concerning the accounting principles of any
specific completed or contemplated transaction, any type of audit opinion on the
Company's financial statements or any other material factor which might be
considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue.
FY 2008 that was not reported.
24
PART III
ITEM 9. 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
ACT.
Set forth below are the names, and terms of office of each of the directors, executive officers and significant employees of the companyConcierge Technologies at June 30, 2008 and a description of the business experience of each.
Office Held Term
Person Offices Since
Person | Offices | Office Held Since | Term of Office |
|
|
|
|
David W. Neibert | C.E.O. and Director | 2007 | 2010 |
James E. Kirk | Secretary and Director | 1996 | 2010 |
Samuel Wu | Director | 2002 | 2010 |
Allen E. Kahn | Chairman, CFO and Director | 1996 | 2010 |
Patrick Flaherty | Director | 2002 | 2010 |
Marc Angell | Director and President of Planet Halo | 2004 | 2010 |
Pat Rodden | Director | 2004 | 2010 |
Allen E. Kahn:Mr. Kahn entered the computer industry as a Systems Engineer with IBM and subsequently held a series of Office
------ ------- ----------- ---------
Michael Huemmer, 60technical, sales, marketing and management positions with other multi-billion dollar corporations before becoming President and 1999 2001
Director
Janet Alexander, 66 SecretaryCEO of two companies marketing data communications hardware and 1999 2001
Director
Michael Huemmer.software. He has extensive experience in voice technology, optical character recognition, data communications and other technical elements of the PCA, which he conceived. Mr. HuemmerKahn 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 employed by Starfestthe President and a director of Concierge Technologies since June 17, 2002 and CEO of Concierge since April ---------------
1999. Prior to this employment he was2007. Mr. Neibert is also the president of Ameripro Sports Marketing
CompanyThe 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 Palm Desert, CaliforniaRoamer One 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 (under the names “Midland”, “Securicor Wireless”, “Linear Modulation Technologies”, and others) globally to the consumer, government and commercial markets and operated a nationwide land mobile radio network in the U.S. known as Roamer One. Intek Global Corporat ion was subsequently acquired by its majority shareholder, Securicor plc of Sutton Surrey, England. Mr. Neibert reported to offices located in Los Angeles, CA, Kansas City, MO, New York City, NY, and Sutton Surrey, England during period from 19951992 – 1998 before locating The Wallen Group in Canoga Park, CA.
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 employment with Starfest.
Janet Alexander. Ms. Alexanderconsulting 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 Starfest's secretarya Director of Concierge, Inc. since ---------------
July 1999.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
25
in electronics and computer sciences and MBA. He has also taken advanced studies in manufacturing, quality assurance and community medicine.
Marc Angell: Mr. Angell is the founder and President of Planet Halo and has operated the company since its inception in 2000. Prior to this employment shefounding Planet Halo, and from the period 1997 through 1999, Mr. Angell was self-employedthe 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 hypnotherapistlicense 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 Wildomer,1994, Mr. Rodden held various product development and program director positions at Virtual Vision, Precor, Paccar and Hughes. He graduated from California from 1995 until June 1998 when she moved to Palm
Springs, California. She was not employed from June 1998 until she became the
secretary of StarfestState University, Chico in July 1999.
74
1984 with a B.S. in Mechanical Engineering.
There are no family relationships between the directors and officers. There are no significant employees of StarfestConcierge who are not described above.
Conflicts of Interest
The officers and directors of the company will not devote more than a portion of their time to the affairs of the company. There will be occasions when the time requirements of the company's business conflict with the demands of their other business and investment activities. Such conflicts may require that the company attempt to employ additional personnel. There is no assurance that the services of such persons will be available or that they can be obtained upon terms favorable to the company.
The officers and directors of the company may be directors or principal shareholders of other companies and, therefore, could face conflicts of interest with respect to potential acquisitions. In addition, officers and directors of the company may in the future participate in business ventures, which could be deemed to compete directly with the company. Additional conflicts of interest and non-arms length transactions may also arise in the future in the event the company's officers or directors are involved in the management of any firm with which the company transacts business. The company's board of directors has adopted a policy that the Company will not seek a merger with, or acquisition of, any entity in which management serve as officers or directors, or in which they or their family members own or hold a controlling ownership interest. Although the board of directors could elect to change this policy, the board of directors has no pres ent intention to do so. In addition, if the company and other companies with which the company's officers and directors are affiliated both desire to take advantage of a potential business opportunity, then the board of directors has agreed that said opportunity should be available to each such company in the order in which such companies registered or became current in the filing of annual reports under the '34 Act.
The company's officers and directors may actively negotiate or otherwise consent to the purchase of a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium over the initial cost of such shares may be paid by the purchaser in conjunction with any sale of shares by the company's officers and directors which is made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to the company's officers and directors to acquire their shares creates a potential conflict of interest for them in satisfying their fiduciary duties to the company and its other shareholders. Even though such a sale could result in a substantial profit to them, they would be legally required to make the decision based upon the best interests of the company and the company's other shareholder s, rather than their own personal pecuniary benefit.
26
No executive officer, director, person nominated to become a director, promoter or control person of our company has been involved in legal proceedings during the last five years such as
·
bankruptcy,
·
criminal proceedings (excluding traffic violations and other minor offenses), or
·
proceedings permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.
·
Nor has any such person been found by a court of competent jurisdiction in a civil action, or the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.
None of the directors holds any directorships in any company with a class of securities registered under the Exchange Act or subject to the reporting requirements of section 15(d) of such Act or any company registered as an investment company under the Investment Company Act of 1940.
Involvement in certain legal proceedings. During the past five years, none of the directors has been involved in any of the following events:
·
A petition under the Federal bankruptcy law or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
·
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
·
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
·
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
·
Engaging in any type of business practice; or
·
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
·
Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; or
·
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated.
·
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Future Trading Commission has not been subsequently reversed, suspended or vacated.
27
Code of Ethics. We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is filed as an exhibit to Form 10-KSB Annual Report for the year ended June 30, 2004 (Exhibit 14 incorporated herein by reference). We undertake to provide to any person without charge, upon request, a copy of such code of ethics. Such a request may be made by writing to the company at its address at 3615 Superior Ave., Suite 3100A, Cleveland, OH 44144.
Corporate Governance.
Security holder recommendations of candidates for the board of directors. Any shareholder may recommend candidates for the board of directors by writing to the president of our company the name or names of candidates, their home and business addresses and telephone numbers, their ages, and their business experience during at least the last five years. The recommendation must be received by the company by March 9 of any year or, alternatively, at least 60 days before any announced shareholder annual meeting.
Audit committee. We have no standing audit committee. Our directors perform the functions of an audit committee. Our limited operations make unnecessary a standing audit committee, particularly in view of the fact that we have only three director at present. None of our directors is an audit committee financial expert, but the directors have access to consultants that can provide such expertise when such is needed.
Compliance with Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------
of the Securities Exchange Act.
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the registrantcompany under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year and Forms 5 and
amendments thereto furnished to the registrantcompany with respect to its most recent fiscal year and a review of any written representations received by the registrantcompany from persons required to file such forms, the following persons no person, who was at any time a
director, officer– either officers, directors or beneficial ownerowners of more than ten percent of any class of equity securities of the registrantcompany registered pursuant to Section 12 of the Securities Exchange Act – failed to file on a timely basis as disclosed in the above Forms, the reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year or prior fiscal years.
years:
Name | No. of Late Reports | No. of Transactions Not Timely Reported | No. of Failures to File a Required Report |
None | 0 | 0 | 0 |
ITEM 10. 11.
EXECUTIVE COMPENSATION
COMPENSATION.
The following information concerns the compensation of Starfest's chiefthe named executive officerofficers for each of the last threetwo completed fiscal years. No other executive
officers or individuals received total annual salaryyears:
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | Salary | Bonus | Common Stock Awards | Total |
|
|
|
|
|
|
David Neibert, CEO | FY 2008 | 0 | 0 | 0 | 0 |
| FY 2007 | 0 | 0 | 0 | 0 |
Allen Kahn, Chairman and CFO | FY 2008 | 0 | 0 | 0 | 0 |
| FY 2007 | 0 | 0 | 0 | 0 |
28
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following information concerns unexercised stock options, stock that has not vested, and bonus that exceeded
$100,000 during the last three completed fiscal years.
| Option Awards | Stock Awards | |||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|
|
|
|
|
|
|
|
|
|
Neibert | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Kahn | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Compensation of Directors
The directors of Concierge received the following compensation in FY 2008 for their services as directors.
DIRECTOR COMPENSATION
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensa- tion ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensa- tion ($) | Total ($) |
|
|
|
|
|
|
|
|
David W. Neibert | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
James F. Kirk | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Samuel Wu | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Allen E. Kahn | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Patrick Flaherty | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Marc Angell | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pat Rodden | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
29
Directors of the company receive no membercompensation for their services as directors.
Stock Options.
During the last two fiscal years, the officers and directors of Starfest's management has been granted any option
orConcierge have received no Stock Options and no stock appreciation rights; accordingly,options are outstanding.
Equity Compensation Plans.
We have no tables relating to such items have
been included within this Item.
There are no employment contracts, compensatory plans or arrangements,
including payments to be received from Starfest, with respect to any director or
executive officer of Starfest which would in any way result in payments to any
such person because of his or her resignation, retirement or other termination
of employment with Starfest or its subsidiaries, any change in control of
Starfest, or a change in the person's responsibilities following a change in
control of Starfest.
Long-Term Compensation
Starfest has no long-termequity compensation plans or employment agreements
with any of its officers or directors.
plans.
ITEM 11. 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table below sets forth certain information regarding beneficialthe ownership, of the common stock of Starfest as of March 7, 2001 bySeptember 22, 2008 of each individual who is known to Starfest, as of the date of this filing,management to be the beneficial owner of more than five percent of Starfest'sthe company’s common stock, its only voting
security.
76
Nameby all directors, and Address Amountnamed executive officers, individually and Of Beneficial Natureas a group.
Name and Address of Beneficial Owner | Amount Owned | Percent of Class |
Allen E. Kahn 7547 W. Manchester Ave., No. 325 Los Angeles, CA 90045 | 14,766,902 | 873% |
Samuel C.H. Wu 1202 Tower 1, Admiralty Centre 18 Harcourt Road Hong Kong, China | 20,855,437 | 10.3% |
Polly Force Co., Ltd. 1202 Tower 1, Admiralty Centre 18 Harcourt Road Hong Kong, China | 10,805,680(1) | 5.3% |
Marc Angell 1313 Beachmont Street Ventura, CA 93001 | 11,164,003(4) | 5.5% |
Fiori Product Development 7760 Hellman Road Clinton, WA 98236 | 411,612(2) | (2) |
F. Patrick Flaherty 637 29th Street Manhattan Beach, CA 90266 | 2,100,000(3) | 1.0% |
James E. Kirk 1401 Kirby, N.E. Albuquerque, NM 87112 | 3,383,291 | 1.7% |
David W. Neibert 24028 Clarington Drive West Hills, CA 91304 | 3,489,100(5) | 1.7% |
Officers and Directors as a Group (7 persons) | 56,170,345(6) | 27.6% |
30
(1)
Mr. Samuel C. H. Wu is the beneficial owner of Percentthese shares and 1,620,852 shares held by Link Sense through his presence on their respective Boards of Owner Beneficial Ownership(1) Class
----------------- ------------------------ ----------
Thomas J. Kenan 1,360,000 shares(2) 5.9%
212 N.W. 18th St.
Oklahoma City, OK 73103
Gary Bryant 1,310,000 shares(3) 5.7%
46471 Manitou
Indian Wells, CA 92210
- -------------------------
(1) Unless otherwise indicated, Starfest believes that all persons namedDirectors.
(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. These shares represent less than one percent.
(3)
Mr. Flaherty had earlier reported beneficial ownership of 1,350,710 shares originally issued to his adult children for which he now disclaims beneficial ownership.
(4)
Mr. Angell owns 9,214,003 shares of common stock. Additionally, Mr. Angell acquired 390,000 shares of Series A Convertible, Voting, Preferred stock with the above table have the sole voting and investment power with respect
to allacquisition of Wireless Village. Each of these shares are convertible into 5 shares of common stock, beneficially owned by them.
(2) 760,000totaling 1,950,000 shares of common stock for which Mr. Angell is also the beneficial owner that have been included in this calculation.
(5)
Mr. Neibert and his two minor children collectively own 1,539,100 shares of common stock. Additionally, Mr. Neibert acquired 390,000 shares of Series A Convertible, Voting, Preferred stock with the acquisition of Wireless Village. Each of these shares are heldconvertible into 5 shares of record bycommon stock, totaling 1,950,000 shares of common stock for which Mr. Neibert is also the Marilyn C. Kenan
Trust,beneficial owner that have been included in this calculation.
(6)
Total includes Series A Convertible, Voting, Preferred stock that can be converted into 3,900,000 shares of which trust Marilyn C. Kenan, the spouse of Thomas J. Kenan,
is the trustee and beneficiary. Mr. Kenan disclaims any beneficial
ownership of any of the shares held in the trust.
(3) 570,000 of these shares are held of record by Suzanne Bryant, Mr.
Bryant's spouse, and 370,000 are held of record by Newport Capital
Corporation, a corporation under the control of Mr. Bryant. Mr. Bryant
disavows any beneficial ownership of any of the sharescommon stock held by Mrs.
Bryant.Angell and Neibert. The table below sets forth the ownership, as of the date of this filing,stock held by all directors and nominees, and each of the named executed officers of
Starfest, and directors and executive officers of Starfest as a group, of the
common stock of Starfest, its only voting security.
Name and Address Amount and Nature of Percent of
of Owner Beneficial Ownership Class
---------------- -------------------- ----------
Michael Huemmer 760,000 shares 3.3%
#1136
9494 East Redfield Road
Scottsdale, AZ 85260
Janet Alexander 100,000 shares 0.4%
Suite C
120 East Andreas Road
Palm Springs, CA 92262
Officers and Directors
as a Group (2 persons) 860,000 shares 3.7%
77
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 Starfest.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.
ITEM 12. 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ThereTRANSACTIONS.
David Neibert, C.E.O. of the Company, and Marc Angell, a director, were no transactions duringalso minority shareholders of the past two years, or proposed
transactions,privately held company Wireless Village that was acquired by Concierge on January 23, 2008. Mr. Neibert and Mr. Angell each received 390,000 shares of Series A Convertible, Voting, Preferred stock in the transaction. Five million shares of Series A stock were issued in total. All matters related to which Starfestthe transaction were reviewed by the Chairman, Allen Kahn, and the board of directors when appropriate. The acquisition was or is to be a party, in which any director,
executive officer, nominee for electiontreated as a director, any security holder named
in Item 10 abovethird party, at-arms-length transaction, between the board of directors of Wireless Village, its shareholders, and any immediate family memberthe board of anydirectors of Concierge. A complete audit of Wireless Village was conducted by our auditors, Kabani & Co., prior to the acquisition.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees. Our principal independent accountant billed us, for each of the foregoing persons
hadlast 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 isother services normally provided in connection with statutory and regulatory filings or engagements for those two fiscal years:
Fiscal Year ended June 30, 2008
$48,500
Fiscal Year ended June 30, 2007
$27,500
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 have a directthe performance of the audit or indirect material interest.
review of our financial statements and not reported above under “Audit Fees”:
Fiscal Year ended June 30, 2008
$-0-
Fiscal Year ended June 30, 2007
$-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, 2008
$-0-
Fiscal Year ended June 30, 2007
$-0-
31
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, 2008
$-0-
Fiscal Year ended June 30, 2007
$-0-
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.
ITEM 13. 15.
EXHIBITS, AND REPORTS ON FORM 8-K
(a) Exhibits
FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Form 10-KSB:
10-K:
Exhibit No.
Description
---------- ------------
2
-
Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.*
2
-
Stock Purchase Agreement among Concierge Technologies, Inc., Wireless Village, Inc., Bill Robb and Daniel Britt.++
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.**
3.7
-
Articles of Incorporation of Concierge Technologies, Inc. filed with the Secretary of State of Nevada on April 20, 2005.+
3.8
-
Articles of Merger between Concierge Technologies, Inc., a California corporation, and Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on March 2, 2006 and the Secretary of State of California on October 5, 2006.+
10.1
-
Agreement of Merger between Starfest, Inc. and Concierge, Inc.*
23
14
- Consent
Code of Jaak (Jack) Olesk, certified public accountant.
23.1 Ethics for CEO and Senior Financial Officers.***
31.1
- Consent
Certification of Kabani & Company, certified public accountant.
*PreviouslyChief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
-
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.
32.1
-
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.
32.2
-
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.
(b) Reports on
32
**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.
+Previously filed with Form 10-KSB FYE 06-30-06 on October 13, 2006; Commission File No. 000-29913, incorporated herein.
++ Previously filed on November 5, 2007 as Exhibit 10.2 to Concierge Technologies’ Form 8-K - Item 1. Changes in Control of Registrant (SECfor 10-30-07; Commission File #0-29913)
filed March 10, 2000.
78
Amendment No. 1 to Form 8-K - Item 1. Changes in Control of Registrant
(SEC File #0-29913) filed September 7, 2000.
Form 8-K - Item 4. Changes in Rgistrant's Certifying Accountant (SEC
File #000-29913) filed March 15, 2000.
Form 8-K - Item 4. Changes in Registrant's Certifying Accountant (SEC
File #000-29913) filed November 17, 2000.
Form 8-K - Item 4. Changes in Registrant's Certifying Accountant (SEC
File #000-29913) filed February 20, 2001.
79
33
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.
STARFEST,
CONCIERGE TECHNOLOGIES, INC.
/s/ David W. Neibert
Date: March 30, 2001 October 14, 2008
By /s/ Michael Huemmer
---------------------------------
Michael Huemmer,
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.
/s/ David W. Neibert
Date: March 30, 2001 By /s/ Michael Huemmer
----------------------------------
Michael Huemmer, President,October 14, 2008
David W. Neibert, C.E.O. and Director
/s/ Allen E. Kahn
Date: October 14, 2008
Allen E. Kahn, Chief Financial Officer and Director
/s/ F.P. Flaherty
Date: March 30, 2001 By /s/ Janet Alexander
----------------------------------
Janet Alexander,October 14, 2008
F. Patrick Flaherty, Director
/s/ James E. Kirk
Date: October 14, 2008
James E. Kirk, Secretary and Director
80
Starfest, Inc.
/s/ Samuel C.H. Wu
Date: October 14, 2008
Samuel C.H. Wu, Director
/s/ Marc Angell
Date: October 14, 2008
Marc Angell, Director
/s/ Pat Rodden
Date: October 14, 2008
Pat Rodden, Director
34
CONCIERGE TECHNOLOGIES, INC.
Commission File No. 333-38828000-29913
Index to Exhibits to Form 10-KSB
For the Fiscal Year Ended December 31, 2000
10-K 06-30-08
The following exhibits are filed, by incorporation by reference, as part of this Form 10-K:
Exhibit No.
Description
2
-
Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.*
2
-
Stock Purchase Agreement among Concierge Technologies, Inc., Wireless Village, Inc., Bill Robb and Daniel Britt.++
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.**
3.7
-
Articles of Incorporation of Concierge Technologies, Inc. filed with the Secretary of State of Nevada on April 20, 2005.+
3.8
-
Articles of Merger between Concierge Technologies, Inc., a California corporation, and Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on March 2, 2006 and the Secretary of State of California on October 5, 2006.+
10.1
-
Agreement of Merger between Starfest, Inc. and Concierge, Inc.*
23
14
- Consent
Code of Jaak (Jack) Olesk, certified public
accountant.
23.1 Ethics for CEO and Senior Financial Officers.***
31.1
- Consent
Certification of Kabani & Company, Inc., certified public
accountant.
*PreviouslyChief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
-
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.
32.1
-
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.
32.2
-
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.
Exhibit 23
Page 1 of 1 Page
JAAK (JACK) OLESK
Certified Public Accountant
345 North Maple Drive, Suite 284
Beverly Hills, CA 90210
310-288-0693
INDEPENDENT AUDITOR'S CONSENT
I consent to the inclusion of my report dated February 9, 2000,
**Previously filed with Form 8-K on the
balance sheet of Starfest, Inc. as of December 31, 1999, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
year ended December 31, 1999 and the year ended December 31, 1998 in theApril 2, 2002; Commission File No. 000-29913, incorporated herein.
***Previously filed with Form 10-KSB Annual Report of Starfest, Inc. for the year ended December 31, 2000.
/s/ Jaak Olesk CPA
------------------
JAAK OLESK CPA
Beverly Hills, California
March 30, 2001
Exhibit 23.1
Page 1 of 1 Page
KABANI & COMPANY, INC.
Certified Public Accountants
8700 Warner Avenue, Suite 280
Fountain Valley, California 92708
Telephone 714-849-1543
Fax 714-596-0303
e-mail: hamidkabani@hotmail.com
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report datedon October 17, 2000, on the
balance sheet of Concierge, Inc., as of June 30, 2000, and the related
statements of operations, stockholders' equity (deficit) and cash flows for the
year ended June 30, 2000, and the year ended June 30, 1999 included in the13, 2004; Commission File No. 000-29913, incorporated herein.
+Previously filed with Form 10-KSB Annual Report of Starfest, Inc.
/s/ Kabani & Company, Inc.
---------------------------
Kabani & Company, Inc.
Fountain Valley, California
March 30, 2001
FYE 06-30-06 on October 13, 2006; Commission File No. 000-29913, incorporated herein.
++ Previously filed on November 5, 2007 as Exhibit 10.2 to Concierge Technologies’ Form 8-K for 10-30-07; Commission File No. 000-29913, incorporated herein.