Table of Contents

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-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, 2016

2019

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Concierge Technologies, Inc.

(Exact name of registrant as specified in its charter)

Nevada

000-2991395-4442384

(state of

incorporation)

000-29913

(Commission File Number)

90-1133909

(IRS Employer

I.D. Number)

29115 Valley Center Rd. #K-206
Valley Center,

1202 Puerta Del Sol

San Clemente, CA 92082

92673

Tel: 866.800.2978

Fax: 888.312.0124

(Address and telephone number of registrant's principal

executive offices and principal place of business)

Securities registered underpursuant to Section 12(b) of the Exchange Act: None.

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

None.

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

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 [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K. [ X ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer     

☐

Non-accelerated filer

☐    (Do not check if a smaller reporting company)

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]                                                                                                Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)                       Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.Act). ☐   Yes     [ ]☒   No [X]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $1,207,549$8,386,366 based upon the per share price ($0.02) at whichof $1.39, as reported by our trading exchange platform, OTC Markets, for the common stock was last sold as of December 31, 2015,2018, the last business day of the registrant’s most recently completed second fiscal quarter, multiplied by the approximate number of shares of common stock held by persons other than executive officers, directors and five percent stockholders of the registrant without conceding that any such person is an “affiliate” of the registrant for purposes of the federal securities laws.

State the number

As of September 27, 2019, there were 37,412,519 shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 67,953,870 shares ofregistrant's Common Stock, $0.001 par value, issued and 3,754,355outstanding.  In addition, we have 53,032 shares of Series B Convertible, Voting, Preferred Stock issued and outstanding on October 11, 2016.September 27, 2019. Series B Preferred stock is convertible, under certain conditions, to 20 shares of common stock for each share of Series B Preferred stock. Each share of Series B Preferred stock votes as 20 shares of common stock.

DOCUMENTS INCORPORATED BY REFERENCE

None

1

 

TABLE OF CONTENTS

PART I

ITEM 1  Business

4

ITEM 1A Risk Factors 10
   
ITEM 11B Unresolved Staff CommentsBusiness1
ITEM 2Properties4
ITEM 3Legal Proceedings412
   
PART II

ITEM 2  Properties

12

ITEM 3  Legal Proceedings

12

ITEM 4  Mine Safety Disclosures 

12

PART II

ITEM 5

Market for Registrant’s Common Equity, Related Stockholder Matters, and
Issuer Purchases of Equity Securities

5

13

ITEM 6 Selected Financial Data 

15

ITEM 7

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

ITEM 7A Quantitative and Qualitative Disclosures About Market Risk22
 
Results of Operations10

ITEM 8

Financial Statements and Supplementary Data

18

22

ITEM 9

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

23

Financial Disclosure

56

ITEM 9A

Controls and Procedures

56

23

ITEM 9B Other Information23
   

PART III

ITEM 10

Directors, Executive Officers, and Corporate Governance

57

24

ITEM 11

Executive Compensation

62

ITEM 11 Executive Compensation

28

ITEM 12

Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

63

29

ITEM 13

Certain Relationships and Related Transactions, and Director Independence

64

30

ITEM 14

Principal Accounting Fees and Services

66

31

PART IV

ITEM 15 Exhibits, Financial Statement Schedules

32

   
PART IVITEM 16 Form 10-K Summary 33

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “would,” “shall,” “might,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:

•

our future financial performance, including our revenue, cost of revenue, gross profit, gross margin, operating expenses, ability to generate positive cash flow, and ability to achieve and maintain profitability;

•

the sufficiency of our cash and cash equivalents to meet our working capital, capital expenditure, and liquidity needs;

ITEM 15

Exhibits, Financial Statement Schedules

•

68

our operating subsidiaries' ability to attract and retain customers to use our products, to optimize the pricing for our products, to expand our sales to our customers, and to convince our existing customers to renew subscriptions;

•

the evolution of technologies affecting our operating subsidiaries' products and markets;

•

our operating subsidiaries' ability to innovate and provide a superior user experience and our intentions and strategy with respect thereto;

•

our operating subsidiaries' ability to successfully penetrate enterprise markets;

•

our operating subsidiaries' ability to successfully expand in our existing markets and into new markets, including international markets;

•

the attraction and retention of key personnel;

•

our ability to effectively manage our growth and future expenses;

•

worldwide economic conditions and their impact on spending; and

•

and our operating subsidiaries' ability to comply with modified or new laws and regulations applying to our business, including privacy and data security regulations.

We caution you that the foregoing list does not contain all of the forward-looking statements made with respect to us and our operating subsidiaries in this Annual Report on Form 10-K.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report on Form 10-K primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors”. Moreover, we and our subsidiaries operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Annual Report on Form 10-K to reflect events or circumstances after the date of this Annual Report on Form 10-K or to reflect new information or the occurrence of unanticipated events, except as required by law. We and our subsidiaries may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

3
Table of Contents

PART I

ITEM 1.            BUSINESS.

Business Development

General

Concierge Technologies, Inc. (“Concierge”, (the “Company” or sometimes the “Company”“Concierge”), was incorporated in California on August 18, 1993 as "Fanfest, Inc." On August 29, 1995 its name was changed to Starfest, Inc. (“Starfest”), and on March 20, 2002 its name was changed to “Concierge Technologies, Inc.”

Pursuant to a Stock Purchase Agreement (the "MAS XX 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 XX 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 (“OTCBB”). Accordingly, the consideration Starfest paid for the 96.83 percent interest in MAS XX was valued at $325,000. Concierge, Inc., a Nevada corporation, loaned 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 thatwhich was the stock portion of the consideration.
Upon execution of the MAS XX Purchase Agreement and the subsequent delivery of $100,000 cash and 150,000 shares of Starfest common stock 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 (the “Commission”), Starfest became the successor issuer to MAS XX for reporting purposes under the Securities and Exchange Act of 1934 (the “Act”) 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 XX 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 OTCBB. 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 OTCBB.
An agreement of merger was entered into between Starfest and Concierge, Inc., a Nevada corporation, on January 26, 2000. The proposed merger was submitted to the shareholders of each of Starfest and Concierge, Inc., pursuant to a Form S-4 Prospectus-Proxy Statement filed with the Commission.

As described in Starfest’s Form 8-K filedincorporated on April 2, 2002, with the Commission (Commission File No. 000-29913), the shareholders of Starfest and Concierge did approve the merger, and the merger was legally effected on March 20, 2002.
Pursuant to the agreement of merger between Starfest and Concierge,
●
Starfest was the surviving corporation,
●
The shareholders of Concierge received pro rata for their shares of common stock of Concierge, 99,957,713 shares of common stock of Starfest in the merger, and all shares of capital stock of Concierge were cancelled,
●
The fiscal year-end of the corporation was changed to June 30,
●
The officers and directors of Concierge became the officers and directors of Starfest, and
●
The name of Starfest was changed to "Concierge Technologies, Inc."
Our Business
Concierge conducts business primarily2005, operates through its wholly-owned operating subsidiaries.wholly owned subsidiaries who are engaged in varied business activities. The operations of Concierge’sthe Company’s wholly-owned subsidiaries are more particularly described herein but are summarized as follows:
●
Kahnalytics, Inc., a US based company, captures and presents data from vehicle-mounted camera devices equipped for live-streaming.
●

●

Wainwright Holdings, Inc. (“Wainwright”), a U.S. based company, is the sole member of two investment services limited liability company subsidiaries, United States Commodity Funds LLC (“USCF”), and USCF Advisers LLC (“USCF Advisers”), each of which manages, operates or is an investment advisor to exchange traded funds and exchange traded products organized as limited partnerships or investment trusts that issue shares which trade on the NYSE Arca stock exchange.

●

Gourmet Foods, Ltd. (“Gourmet Foods”), a New Zealand based company, manufactures and distributes New Zealand meat pies on a commercial scale.

●

Brigadier Security Systems (2000) Ltd. (“Brigadier”), a Canadian based company, sells and installs commercial and residential alarm monitoring systems.

●

Kahnalytics, Inc. dba/Original Sprout (“Original Sprout”), a U.S. based company, is engaged in the wholesale distribution of hair and skin care products under the brand name Original Sprout on a global scale. The former business of Kahnalytics, providing live-streaming mobile video on a subscription basis, was insignificant and was terminated after transitioning to the current business of distributing hair and skin care products in December 2017.

See “Note 12. Business Combinations” to our audited financial statements included elsewhere in this annual report for a description of the terms of our acquisitions for our operating businesses.

Concierge manages its operating businesses on a commercial scale.

●
Brigadier Security Systems, a Canadian based company, sellsdecentralized basis. There are no centralized or integrated operational functions such as marketing, sales, legal or other professional services and installs commercial and residential alarm monitoring systems. These activities are conductedthere is little involvement by Concierge’s management in the US, New Zealandday-to-day business affairs of its operating subsidiary businesses. Concierge’s corporate management is responsible for capital allocation decisions, investment activities and Canada respectively.
On May 5, 2004 we acquired allselection and retention of the outstanding and issued shares of Planet Halo, a privately held Nevada corporation.
On June 5, 2007 Planet Halo launched its first wireless broadband network designed for subscription accessChief Executive to the Internet. The second such network was completed in Ventura, California during the 2007-2008 fiscal year. Planet Halo continued to operate and expand the subscriber base until encountering insurmountable competition from disruptive technologies. The wireless business was discontinued during the fiscal year ended June 30, 2011, and a transition was made to research and development activities for in-vehicle video recording devices. In January 2013 we sold all of our interest in Planet Halo through a stock redemption agreement wherein a holder of Concierge Series B, Voting, Convertible Preferred stock exchanged a portion of those shares for allhead each of the issuedoperating subsidiaries. Concierge's corporate management is also responsible for corporate governance practices, monitoring regulatory affairs, including those of its operating businesses and outstanding stockinvolvement in Planet Halo.

On January 23, 2008 we acquired allgovernance-related issues of the outstanding and issued shares of Wireless Village, a privately held Nevada corporation based in Cleveland, Ohio. Wireless Village’s assets included computer hardware, software, domain names, existing radio site infrastructure, and expertise in designing, operating, managing and maintaining wireless and wired networks, including video security systems. Wireless Village began transitioning to the business of mobile incident reporting, or “black box” technology, for vehicles during the fiscal year ended June 30, 2010. During September 2010 Wireless Village offered three knowledgeable individuals, a product manufacturer, and an industry lobbyist an equity stake in the company in exchange for providing their services and expertise, along with a potential client list, exclusively to Wireless Village. Accordingly, on October 8, 2010, we conveyed approximately 49% of Concierge’s equity in Wireless Village, in the aggregate, to the aforementioned group. As a result the focus of Wireless Village was redirected to the business of mobile incident reporting technology and sales. A fictitious business name of 3rdEye Cam was adopted and filed in the State of Nevada and, subsequent to a trade mark dispute settlement, that name was discontinued in favor of the fictitious name Janus Cam. The company then operated from leased offices in South San Francisco, CA.
During the fiscal year ended June 30, 2013, Concierge, through a stock exchange agreement, acquired all of the shares owned by the minority shareholders of Wireless Village in exchange for shares of Concierge Series B, Voting, Convertible Preferred stock. As of June 30, 2014, Wireless Village was a wholly owned subsidiary ofits subsidiaries as needed.  Across Concierge and its only operating subsidiary.
Duringsubsidiaries, the fiscal year ended June 30, 2015, we entered into a Stock Redemption Agreement (the “SRA”) wherein we agreed to sell all of the issued and outstanding shares in Wireless Village to the executive management team of Wireless Village in exchange for the redemption of 68,000,000 shares of Concierge’s common stock held by the buyers plus a forgiveness of intercompany debt totaling $344,052 owed to us by Wireless Village. As a further condition of the SRA a certain segment of the Wireless Village business was to be retained byCompany employs 90 full-time employees.

Subsidiary Business Overview

Wainwright

On December 9, 2016, Concierge through a non-exclusive distribution agreement. The transaction closed on May 7, 2015.

On May 26, 2015, a new wholly-owned subsidiary named Kahnalytics, Inc. (“Kahnalytics”), was established in the State of California for the purpose of taking on the segment of the business retained in the spinoff of Janus Cam and to direct resources towards the further development of data processing capabilities intended for risk management used by vehicle insurance companies.
On August 11, 2015, we acquired all of the issued and outstanding stock in Gourmet Foods, Ltd.,Wainwright which is controlled by our CEO and majority shareholder Nicholas Gerber and another Concierge shareholder, Scott Schoenberger, a New Zealand corporationmember of our board of directors. Wainwright operates through USCF and USCF Advisers, which collectively operate 13 exchange traded products (“Gourmet Foods”ETPs”) locatedand exchange traded funds (“ETFs”) listed on the NYSE Arca, Inc. ("NYSE Arca") with a total of approximately $2.4 billion in Tauranga, whoassets under management as of June 30, 2019. Wainwright earns revenues through its subsidiaries' contractual agreements providing investment management and advisory services in exchange for management fees charged against the funds. Wainwright’s operating subsidiaries focus primarily on providing investment advisory services to funds that invest in a broad base or single commodity, particularly in oil, natural gas, gasoline and metals. Concierge acquired Wainwright in a stock-for-stock exchange for (i) 27,293,333 (as adjusted approximately for the 1 for 30 reverse stock split of our outstanding shares of common and preferred stock effective on December 15, 2017, (the "2017 Reverse Stock Split")) shares of our common stock and (ii) 311,804 (as adjusted approximately for the 2017 Reverse Stock Split) shares of our Series B Voting, Convertible, Preferred stock (which preferred shares are convertible into approximately 6,236,079 shares of Company Common Stock). (See Note 13 to our Financial Statements)

4

Services and Customers

USCF is a commercial-scale manufacturercurrently the General Partner in the following Securities Act of New Zealand meat pies under1933 LP commodity based index funds and Sponsor (“Sponsor”) for the brand names “Ponsonby Pies”fund series within the United States Commodity Index Funds Trust (“USCIF Trust”) and “Pat’s Pantry”. Gourmet Foods distributes its products through major grocery store chains, convenience stores, small restaurantsthe USCF Funds Trust (“USCF Funds Trust”):

USCF as General Partner for the following funds:

United States Oil Fund, LP (“USO”)

Organized as a Delaware limited partnership in May 2005

United States Natural Gas Fund, LP (“UNG”)

Organized as a Delaware limited partnership in November 2006

United States Gasoline Fund, LP (“UGA”)

Organized as a Delaware limited partnership in April 2007

United States Diesel Heating Oil Fund, LP (“UHN”)

Organized as a Delaware limited partnership in April 2007; Liquidated September 12, 2018

United States 12 Month Oil Fund, LP (“USL”)

Organized as a Delaware limited partnership in June 2007

United States 12 Month Natural Gas Fund, LP (“UNL”)

Organized as a Delaware limited partnership in June 2007

United States Short Oil Fund, LP (“DNO”)

Organized as a Delaware limited partnership in June 2008; Liquidated September 12, 2018

United States Brent Oil Fund, LP (“BNO”)

Organized as a Delaware limited partnership in September 2009

USCF as fund Sponsor - each a series within the USCIF Trust

United States Commodity Index Funds Trust (“USCIF Trust”)

A series trust formed in Delaware December 2009

United States Commodity Index Fund (“USCI”)

A commodity pool formed in April 2010 and made public August 2010

United States Copper Index Fund (“CPER”)

A commodity pool formed in November 2010 and made public November 2011

United States Agriculture Index Fund (“USAG”)

A commodity pool formed in November 2010 and made public April 2012; Liquidated September 12, 2018

USCF as fund Sponsor - each a series within the USCF Funds Trust

USCF Funds Trust (“USCF Funds Trust”)

A series trust formed in Delaware March 2016

United States 3X Oil Fund (“USOU”)

A commodity pool formed in May 2017 and made public July 2017

United States 3X Short Oil Fund (“USOD”)

A commodity pool formed in May 2017 and made public July 2017

5

USCF Advisers serves as the investment adviser to the funds listed below within the Trusts and gasoline station markets. The purchase price of $1,753,428 was paid in cash.

On June 2, 2016, we acquired allhas overall responsibility for the general management and administration for the Trusts. Pursuant to the current Investment Advisory Agreements, USCF Advisers provides an investment program for the Trusts’ funds and manages the investment of the issuedassets.

Advisers as fund manager for each series within the USCF ETF Trust and the USCF Mutual Funds Trust:

USCF ETF Trust (“ETF Trust”)

Organized as a Delaware statutory trust in November 2013  

             USCF SummerHaven SHPEI Index Fund ("BUY")

       Fund launched November 30, 2017

             USCF SummerHaven SHPEN Index Fund ("BUYN")

       Fund launched November 30, 2017

Stock Split Index Fund (“TOFR”)

Fund launched September 2014; Liquidated October 20, 2017

Restaurant Leaders Index Fund (“MENU”)

Fund launched November 2016; Liquidated October 20, 2017

             USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund

       Fund launched May 2018

USCF Mutual Funds Trust ("Mutual Funds Trust")

Organized as a Delaware statutory trust in July 2016  

USCF Commodity Strategy Fund ("USCFX" and "USCIX")

Fund launched March 2017; Liquidated March 21, 2019

All USCF funds and outstanding stock in Brigadier Security Systems, a Canadian corporation (“Brigadier”) located in Saskatoon, Saskatchewan. Brigadier sellsthe Trusts' funds are collectively referred to as the “Funds” hereafter.

As of and installs alarm monitoringfor the years ended June 30, 2019 and security systems2018 approximately 89% of Wainwright’s revenue and accounts receivable were attributed to commercialits three largest funds United States Oil Fund, LP, United States Natural Gas Fund, LP and residential customers under brand names “Brigadier Security Systems” and “Elite Security” throughout the province of Saskatchewan with offices in Saskatoon and Regina. The all-cash purchase price was $1,540,830.


Competition.Our potential competitorsUnited States Commodity Index Fund.

Competition

Wainwright faces competition from other commodity fund managers, which include larger, better financed companies that offer products similar to ours. In particular, our foreign subsidiaries face stiff competition with respect to their product and service offerings.Wainwright’s. Many of ourthese competitors have substantially greater financial, technical, and human resources than we do,Wainwright does, as well as greater experience in the discovery and development of products and the commercialization of those products. Our competitors’ products may be more effective, or more effectively marketed and sold, than any products we may commercialize and may render our products obsolete or non-competitive before we can recover the expenses of their commercialization. Our larger competitors also enjoy a much wider and entrenched market share making it particularly difficult for us to penetrate certain market segments and even if penetrated, might make it difficult to maintain. We anticipate that we will face intense and increasing competition as new products and new competitors enter the market. However, with respect to the market share we currently enjoy, we believe that our core customers will remain loyal. Wecommercialize. Wainwright will continue to strive to capture additional customersdevelop and consider new fund opportunities identified through organic growthits research efforts and a focus on quality.

Governmental Approvalreview 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 sale of subscriptions to its Kahnalytics live-streaming data services, and no specific license or approvals are required, with the exception of adoption by local industry associations or municipalities on a case-by-case basis of the devices meeting suitability for purpose standards.
Dependence on Major Customers and Suppliers. Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its single-source sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the fiscal year ended June 30, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% ofmarket needs. However, the cost of goods sold for fiscal year ended June 30, 2015. Saleslaunching and seeding new funds is dependent upon existing and new capital resources. The ability to successfully launch new funds competing with much larger financial institutions with greater financial and human capital will be challenging.

Regulation

Wainwright’s operating subsidiaries, USCF and USCF Advisers, are subject to federal, state and local laws and regulations generally applicable to the investment services industry. USCF is a commodity pool operator (“CPO”) subject to regulation by the Commodity Futures Trading Commission (the "CFTC") and the National Futures Association (the “NFA”) under the Commodities Exchange Act (“CEA”). USCF Advisers is an investment adviser registered under the Investment Advisers Act of these products were discontinued1940, as amended and has registered as a CPO under the CEA. ETPs issued or sponsored by USCF are required to be registered with the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Act of 1933. USCF Advisers advises exchange traded funds and a mutual fund (liquidated during the current fiscal year.

Concierge, through Brigadier Security Systems, is dependent upon its contractual relationshipyear) registered with the alarm monitoring companySEC under the Investment Company Act of 1940.

6

Employees

Wainwright’s operating subsidiaries employ approximately 15 persons, a majority of whom are located in Walnut Creek, California. The operating subsidiaries are responsible for the retention of sub-advisers to manage the investments of each managed Funds’ assets in conformity with their respective investment policies if the operating subsidiary does not provide those services directly. Wainwright’s operating subsidiaries may also retain third-parties to provide custody, distribution, fund administration, transfer agency, and all other non-distribution related services necessary for each fund to operate. Wainwright, through its operating subsidiaries, bears all of its own costs associated with providing these advisory services and the expenses of the members of the board of directors of each fund who purchasesare affiliated with Wainwright.

Intellectual Property

Wainwright subsidiary USCF owns registered trademarks for USCF and USCF Advisers.  The funds USCF is a general partner or sponsor of each have registered trademarks owned by USCF. Additionally, USCF was granted two patents Nos. 7,739,186 and 8,019,675, for systems and methods for an exchange traded fund (ETF) that tracks the monitoring contractsprice of one or more commodities.

Gourmet Foods

Gourmet Foods, Ltd. (“Gourmet Foods”), was organized in its current form in 2005 (previously known as Pats Pantry Ltd) and provides monitoring servicesacquired by Concierge in August 2015. Pats Pantry was founded in 1966 to Brigadier’s customers. Inproduce and sell wholesale bakery products, meat pies and patisserie cakes and slices, in New Zealand. Gourmet Foods, located in Tauranga, New Zealand, sells substantially all of its goods to supermarkets and service station chains with stores located throughout New Zealand. Gourmet Foods also has a large number of smaller independent lunch bars, cafes and corner dairies among the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish suchcustomer list, however they comprise a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Salesrelatively insignificant dollar volume in comparison to the two largest customers totaled 55%primary accounts of the total revenues for the one-month period ended June 30, 2016,large distributors and accounted for approximately 38.6% of accounts receivable as of the balance sheet date of June 30, 2016.


retailers.

Products and Customers

Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, and 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business.

For the 11-month period endingyear ended and balance sheet date of June 30, 2016, our2019, Gourmet Foods’ largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 14%22% of our grossGourmet Foods sales revenues and 34%28% of ourGourmet Foods accounts receivable.receivable as compared to 21% and 33% for the prior year ended June 30, 2018, respectively. The second largest in the grocery industry accounted for approximately 10% of our gross revenues and 12% of ourGourmet Foods sales revenues for the year ended June 30, 2019 as compared to 12% for the year ended June 30, 2018. This same group accounted for 19% of Gourmet Foods accounts receivable.receivable as of June 30, 2019 as compared to 16% as of June 30, 2018. In the gasoline convenience store market we supplyGourmet Foods supplies two major accounts.channels. The largest is a marketing consortium of gasoline dealers accountingoperating under the same brand who, for the year ended and balance sheet date of June 30, 2019, accounted for approximately 44%43% of ourGourmet Foods’ gross sales revenues and 24%as compared to 41% for the year ended June 30, 2018. No single member of our accounts receivable. The second largest are independent operators accountingthe consortium is responsible for approximately 13%a significant portion of gross sales and 17% ofGourmet Foods’ accounts receivable. The third category of independent retailers and cafes accounted for the remaining balance of ourGourmet Foods’ gross sales revenue, however the group is fragmentedmembers are independently owned and individually responsible for their financial obligations with no one customer accountsaccounting for a significant portion of our revenues. revenues or accounts receivable.

Sources and Availability of Materials

Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise.

Seasonality. There should However, the unavailability of, or increase in price in, any of the ingredients on which Gourmet Foods relies to produce its products could harm its operating results for such period.

Competition

Gourmet Foods faces competition from other commercial-scale manufacturers of meat pies located in New Zealand and Australia. Competitors’ products may be no seasonal aspectmore effective, or more effectively marketed and sold, than any products Gourmet Foods may commercialize. Larger competitors in New Zealand also enjoy a wider and more entrenched market share making it particularly difficult for us to Concierge’s business.

Researchpenetrate certain market segments and, Development. Concierge expended no significant amounteven if penetrated, might make it difficult to maintain. In an effort to expand its market presence and limit competitive interference, Gourmet Foods from time to time attempts to acquire other commercial-scale manufacturers of money on research and developmentmeat pies or confections. A recent attempt at such an acquisition was made during the current fiscal year, endinghowever failed subsequent to June 30, 2016.
Environmental Controls. Concierge is subject2019 due to no environmental controls or restrictions that requireunsatisfactory results of due diligence discovery. (See Note 17 to the outlayConsolidated Financial Statements)

Seasonality

The location of a permit in order to engage in businessGourmet Foods in the US. southern hemisphere provides them with a warm Christmas holiday season and some increased business as customers tend to be traveling and purchase more ready-to-eat foods. Although this increase in sales is observable, it is not deemed significant and the opposing seasons to the northern hemisphere work to offset any corresponding down turn in revenues for Brigadier, our Canadian subsidiary, during winter months. Overall, the consolidated business does not experience any material seasonality due to Gourmet Foods.

Regulation

In New Zealand our subsidiary, Gourmet Foods, is required to have certain permits from health regulatory agencies and export permits for certain products it chooses to export. Gourmet Foods is also subject to local regulations as are usual and customary for those in the food processing, manufacturing and distribution business.

Patents, Trademarks, Copyrights and

Intellectual Property. Concierge has trademarked its Personal Communications Attendant. It has no patents on the product.

Gourmet Foods, Ponsonby Pies and Pat’s Pantry are all registered trademarks of Gourmet Foods, Ltd.

Number of

Employees.On June 30, 2016, we employed no persons full time and relied solely on independent sales personnel, commissioned agents, contracted service providers and consultants to perform additional support and administrative functions in the US.

Gourmet Foods employs approximately 45 persons in New ZealandZealand.

Brigadier

On June 2, 2016, Concierge acquired all of the issued and outstanding stock in Brigadier, a Canadian corporation headquartered in Saskatoon, Saskatchewan. Brigadier sells and installs alarm monitoring and security systems to commercial and residential customers under brand names "Brigadier Security Systems" and "Elite Security" throughout the province of Saskatchewan with offices in Saskatoon and Regina.

Services, Products and Customers

Brigadier Security Systems (2000) Ltd. (“Brigadier”) was founded in 1985 and through internal growth and acquisitions the core business of Brigadier began in 1998. Today Brigadier is one of the largest SecurTek security monitoring dealers in Saskatchewan with offices in both major urban areas of Regina (dba Elite Security Systems (2005) Ltd.) and Saskatoon. SecurTek is owned by SaskTel which is Saskatchewan's leading Information and Communications Technology (ICT) provider with over 1.4 million customer connections across Canada. Brigadier is also a Honeywell Certified Access Control Integrator, Kantech Corporate Certified Integrator and UTC Interlogix Authorized dealer and the largest independent security contractor in the province. Brigadier provides comprehensive security solutions including access control, camera systems, ULC certified fire alarm panels, and intrusion alarms to home and business owners as well as government offices, schools and public buildings. Brigadier typically sells hardware to customers and brokers a 24/7 monitoring of their premises. The contract for monitoring the premises is typically supported by SecurTek, who pays Brigadier a monthly maintenance and support fee for each contract remaining in effect.

Concierge, through Brigadier, is partially dependent upon its contractual relationship with the alarm monitoring company who provides monitoring services to Brigadier’s customers. In the event this contract is terminated, Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the largest customer, which includes contracts and recurring monthly support fees, totaled 46% and 41% of the total Brigadier revenues for the years ended June 30, 2019 and June 30, 2018, respectively. The same customer accounted for approximately 37% of Brigadier's accounts receivable as of the balance sheet date of June 30, 2019 as compared to 35% as of June 30, 2018. Another large account, which has been a significant customer this fiscal year, contributed 12% of the total sales revenues for the year ended June 30, 2019 and nil for the year ended June 30, 2018. There were no accounts receivable from this customer as of the years ended June 30, 2019 or June 30, 2018.

Sources and Availability of Materials

Brigadier purchases alarm panels, digital and analog cameras, mounting hardware and accessory items needed to complete security installations from a variety of sources. The manufacture of electronic items such as those sought by Brigadier has expanded to a global scale thus providing Brigadier with a broad choice of suppliers. Brigadier bases its vendor selection on several criteria including: price, availability, shipping costs, quality, suitability for purpose and the technical support of the manufacturer.

Competition

Although it holds a dominant market position in the province of Saskatchewan, Brigadier faces competition from larger, better financed companies that offer similar products and services. In addition, it is possible that Brigadier may face increasing competition as disruptive technologies enter the market. However, with respect to the market share it currently enjoys, Brigadier expects that their core customers will remain loyal and that an opportunity exists to capitalize on the deployment of new technologies. Brigadier's management will continue efforts to capture additional customers through organic growth and a focus on quality.

Seasonality

Brigadier, due to its location in the province of Saskatchewan, Canada, is far enough north that winter weather has a negative effect on its ability to complete some installations, particularly those involving new construction. For this reason, the period from November through March typically produces less revenue than comparison periods during other seasons of the year. Although this decrease in sales is observable, the downturn in sales revenues for the winter months at Brigadier are offset in large part by the increase in revenues for our subsidiary Gourmet Foods in the Southern Hemisphere. Overall, the consolidated business does not experience any material seasonality due to Brigadier Security Systems.

Employees

Brigadier employs approximately 1921 persons in Canada.

Original Sprout

Kahnalytics was founded in 2015 and adopted the dba/Original Sprout in December 2017 (see Note 12 to the Consolidated Financial Statements). For the year ended June 30, 2017  (prior to the acquisition of the Original Sprout assets), Kahnalytics had incurred de minimis operating losses insignificant to the overall enterprise. Prior to the acquisition of the Original Sprout assets, and as of June 30, 2017, the residual business the company was founded to oversee was being wound down and management expected to transition focus to another industry. As of June 30, 2018, this legacy business had been completely wound down.  Accordingly, the results of operations for the twelve-month period ending June 30, 2018 reflects only two quarters of business operations with the newly acquired assets and should not be viewed as indicative of a full twelve-month period of operations. Similarly, there is no meaningful comparative data for the twelve-month period ending June 30, 2018 as the business included nominal subscription sales to a web hosted service and not the wholesale distribution of beauty products as it currently exists. 

Products and Customers

Original Sprout sells its products through 3 channels to market: 1) direct sales to end users via online shopping cart, 2) distributors who, in turn, sell to other retailers or wholesalers, and 3) to retail stores selling to end users.

For the year ended June 30, 2018, Original Sprout, which operated with its current product offering for only 194 days, is not indicative of historical or future operations. For the actual concentration of risk with respect to the current business, focus is given for the period from July 1, 2018 through June 30, 2019 and no comparison exists for the prior year period as only partial business in this sector was conducted by Original Sprout. Among thousands of customers, Original Sprout does have several major accounts with distributors however only one account represented 10% of our annual sales revenues. There were 3 major distributor accounts, all current, representing 25%, 17%, and 12% for a total of 54% of all accounts receivable as of June 30, 2019 as compared to 10%, 20% and 3%respectively as of June 30, 2018.

Sources and Availability of Materials

Concierge, through Original Sprout, is dependent upon its relationship with a product packaging company who, at the direction of Original Sprout, produces the products in accordance with proprietary formulas, packages them in appropriate containers, and delivers the finished goods to Original Sprout for distribution to its customers. All of Original Sprout’s products are currently produced by this packaging company, although if this relationship were to fail there are other similar packaging companies available to Original Sprout at competitive pricing. Because of the nature of the Original Sprout product ingredients, some of the ingredients may, at times, be difficult to source in timely fashion or at the expected price point. To safeguard against this possibility Original Sprout endeavors to maintain at least a 90-day supply of all products in stock. Estimating and maintaining a reserve stock account is not a guarantee that a shortage of ingredient supplies will not affect production such that Original Sprout will not exhaust its reserves or be unable to fulfill customer orders.

Competition

Original Sprout manufactures and distributes only 100% vegan, safe and non-toxic, hair and skin care products which we believe differentiate it significantly from other main-stream products. The use of organic and natural extracts is a growing trend in the U.S. and abroad, and other established brands are beginning to make products for this market. As more entrants to the high-end, vegan, hair care segment come into existence it is inevitable that some will be better financed and have more brand recognition and resources than those of Original Sprout. Original Sprout is focused on promoting its own brand name as a recognized pioneer in 100% vegan, safe, effective, hair care products through recruitment of addition distributors, nationwide retail stores, and increased social media presence with the expectation that establishing brand awareness will allow the continued growth of annual revenues and market share protection, though there can be no guarantees that such efforts will be sufficient to offset the effects of competition in the future.

9

Seasonality

There is no significant seasonality for sales of products for Original Sprout, though sales will fluctuate around traditional holidays, and certain products, such as sun screen, will be lower in winter months than in summer months. Overall, the consolidated business does not experience any material seasonality due to Original Sprout.

Regulation

In the U.S. our subsidiary, Original Sprout, is not required to have permits for distribution of its products, however it chooses to gain recognition from certain testing laboratories and other quasi-regulatory agencies for compliance with accepted standards for hair and skin care ingredients and lack of toxic chemicals in their formulas and processes. For export, Original Sprout is often compelled to submit its products to foreign government agencies or certified laboratories for ingredient testing prior to being accepted for import as a “safe” product. The Original Sprout products comply with all applicable regulations, both domestic and foreign, in areas where they are sold or distributed.

Intellectual Property

The formulations and ingredient percentages of the many products of Original Sprout are considered its intellectual property, though many cannot be patented, they are maintained as confidential. The names "Original Sprout", "D’Organiques Original Sprout" are registered trademarks of Original Sprout.

Employees

Original Sprout employees 9 persons on a full time basis at its location in San Clemente, California.

Available Information

We maintain a website at www.conciergetechnology.net. We make available free of charge on or through our website our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as reasonably practicable after we electronically file or furnish such materials to the SEC. The information on our website is not incorporated by reference in this annual report on Form 10-K.  In addition, the U.S. Securities and Exchange Commission ("SEC") maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC, from which investors can electronically access Concierge's SEC filings.

ITEM 1A.       RISK FACTORS  

Concierge and its subsidiaries (referred to herein as “we,” “us,” “our” or similar expressions) are subject to certain risks and uncertainties in its business operations which are described below. The risks and uncertainties described below are not the only risks we face. Additional risks and uncertainties that are presently unknown or are currently deemed immaterial may also impair our business operations.The following risk factors should be read in connection with the other information included in this annual report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and our financial statements and the related notes.


10

Risks Related to our Business and Structure

Concierge is a holding company and its only material assets are its cash in hand, equity interests in its operating subsidiaries and its other investments. As a result, Concierge’s principal source of cash flow is distributions from its subsidiaries and its subsidiaries may be limited by law and by contract in making distributions to Concierge.

As a holding company, Concierge's assets are its cash and cash equivalents, the equity interests in its subsidiaries and other investments.

The principal source of cash flow is distributions from our subsidiaries. Thus, our ability to finance future acquisitions or develop new projects is dependent on the ability of our subsidiaries to generate sufficient net income and cash flows to make upstream cash distributions to us. Our subsidiaries are separate legal entities, and although they may be wholly-owned or controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends, distributions or otherwise. The ability of our subsidiaries to distribute cash to us are and will remain subject to, among other things, restrictions that are contained in each subsidiaries’ financing agreements, availability of sufficient funds and applicable state laws and regulatory restrictions.

Claims of creditors of our subsidiaries generally will have priority as to the assets of such subsidiaries over our claims and claims of our creditors and stockholders. To the extent our cash flow is dependent on our subsidiaries ability to make distributions to us could materially limit our ability to grow, pursue business opportunities or make acquisitions that could be beneficial to our businesses.

We are dependent on certain key personnel, the loss of which may adversely affect our financial condition or results of operations.

Major capital allocation decisions and investment decisions are made by Chief Executive Officer and Chairman of the Board of Directors, Nicholas Gerber, with consultation from key personnel, from our management team and the executive management team from our subsidiaries. The executive management teams that lead the Company and our subsidiaries are also highly experienced and possess extensive skills in their industry. If Mr. Gerber were to become unavailable, there could be a material adverse impact on our operations. However, the Company’s Board of Directors have the power and authority to fill a vacancy left by Mr. Gerber. The ability to retain key personnel is important to our success and future growth. Competition for these professionals can be intense, and we may not be able to retain and motivate our existing officers and senior employees, and continue to compensate such individuals competitively. The unexpected loss of the services of one or more of these individuals could have a detrimental effect on our operations and negatively impact our financial condition or results of operations of our businesses, and could hinder the ability of our business and our subsidiaries to effectively compete in the various industries in which we operate.

We need qualified personnel to manage and operate our subsidiaries.

Our decentralized business model requires that we retain qualified and competent managers to continue day-to-day operations of our subsidiaries and continue business operations in a changing political, business or regulatory environment. Our subsidiaries require qualified and competent personnel to execute their business plans and continue servicing their clients, suppliers and other stakeholders. Our inability to attract and retain qualified personnel to operate our business subsidiaries could negatively impact our operating results and our overall financial condition that is important to our success and future growth.

Cyber Security Risks

The efficient operation of our businesses is dependent on computer hardware and software systems. Unauthorized computer infiltration, denial-of-service attacks, phishing efforts, unauthorized access, malicious software codes, computer viruses or other such harmful computer campaigns may negatively impact our business causing significant disruptions to our business operations. We expect that we may be subject to a cyber-attack in some form or fashion in the future as such attacks become more sophisticated and frequent to all industries and all businesses of every size. There can be no assurance that our cyber-security measures and technology will adequately protect us from these and other risks, including external risks such as natural disasters and power outages and internal risks such as insecure coding and human error.

Although we have undertaken steps to prevent and mitigate cyber risks, there is no guarantee that our efforts will prevent cyber-attacks perpetrated against our information systems which could result in loss of assets and critical information, theft of intellectual property or inappropriate disclosure of confidential information and could expose us to remediation costs and reputational damage which could adversely affect our business in ways that cannot be predicted at this time. Any of these risks could materially affect our results of operations and consolidated financial results.

11

Future acquisitions or business opportunities could involve unknown risks that could harm our business and adversely affect our financial condition and results of operations.

We are a holding company that owns interests in a number of different businesses. We have in the past, and intend in the future, to acquire businesses that involve unknown risks, some of which will be particular to the industry in which the investment or acquisition targets operate, including risks in industries with which we are not familiar or experienced. There can be no assurance our due diligence investigations will identify every matter that could have a material adverse effect on us or the entities that we may acquire. We may be unable to adequately address the financial, legal and operational risks raised by such investments or acquisitions, especially if we are unfamiliar with the relevant industry, which can lead to significant losses on material investments. The realization of any unknown risks could expose us to unanticipated costs and liabilities and prevent or limit us from realizing the projected benefits of the investments or acquisitions, which could adversely affect our financial condition and liquidity. In addition, our financial condition, results of operations and the ability to service our debt may be adversely impacted depending on the specific risks applicable to any business we invest in or acquire and our ability to address those risks.

We could consume resources in researching acquisitions, business opportunities or financings and capital market transactions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or invest in another business.

We are a holding company in the business of owning diverse and profitable businesses. Our business model also encompasses researching and investigating new acquisitions and business opportunities to support the growth of our Company. With each new contemplated acquisition or business opportunity, there are resources that must be allocated towards acquisition or engaging in a new business opportunity such as, the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments with respect to such transaction and may require substantial management time and attention and substantial costs for financial advisors, accountants, attorneys and other advisors. If a decision is made not to consummate a specific acquisition, business opportunity or financing and capital market transaction, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific acquisition, investment target or financing, we may fail to consummate the investment or acquisition for any number of reasons, including those beyond our control. Any such event could consume significant management time and result in a loss to us of the related costs incurred, which could adversely affect our financial position and our ability to consummate other acquisitions and investments.

ITEM 1B.       UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2.          PROPERTIES.

WePROPERTIES

As of June 30, 2019 the Company did not own noany plants or real property.

  However, on July 2, 2019, Brigadier finalized the purchase of its office facility and land located in Saskatoon for CAN $750,000 (Approximately US$572,858), funded by a bank loan of CAN$525,000 (approximately US$401,000) and CAN$225,000 (approximately US$171,858) in cash. The bank loan matures in 5 years and bears interest at the annual rate of 4.14%. See Note 17-Subsequent Events.

Facilities

Our administration

Administrative offices are housedco-located in the facility leased by our Chief Financial Officer, David Neibert,subsidiary, Original Sprout, whose mailing address is 29115 Valley Center Rd., K-206, Valley Center, CA 92082. The Company pays no rent and has no lease obligations.1202 Puerta Del Sol, San Clemente, California 92673. Our wholly-owned subsidiary, Brigadier, rents facilities in Saskatoon and Regina, Canada. Our wholly-owned subsidiary, Gourmet Foods, rents facilities in Tauranga, New Zealand. Wainwright leases office space in Walnut Creek, California. We believe that the facilities described herein are adequate for our current and immediately foreseeable operating needs.

ITEM 3.          LEGAL PROCEEDINGS.

On May 6, 2002, a default judgment was awardedPROCEEDINGS

From time to Brookside Investments Ltd. (“Brookside”) against, jointly and severally, our company, Allen E. Kahn, and The Whitehall Companiestime, the Company is involved in legal proceedings arising mainly from 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 refundordinary course of its investment as a resultbusiness. Currently, there are no legal proceedings pending.

ITEM 4.         MINE SAFETY DISCLOSURES

Not applicable.

12
As of May 6, 2012, the judgment had lapsed and there is no further effect. Although the judgment is no longer enforceable against Concierge, and Concierge is no longer domiciled in the state of jurisdiction where the judgment was entered, the amount of $135,000 continues to be listed among the accrued expenses of the company.

PART II

ITEM 5.          MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

SECURITIES

Our Common Stock presently trades on the OTC Markets QB Exchange. The high and low bid prices, as reported by OTC Markets, are as follows for fiscal years ended June 30, 20152018 and 2016.2019. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The prices are adjusted for the 1:1030 reverse stock split effectuated on December 15, 2015.

 
 
High
 
 
 Low
 
Calendar 2014
 
 
 
 
 
 
3rd Qtr.
 $0.146 
 $0.085 
4th Qtr
 $0.099 
 $0.025 
 
    
    
Calendar 2015
    
    
1st Qtr
 $0.068 
 $0.029 
2nd Qtr
 $0.119 
 $0.043 
3rd Qtr.
 $0.095 
 $0.03 
4th Qtr
 $0.089 
 $0.02 
 
    
    
Calendar 2016
    
    
1st Qtr
 $0.10 
 $0.02 
2nd Qtr
 $0.04 
 $0.02 

2017.

 

 

High

 

 

Low

 

 

 

Calendar 2017

 

3rd Quarter

 

$

1.79

 

 

$

1.17

 

4th Quarter

 

$

2.15

 

 

$

1.22

 

 

 

 

 

 

 

 

 

 

 

 

Calendar 2018

 

1st Quarter

 

$

1.61

 

 

$

1.21

 

2nd Quarter

 

$

1.41

 

 

$

0.90

 

3rd Quarter

 

$

1.23

 

 

$

0.55

 

4th Quarter

 

$

1.85

 

 

$

0.86

 

 

 

 

 

 

 

 

 

 

 

 

Calendar 2019

 

1st Quarter

 

$

1.40

 

 

$

0.80

 

2nd Quarter

 

$

1.30

 

 

$

0.65

 

Holders

On June 30, 2016,September 27, 2019, there were approximately 353365 registered holders of record of our common stock.

Dividends

We have had no retained earnings and have declared no dividends on our capital stock.for the current year nor do we expect to in the foreseeable future. Our ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, dividends may be paid to the extent that a corporation’s assets exceed its liabilities and it is able to pay its debts as they become due in the usual course of business. Under Nevada law, a company - such as our company - can pay dividends only

●

from retained earnings, orand

●

no distribution can be made, if after giving it effect,

the dividend is made,

●
corporation would not be able to pay its tangibledebts as they become due in the usual course of business; or

except as otherwise specifically allowed by the articles of incorporation, the corporation’s total assets would equal at least 11/4 times its liabilities, and

●
its current assets would at least equal its current liabilities, or
●
if the average of its earnings before income taxes and before interest expenses for the last two years wasbe less than the averagesum of its interest expenses fortotal liabilities plus the last two years, then its current assets mustamount that would be equalneeded, if the corporation were to be dissolved at least 11/4 times its current liabilities.the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution.

Our strategy on dividends is to declare and pay dividends only from retained earnings and only when our Board of Directors deems it prudent and in the best interests of the company to declare and pay dividends.

Penny Stock Regulations

Our common stock trades on the OTC Markets QB Exchange at a price less than $5 a share and therefore is subject to the rules governing "penny stocks."

A "penny stock" is any stock that:

●
sells for less than $5 a share.
●
is not listed on an exchange or authorized for quotation on The Nasdaq Stock Market, and
●
is not a stock of a "substantial issuer." We currently have net tangible assets of at least $2 million which would qualify us as a “substantial issuer”.

•

sells for less than $5 a share.

•

is not listed on an exchange or authorized for quotation on The NASDAQ Stock Market, and

•

is not a stock of a "substantial issuer." We currently have net tangible assets of at least $2 million which would qualify us as a “substantial issuer”.

There are statutes and regulations of the Commission that impose a strict regimen on brokers that recommend penny stocks.

13

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:

●
transactions not recommended by the broker-dealer,
●
sales to institutional accredited investors,
●
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
●
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.

•

transactions not recommended by the broker-dealer,

•

sales to institutional accredited investors,

•

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

•

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:

●
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,

● 
A warning that salespersons of penny stocks are not impartial advisers but are paid to sell the stock,
● 
The statement that federal law requires the salesperson to tell the potential investor in a penny stock -
● 
the "offer" and the "bid" on the stock, and
● 
the compensation the salesperson and his firm will receive for the trade,
● 
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,
● 
A warning that a large spread between the bid and the offer price can make the resale of the stock very costly,
● 
Telephone numbers a person can call if he or she is a victim of fraud,
● 
Admonitions -
● 
to use caution when investing in penny stocks,
● 
to understand the risky nature of penny stocks,
● 
to know the brokerage firm and the salespeople with whom one is dealing, and
● 
to be cautious if one’s salesperson leaves the firm.

•

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,

•

A warning that salespersons of penny stocks are not impartial advisers but are paid to sell the stock,

•

The statement that federal law requires the salesperson to tell the potential investor in a penny stock,

•

the "offer" and the "bid" on the stock, and

•

the compensation the salesperson and his firm will receive for the trade,

•

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,

•

A warning that a large spread between the bid and the offer price can make the resale of the stock very costly,

•

Telephone numbers a person can call if he or she is a victim of fraud,

•

Admonitions -

•

to use caution when investing in penny stocks,

•

to understand the risky nature of penny stocks,

•

to know the brokerage firm and the salespeople with whom one is dealing, and

•

to be cautious if one’s 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.

14

Effects of the Rule

The above penny stock regulatory scheme is a response by the Congress and the Commission to known abuses in the telemarketing of low-priced securities by "boiler shop" operators. The scheme imposes market impediments on the sale and trading of penny stocks. It has a limiting effect on a stockholder's ability to resell a penny stock.

Our shares likely will trade below $5 a share on the OTC Markets exchange and be, for some time at least, shares of a "penny stock" subject to the trading market impediments described above.

Recent Sales of Unregistered Securities; Outstanding Stock Options

The following sets forth certain information concerningCompany sold no shares of any class of stock, nor issued any securities which were sold or issued by us without the registration of the securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements within the past three years:


On February 19, 2014, we issued 53,571 unregistered shares of our common stocklast two years up to a holder of a note receivable from Janus Cam as a fee in exchange for an agreement to extend the maturity date of the note receivable. The transaction was recorded as an expense of $750 based on the market value of our stock as of the date of issue. We have also issued shares of common stock in settlement of convertible debentures as detailed in the following paragraphs. The issued shares were unregistered and issued as per the following:
Date
 
No. of Shares
 
Shareholder
 
Type of Consideration
 
Value of Consideration
 
2/19/2014
  53,571 
Lisa Powell Brown
 
Debt settlement
 $750 
9/22/2014
  4,346,247 
Asher Enterprises
 
Debt settlement
 $28,000 
10/10/2014
  5,424,000 
Asher Enterprises
 
Debt settlement
 $27,120 
1/26/2015
  266,666,667 
Nicholas & Melinda Gerber Living Trust
 
Cash
 $773,333 
1/26/2015
  133,333,333 
Schoenberger Family Trust
 
Cash
 $386,667 
1/26/2015
  8,270,000 
Polly Force Company, Ltd
 
Debt settlement
 $82,700 
On February 18, 2014, we entered into a series of agreements, including a convertible debenture, that resulted in a funding of $53,000. The note was convertible, at the option of the debenture holder, to restricted common shares after August 18, 2014, at a conversion price calculated on a prescribed discount to the trailing 10-day volume weighted average market price (“VWAP”) of our shares on the date of conversion. During the initial 6 monthsJune 30, 2019 apart from the dateconversion of the note we may repay the principal plus accrued interest at the rate of 8% per annum by applying a pre-payment penalty determined on a sliding scale tied to the aging of the note. After the initial 6-month period had elapsed we could not repay the note until its maturity date on November 18, 2014, at which time the note principal and interest became due and payable without pre-payment penalty. We identified embedded derivatives related to the convertible debenture. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that we record fair value of the derivatives as of the inception date of the convertible debenture and fair value as of each subsequent balance sheet date. During the quarter ended September 30, 2014, at the election of the debenture holder, we converted $28,000 of the principal to equity through issuance of 4,346,247 shares of common stock. During the quarter ended December 31, 2014, at the election of the debenture holder we converted $25,000 of the principal plus $2,120 of accrued interest to equity through issuance of 5,424,000 shares of common stock. The debenture was paid in full as of October 10, 2015, and thus no derivative expense or fair value of the embedded derivative was recorded for the fiscal year ended June 30, 2015.
On January 1, 2013, we consolidated all outstanding notes payable due a related party into one loan agreement containing certain conversion features whereby the note holder could convert the principal amount of the loan, $204,700 comprised of the sum total of the principal amounts of the individual notes, $122,000, plus $82,700 in accrued interest applicable to those notes, together with accrued interest on the principal at the rate of 4.944% per annum, into shares of our common stock at the conversion rate of $0.02 per share. The note is unsecured and became due and payable on January 1, 2015. The accrued interest on this $204,700 convertible debenture as of December 31, 2014 was $20,241. There was no beneficial conversion feature involved in the new note. On December 19, 2014, we entered into an amendment to the debenture that allowed for the maturity date to be extended to June 1, 2015, and provided us with rights to settle the debenture in full, upon completion of an equity investment in excess of $1,500,000, by payment of $122,000 in cash and issuance of 8,270,000 shares of common stock valued at $0.01 per share to the debenture holder. On January 26, 2015, we exercised those rights and paid the debenture in full. The transaction resulted in a gain on the issuance of shares of $69,861 as the fair market value of a share of our common stock at December 19, 2014, was $0.004. The gain resulted for a related party, thus it was recorded in additional paid in capital account.

We sold the following383,919 issued shares of our Series B Voting, Convertible, Voting, Preferred Stock during the last three years without registering the shares. Each share of Series B Convertible, Voting, Preferred Stock is convertible into 20stock to 7,678,380 shares of unregistered common stock. Subsequent to June 30, 2019, the Company issued 175,000 shares of restricted common stock and carries a vote equal to 20 shares of common stock in all matters brought before the shareholders for vote.
Date
 
No. of Shares
 
Shareholder 
Type of Consideration
 
Value of Consideration
 
  9/8/12
  560,000 
Gonzalez & Kim
 
Cash and Debt settlement
 $112,000 
1/26/2015
  21,634,332 
Nicholas & Melinda Living Trust
 
Cash
 $1,226,667 
1/26/2015
  10,817,167 
Schoenberger Family Trust
 
Cash
 $613,333 
We issued the following shares of common stock pursuant to certain conversion rights contained in our preferred stock. The shares of preferred stock issued in the conversion were cancelled resulting in no net effectMaxim Partners LLC (see Note 17 to the number of voting shares outstanding.
Date
 
No. of Shares Converted
 
Type of Shares
 
Shareholder
 
Common Stock Issued
 
10/22/2014
  2,203,182 
Series B Pref
 
Peter Park
  44,063,640 
10/22/2014
  2,203,182 
Series B Pref
 
Nelson Choi
  44,063,640 
6/4/2015
  206,186 
Series A Pref
 
Jan Carter
  1,030,930 
All of the above unregistered sales were made pursuant to the exemption from registration provided by the Commission’s Regulation D, Rule 506. All purchasers were either accredited investors or, if not, were provided copies of our recent filings with the Commission including financial statements meeting the requirements of the Commission’s Item 310 of Regulation S-B. All purchasers were provided the opportunity to ask questions of our management.
Consolidated Financial Statements). The Company has no stock option plan nor any outstanding stock warrants.

ITEM 6.          SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.          MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Some of the information contained in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report includes forward-looking statements based on our current management’s expectations. There can be no assurance that actual results, outcomes or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors, including, among others, our limited operating history, unpredictability of future operating results, competitive pressures and the other potential risks and uncertainties.

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.elsewhere in this annual report on Form 10-K. See "Financial"Consolidated Financial Statements."

Introduction

Concierge Technologies, Inc. (“Concierge”) or the (“Company”) conducts business through its wholly-owned operating subsidiaries operating in the U.S., New Zealand and Canada. The operations of the Company’s wholly-owned subsidiaries are more particularly described herein but are summarized as follows:

●

Wainwright Holdings, Inc. (“Wainwright”), a U.S. based company, is the sole member of two investment services limited liability company subsidiaries that manages, operates or is an investment advisor to exchange traded funds organized as limited partnerships or investment trusts that issue shares that trade on the NYSE Arca stock exchange.

●

Gourmet Foods, Ltd. (“Gourmet Foods”), a New Zealand based company, manufactures and distributes New Zealand meat pies on a commercial scale.

●

Brigadier Security Systems (2000) Ltd. (“Brigadier”), a Canadian based company, sells and installs commercial and residential alarm monitoring systems.

●

Kahnalytics, Inc. dba/Original Sprout (“Original Sprout”), a U.S. based company, is engaged in the wholesale distribution of hair and skin care products under the brand name Original Sprout on a global scale. The former business of Kahnalytics, providing live-streaming mobile video on a subscription basis, was insignificant and was terminated after transitioning to the current business of distributing hair and skin care products as of December 18, 2017.

Because the Company conducts its businesses through Planet Haloits wholly-owned operating subsidiaries, the risks related to our wholly-owned subsidiaries are also risks that impact the Company's financial condition and Wireless Village, had been selling subscriptionsresults of operations.  See, "Note 2. Summary of Significant Accounting Policies / Major Customers and Suppliers - Concentration of Credit Risk" in the consolidated financial statements for more information.

Critical Accounting Policies

A summary of our significant accounting policies is described in detail in Note 2 to our Consolidated Financial Statements.

Plan of Operation for the Next Twelve Months

Our plan of operation for the next twelve months is to apply necessary resources, which may include experienced personnel, cash, or synergistic acquisitions made with cash, equity or debt, into growing each of our business units to their potential. Original Sprout is in the initial stages of transitioning from a largely boutique offering to a more mainstream product and as such we anticipate measurable growth in revenues for the coming years. Additionally, we are expecting moderate growth in Brigadier through focused management initiatives and consolidation within the security industry coupled with expanded product offerings. Similarly, we expect Gourmet Foods to be operating more efficiently under current management and continue to increase market share through additional product offerings and channels to market, including distribution in New Zealand of the products from Original Sprout. Wainwright will continue to develop innovative and new fund products to grow its wireless Internet access serviceportfolio. In addition to our long-term mission that is an acquisition strategy based upon identifying and acquiring profitable, mature, companies of a diverse nature and with in-place management that produces increased revenue streams, the Company is also focused upon building expertise and developing FinTech opportunities in various increments, including daily, weekly, monthlythe financial services sector. In a more general sense, the Company is characterizing its business in two categories; 1) financial services and yearly since 2007. During2) other operating units. The purpose is to isolate the fiscal year endingcyclical nature of the financial services business from our other industry segments. As revenues from financial services fluctuate over time due to varying performance of the commodities markets, our other operations are expected to be stable and sustainable by comparison. By these initiatives we seek to:

●

continue to gain market share for our wholly-owned subsidiaries’ areas of operation,

●

increase our gross revenues and realize net operating profits,

●

lower our operating costs by unburdening certain selling expenses to third party distributors,

●

have sufficient cash reserves to pay down accrued expenses,

●

attract parties who have an interest in selling their privately held companies to us,

●

achieve efficiencies in accounting and reporting through consolidated operations of our subsidiaries from a management perspective,

●

strategically pursue additional company acquisitions, and

●invest in the development of FinTech opportunities in the financial services space.

Results of Operations

Concierge and Subsidiaries

For the Year Ended June 30, 2011, we completed2019 Compared to the transition away from this business and refocused our efforts, through our majority owned subsidiary Wireless Village dba/Janus Cam, on the sale and distribution of mobile video surveillance systems, generically known as “drive cams”. During the fiscal year endedYear Ended June 30, 2013, we sold Planet Halo to a shareholder through a stock redemption agreement and we acquired all2018

Financial Summary

The table below summarizes each of the minority owned sharesConcierges subsidiaries into one of Wireless Village through a stock-for-stock exchange. Having Wireless Village as a wholly-owned subsidiary for 2 years produced operating losses and we elected to raise additional working capital through equity as well as change our strategic focus. Accordingly, during the fiscal year ended June 30, 2015, we raised $3 million in cash, sold Wireless Village to its executive management team through a stock redemption agreement, established Kahnalytics as our wholly-owned subsidiary in order to carry on certain profitable aspects of the former Wireless Village line oftwo categories. The Wainwright business acquired Gourmet Foods, and acquired Brigadier. The acquisition of Gourmet Foods was completed on August 11, 2015, and the acquisition of Brigadier on June 2, 2016, both consummated as cash transactions. As of June 30, 2016, our financial statements are representative of the operating results of these three wholly-owned subsidiaries.

Kahnalytics
On May 26, 2015, we established a new wholly-owned subsidiary domiciledis included in the state of CaliforniaFinancial Services columns and named Kahnalytics, Inc. (“Kahnalytics”). Kahnalytics took overall other subsidiaries, including Gourmet, Brigadier, and Original Sprout in the business of selling cameras, installation and support services to the insurance industry, a business segment formerly addressed by Janus Cam, but then retained by Concierge as part of the Stock Redemption Agreement.
During the period July 1, 2015, through October 1, 2015, Kahnalytics purchased cameras, various other hardware items, and installation services for sale to specific insurance companies, and ultimately for installation into insured’s vehicles. The hardware items are either listed in inventory if held beyond the close of the current accounting period, or summarized as “cost of goods sold” when sold. Inventory orders which have been paid for, or partially paid for, in advance of receipt are classified as “Advance to Suppliers.” Generally, hardware is sold to customers who require delivery and installation of the product in their vehicles. The charges for services such as theseOther Operating Units columns. Corporate expenses are included in the bundled, installed, sales price reflected on sales invoices and accounts receivable. The revenuesConcierge Corporate columns. Note that our subsidiary Original Sprout shows operating results for Kahnalytics for the years ended June 30, 2016, for camera and related sales were $120,430 as compared to the year ending June 30, 2015, where sales were $95,057. During October 2015 Kahnalytics moved away from the camera sales segment and refocused its business towards the capture of live-steaming data from vehicle camera devices. As a result, the remaining inventory of cameras and SD cards were deemed discontinued products and their combined value (being lower of cost or market) was impaired by $48,330.

By obtaining an exclusive software license and partnering with a camera importer/distributor as a channel-to-market, Kahnalytics began the business of hosting a web-based server that subscribers could access to view their camera video files, vehicle location, speed and event triggers in real time. The system was ready to launch by June 2016. To facilitate the sales process and entice customers to the online subscription service, Kahnalytics implemented a hardware subsidy program and offered a wireless data plan that was resold to subscribersonly six months of the service, called2018 year which accounts for, in part, the Kahnalytics Fleet Management Service or “FMS”. Two types of services were offered, 1) a FMS basic subscription plan where subscribers provided their own wireless connection toincrease in revenues and profits for 2019 over the FMS2018 year.

($’s in thousands)

Financial Services

Other Operating Units

Concierge Corporate

Consolidated

 

2019

2018

Change

2019

2018

Change

20192018Change

2019

2018

Change

   $%  $%  $%  $%

Revenue

 $15,021

$18,744

($3,723)

(20%)

 $11,928

 $9,967

 $1,961

20%    

 $26,949

$28,711

 ($1,762)

(6%)

% of total revenue

56%

65%

 

(9%)

44%

35%

 

9%        

Cost of revenue

 

 

 

 

 $6,936

$5,915$1,02117%    $6,936$5,915$1,02117%

Gross profit

$15,021$18,744($3,723)(20%)

$4,992

$4,052 

$940

23%    $20,013$22,796($2,783)(12%)
Operating expenses$14,095$15,527($1,432)(9%)$3,950$3,488$46213%$1,212$974$23824%$19,257$19,989($732)(4%)

% of total operating expenses

73%78% (5%)21%17% 4%6%5% 1%    
Income (loss) from operations$926$3,217($2,291)(71%)$1,042$564$47885%($1,212)($974)($238)(24%)$756$2,807($2,051)(73%)

Other (expense) / income 

    ( $148)

 ($324)

   $176

54%

      $25

$43($18)(42%)($24)($25)$14%($147)($306)$159(52%)

Income (loss) before income taxes

     $778

$2,893

($2,115)

(73%)

      $1,067

      $607

$46076%($1,236)($999)($237)(24%)$609$2,501($1,892)(76%)

 

                

 Revenue and 2) a FMS data plan where subscribers were provided hardware needed to connect wirelessly to the Internet and also charged a monthly fee for the air time usage. Kahnalytics also charged a subsidized price of $50 per each wireless hardware device used in creating the wireless connection. For the year ended June 30, 2016, the total revenues from FMS related hardware sales was $2,250. Kahnalytics purchases data plans from a network reseller and, in turn, resells that plan to its subscribers. For the year ended June 30, 2016, sales of FMS basic subscriptions were $480 and FMS data plans were $0. There were no FMS related subscription or hardware salesOperating Income

Consolidated revenue for the year ended June 30, 2015. Hardware sales2019 was $26.9 million representing a $1.8 million decrease from the prior year revenue of cameras and SD cards$28.7 million. While net revenues decreased as a result of lower Fund assets under management ("AUM") from our fund management business by approximately $3.7 million for the year ended June 30, 2016, were $117,7002019 as compared to $95,057 for the year ended June 30, 2015. Other2018, the corporation's revenues derived from its other operating units increased by approximately $1.9 million over the same period, resulting in a net reduction to revenue in fiscal year 2019 of approximately 6%. Concierge produced an operating income for the year ended June 30, 2016, was $81 and comprised2019 of adjustments to sales tax liability$0.8 million as compared to $0$2.8 million for the year ended June 30, 2015. Accounts receivable as2018. This represents a decrease in operating income of June 30, 2016, were $2,640 as compared to $95,417 as of June 30, 2015. The difference is attributed to the discontinuation of most hardware sales during the current fiscal year and the focus on subscription services instead, which results in less gross revenues overall rather than any significant change in the aging of accounts receivable. Net loss after the impairment of inventory of $48,330 and provision for income tax of $800 was $60,612 as compared to a net loss$2.0 million for the year ended June 30, 20152019 when compared to the year ended June 30, 2018 of $10,332.approximately 73%. The decrease in operating income was primarily attributable to lower fund management revenue from Wainwright due to lower AUM.

Other Expenses

Other expense, including provision for income tax of $0.3 million and $0.8 million, for the years ended June 30, 2019 and 2018 were $0.5 million and $1.1 million for the years ended June 30, 2019 and 2018, respectively, resulting in a net income of $0.3 million and $1.7 million, respectively. After giving consideration to currency translation losses of $45 thousand our comprehensive income for the year ended June 30, 2019 was $0.2 million as compared to the year ended June 30, 2018 where there was a currency translation loss of $214 thousand and a short-term investment valuation increase of $244 thousand resulting in comprehensive income of $1.8 million. Comprehensive gain and loss are comprised of fluctuations in foreign currency exchange rates and effects in the valuation of our holdings in New Zealand and Canada.

Net Income

Overall, the net income between the year ended June 30, 2019 as compared to the year ended June 30, 2018 decreased by approximately $1.4 million or approximately 85% to approximately $0.3 million. The reduction in profits for the year ended June 30, 2019 was primarily attributable to lower fund management revenue from Wainwright due to a lower amount of AUM, partially offset by decreases in Wainwright variable operating expenses, and general and administrative costs.

Income Tax

Provision for income tax for the years ended June 30, 2019 and 2018 are $0.3 million and $0.8 million, respectively, primarily attributable to our United States operations through our Wainwright subsidiary. 

Wainwright Holdings

Wainwright was founded as a holding company in March 2004 as a Delaware corporation with one subsidiary, Ameristock Corporation, which was an investment adviser to Ameristock Mutual Fund, Inc., a registered 1940 Act large cap value equity fund. In January 2010, Ameristock Corporation was spun off as a standalone company. In May 2005, USCF was formed as a single member limited liability company in the state of Delaware. In June 2013, USCF Advisers was formed as a Delaware limited liability company and in July 2014, was registered as an investment adviser under the Investment Advisers Act of 1940, as amended. In November 2013, the USCF Advisers board of managers formed USCF ETF Trust (“ETF Trust”) and in July 2016, the USCF Mutual Funds Trust (“Mutual Funds Trust” and together with “ETF Trust” the “Trusts”) both as open-end management investment companies registered under the Investment Company Act of 1940, as amended ("the 1940 Act"). The Trusts are authorized to have multiple segregated series or portfolios. Wainwright owns all of the issued and outstanding limited liability company membership interests of its subsidiaries, USCF and USCF Advisers, each a Delaware limited liability company and are affiliated companies.  USCF serves as the general partner (“General Partner”) for various limited partnerships (“LP”) and sponsor (“Sponsor”) as noted below. USCF and USCF Advisers are subject to federal, state and local laws and regulations generally applicable to the investment services industry. USCF is a commodity pool operator (“CPO”) subject to regulation by the Commodity Futures Trading Commission (the "CFTC") and the National Futures Association (the “NFA”) under the Commodities Exchange Act (“CEA”). USCF Advisers is an investment adviser registered under the Investment Advisers Act of 1940, as amended and has registered as a CPO under the CEA. Exchange traded products (“ETPs”) issued or sponsored by USCF are required to be registered with the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Act of 1933.  As of June 30, 2018, USCF Advisers advises three exchange traded funds (“ETFs”) and one commodity mutual fund registered with the SEC under the Investment Company Act of 1940. Wainwright and subsidiaries USCF and USCF Advisers are collectively referred to as “Wainwright” hereafter. 

USCF is currently the General Partner in the following Securities Act of 1933 LP commodity based index funds and Sponsor (“Sponsor”) for the fund series within the United States Commodity Index Funds Trust (“USCIF Trust”) and the USCF Funds Trust (“USCF Funds Trust”):

USCF as General Partner for the following funds:

United States Oil Fund, LP (“USO”)

Organized as a Delaware limited partnership in May 2005

United States Natural Gas Fund, LP (“UNG”)

Organized as a Delaware limited partnership in November 2006

United States Gasoline Fund, LP (“UGA”)

Organized as a Delaware limited partnership in April 2007

United States Diesel Heating Oil Fund, LP (“UHN”)

Organized as a Delaware limited partnership in April 2007; Liquidated September 12, 2018

United States 12 Month Oil Fund, LP (“USL”)

Organized as a Delaware limited partnership in June 2007

United States 12 Month Natural Gas Fund, LP (“UNL”)

Organized as a Delaware limited partnership in June 2007

United States Short Oil Fund, LP (“DNO”)

Organized as a Delaware limited partnership in June 2008; Liquidated September 12, 2018

United States Brent Oil Fund, LP (“BNO”)

Organized as a Delaware limited partnership in September 2009

USCF as fund Sponsor - each a series within the USCIF Trust

United States Commodity Index Funds Trust (“USCIF Trust”)

A series trust formed in Delaware December 2009

United States Commodity Index Fund (“USCI”)

A commodity pool formed in April 2010 and made public August 2010

United States Copper Index Fund (“CPER”)

A commodity pool formed in November 2010 and made public November 2011

United States Agriculture Index Fund (“USAG”)

A commodity pool formed in November 2010 and made public April 2012; Liquidated September 12, 2018

USCF as fund Sponsor - each a series within the USCF Funds Trust:

USCF Funds Trust (“USCF Funds Trust”)

A series trust formed in Delaware March 2016

United States 3X Oil Fund (“USOU”)

A commodity pool formed in May 2017 and made public July 2017

United States 3X Short Oil Fund (“USOD”)

A commodity pool formed in May 2017 and made public July 2017

USCF Advisers serves as the investment adviser to the fund(s) listed below within the Trusts and has overall responsibility for the general management and administration for the Trusts. Pursuant to the current Investment Advisory Agreements, USCF Advisers provides an investment program for the Trusts’ fund(s) and manages the investment of the assets.

Advisers as fund manager for each series within the USCF ETF Trust and the USCF Mutual Funds Trust:

USCF ETF Trust (“ETF Trust”)

Organized as a Delaware statutory trust in November 2013  

             USCF SummerHaven SHPEI Index Fund ("BUY")

Fund launched November 30, 2017

             USCF SummerHaven SHPEN Index Fund ("BUYN")

Fund launched November 30, 2017

             Stock Split Index Fund (“TOFR”)

Fund launched September 2014; Liquidated October 20, 2017

             Restaurant Leaders Index Fund (“MENU”)

Fund launched November 2016; Liquidated October 20, 2017

                      USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund

         Fund launched May 2018

USCF Mutual Funds Trust ("Mutual Funds Trust")

Organized as a Delaware statutory trust in July 2016  

            USCF Commodity Strategy Fund ("USCFX" and "USCIX")

Fund launched March 2017; Liquidated March 21, 2019

All USCF funds and the Trusts' funds are collectively referred to as the “Funds” hereafter.

Wainwright’s revenue and expenses are primarily driven by the amount AUM. Wainwright earns monthly management and advisory fees based on agreements with each Fund as determined by the contractual basis point management fee structure in each agreement multiplied by the average AUM over the given period. Many of the company’s expenses are dependent upon the amount of AUM. These variable expenses include Fund administration, custody, accounting, transfer agency, marketing and distribution, and sub-adviser fees and are primarily determined by multiplying contractual fee rates by AUM. Total Operating Expenses are grouped into the following financial statement line items: General and Administrative, Marketing, Operations and Salaries and Compensation.

For the Year Ended June 30, 2019, Compared to the Year Ended June 30, 2018

Revenue

Average AUM for the year ended June 30, 2019 was at $2.7 billion, as compared to approximately $3.4 billion from the year ended June 30, 2018 primarily due to a decrease in USO,USCI and UNG AUM. As a result, the revenues from management and advisory fees decreased by approximately $3.7 million, or 20%, to $15.0 million for the year ended June 30, 2019 as compared to the year ended June 30, 2018 where revenues from management and advisory fees totaled $18.7 million.

Expenses

Wainwright’s total operating expenses for year ended June 30, 2019 decreased by $1.4 million to $14.1 million, or approximately 10%, from $15.5 million for the year ended June 30, 2018. Variable expenses, as described above, decreased by $0.8 million over the respective twelve-month period due to due to lower AUM which reduced variable marketing and distribution expenses, sub-advisory fees and other variable costs. General and Administrative expenses decreased $0.4 million to $2.1 million for the year ended June 30, 2019 from $2.5 million for the year ended June 30, 2018 due to decreases in legal and professional fees and new fund startup expenses. Total marketing expenses decreased $0.8 million to $2.5 million for the year ended June 30, 2019 as compared to the prior year period due to a decrease of $0.4 million in advertising and marketing conferences along with a  $0.4 million reduction in variable distribution costs as a result of lower AUM. Employee Salaries and Compensation expenses were approximately $4.8 million and $4.6 million for the years ended June 30, 2019 and June 30, 2018, respectively, due to accrued vacation and small increases in annual compensation offset by a reduction in annual bonuses.

Income

Income before income taxes for the year ended June 30, 2019 decreased $2.1 million to $0.8 million from $2.9 million for year ended June 30, 2018 due to $3.7 million in lower revenue as a result of lower AUM, offset by a $1.4 million  reduction in operating expenses along with a decrease of $0.2 million in other expenses.

Gourmet Foods,

Ltd.

Gourmet Foods Limited (“Gourmet Foods”), was organized in its current form in 2005 (previously known as Pats Pantry Ltd. (“Pats Pantry”))Ltd). Pats Pantry was founded in 1966 to produce and sell wholesale bakery products, meat pies and patisserie cakes and slices, in New Zealand. Gourmet Foods, located in Tauranga, New Zealand, sells substantially all of its goods to supermarkets and service station chains with stores located throughout New Zealand. Gourmet Foods also has a large number of smaller independent lunch bars, cafes and corner dairies among the customer list, however they comprise a relatively insignificant dollar volume in comparison to the primary accounts of large distributors and retailers. We purchased all of the issued and outstanding shares of Gourmet Foods effective as of August 1, 2015, even though the transaction did not officially close until August 11, 2015.

An independent evaluation of the assets of Gourmet Foods was commissioned as was an audit of their last two fiscal years ended March 31st. It was ascertained that Gourmet Foods had experienced a net loss over the fiscal year ended March 31, 2015, of $9,558. Contributing to the loss were several factors that current management does not expect to reoccur which included an effort to export product to Korea and an ill-suited sales effort involving the addition of field sales representatives and their associated expenses including company provided vehicles. Since the acquisition date of August 11, 2015, Gourmet Foods has initiated several strategies designed to improve profitability through a more efficient and automated production process and sales growth initiatives that involve an outreach to areas currently underserved by Gourmet Foods. To assist with the purchase of new machinery and cover interim working capital needs, we extended an interest-free intercompany loan of NZ$250,000 translated to US$158,948 as of the date of transfer.

The accompanying financial statements include the operations of Gourmet Foods for the period August 1, 2015, through June 30, 2016. Because we did not acquire Gourmet Foods until the current fiscal year there is no comparison data supplied in the accompanying Condensed Consolidated Statements of Operations for Gourmet Foods for the periods ended June 30, 2015, nor are the assets and liabilities of Gourmet Foods included in the Condensed Consolidated Balance Sheets as of June 30, 2015.

Gourmet Foods operates exclusively in New Zealand and thus the New Zealand dollar is its functional currency. In order to consolidate ourConcierge’s reporting currency, the US dollar, with that of Gourmet Foods, we recordConcierge records foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation.ASC 830-30. The translation of New Zealand currency into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from the foreign currency translations are included in Otherforeign currency translation (loss) gain on the Consolidated Statements of Comprehensive Income (Loss)as well as accumulated other comprehensive (loss) income found on the Condensed Consolidated StatementsBalance Sheets.

For the Year Ended June 30, 2019, Compared to the Year Ended June 30, 2018

Revenue

Net revenues for the year ended June 30, 2016.

Net revenues for the eleven-month period August 1, 2015, through June 30, 20162019 were $3,756,402. Cost$4.7 million with cost of goods sold for the eleven-month period ending June 30, 2016, was $2,500,075of $3.3 million resulting in a gross profit of $1,256,327$1.4 million as compared to the year ended June 30, 2018 where net revenues were $5.0 million; cost of goods sold were $3.5 million; and gross profit was $1.5 million.

Expenses

General, administrative and selling expenses, including wages and marketing, for the years ended June 30, 2019 and 2018 were $1 million and $1.1 million producing operating income of $0.4 million and $0.4 million, respectively, or approximately 33% gross margin. General and administrative expenses9% net operating profit for the eleven-month period were $967,180 resulting in a net income before other income and expenses and income tax of $289,147.2019, 8% for 2018. The depreciation expense, incentive bonus, and other income (expense) totaled approximately $0.4 million for Gourmet Foods over the eleven-month period endingyear ended June 30, 2016, was $225,810. The2019 as compared to $0.3 million for the year ended June 30, 2018. 

Income

Income for the year ended June 30, 2019, after expenses of approximately $0.4 million, resulted in approximately $46 thousand before income tax provision of $80,892, the interest income of $3,842 and other income of $2,370approximately $59 thousand resulted in a net loss of approximately $13 thousand as compared to a net income of $214,467. Accounts receivable as of$99 thousand for the year ended June 30, 2016 were $285,673.

2018. Overall, net profit margins for the comparative periods are consistent and differences are attributed to depreciation expense, varying income tax provisions and the fluctuation of currency exchange rates with the New Zealand dollar.

Brigadier Security Systems

(2000) Ltd.

Brigadier Security Systems (2000) Ltd. (“Brigadier”) was founded in 1985 and through internal growth and acquisitions the core business of Brigadier began in 1998. Today Brigadier is one of the largest SecurTek security monitoring dealers in Saskatchewan with offices in both major urban areas of Regina (under the fictitious business name of “Elite Security”(dba Elite Security Systems (2005) Ltd.) and Saskatoon. SecurTek is owned by SaskTel which is Saskatchewan's leading Information and Communications Technology (ICT) provider with over 1.4 million customer connections across Canada. Brigadier is also a Honeywell Certified Access Control Distributor,Integrator, Kantech Global DealerCorporate Certified Integrator and UTC Interlogix Security ProAuthorized dealer and the largest independent security contractor in the province. Brigadier provides comprehensive security solutions including access control, camera monitoring, motion detection,systems, fire alarm panels, and intrusion alarms to home and business owners as well as government offices, schools and public buildings. Brigadier typically sells hardware, to customersinstallation service, and a full time monitoring contract to customers. Under the terms of its authorized dealer contract with the monitoring company, Brigadier earns monthly payments during the term of the premises. Themonitoring contract for monitoring the premise is then conveyed to a third party telecom in exchange for an upfront payment and recurring residuals basedperformance of customer service activities on subscriber contracts.


The accompanying financial statements includebehalf of the operations of Brigadier for the period June 1, 2016, through June 30, 2016. Because we did not acquire Brigadier until the current fiscal year there is no comparison data supplied in the accompanying Condensed Consolidated Statements of Operations for Brigadier for the periods ended June 30, 2015, nor are the assets and liabilities of Brigadier included in the Condensed Consolidated Balance Sheets as of June 30, 2015.
monitoring company.

Brigadier operates exclusively in Canada and thus the Canadian dollar is its functional currency. In order to consolidate ourConcierge’s reporting currency, the USU.S. dollar, with that of Brigadier, we recordConcierge records foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation.ASC 830-30. The translation of Canadian currency into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period.

Gains and losses resulting from the foreign currency translations are included in Otherforeign currency translation (loss) gain on the Consolidated Statements of Comprehensive Income (Loss)as well as accumulated other comprehensive (loss) income found on the Condensed Consolidated Statements of Operations and Comprehensive Income and are listed as a gain of $5,098Balance Sheets.

For the Year Ended June 30, 2019, Compared to the Year Ended June 30, 2018

Revenue

Net revenues for the year ended June 30, 2016.

Brigadier purchases various component parts and accessories anticipated to be required in near-term installations of systems pursuant to sales forecasts. These parts are listed in inventory until sold, which is determined by a sales contract, delivery of the product, and a reasonable expectation of payment under typical terms of sale are in evidence. Inventories are valued at the lower of cost (determined on a FIFO basis) or market. Inventories include product cost, inbound freight and warehousing costs. We compare the cost of inventories with the market value and an allowance is made for writing down the inventories to their market value, if lower. As of June 30, 2016, an allowance for obsolete inventory value in the amount of $14,282 was recorded in general and administrative expense.
The net sales for the one-month period ending June 30, 2016,2019 were $348,553$3.6 million with cost of goods sold recorded as $124,931approximately $1.6 million, resulting in a gross profit of $223,622 andapproximately $1.9 million with a gross margin of 64%. General and administrative expenses for the one-month period were $179,959 providing net operating income before income tax provision and interest expense of $43,663, or 13%. The depreciation expense for Brigadier for the one-month period was $560, income tax provision at June 30, 2016, was $14,330, interest expense (net) was $17 and allowance for obsolete inventory was $14,282 resulting in a net profit of $29,316. Accounts receivable at June 30, 2016, were $550,907.
Concierge Technologies
The primary expenses of Concierge are comprised of professional fees paid to auditors, transaction costs incurred for fund raising and acquisitions, accrued interest on borrowed funds and consulting fees paid to our advisors. For the year ended June 30, 2016, Concierge had no commercial operations apart from those of its subsidiaries. Revenues from operations during the year ended June 30, 2016, were zero as compared to $160,094 for the year ended June 30, 2015. Overall, consolidated net revenues for the year ending June 30, 2016, were $4,225,385 and $223,565 for the year ended June 30, 2015. Cost of revenues for the year ending June 30, 2016, and 2015 were $2,746,132 and $188,325 respectively, representing a gross profit percentage of approximately 35% for the year ended June 30, 2016,54% as compared to the year ended June 30, 2018 where net revenues were approximately $3.3 million with cost of goods sold of $1.5 million and a gross profit of $1.8 million, or approximately 55%.

Expenses

General, administrative and selling expenses for the year ended June 30, 2019 were $1.4 million producing an operating profit of $0.6 million or approximately 15% as compared to the year ended June 30, 2018 where operating profits were $0.4 million, or approximately 13%, with general, administrative and selling expenses of $1.4 million.

Income

Other expense comprised of depreciation, income tax, interest income, other income, and gain on sale of assets totaled approximately $145 thousand for the year ended June 30, 2019 resulting in income after income taxes of approximately $0.4 million as compared to income after income taxes of approximately $0.4 million for the year ended June 30, 2018 where other expense totaled $31 thousand.

Original Sprout

Kahnalytics was founded in 2015 and adopted the dba/Original Sprout in December 2017 (see Note 12 to the Consolidated Financial Statements). For the year ended June 30, 2017 (prior to the acquisition of 15%the Original Sprout assets), Kahnalytics had incurred de minimis operating losses insignificant to the overall enterprise. Prior to the acquisition of the Original Sprout assets, and as of June 30, 2017, the residual business the company was founded to oversee was being wound down and management expected to transition focus to another industry. As of June 30, 2018, this legacy business had been completely wound down.  Accordingly, the results of operations for the twelve-month period ending June 30, 2018 reflects only two quarters of business operations with the newly acquired assets and should not be viewed as indicative of a full twelve-month period of operations. Similarly, there is no meaningful comparative data for the twelve-month period ending June 30, 2018 as the business included nominal subscription sales to a web hosted service and not the wholesale distribution of beauty products as it currently exists. As a result, only the operating results for the twelve months ended June 30, 2019 are included below. Pro forma results for the fiscal year ended June 30, 2018 are included in Note 12.

For the Year Ended June 30, 2019

Revenue

Net revenues for the year ended June 30, 2019 were $3.6 million with cost of goods sold recorded as approximately $2 million resulting in a gross profit of approximately $1.6 million and a gross margin of approximately 46%. Operating costs include generalPro forma results for the year ended June 30, 2018 are included in Note 12.

Expenses

General, administrative and administrative expense of $1,411,047 and inventory impairment of $48,330selling expenses were approximately $0.9 million resulting in an operating income of $19,876 for the year ended June 30, 2016 as comparedapproximately $0.7 million or approximately 20%.

Income

After consideration given to a loss of $131,690 for the year ended June 30, 2015


We realized a net income beforetax provision, of income taxes, after other income, $2,880 and interestdepreciation expense, of $8,686, and comprehensivethe net income for the year ended June 30, 2016,2019 was approximately $0.4 million.

Liquidity and Capital Resources

Concierge is a holding company that conducts its operations through its subsidiaries. At its holding-company level, its liquidity needs relate to operational expense, the funding of additional business acquisitions and new investment opportunities. Our operating subsidiaries' principal liquidity requirements arise from cash used in operating activities, debt service, and capital expenditures, including purchases of equipment and services, operating costs and expenses, and income taxes.

As of June 30, 2019, we had $6.5 million of cash and cash equivalents on a consolidated basis as compared to $7.5 million as of June 30, 2018. The reduction in cash was due to a reduction in net loss before taxesincome as well as cash paid for a prior year acquisition. Additionally, the movement of $204,216 for$0.75 million from administrative cash accounts to interest bearing investment accounts along with a reduction in current liabilities from payments made during the year ended June 30, 2015. We attribute2019 had an impact on the increased income to the inclusion of acquired subsidiaries Brigadier and Gourmet Foods as well as disposal of non-revenue producing subsidiaries present during the fiscal year ended June 30, 2015. The net loss after income tax provision of $96,022 on a consolidated basis for the year ended June 30, 2016 was $81,952 as compared to an income of $14,191 for the year ended June 30, 2015.

Comprehensive Loss, after giving consideration to foreign currency translation losses for the year ended June 30, 2016, was $111,455 as compared to income of $14,191 for the year ending June 30, 2015, where no foreign currency translation was required.
Plan of Operation for the Next Twelve Months
Our plan of operation for the next twelve months is to expand the development of Kahnalytics through implementation of software development and addition of new products, including a branding and promotion of a recurring revenue product offering. Additionally, we are expecting moderate growth in Brigadier through focused management initiatives and consolidation within the security industry. Similarly, we expect Gourmet Foods to be operating more efficiently under current management and continue to increase market share through additional product offerings and channels to market. Our mission is to continue with our acquisition strategy by identifying and acquiring profitable, mature, companies of a diverse nature and with in-place management to produce increasing revenue streams. By these initiatives we hope to:
●
continue to gain market share for our wholly-owned subsidiaries’ areas of operation,
●
increase our gross revenues and realize net operating profits,
●
lower our operating costs by unburdening certain selling expenses to third party distributors,
●
source and retain staff experienced in the field of software development and application of database report writing functions,
●
have sufficient2019 cash reserves to pay down accrued expenses,
●
complete business combinations where we have a common control interest among shareholders,

●
attract parties who have an interest in selling their privately held companies to us, and
●
achieve efficiencies in accounting and reporting through consolidated operations of our subsidiaries from a management perspective.
Liquidity
balance.

During the current and past fiscal year we haveyears combined, Concierge has invested approximately $3.5 million in cash towards purchasing and assimilating the Original Sprout assets into the Concierge Technologies group of companies. During the previous years ended June 30, 2016 through June 30, 2017, Concierge invested approximately $3.3 million in cash to acquire Gourmet Foods and Brigadier into our groupSecurity Systems as well as the acquisition through a stock-for-stock exchange of companies. We have continued to pursue business opportunities with Kahnalytics and intend to grow that opportunity by implementation of a software development project in the coming months that is envisioned to produceWainwright, which provides a significant recurring revenue stream when finalized. We forecastand value. Despite these cash investments, our working capital position remains strong at $12.3 million and our position has strengthened year-to-year. Management forecasts Wainwright, Gourmet Foods, Brigadier and BrigadierOriginal Sprout to continue toall produce a profit during the coming fiscal year and the realization of those profits by Concierge mayis not expected to be augmentedsignificantly impacted by a resurgence of the New Zealand and Canadian currenciesforeign currency fluctuations against the U.S. dollar during the coming fiscal year.period. While we intendConcierge intends to maintain and improve ourits revenue stream from wholly owned subsidiaries, Kahnalytics, Brigadier and Gourmet Foods, we are also lookingConcierge continues to expand our business to includepursue acquisitions of other synergistic partners and pursue possible licensing agreements for product distribution on a global scale.profitable companies which meet its target profile. Provided ourConcierge’s subsidiaries continue to operate as they are presently, and are projected to operate, we haveConcierge has sufficient capital to pay ourits general and administrative expenses for the coming fiscal year and to adequately pursue ourits long term business objectives.

Borrowings

As of June 30, 2019, we had $0.7 million of related-party and third-party indebtedness on a consolidated basis as compared to $0.8 million as of June 30, 2018. Concierge, without inclusion of its subsidiary companies, as of June 30, 2019 and June 30, 2018, had $0.6 million of indebtedness. We believeare not required to make interest payments on our notes until the maturity date.

Current related party notes payable consist of the following:

 

 

June 30, 2019

 

 

June 30, 2018

 

Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)

 

 

3,500

 

 

 

3,500

 

Notes payable to shareholder, interest rate of 4%, unsecured and payable on May 25, 2022

 

 

250,000

 

 

 

250,000

 

Notes payable to shareholder, interest rate of 4%, unsecured and payable on April 8, 2022

 

 

350,000

 

 

 

350,000

 

 

 

$

603,500

 

 

$

603,500

 

As of June 30, 2019, Brigadier had, in the aggregate, an outstanding principal balance of CD$114,292 (approx. US$87,297) related to new vehicle purchases. For each vehicle purchased, the loan principal together with interest is amortized over 60 equal monthly installments. The Consolidated Balance Sheets as of June 30, 2019 and June 30, 2018 reflect the amount of the principal balance which is due within twelve months as a current liability of US$26,241 and US$46,705, respectively. Principal amounts under the loans which is due after twelve months are recorded in long term liabilities as US$61,057 and US$149,491 at June 30, 2019 and June 30, 2018 respectively. Interest on the loans is expensed or accrued as it becomes due. Total interest on all vehicle loans for the years ended June 30, 2019 and 2018 was US$5,197 and US$4,209, respectively.

Investments

Wainwright, from time to time, provides initial investments in the creation of ETP funds that through executionWainwright manages. Wainwright classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. These investments are described further in Note 7 to our Financial Statements.

Reverse Stock Split

On November 17, 2017 our Board and the majority stockholders approved the adoption of a one-for-thirty (1:30) reverse stock split whereby each thirty shares of our current business plan,common stock and Series B Preferred stock issued and outstanding as of the record date established by the Board shall be combined into one share of common stock or preferred stock, as applicable (the “Reverse Stock Split”). The Reverse Stock Split became effective on December 15, 2017 and all share amounts have been retroactively adjusted for this reverse stock split.

Dividends

Our strategy on dividends is to declare and pay dividends only from retained earnings and only when our Board of Directors deems it prudent and in the best interests of the company to declare and pay dividends. We have paid no dividends and we will be able to continuedo not expect to pay our financial obligations and to avoid increases in its accrued liabilities inany dividends over the comingnext fiscal year.

Off-Balance Sheet Arrangements

As

At June 30, 2019, and as of October 3, 2016,September 30, 2019, we have 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 credit, liquidity or market risk support to such entity for such assets,
●
an obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging, or research and development services with, us.

●

An obligation under a guarantee contract,

●

A retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets,

●

An obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, us where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging, or research and development services with us.

ITEM7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM8.          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

DATA

Our financial statements appear as follows:


Report of Independent Registered Public Accounting Firm

19

F-1

Consolidated Balance Sheets, as of June 30, 20162019 and 20152018

21

F-2

Consolidated Statements of Operations and Comprehensive Income (Loss), for the years ended June 30, 20162019 and 20152018

22

F-3

Consolidated Statements of Changes in Stockholders’ Equity (Deficit),Comprehensive Income for the years ended June 30, 20162019 and 20152018

23

F-4

Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity for the years ended June 30, 2019 and 2018

F-5

Consolidated Statements of Cash Flows, for the years Ended June 30, 20162019 and 20152018

24

F-6

Notes to Consolidated Financial Statements

25

F-7

22


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

and
Stockholders of Concierge Technologies, Inc.
and Subsidiaries

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Concierge Technologies, Inc. and its subsidiaries (the "Company") as of June 30, 20162019 and 2015, and2018, the related consolidated statements of operations, comprehensive income, convertible preferred stock and stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2016. 2019, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2019, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on thesethe Company's consolidated financial statements based on our audits. We did not auditare a public accounting firm registered with the financial statements of Brigadier Security Systems (2000) Limited, a wholly-owned subsidiary, which statements reflect total assets of 20% of consolidated total assets as of June 30, 2016Public Company Accounting Oversight Board (United States) ("PCAOB") and total revenues of 8% of consolidated total revenues for the one year period ended June 30, 2016. Those statements were audited by another auditor, whose report has been furnishedare required to us, and our opinion, insofar as it relatesbe independent with respect to the amounts included for Brigadier Security Systems (2000) Limited, is based solely onCompany in accordance with the reportU.S. federal securities laws and the applicable rules and regulations of the other auditor.

Securities and Exchange Commission and the PCAOB.

We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Anmisstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit includesof its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement presentation.statements. We believe that our audits and the report of the other auditor provide a reasonable basis for our opinion.

/s/ BPM LLP

San Francisco, California

September 30, 2019

We have served as the Company's auditor since 2017.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

  

June 30, 2019

  

June 30, 2018

 
         

ASSETS

 
         

CURRENT ASSETS

        

Cash and cash equivalents

 $6,481,815  $7,524,114 

Accounts receivable, net

  939,649   1,068,240 

Accounts receivable - related parties

  1,037,146   1,458,159 

Inventories

  1,008,662   931,065 

Prepaid income tax and tax receivable

  1,754,369   2,138,636 

Investments

  3,756,596   3,204,005 

Other current assets

  546,105   374,617 

Total current assets

  15,524,342   16,698,836 
         

Restricted cash

  13,436   13,536 

Property and equipment, net

  757,014   1,080,471 

Goodwill

  915,790   915,790 

Intangible assets, net

  2,659,723   2,995,231 

Deferred tax assets, net

  859,696   865,120 

Other assets, long - term

  523,607   532,165 

Total assets

 $21,253,608  $23,101,149 
         

LIABILITIES AND STOCKHOLDERS' EQUITY

 
         

CURRENT LIABILITIES

        

Accounts payable and accrued expenses

 $2,867,081  $3,249,387 

Expense waivers – related parties

  325,821   662,650 

Purchase consideration payable

  -   1,205,000 

Notes payable - related parties

  3,500   3,500 

Equipment loans, current portion

  26,241   46,705 

Total current liabilities

  3,222,643   5,167,242 
         

LONG TERM LIABILITIES

        

Notes payable - related parties

  600,000   600,000 

Equipment loans, net of current portion

  61,057   149,491 

Deferred tax liabilities

  176,578   208,419 

Total liabilities

  4,060,278   6,125,152 
         

STOCKHOLDERS' EQUITY

        

Preferred stock, $0.001 par value; 50,000,000 authorized

        

Series B: 53,032 issued and outstanding at June 30, 2019 and 436,951 at June 30, 2018

  53   437 

Common stock, $0.001 par value; 900,000,000 shares authorized; 37,237,519 shares issued and outstanding at June 30, 2019 and 29,559,139 at June 30, 2018

  37,237   29,559 

Additional paid-in capital

  9,178,838   9,186,132 

Accumulated other comprehensive (loss) income

  (175,659

)

  148,808 

Retained earnings

  8,152,861   7,611,061 

Total stockholders' equity

  17,193,330   16,975,997 

Total liabilities and stockholders' equity

 $21,253,608  $23,101,149 

The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

  

Year Ended

  

Year Ended

 
  

June 30, 2019

  

June 30, 2018

 
         
         

Net revenue

        

Fund management - related party

 $15,021,439  $18,744,313 

Food products

  4,747,358   4,968,158 

Security systems

  3,558,580   3,303,584 

Beauty products and other

  3,621,246   1,694,534 

Net revenue

  26,948,623   28,710,589 
         

Cost of revenue

  6,936,421   5,914,719 
         

Gross profit

  20,012,202   22,795,870 
         
         

Operating expense

        

General and administrative expense

  4,205,389   4,828,241 

Fund operations

  4,494,001   4,933,437 

Marketing and advertising

  2,910,447   3,554,507 

Depreciation and amortization

  702,320   576,674 

Salaries and compensation

  6,944,457   6,096,232 

Total operating expenses

  19,256,614   19,989,091 
         

Income from operations

  755,588   2,806,779 
         
         

Other (expense) income:

        

Other (expense) income

  (484,028

)

  (316,337

)

Interest and dividend income

  366,796   111,929 

Interest expense

  (29,493

)

  (101,089

)

Total other (expense) income, net

  (146,725

)

  (305,497)
         

Income before income taxes

  608,863   2,501,282 
         

Provision of income taxes

  347,014   766,596 
         

Net income

 $261,849  $1,734,686 
         

Weighted average shares of common stock

        

Basic

  32,588,418   29,559,139 

Diluted

  38,298,159   38,298,159 
         

Net income per common share

        

Basic

 $0.01  $0.06 

Diluted

 $0.01  $0.05 

The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

  

Year Ended

  

Year Ended

 
  

June 30, 2019

  

June 30, 2018

 
         

Net income

 $261,849  $1,734,686 
         

Other comprehensive income (loss):

        

Foreign currency translation (loss) gain

  (44,516

)

  (214,284

)

Changes in short-term investment valuation

  -   243,754 

Comprehensive income

 $217,333  $1,764,156 

The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF  CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED JUNE 30, 2019 AND 2018

 

 

Preferred Stock

(Series B)

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

Shares

 

 

Amount

 

 

Number of

Shares

 

 

Par

Value

 

 

Additional

Paid - in

Capital

 

 

Accumulated

Other Comprehensive Income (Loss)

 

 

 

Retained

Earnings

 

 

Total

Stockholders' Equity

 

Balance at July 1, 2017

 

 

436,951

 

 

$

2,011,934 

 

 

29,559,139

 

 

$

29,559

 

 

$

7,174,635

 

 

$

119,338

 

 

$

5,876,375

 

 

$

13,199,907

 

Reclassification of Series B Preferred stock par value (1)

 

 

-

 

 

 

437

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

437

 

Reclassification of Series B Preferred stock to additional paid-in capital (1)

 

 

-

 

 

 

(2,011,497

)

 

 

-

 

 

 

-

 

 

 

2,011,497

 

 

 

-

 

 

 

-

 

 

 

2,011,497

 

Stockholders' equity following reverse stock split (1)

 

 

436,951

 

 

 

437

 

 

 

29,559,139

 

 

 

29,559

 

 

 

9,186,132

 

 

 

119,338

 

 

 

5,876,375

 

 

 

15,211,841

 

Change in investment valuation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

243,754

 

 

 

-

 

 

 

243,754

 

(Loss) on currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(214,284

)

 

 

-

 

 

 

(214,284

)

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,734,686

 

 

 

1,734,686

 

Balance at June 30, 2018

 

 

436,951

 

 

 

437

 

 

 

29,559,139

 

 

 

29,559

 

 

 

9,186,132

 

 

 

148,808

 

 

 

7,611,061

 

 

 

16,975,997

 

(Loss) on currency translation

                     

 

(44,516

)

     

 

(44,516

)

Reclassification of investment gains

                     

 

(279,951

)

  

279,951

   

-

 

Conversion of preferred shares

 

 

(383,919

)

 

 

(384

)

  

7,678,380

   

7,678

  

 

(7,294

)

          

-

 

Net income

                          261,849   261,849 

Balance at June 30, 2019

  

53,032

  

$

53

   

37,237,519

  

$

37,237

  

$

9,178,838

  

($

175,659

)

 

$

8,152,861

  

$

17,193,330

 

Note (1) Upon issuance of the preferred shares in the Wainwright acquisition, the Company no longer had sufficient authorized, unissued, common stock to allow for Series B conversion. Accordingly, the Series B was reclassified to the mezzanine section. On December 15, 2017 a 1:30 reverse stock split was completed and allowed for the Series B shares to be moved from the mezzanine section to stockholders' equity. All share amounts have been adjusted for the reverse stock split (Note 13).

The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

  

For the years ended

 
  

2019

  

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

        

Net income

 $261,849  $1,734,686 

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation and amortization

  702,320   576,674 

Deferred taxes

  (26,417)  564,992 

Bad debt expense

  2,075   51,747 

Unrealized loss on investments

  1,995   359,666 
Realized (gain) on sale of investments  (30,718)  (3,592)

(Gain) on disposal of equipment

  (3,369

)

  (8,364

)

         

(Increase) decrease in current assets:

        

Accounts receivable, net

  128,105   7,137 

Accounts receivable - related party

  421,013   304,112 

Prepaid income taxes and tax receivable

  421,845   (906,085

)

Inventories

  (79,127

)

  (162,388

)

Other current assets

  (161,254)  4,045 

Increase (decrease) in current liabilities:

        

Accounts payable and accrued expenses

  (425,690

)

  406,126 

Expense waiver -  related party

  (336,829

)

  73,557 

Net cash provided by operating activities

  875,798   3,002,313 
         

CASH FLOWS FROM INVESTING ACTIVITIES:

        

Cash paid for acquisition of business assets

  (1,205,000

)

  (2,277,172

)

Purchase of equipment - net of disposals

  (50,165

)

  (318,064

)

Sale of investments

  3,230,891   1,372,019 

Purchase of investments

  (3,754,132

)

  (1,109,596

)

Net cash used in investing activities

  (1,778,406

)

  (2,332,813

)

         

CASH FLOWS FROM FINANCING ACTIVITIES:

        

Proceeds of equipment loan

  -   178,604 

Repayment of equipment loan

  (108,898

)

  (67,660)

Net cash (used in) provided by financing activities

  (108,898

)

  110,944 
         
         
         

Effect of exchange rate change on cash, cash equivalents and restricted cash

  (30,893

)

  13,184 
         

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

  (1,042,399

)

  793,628 
         

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE

  7,537,650   6,744,022 
         

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE

 $6,495,251  $7,537,650 
         
         

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

        

Cash paid during the period for:

        

Interest paid

 $29,493  $- 

Income taxes paid

 $202,363  $965,272 

Purchase consideration payable (see Note 12)

 $-  $1,205,000 

The accompanying notes are an integral part of these consolidated financial statements.

 
In our opinion, based on our audits and the report of the other auditor, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Concierge Technologies, Inc. and its subsidiaries as of June 30, 2016 and 2015, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2016 in conformity with accounting principles generally accepted in the United States of America.
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has incurred accumulated losses of $6,430,722. These factors along with those discussed in Note 4 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 4.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty
/S/ Kabani & Company, Inc.
Certified Public Accountants
Los Angeles, California
October 20, 2016

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholder of Brigadier Security Systems (2000) Ltd.
We have audited the accompanying balance sheet of Brigadier Security Systems (2000) Limited as of June 30, 2016, and the related statements of comprehensive income, changes in equity, and cash flows for the period from June 1, 2016 to June 30, 2016. 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.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Brigadier Security Systems (2000) Limited as of June 30, 2016, and the results of its operations and its cash flows for the period from June 1, 2016 to June 30, 2016 in conformity with accounting principles generally accepted in the United States of America.
Saskatoon, Saskatchewan
October 14, 2016Chartered Professional Accountants


CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
 
 
 
 
 
 
 
 
 
 As of June
30, 2016
 
 
 As of June
30, 2015
 
 ASSETS
 
 
 
 
 
 
CURRENT ASSETS:
 
 
 
 
 
 
Cash & cash equivalents
 $1,060,184 
 $1,970,062 
Accounts receivable, net
  839,220 
  95,417 
Inventory, net
  436,541 
  85,849 
Other current assets
  24,876 
  - 
Total current assets
  2,360,821 
  2,151,328 
 
    
    
Deposit
  - 
  182,931 
Property and equipment, net
  1,166,693 
  - 
Goodwill
  219,256 
  - 
Intangible Assets-Net
  1,018,213 
  - 
Total assets
 $4,764,983 
 $2,334,259 
 
    
    
     LIABILITIES AND STOCKHOLDERS' EQUITY
    
    
 
    
    
CURRENT LIABILITIES:
    
    
Accounts payable and accrued expenses
 $997,644 
 $269,501 
Purchase consideration payable
  214,035 
  - 
Notes payable - related parties
  308,500 
  8,500 
Notes payable
  8,500 
  8,500 
Convertible debenture - related parties, net
  1,300,000 
  - 
Total liabilities
  2,828,680 
  286,501 
 
    
    
COMMITMENT & CONTINGENCY
    
    
 
    
    
STOCKHOLDERS' EQUITY
    
    
Preferred stock, 50,000,000 authorized par $0.001
    
    
Series B: 3,754,355 issued and outstanding at June 30, 2016 and June 30, 2015
  3,754 
  3,754 
Common stock, $0.001 par value; 900,000,000 shares authorized; 67,953,870 shares issued and outstanding at at June 30, 2016 and June 30, 2015
  67,954 
  67,954 
Additional paid-in capital
  8,325,620 
  8,325,620 
Accumulated other comprehensive income (loss)
  (29,503)
  - 
Accumulated deficit
  (6,431,522)
  (6,349,570)
Total Stockholders' equity
  1,936,303 
  2,047,758 
Total liabilities and Stockholders' equity
 $4,764,983 
 $2,334,259 
 
    
    
The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
 
 
 
 
 
  
For the Years Ended
June 30
 
 
 
2016
 
 
2015
 
 
 
 
 
 
 
 
Net revenue
 $4,225,385 
 $223,565 
 
    
    
Cost of revenue
  2,746,132 
  188,325 
 
    
    
Gross profit
  1,479,253 
  35,240 
 
    
    
 
    
    
Operating expense
    
    
General & administrative expense
  1,411,047 
  166,930 
Impairment of inventory value
  48,330 
  - 
Total Operating Expenses
  1,459,377 
  166,930 
 
    
    
Operating Income (Loss)
  19,876 
  (131,690)
 
    
    
Other income (expense)
    
    
Other income
  2,880 
  5,086 
Interest expense
  (8,686)
  (77,611)
Total other expense
  (5,806)
  (72,525)
 
    
    
Income (Loss) from continuing operations before income taxes
  14,070 
  (204,216)
 
    
    
Provision of income taxes
  (96,022)
  - 
 
    
    
Loss from continuing operations
  (81,952)
  (204,216)
 
    
    
Income from Discontinued Operations
    
    
Gain on disposal of subsidiary
  - 
  109,600 
Income from discontinued operations
  - 
  108,807 
Income from Discontinued Operations
  - 
  218,407 
 
    
    
Net Income (Loss)
 $(81,952)
 $14,191 
 
    
    
Other Comprehensive Income (Loss)
    
    
Foreign currency translation gain (loss)
  (29,503)
  - 
Comprehensive Income (Loss)
 $(111,455)
 $14,191 
 
    
    
 
    
    
 
    
    
Weighted average shares of common stock
    
    
Basic
  67,953,870 
  47,229,336 
Diluted
  67,953,870 
  84,974,973 
 
    
    
Net loss per common share - continuing operations
    
    
Basic & Diluted
 $(0.00)
 $(0.00)
 
    
    
Net loss per common share - Discontinued operations
    
Basic
 $- 
 $0.00 
Diluted
 $- 
 $0.00 
 
    
    
Net income per common share
    
    
Basic
 $(0.00)
 $0.00 
Diluted
 $(0.00)
 $0.00 
 
    
    
 
The accompanying notes are an integral part of these consolidated financial statements.
 

 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
 
 
FOR THE YEARS ENDED JUNE 30, 2016 AND 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred Stock (Series A)
 
 
Preferred Stock (Series B)
 
 
Common Stock
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
Number of
 
 
Par
 
 
Number of
 
 
Par
 
 
Number of
 
 
Par
 
 
Additional
 
 
Accumulated
 
 
Accumulated
 
 
Concierges'
 
 
 
Shares
 
 
Value
 
 
Shares
 
 
Value
 
 
Shares
 
 
Value
 
 
Paid In Capital
 
 
OCI
 
 
Deficit
 
 
Equity (Deficit)
 
Balance at June 30, 2014
  206,186 
 $206 
  949,841 
 $950 
  24,033,785 
 $24,034 
 $4,179,070 
 $- 
 $(4,893,708)
 $(689,448)
 
    
    
    
    
    
    
    
    
    
    
Issuance of Common Stock in settlement of convertible debenture
  - 
  - 
  - 
  - 
  1,804,025 
  1,804 
  156,257 
    
  - 
  158,061 
Beneficial conversion feature liability on debt issuance
  - 
  - 
  - 
  - 
  - 
  - 
  67,571 
    
  - 
  67,571 
Gain on debt settlement with a related party
  - 
  - 
  - 
  - 
  - 
  - 
    
    
  - 
  - 
Issuance of Common Stock for cash
  - 
  - 
  - 
  - 
  40,000,000 
  40,000 
  1,120,000 
    
  - 
  1,160,000 
Issuance of series B Preferred Stock for cash
  - 
  - 
  3,245,150 
  3,245 
  - 
  - 
  1,836,755 
    
  - 
  1,840,000 
Benefical conversion feature for issuance of series B Preferred Stock
  - 
  - 
  - 
  - 
  - 
  - 
  1,470,053 
    
  (1,470,053)
  - 
Cancellation of Common Stock as consideration for disposal of subsidiary
  - 
  - 
  - 
  - 
  (6,800,000)
  (6,800)
  (495,816)
    
  - 
  (502,616)
Conversion of series A Preferred Stock to Common Stock
  (206,186)
  (206)
  - 
  - 
  103,093 
  103 
  103 
    
  - 
  0 
Conversion of series B Preferred Stock to Common Stock
  - 
  - 
  (440,636)
  (441)
  8,812,728 
  8,813 
  (8,373)
    
  - 
  (0)
Net income for the year ended June 30, 2015
    
    
    
    
    
    
    
    
  14,191 
  14,191 
Balance at June 30, 2015
  - 
  0 
  3,754,355 
  3,754 
  67,953,630 
  67,954 
  8,325,620 
  - 
  (6,349,570)
  2,047,758 
 
    
    
    
    
    
    
    
    
    
    
Gain (Loss) on currency translation for the year ended June 30, 2016
    
    
    
    
    
    
    
  (29,503)
    
  (29,503)
Net loss for the year ended June 30, 2016
    
    
    
    
    
    
    
    
  (81,952)
  (81,952)
Balance at June 30, 2016
  - 
 $- 
  3,754,355 
 $3,754 
  67,953,630 
 $67,954 
 $8,325,620 
 $(29,503)
 $(6,431,522)
 $1,936,303 
The accompanying notes are an integral part of these consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
 
 
 
 
 
 
 
For the years ended June 30,
 
 
 
2016
 
 
2015
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
Net income (loss)
 $(81,952)
 $14,191 
(Income) / Loss from discontinued operations
  - 
  (108,807)
 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
 
Depreciation
  226,556 
  - 
Amortization
  27,658 
  - 
Impairment of Inventory
  48,330 
  - 
Gain on disposal of subsidiary
  - 
  (109,600)
Amortization of debt issuance cost
  - 
  67,571 
(Increase) decrease in current assets:
    
    
Accounts receivable
  (32,863)
  (95,417)
Inventory
  106,393 
  (85,849)
Other current assets
  (4,285)
  - 
Increase (decrease) in current liabilities:
    
    
Accounts payable & accrued expenses
  160,386 
  16,275 
   Net cash provided by (used in) operating activities
  450,223 
  (301,636)
 
    
    
CASH FLOWS FROM INVESTING ACTIVITIES:
    
    
Purchase of equipment
  (103,662)
  - 
Payment of cash to subsidiary disposed as part of sale agreement
  - 
  (353,100)
Cash used in purchase of new subsidiaries net of cash acquired
  (2,766,205)
  (182,931)
   Net cash used in investing activities
  (2,869,866)
  (536,031)
 
    
    
CASH FLOWS FROM FINANCING ACTIVITIES:
    
    
Proceeds from related party debts
  1,600,000 
  - 
Repayments of related party debts
  - 
  (29,500)
Proceeds from notes payable & debentures
  - 
  43,500 
Repayments of notes payable & debentures
  - 
  (222,000)
Proceeds from sale of common shares
  - 
  1,160,000 
Proceeds from sale of preferred shares
  - 
  1,840,000 
   Net cash provided by financing activities
  1,600,000 
  2,792,000 
 
    
    
Effect of currency exchange rate fluctuation on cash and cash equivalents
  (90,235)
  - 
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS
  (909,878)
  1,954,332 
 
    
    
CASH & CASH EQUIVALENTS, BEGINNING BALANCE
  1,970,062 
  15,730 
 
    
    
CASH & CASH EQUIVALENTS, ENDING BALANCE
 $1,060,184 
 $1,970,062 
 
    
    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    
    
Cash paid during the period for:
    
    
Interest - continuing operations
 $29 
 $7,984 
Interest - discontinued operations
 $- 
 $4,103 
Income taxes - continued operations
 $14,393 
 $- 
Income taxes - discontinued operations
    
 $35,538 
 
    
    
 
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
 
    
Purchase consideration payable
 $214,035 
 $- 
Beneficial conversion feature for issuance of Series B Preferred Stock
 $- 
 $1,470,053 
Cancellation of common stock in connection with disposal of subsidiary
 $- 
 $(502,616)
Issuance of common stock in settlement of convertible debentures & Notes & Accrued Interest
 $- 
 $158,061 
 
    
    
The accompanying notes are an integral part of these audited consolidated financial statements.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.     ORGANIZATION AND DESCRIPTION OF BUSINESS

Concierge Technologies, Inc., (the “Company” or “Concierge”), a Nevada corporation, was originally incorporated in California on August 18, 1993 as Fanfest, Inc. On March 20, 2002, the Company changed its name to Concierge Technologies, Inc. The Company’s principal operations include the purchase and sale of digital equipmentoperates through its wholly owned subsidiaries Wireless Village doingwho are engaged in varied business activities. The operations of the Company’s wholly-owned subsidiaries are more particularly described herein but are summarized as Janus Cam (untilfollows:

●

Wainwright Holdings, Inc. (“Wainwright”), a U.S. based company, is the sole member of two investment services limited liability company subsidiaries, United States Commodity Funds LLC (“USCF”), and USCF Advisers LLC (“USCF Advisers”), each of which manages, operates or is an investment advisor to exchange traded funds organized as limited partnerships or investment trusts that issue shares which trade on the NYSE Arca stock exchange.

●

Gourmet Foods, Ltd. (“Gourmet Foods”), a New Zealand based company, manufactures and distributes New Zealand meat pies on a commercial scale.

●

Brigadier Security Systems (2000) Ltd. (“Brigadier”), a Canadian based company, sells and installs commercial and residential alarm monitoring systems.

●

Kahnalytics, Inc. dba/Original Sprout (“Original Sprout”), a U.S. based company, is engaged in the wholesale distribution of hair and skin care products under the brand name Original Sprout on a global scale. The former business of Kahnalytics, providing live-streaming mobile video on a subscription basis, was insignificant and was terminated after transitioning to the current business of distributing hair and skin care products.

See “Note 12. Business Combinations” for a description of the terms of our acquisitions for our operating businesses.

Concierge manages its disposaloperating businesses on a decentralized basis. There are no centralized or integrated operational functions such as marketing, sales, legal or other professional services and there is little involvement by Concierge’s management in the day-to-day business affairs of May 7, 2015), Gourmet Foods, a manufacturerits operating subsidiary businesses. Concierge’s corporate management is responsible for capital allocation decisions, investment activities and distributorselection and retention of meat piesthe Chief Executive to head each of the operating subsidiaries. Concierge's corporate management is also responsible for corporate governance practices, monitoring regulatory affairs, including those of its operating businesses and involvement in New Zealand, Brigadier Security Systems, a providergovernance-related issues of security alarm installation and monitoring located in Canada, and Kahnalytics, Inc. a California corporation providing vehicle-based live streaming video and event recording to online subscribers.its subsidiaries as needed.

 

NOTE 2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles

Basis of Consolidation

Presentation and Accounting Principles

The Company has prepared the accompanying financial statements on a consolidated basis. In the opinion of management, the accompanying consolidated financialbalance sheets and related statements of income and comprehensive income, and cash flows include the accountsall adjustments, consisting only of Concierge Technologies, Inc., and its wholly owned subsidiaries, Kahnalytics, Gourmet Foods, Ltd., Brigadier Security Systems and Wireless Village (discontinuednormal recurring items, necessary for their fair presentation, prepared on May 7, 2015). All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates
The preparation of consolidated financial statements isan accrual basis, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The accompanying condensed consolidated financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Original Sprout.

All significant inter-company transactions and accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the Financial Statements are in conformity with U.S. GAAP which 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 statementsFinancial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-7

Cash and Cash Equivalents

For purposes of the consolidated statement of cash flows,

Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations.


Concentrations of Risk
less. The Company maintains its cash balances at aand cash equivalents in financial institution headquarteredinstitutions in San Diego, California.the United States, Canada, and New Zealand. Accounts in the United States are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor. The Company’s uninsured cash balance in the United States was $33,026 at June 30, 2016. Cash balancesdepositor, and accounts in Canada are maintained at a financial institution in Saskatoon, Saskatchewan. Each account is insured up to CD$100,000 by the Canada Deposit Insurance Corporation (CDIC). The Company’s uninsured cash balanceup to CD$100,000 per depositor. Accounts in Canada was CD$123,311 (approximately US$95,190) at June 30, 2016.
Balances at financial institutions within certain foreign countries, including New Zealand whereare uninsured. The Company has, at times, held deposits in excess of insured amounts, but the Company maintains cashdoes not expect any losses in such accounts.

Accounts Receivable, net and Accounts Receivable - Related Parties

Accounts receivable, net, consist of receivables from the Brigadier, Gourmet Foods and Original Sprout businesses. Management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes in customer payment patterns to determine whether or not an account should be deemed uncollectible. Reserves, if any, are recorded on a specific identification basis. Account balances are not covered by insurance.charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of June 30, 2016,2019 and June 30, 2018, the Company had uninsured deposits$2,075 and $51,747, respectively, listed as doubtful accounts.

Accounts receivable - related to cash deposits in uninsured accounts maintained within foreign entitiesparties, consist of approximately $568,427. The Company has not experienced any losses in such accounts.


CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Major customers & suppliers
Concierge, through Kahnalytics as a licensed userfund asset management fees receivable from the Wainwright business. Management fees receivable generally consist of a proprietary software application, is dependent on the continued supportone month of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its single-source sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. Hardware sold by Kahnalytics is currently supplied by one source, howevermanagement fees which are collected in the event this source proves to be inadequate theremonth after they are other alternative sourcesearned. As of equal or comparable devices as needed by Kahnalytics. During the fiscal year ended June 30, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for fiscal year ended2019, and June 30, 2015. Sales2018, there is no allowance for doubtful accounts as all amounts are deemed collectible.

Major Customers and Suppliers – Concentration of these products were discontinued during the current fiscal year.

Credit Risk

Concierge, through Brigadier, Security Systems, is partially dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated, Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customerscustomer, which includes contracts and recurring monthly support fees, totaled 55%46% and 41% of the total Brigadier revenues for the one-month periodyears ended June 30, 2016,2019 and June 30, 2018, respectively. The same customer accounted for approximately 38.6%37% of Brigadier's accounts receivable as of the balance sheet date of June 30, 2016.

2019 as compared to 35% as of June 30, 2018. Another large account, which has been a significant customer this fiscal year, contributed 12% of the total sales revenues for the year ended June 30, 2019 and nil for the year ended June 30, 2018. There were no accounts receivable from this customer as of June 30, 2019 or 2018.

Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, and 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business.

For the 11-month period endingyear ended and balance sheet date of June 30, 2016, our2019, Gourmet Foods’ largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 14%22% of our grossGourmet Foods sales revenues and 34%28% of ourGourmet Foods accounts receivable.receivable as compared to 21% and 33% for the prior year ended June 30, 2018, respectively. The second largest in the grocery industry accounted for approximately 10% of our gross revenues and 12% of ourGourmet Foods sales revenues for the year ended June 30, 2019 as compared to 12% for the year ended June 30, 2018. This same group accounted for 19% of Gourmet Foods accounts receivable.receivable as of June 30, 2019 as compared to 16% as of June 30, 2018. In the gasoline convenience store market we supplyGourmet Foods supplies two major accounts.channels. The largest is a marketing consortium of gasoline dealers accountingoperating under the same brand who, for the year ended and balance sheet date of June 30, 2019, accounted for approximately 44%43% of ourGourmet Foods’ gross sales revenues and 24%as compared to 41% for the year ended June 30, 2018. No single member of our accounts receivable. The second largest are independent operators accountingthe consortium is responsible for approximately 13%a significant portion of gross sales and 17% ofGourmet Foods’ accounts receivable. The third category of independent retailers and cafes accounted for the remaining balance of ourGourmet Foods’ gross sales revenue, however the group is fragmentedmembers are independently owned and individually responsible for their financial obligations with no one customer accountsaccounting for a significant portion of our revenues. Gourmet Foodsrevenues or accounts receivable.

Concierge, through Original Sprout, is not dependent upon any one major suppliercustomer or group of customers as many alternative sources are available in the local market place should the need arise.



CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Allowance for Doubtful Debts
The Company maintains an allowance for doubtfulno single customer or buying group consistently accounts for estimated losses inherent in itsover 10% of the gross revenues, though due to timing of deliveries one customer accounted for approximately 10% of our gross revenues for the year ended June 30, 2019. There were 3 major distributor accounts, all current, representing 25%, 17%, and 12% for a total of 54% of all accounts receivable portfolio. In establishing the required allowance, management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, customer concentrations, current economic trends and changes in customer payment patterns. Reserves are recorded primarily on a specific identification basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Asas of June 30, 20162019. Original Sprout is partially dependent upon its relationship with a product packaging company who, at the direction of Original Sprout, manufactures the products, packages them in appropriate containers, and 2015,delivers the Company had recorded allowancefinished goods to Original Sprout for doubtfuldistribution to its customers. All of Original Sprout’s products are currently produced by this packaging company, although if this relationship were to fail there are other similar packaging companies available to Original Sprout at competitive pricing.

For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated 12 month revenues and accounts receivable – related parties as of $3,600June 30, 2019 and $Nil, respectively.June 30, 2018 as depicted below.

  

Year ended June 30, 2019

  

Year ended June 30, 2018

 
  

Revenue

  

Revenue

 

Fund

                

USO

 $7,308,354   49

%

 $9,752,223   52

%

USCI

  4,051,605   27

%

  4,253,921   23

%

UNG

  1,922,596   13

%

  2,753,723   15

%

All Others

  1,738,884   11

%

  1,984,446   10

%

Total

 $15,021,439   100

%

 $18,744,313   100

%

F-8

  

June 30, 2019

  

June 30, 2018

 
  

Accounts Receivable

  

Accounts Receivable

 

Fund

                

USO

 $526,981   51

%

 $674,535   46

%

USCI

  236,251   23

%

  431,288   30

%

UNG

  141,413   13

%

  182,399   12

%

All Others

  132,501   13

%

  169,937   12

%

Total

 $1,037,146   100

%

 $1,458,159   100

%

Inventories

Inventories, consisting primarily of food products and packaging in New Zealand, hair and skin care finished products and components in the U.S. and security system hardware in Canada, are valued at the lower of cost (determined on a FIFO basis) or market.net realizable value. Inventories include product cost, inbound freight and warehousing costs.costs where applicable. Management compares the cost of inventories with the marketnet realizable value and an allowance is made for writing down the inventories to their marketnet realizable value, if lower. DuringFor the yearyears ended June 30, 2016,2019 and 2018 impairment to inventory value was recorded as $0 and $0, respectively. An assessment is made at the Company incurred an impairment lossend of $48,330 dueeach fiscal year to valuingdetermine what slow-moving inventory at market whichitems, if any, should be deemed obsolete and written down to their estimated net realizable value. For the years ended June 30, 2019 and June 30, 2018, the expense for slow-moving or obsolete inventory was lower than cost.

$10,317 and $0, respectively.

Property and Equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and leasehold improvements are capitalized. Office furniture and equipment include office fixtures, computers, printers and other office equipment plus software and applicable packaging designs. Leasehold improvements, which are included in plant and equipment, are depreciated over the shorter of the useful life of the improvement and the length of the lease. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed using various methodsthe straight line method over anthe estimated useful life of the asset.asset (see Note 5 to the Consolidated Financial Statements). 

Category

 

Estimated Useful Life (in years)

 

Plant and equipment:

 

 

5

to

10

 

Furniture and office equipment:

 

 

3

to

5

 

Vehicles

 

 

3

to

5

 

Category
Estimated Useful Life
Computer Equipment & Software3 to 5 Years
Office furniture and equipment:3 to 5 Years
Autos3 to 5 Years

Intangible Assets

Intangible assets consist of brand names, domain names, recipes, non-compete agreements and customer lists. Intangible assets with finite lives are amortized over the estimated useful life and are evaluated for impairment at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the discounted expected future cash flows. If the future discounted cash flows are less than the carrying amount of these assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.


CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
There was no impairment recorded for the year ended June 30, 2019 or for the year ended June 30, 2018.

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase businesses combination. Goodwill is reviewedtested for impairment on an annual basis during the fourth quarter of our fiscal year, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. The goodwill impairment test is a two-step test. Under the first step, thefairthe fair value of the reporting unit is compared with its carrying value including goodwill. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test. Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. There was no impairment recorded for the years ended June 30, 2019 and 2018

F-9

Impairment of Long-Lived Assets

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

There was no impairment recorded for the years ended June 30, 2019 or 2018.

Investments and Fair Value of Financial Instruments

Short-term investments are classified as available-for-sale securities. The Company's financial instruments primarily consistCompany measures the investments at fair value at period end with any changes in fair value reflected as unrealized gains or (losses) which is included as part of cashother (expense) income. The Company values its investments in accordance with Accounting Standards Codification ("ASC") 820 – Fair Value Measurements and cash equivalents, accounts receivable,Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and accounts payable.

expands disclosures about fair value measurement. The changes to past practice resulting from the application of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurement. ASC 820 establishes a fair value hierarchy that distinguishes between: (1) market participant assumptions developed based on market data obtained from sources independent of the Company (observable inputs) and (2) The Company’s own assumptions about market participant assumptions developed based on the best information available under the circumstances (unobservable inputs). The three levels defined by the ASC 820 hierarchy are defined as follows:

Level 1:1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

liabilities that the reporting entity has the ability to access at the measurement date.

Level 2:2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such asindirectly. Level 2 assets include the following: quoted prices for similar assets or liabilities;liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active;active, inputs other than quoted prices that are observable for the asset or otherliability, and inputs that are observablederived principally from or can be corroborated by observable market data by correlation or other means (market-corroborated inputs).

Level 3 – Unobservable pricing input at the measurement date for substantially the full termasset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.

In some instances, the inputs used to measure fair value might fall within different levels of the assets or liabilities.

Level 3: Unobservable inputsfair value hierarchy. The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level that are supported by little or no market activity and that areis significant to the fair value measurement in its entirety.

F-10
As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is primarily attributed to the short maturities of these instruments.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition


Revenue primarily consists of fees earned through management of investment funds, sale of gourmet meat pies and related bakery confections in New Zealand, security alarm system installation and monitoringmaintenance services in Canada, and salewholesale distribution of mobile video recording deviceshair and gathering of live-streaming video recording data displayed online to subscribers in the U.S.A.skin care products. Revenue is accounted for net of sales taxes, sales returns, trade discounts. RevenueThe performance obligation is recognizedsatisfied when persuasive evidence of an arrangement exists, the price is fixed or determinable, the delivery has occurred, no other significant obligations of the Company exist, and collectability is probable. Product is considered delivered to the customer once itproduct has been shipped and title, risk of loss and rewards of ownership have been transferred. For most of the Company’s product sales or services, these criteria are met at the time the product is shipped.

Share-based Compensation
shipped, the subscription period commences, or the management fees are accrued. For our Brigadier subsidiary in Canada, the Company operates under contract with an alarm monitoring company that pays a percentage of their recurring monitoring fee to Brigadier in exchange for continued customer service and support functions with respect to each customer maintained under contract by the monitoring company. 

Recently Adopted Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance that set forth a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company measures stock-based compensation cost atadopted this new standard and its related amendments as of July 1, 2018 using the grant datemodified retrospective transition method, whereby the cumulative effect of initially applying the new standard recognized as an adjustment to the opening balance of stockholders equity. Results for reporting periods commencing on or after July 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for that prior period. The impact of adoption did not have a material effect on our financial results. The adoption of the new standard impacted the identification of separate obligations for certain sales of security systems and related monitoring sales. The Company generates revenue, in part, through contractual monthly recurring fees received for providing ongoing customer support services to monitoring company clientele. The five-step process governing contract revenue reporting includes:

1. Identifying the contract(s) with customers

2. Identifying the performance obligations in the contract

3. Determining the transaction price

4. Allocate the transaction price to the performance obligations in the contract

5. Recognize revenue when or as the performance obligation is satisfied

Transactions involve security systems that are sold outright to the customer where the Company's performance obligations include customer support services and the sale and installation of the security systems. For such arrangements, the Company allocates a portion of the transaction price to each performance obligation based on a relative stand-alone selling price. Revenue associated with the fair valuesale and installation of security systems is recognized once installation is complete, and is reflected as security system revenue in the Consolidated Statements of Operations. Revenue associated with customer support services is recognized as those services are provided, and is included as a component of security system revenue in the Consolidated Statements of Operations, which for the year ended June 30, 2019, were approximately US$352,249, or approximately 10% of the award and recognize it as expense overtotal security system revenues. These revenues for the applicable vesting periodyear ended June 30, 2019 account for approximately 1% of total consolidated revenues. None of the stock award usingother subsidiaries of the straight-line method.

Company generate revenues from long term contracts.

Because the Company has no contract with the end user, and the monthly payments for customer support services are made to the Company by the monitoring company who has a contract with the end user, and end user customers are subject to cancellation through no control of the Company; therefore, no deferred revenues or contingent liability reserves have been established with respect to these contracts. The services are deemed delivered as the obligation is acknowledged on a monthly basis.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits or if future deductibility is uncertain.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.

F-11

Advertising Costs

The Company expenses the cost of advertising as incurred. AdvertisingMarketing and advertising costs for the years ended June 30, 20162019 and 20152018 were negligible.

$2.9 million and $3.6 million, respectively.

Other Comprehensive Income (Loss) and

Foreign Currency Translation

We record foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, ASC 830-30, Foreign Currency Translation.Translation. The accounts of Gourmet Foods Ltd. use the New Zealand dollar as the functional currency. The accounts of Brigadier Security System use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the weighted average exchange rate throughout the period. Foreign currency transaction gains and (losses) can also occur if a transaction is settled in a currency other than the entity's functional currency. Accumulated currency translation lossgains and (losses) are classified as an item of accumulated other comprehensive lossincome (loss) in the stockholders’ equity section of the consolidated balance sheet was $29,503 as of June 30, 2016.

Statement of Cash Flows
The Company’s cash flows from operations are calculated based uponsheet.

Short-Term Investment Valuation

In January 2016, the local currencies. As a result, amountsFASB issued authoritative guidance related to assetsthe accounting for equity investments, financial liabilities under the fair value option, and liabilities reported on the statement of cash flowspresentation and disclosure requirements for financial instruments. Under the new guidance, equity investments with readily determinable fair values, except those accounted for under the equity method, will not necessarily agreebe measured at fair value with changes in fair value recognized in earnings rather than other comprehensive income (loss). In addition, this update clarifies the corresponding balancesguidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from the unrealized losses on certain debt securities. The Company adopted this guidance effective on July 1, 2018. See Recent Accounting Pronouncements below related to July 1, 2018 reclassification of accumulated other comprehensive income to retained earnings. Besides this reclassification there was no material impact to Consolidated Financial Statements as a result of the consolidated balance sheet.

adoption.

Segment Reporting

The Company defines operating segments as components 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 allocates its resources and assesses the performance of its sales activities based on the geographic locations of its subsidiaries (see(Refer to Note 20)16 of the Consolidated Financial Statements).

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, withassumed. For the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequentyears ended June 30, 2019 and 2018 a determination was made that no adjustments are recorded to earnings.

Reclassifications
Certain 2015 balances have been reclassified to conform to the 2016 presentation

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
were necessary.

Recent Accounting Pronouncements

In May 2014, adopted during the (“FASB”) issuedyear ended June 30, 2019

On July 1, 2018 the Company adopted ASU 2016-01 Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities and Accounting Standards Update (“ASU”Codification ("ASC") 2014-09,606 - Revenue from Contracts with Customers which provides a single("ASC 606"). A summary of the effects of the initial adoption of ASU 2016-01 and ASC 606 follows:

  

ASU 2016-01

  

ASC 606

  

Total

 

Increase (decrease):

            

Assets

 $-  $-  $- 

Liabilities

 $-  $-  $- 

Accumulated other comprehensive income

 $(279,951

)

 $-  $(279,951

)

Retained earnings

 $279,951  $-  $279,951 

The above (“ASU 2016-01”) entry reclasses accumulated gains from changes in short-term investment valuations previously recorded in comprehensive model for entitiesincome to use in accounting for revenueretained earnings. ASU 2016-01 requires that unrealized gains and losses arising from contracts with customerschanges in market values of our investments in equity securities be recorded in the condensed consolidated statements of operations rather than in accumulated other comprehensive income (loss) on the balance sheet. Prior to July 1, 2018 investment gains and will supersede most current revenue recognition guidance. losses related to equity securities were reflected on the condensed consolidated statements of comprehensive income.

The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflectsCompany has reviewed new accounting pronouncements issued between September 28, 2018, the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effectivefiling date of our most recent prior Annual Report on Form 10-K, and the filing date of this Annual Report on Form 10-K, and has determined that no new revenue standard by one year, which will make it effective forpronouncements, apart from Topic 842 described below, issued are relevant to the Company, in the first quarter of its fiscal year ending June 30, 2019. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force) (ASU 2014-12). The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and thatcould be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The Company is currently evaluating the impact of adopting ASU 2014-12 on the Company’s results of operations and/or financial condition.
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditionshave, or events, in the aggregate, raise substantial doubt about the entity’s ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management’s plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have, a material impact on the Company’s consolidated financial statements.
In January 2015, the FASB issued Accounting Standards Update No. 2015-01, Income Statement – Extraordinary and Unusual items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Conceptposition, results of Extraordinary Items (ASU 2015-01). The amendment eliminates from U.S. GAAP the concept of extraordinary items. This guidance is effective foroperations or disclosure requirements.

On July 1, 2019, the Company adopted FASB ASU 2016-02, Leases (Topic 842), which supersedes the requirements in Topic 840, Leases. The objective of Topic 842 is to establish the first quarterprinciples that lessees and lessors shall apply to report useful information to users of fiscal 2017. Earlyfinancial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. It is expected that assets and liabilities will increase based on the present value of remaining lease payments for leases in place at the adoption is permitted and allowsdate; however, based on the Company to apply the amendment prospectively or retrospectively. The adoptioncurrent level of long term leases in place, this guidance is not expectedmaterial to have a material impact on the Company’s consolidated financial statements.


CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In February 2015, FASB issued ASU No. 2015-02, (Topic 810): Amendments to the Consolidation Analysis. ASU No. 2015-02 provides amendments to respond to stakeholders’ concerns about the current accounting for consolidation of certain legal entities. Stakeholders expressed concerns that GAAP might require a reporting entity to consolidate another legal entity in situations in which the reporting entity’s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity’s voting rights, or the reporting entity is not exposed to a majority of the legal entity’s economic benefits or obligations. ASU No. 2015-02 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations or financial position or disclosures.position. See Note 15 for information on existing leases.

 
In April 2015, FASB issued ASU No. 2015-03, (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. ASU No. 2015-03 provides guidance that will require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU No. 2015-03 affects disclosures related to debt issuance costs but does not affect existing recognition and measurement guidance for these items. ASU No. 2015-03 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
In April 2015, FASB issued ASU No. 2015-05, (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangements. ASU No. 2015-05 provides guidance on a customer’s accounting for fees paid in a cloud computing arrangement, which includes software as a service, platform as a service, infrastructure as a service, and other similar hosting arrangements. ASU No. 2015-05 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
In September 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-16, Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments.” ASU No. 2015-06 simplifies the accounting for measurement-period adjustments attributable to an acquisition. Under prior guidance, adjustments to provisional amounts during the measurement period that arise due to new information regarding acquisition date circumstances must be made retrospectively with a corresponding adjustment to goodwill. The amended guidance requires an acquirer to record adjustments to provisional amounts made during the measurement period in the period that the adjustment is determined. The adjustments should reflect the impact on earnings of changes in depreciation, amortization, or other income effects, if any, as if the accounting hadbeen completed as of the acquisition date. Additionally, amounts recorded in the current period that would have been reflected in prior reporting periods if the adjustments had been recognized as of the acquisition date must be disclosed either on the face of the income statement or in the notes to financial statements. This guidance is effective prospectively for interim and annual periods beginning after December 15, 2015 and early application is permitted. The impact of the guidance on our financial condition, results of operations and financial statement disclosures will depend on the level of acquisition activity performed by the Company.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In November 2015, the Financial Accounting Standards Board (FASB) issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes” (ASU 2015-17), which changes how deferred taxes are classified on the balance sheet and is effective for financial statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. ASU 2015-17 requires all deferred tax assets and liabilities to be classified as non-current. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
In January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01), which requires equity investments that are not accounted for under the equity method of accounting to be measured at fair value with changes recognized in net income and updates certain presentation and disclosure requirements. ASU 2016-01 is effective beginning after December 15, 2017. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures.
In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which requires lessees to recognize right-of-use assets and lease liabilities, for all leases, with the exception of short-term leases, at the commencement date of each lease. This ASU requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. This ASU is effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods.Early adoption is permitted. The amendments of this update should be applied using a modified retrospective approach, which requires lessees and lessors to recognize and measure leases at the beginning of the earliest period presented. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.
In March 2016, the FASB issued Accounting Standards Update 2016-07, Investments- Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting (“ASU 2016-07”). ASU 2016-07 eliminates the requirement to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. ASU 2016-07 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We are currently evaluating the impact the adoption of this standard would have on our financial condition, results of operations and cash flows.
In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting.” The guidance simplifies accounting for share-based payments, most notably by requiring all excess tax benefits and tax deficiencies to be recorded as income tax benefits or expense in the income statement and by allowing entities to recognize forfeitures of awards when they occur. This new guidance is effective for annual reporting periods beginning after December 15, 2016 and may be adopted prospectively or retroactively. We are currently evaluating the impact the adoption of this standard would have on our financial condition, results of operations and cash flows.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements.

NOTE 3.          BASIC AND DILUTED NET LOSS PER SHARES

SHARE

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.

Diluted net loss per share for the year ended June 30, 2016 did The Company does not reflect the effects of shares potentially issuable upon conversion of convertible notes & preferred stock. These potentially issuable shares would have an anti-dilutive effect on the Company’s net loss per share in 2016. any options or warrants.

Diluted net income per share for the year ended June 30, 2015 reflectedreflects the effects of shares actually potentially issuable upon conversion of convertible preferred stock.

The components of basic and diluted earnings per share were as follows:

  

For the year ended June 30, 2019

 
  

Net Income

  

Shares

  

Per Share

 

Basic income per share:

            

Net income available to common shareholders

 $261,849   32,588,418  $0.01 

Effect of dilutive securities

  -   -   - 

Preferred stock Series B

  -   5,709,741   - 

Diluted income per share

 $261,849   38,298,159  $0.01 

  

For the year ended June 30, 2018

 
  

Net Income

  

Shares

  

Per Share

 

Basic income per share:

            

Net income available to common shareholders

 $1,734,686   29,559,139  $0.06 

Effect of dilutive securities

  -   -   - 

Preferred stock Series B

  -   8,739,020   - 

Diluted income per share

 $1,734,686   38,298,159  $0.05 

 
 
 
  For the year ended June 30, 2016           
 
 
 
Net Loss
 
 Shares 
 
 Per Share
 
Basic loss per share:
 
 
 
 
 
 
 
 
 
Net loss available to common shareholders
 $(81,952)
  67,953,870 
 $(0.00)
Effect of dilutive securities
    
    
    
Preferred stock Series B
  - 
    
    
Convertible Debt
  - 
    
    
Diluted loss per share
 $(81,952)
  67,953,870 
 $(0.00)
 
 
 For the year ended June 30, 2015         
 
 
 
Net Income
 
 
Shares
 
 
Per Share
 
Basic income per share:
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
 $14,191 
  47,229,336 
 $0.00 
Effect of dilutive securities
    
    
    
Preferred stock Series B
    
  37,745,637 
    
Convertible Debt
    
  - 
    
Diluted income per share
 $14,191 
  84,974,973 
 $0.00 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 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. The Company has an accumulated deficit of $6,431,522 as of June 30 2016, including a net loss of $81,952 during the year ended June 30, 2016. The historical losses have adversely affected the liquidity of the Company. Although losses are expected to be curtailed during the coming fiscal year due to the increasing revenues of its wholly owned subsidiary Kahnalytics, along with the acquisition of revenue producing subsidiaries, the Company faces continuing significant business risks, which include, but are not limited to, its ability to maintain vendor and supplier relationships by making timely payments when due, continue product research and development efforts at Kahnalytics, and successfully competeINVENTORIES

Inventories for customers within the areas of interest for its Canadian and New Zealand held subsidiaries.

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 increase profitability from its subsidiary operations, obtain financing, and 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 or classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. Management devoted considerable effort from inception through the period ended June 30, 2016, towards (i) sourcing additional working capital including $1,600,000 debt issuance completed during the year ended June 30, 2016, (ii) management of accrued expenses and accounts payable, (iii) divestiture of non-revenue producing subsidiaries, (vi) acquisition of profit producing subsidiaries such as Gourmet Foods, Brigadier and Brigadier Security Systems, and (v) other business combinations between entities where we have a common controlling interest such as Wainwright Holdings.
Management believes that the above actions will allow the Company to continue operations for the next 12 months.

NOTE 5.INVENTORIES
InventoriesOriginal Sprout consisted of the following:following totals:

  

June 30,

  

June 30,

 
  

2019

  

2018

 

Raw materials

 $208,284  $195,674 

Supplies and packing materials

  188,035   142,257 

Finished goods

  612,343   593,134 

Total inventories

 $1,008,662  $931,065 

 
 
 
June 30,
 
 
June 30,
 
 
 
2016
 
 
2015
 
Raw materials
 $50,023 
 $- 
Supplies and packing materials
  77,497 
  - 
Finished goods
  357,351 
  85,849 
 
  484,871 
  85,849 
Less : Impairment of Finished Goods
  (48,330)
  - 
Total
 $436,541 
 $85,849 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. PROPERY5.          PROPERTY AND EQUIPMENT

Property, Plantplant and Equipmentequipment consisted of the following as of June 30, 20162019 and 2015.2018:

  

June 30, 2019

  

June 30, 2018

 

Plant and equipment

 $1,511,629  $1,487,568 

Furniture and office equipment

  188,370   171,978 

Vehicles

  332,672   351,381 

Total property and equipment, gross

  2,032,671   2,010,927 

Accumulated depreciation

  (1,275,657

)

  (930,456

)

Total property and equipment, net

 $757,014  $1,080,471 
 
 
June 30,
2016
 
 
June 30,
2015
 
Plant and Equipment
 $1,477,411 
 $- 
Furniture & Office Equipment
  119,123 
  12,910 
Vehicles
  58,850 
 -
Total Property and Equipment, Gross
  1,655,384 
  12,910 
Accumulated Depreciation
  (488,691)
  (12,910)
Total Property and Equipment, Net
 $1,166,693 
 $- 

For the years ended June 30, 20162019 and 2015,2018, depreciation expense for property, plant and equipment totaled $226,556$366,812 and $0,$342,628, respectively. 

 

NOTE 7.6.          INTANGIBLE ASSETS

Intangible assets consisted of the following:

  

June 30, 2019

  

June 30, 2018

 

Customer relationships

 $700,252  $700,252 

Brand name

  1,142,122   1,142,122 

Domain name

  36,913   36,913 

Recipes

  1,221,601   1,221,601 

Non-compete agreement

  274,982   274,982 

Total

  3,375,870   3,375,870 

Less : accumulated amortization

  (716,147

)

  (380,639

)

Net intangibles

 $2,659,723  $2,995,231 
 
 
June 30,
 
 
 June 30,
 
 
 
2016
 
 
 2015
 
Brand name
 $402,123 
 $- 
Domain name
  36,913 
  - 
Customer relationships
  500,252 
  - 
Non-compete agreement
  84,982 
  - 
Recipes
  21,601 
  - 
Total
  1,045,871 
  - 
Less : Accumulated Amortization
  (27,658)
  - 
Net Intangibles
  $1,018,213 
 $- 

CUSTOMER RELATIONSHIP

On August 11, 2105,2015, the Company acquired Gourmet Foods, Ltd.Foods. The fair value on the acquired customer relationships was estimated to be $66,153 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be $434,098$434,099 and is amortized over the remaining useful life of 10 years. On December 18, 2017 the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired customer relationships was determined to be $200,000 and is amortized over the remaining useful life of 7 years.

  

June 30, 2019

  

June 30, 2018

 

Customer relationships

 $700,252   700,252 

Less: accumulated amortization

  (203,492

)

  (124,895

)

Total customer relationships, net

 $496,760   575,357 

F-14
June 30,
2016
June 30,
2015
Customer relationships
$500,252
-
Less: accumulated amortization
9,659
-
Total customer relationships, net
$490,593
-
Table of Contents

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BRAND NAME

On August 11, 2105,2015, the Company acquired Gourmet Foods, Ltd.Foods. The fair value on the acquired brand name was estimated to be $61,429 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be $340,694 and is amortized over the remaining useful life of 10 years. On December 18, 2017 the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired brand name was determined to be $740,000 and is considered to have an indefinite life. Unlike the brand names Gourmet Foods and Brigadier Security Systems, Original Sprout is an actual product name and recognized associated brand that is identifiable to consumers of the product and is the basis of the value proposition. That brand name will forever be associated with the product offering unless and until such time in the future as the Company may elect to discontinue the use of the brand and move towards establishment of an alternative product offering. Therefore, the Company will test for impairment of the brand name "Original Sprout" at each reporting interval with no amortization recognized.

  

June 30, 2019

  

June 30, 2018

 

Brand name

 $1,142,122  $1,142,122 

Less: accumulated amortization

  (129,084

)

  (88,872

)

Total brand name, net

 $1,013,038  $1,053,250 
June 30,
2016
June 30,
2015
Brand name
$402,123
-
Less: accumulated amortization
8,447
-
Total brand name, net
$393,696
-

DOMAIN NAME

On August 11, 2105,2015, the Company acquired Gourmet Foods, Ltd. The fair value on the acquired domain name was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired domain name was estimated to be $15,312 and is amortized over the remaining useful life of 5 years.

  

June 30, 2019

  

June 30, 2018

 

Domain name

 $36,913  $36,913 

Less: accumulated amortization

  (26,341

)

  (18,958

)

Total brand name, net

 $10,572  $17,955 
June 30,
2016
June 30,
2015
Domain Name
$36,913
-
Less: accumulated amortization
4,193
-
Total brand name, net
$32,720
-

RECIPES

AND FORMULAS

On August 11, 2105,2015, the Company acquired Gourmet Foods, Ltd.Foods. The fair value on the recipes was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. On December 18, 2017 the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired recipes and formulas was determined to be $1,200,000 and is amortized over the remaining useful life of 8 years. 

  

June 30, 2019

  

June 30, 2018

 

Recipes and formulas

 $1,221,601  $1,221,601 

Less: accumulated amortization

  (246,622

)

  (92,303

)

Total recipes and formulas, net

 $974,979  $1,129,298 
 
 
June 30,  
 
 
June 30,  
 
 
 
2016  
 
 
2015  
 
Recipes
 $21,601 
 $-  
Less: accumulated amortization
  3,937 
  -  
Total Recipes, net
 $17,664 
  -  

NON-COMPETE AGREEMENT

On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired non-compete agreement was estimated to be $104,122$84,982 and is amortized over the remaining useful life of 5 years. On December 18, 2017 the Company’s wholly-owned subsidiary, Kahnalytics, Inc., acquired the assets of Original Sprout LLC. The fair value of the acquired non-compete agreement was determined to be $190,000 and is amortized over the remaining useful life of 5 years.

  

June 30, 2019

  

June 30, 2018

 

Non-compete agreement

 $274,982  $274,982 

Less: accumulated amortization

  (110,608

)

  (55,612

)

Total non-compete agreement, net

 $164,374  $219,370 
June 30,
2016
June 30,
2015
Non-compete agreement
$84,982
-
 Less: accumulated amortization
1,421
-
Total non-compete agreement, net
$83,561
-

AMORTIZATION EXPENSE

The total amortization expense for intangible assets for the years ended June 30, 2019 and June 30, 2018 was $335,508 and $234,046, respectively.

F-15

Estimated amortization expenses of intangible assets for the next five twelve monthstwelve-month periods endedending June 30, are as follows:

Years Ending June 30,

 

Expense

 

2020

 $335,508 

2021

  326,034 

2022

  306,809 

2023

  286,507 

2024

  268,809 

Thereafter

  1,136,056 

Total

 $2,659,723 

 

NOTE 7.          OTHER ASSETS

Other Current Assets

Other current assets totaling $546,105 as of June 30, 2019 and $374,617 as of June 30, 2018 are comprised of various components as listed below.

  

As of June 30, 2019

  

As of June 30, 2018

 

Prepaid expenses

 $462,215  $358,869 

Other current assets

  83,890   15,748 

Total

 $546,105  $374,617 

Investments

Wainwright, from time to time, provides initial investments in the creation of ETP funds that Wainwright manages. Wainwright classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. Investments in which no controlling financial interest or significant influence exists are recorded at fair value included in comprehensive income (loss) through June 30, 2018 and subsequently through earnings in accordance with ASU 2016-01. As ofJune 30, 2019 and June 30, 2018, investments were approximately $3.8 million and $3.2 million, respectively. Investments in which no controlling financial interest exists, but significant influence exists are recorded as per the equity method of investment accounting. As of June 30, 2019 and June 30, 2018, there were no investments requiring the equity method investment accounting.

Investments measured at estimated fair value consist of the following as of June 30, 2019 and June 30, 2018:

  

As of June 30, 2019

 
  

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized

Losses

  

Estimated

Fair

Value

 

Money market funds

 $3,005,182  $-  $-  $3,005,182 

Other short term investments

  749,988   -   (739

)

  749,249 

Other equities

  3,421   -   (1,256

)

  2,165 

Total short-term investments

 $3,758,591  $-  $(1,995

)

 $3,756,596 

  

As of June 30, 2018

 
  

Cost

  

Gross

Unrealized

Gains

  

Gross

Unrealized

Losses

  

Estimated

Fair

Value

 

Money market funds

 $180,138  $-  $-  $180,138 

USCI mutual fund investment

  2,500,000   280,480   -   2,780,480 

Hedged asset

  523,100   -   (280,761

)

  242,339 

Other equities

  1,577   -   (529

)

  1,048 

Total short-term investments

 $3,204,815  $280,480  $(281,290

)

 $3,204,005 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARYF-16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSTable of Contents

The following tables summarize the valuation of the Company’s securities at June 30, 2019 and June 30, 2018 using the fair value hierarchy:

Years Ending June 30,
 
Expense  
 
2017
 $118,937 
2018
 $118,937 
2019
 $118,937 
2020
 $118,937 
2021
 $109,385 
  

As of June 30, 2019

 
  

Total

  

Level 1

  

Level 2

  

Level 3

 

Money market funds

 $3,005,182  $3,005,182  $-  $- 

Other short term investments

  749,249   749,249   -   - 

Other equities

  2,165   2,165   -   - 

Total

 $3,756,596  $3,756,596  $-  $- 

  

As of June 30, 2018

 
  

Total

  

Level 1

  

Level 2

  

Level 3

 

Money market funds

 $180,138  $180,138  $-  $- 

Mutual fund investment

  2,780,480   2,780,480   -   - 

Hedge asset

  242,339   -   242,339   - 

Other equities

  1,048   1,048   -   - 

Total

 $3,204,005  $2,961,666  $242,339  $- 

During the years ended June 30, 2019 and 2018, there were no transfers between Level 1 and Level 2.

Restricted Cash

At June 30, 2019 and 2018, Gourmet Foods had on deposit approximately NZ$20,000 (approximately US$13,437 and US$13,536, respectively after currency translation) securing a lease bond for one of its properties. The cash securing the bond is restricted from access or withdrawal so long as the bond remains in place.

Long - Term Assets

Other long term assets totaling $523,607 and $532,165 at June 30, 2019 and June 30, 2018, respectively, were attributed to Wainwright and Original Sprout and consisted of

(i)

$500,000 as of June 30, 2019 and June 30, 2018 representing 10% equity investment in a registered investment adviser accounted for on a cost basis,

(ii)

and $23,607 as of June 30, 2019 and $32,165 at June 30, 2018 representing deposits and prepayments of rent.

 

NOTE 8.          GOODWILL

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in business combinations. The amounts recorded in goodwill for June 30, 2019 and 2018 were $915,790 and $915,790, respectively.

Goodwill is comprised of the following amounts:

  

As of June 30, 2019

  

As of June 30, 2018

 
         

Goodwill – Original Sprout

 $416,817  $416,817 

Goodwill – Gourmet Foods

  147,628   147,628 

Goodwill - Brigadier

  351,345   351,345 

Total

 $915,790  $915,790 
 
 
As of June 30,  
 
 
As of June 30,   
 
 
 
2016  
 
 
2015   
 
Trained workforce – Gourmet Foods
 $51,978 
 $- 
Trained workforce - Brigadier
  75,795 
  -
 
Goodwill – Gourmet Foods
  45,669 
  -
 
Goodwill - Brigadier
  45,814 
  -
 
 
 $219,256 
 $- 

The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the year ended June 30, 2016.2019 or June 30, 2018.

 

NOTE 9.          ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

  

June 30, 2019

  

June 30, 2018

 

Accounts payable

 $1,720,902  $1,935,645 

Accrued interest

  117,555   56,689 

Taxes payable

  181,563   3,938 

Deferred rent

  37,076   3,681 

Accrued payroll, vacation and bonus payable

  345,520   299,630 

Accrued expenses

  464,465   949,804 

Total

 $2,867,081  $3,249,387 

 
 
 
June 30,
2016
 
 
June 30,
2015
 
Accounts payable
 $288,170 
 $108,860 
Accrued judgment
  135,000 
  135,000 
Accrued interest
  13,918 
  781 
Taxes Payable
  167,683 
  -
 
Accrued Payroll and Vacation Pay
  127,271 
  - 
Accrued Expenses
  265,502 
  24,860 
Total
 $997,644 
 $269,501 

NOTE 10.         NOTES PAYABLE - RELATED PARTY

TRANSACTIONS

Notes Payable - Related Parties

Current related party notes payable consist of the following:

  

June 30, 2019

  

June 30, 2018

 

Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)

 $3,500  $3,500 

Notes payable to shareholder, interest rate of 4%, unsecured and payable on May 25, 2022

  250,000   250,000 

Notes payable to shareholder, interest rate of 4%, unsecured and payable on April 8, 2022

  350,000   350,000 
  $603,500  $603,500 
 
 
June 30,
2016
 
 
June 30,
2015
 
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due)
 $5,000 
 $5,000 
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)
  3,500 
  3,500 
Notes payable to affiliate of director/shareholder, interest rate of 4%, unsecured and payable on June 30, 2017
  300,000 
  - 
 
 $308,500 
 $8,500 

On January 1, 2013 we consolidated all outstanding notes payable due a related party into one loan agreement containing certain conversion features whereby the note holder could convert the principal amount of the loan, $204,700 comprised of the sum total of the principal amounts of the individual notes, $122,000, plus $82,700 in accrued interest applicable to those notes, together with accrued interest on the principal at the rate of 4.944% per annum, into shares of our common stock at the conversion rate of $0.02 per share. On December 19, 2014 we entered into an amendment to the debenture that allowed for the maturity date to be extended to June 1, 2015 and provided the Company rights to settle the debenture in full, upon completion of an equity investment in excess of $1,500,000, by payment of $122,000 in cash and issuance of 8,270,000 shares of common stock valued at $0.01 per share to the debenture holder. On January 26, 2015 we exercised those rights and paid the debenture in full. The transaction resulted in a gain on the issuance of shares of $69,861. which was recorded in additional paid in capital account as the transaction was with a related party.
On February 13, 2015 the Company repaid the outstanding notes due to two related parties totaling $21,000 in principal and $4,000 in accrued interest. A total of $5,086 in accrued interest was forgiven by the noteholders in settlement of the debt.

Interest expense for all related party notes for the years ended June 30, 2019 and 2018 was $24,280 and $24,280, respectively. 

Wainwright - Related Party Transactions

The Funds managed by USCF and USCF Advisers are deemed by management to be related parties. The Company’s Wainwright revenues, totaling $15.0 million and $18.7 million for the years ended June 30, 2019 and 2018, respectively, were earned from these related parties. Accounts receivable, totaling $1.0 million and $1.5 million as of June 30, 2019 and June 30, 2018, respectively, were owed from these related parties. Fund expense waivers, totaling $0.3 million and $0.7 million and fund expense limitation amounts, totaling $0.2 million and $0.5 million, for the years ended June 30, 2019 and 2018, respectively, were incurred on behalf of these related parties. Waivers payable, totaling $0.3 million and $0.7 million as of June 30, 2019 and June 30, 2018, respectively, were owed to these related parties. Fund expense waivers and fund expense limitation obligations are defined under Note 15 to the Consolidated Financial Statements.

NOTE 11.         EQUIPMENT LOANS

As of June 30, 2019, Brigadier had, in the aggregate, an outstanding principal balance of CD$114,292 (approx. US$87,297) related to new vehicle purchases. For each vehicle purchased, the loan principal together with interest is amortized over 60 equal monthly installments. The Consolidated Balance Sheets as of June 30, 2019 and June 30, 2018 reflect the amount of the principal balance which is due within twelve months as a current liability of US$26,241 and $46,705, respectively. Principal amounts under the loans which is due after twelve months are recorded in long term liabilities as US$61,057 and $149,491 for the years ended June 30, 2019 and 2018 respectively. Interest on the loans is expensed or accrued as it becomes due. Total interest on all vehicle loans for the year ended June 30, 2016 amounted to $7822019 was US$5,197 and was $781$12,662 for the year ended June 30, 2018.

NOTE 12.         BUSINESS COMBINATION

Acquisition of the assets of The Original Sprout, LLC

Kahnalytics, Inc., a wholly owned subsidiary of Concierge Technologies domiciled in California, was founded during May 2015 for the purpose of carrying on the residual business from the disposal of Concierge Technologies.

NOTE 11. NOTE PAYABLE
On November 8, 2013Technologies' former subsidiary, Wireless Village entered intodba/Janus Cam. As that business segment slowly wound down over the ensuing two years, management began a short term Note Agreementsearch for another business opportunity for Kahnalytics. Accordingly, on December 18, 2017, Kahnalytics acquired all of the assets of The Original Sprout, LLC, a California limited liability company. Simultaneous with an unaffiliated individualthe acquisition, Kahnalytics registered a "doing business as" (or "dba") name of “Original Sprout” and transitioned its business to the manufacture, warehousing and wholesale distribution of non-toxic, all-natural, hair and skin care products under the brand name Original Sprout. The acquisition by Kahnalytics was financed through a non-interest bearing note from Concierge Technologies. The purchase price was approximately $3.5 million with payments to be made over the course of a twelve-month period and per the estimated allocation as depicted in the following table.

Item

 

Amount

 

Inventory

 $371,866 

Accounts receivable

  288,804 

Furniture, fixtures and equipment

  1,734 

Pre-payments of inventory

  8,775 

Discount on installment payments**

  64,176 

Intangible assets*

  2,330,000 

Goodwill

  416,817 

Total Purchase Price

 $3,482,172 

*See Note 6 for further detail of intangible assets acquired.

**This amount of $50,000, the proceeds of which were used to pay down inventory purchase costs. Interestrepresents a discount on the Note accrued at the rate of 10% per annuminstallment payments and was payable in monthly installments with a maturitycharged to interest expense.

On the closing date of February 19, 2014 payable by Wireless Village. On February 19, 2014 the unaffiliated individual agreedtransaction, December 18, 2017, Kahnalytics paid $982,172 in cash towards the purchase price and deposited an additional $1,250,000 in an attorney-held client trust account which was released to extend the maturity datesellers, after downward adjustments due to June 1, 2014 andchanges in acquired accounts receivable, on May 18, 2018. The balance of the Company agreed to pay a loan commitment fee of 1.5%, or $750. By agreement, that fee was paid by the issuance of 53,571 shares of common stock with a market value on the date of issuance of $0.014 per share. The note was subsequently extended to mature on January 5,2015, and then again to mature on February 27, 2015 provided Concierge Technologies guaranteed the repayment on behalf of Wireless Village. A fee in the amount of 1%, or $500,purchase price, after consideration for monthly installment payments, was paid in cash to the noteholder by Wireless Village in exchange for the agreement to extend the maturity date. On February 13, 2015 the note was repaid in full by Concierge Technologies.


On December 24, 2014 the Company entered into an unsecured promissory note agreement with an unaffiliated individual for the principal amount of $35,000 plus interest to accrue at the rate of 6% per annum on the unpaid principal. January 5, 2019. 

Supplemental Pro Forma Information (Unaudited)

The note and accrued interest was due and payable on or before June 30, 2015. The proceeds of the loan were reserved in anticipation of the need to pay a convertible debenture maturing in January 2015. On January 26, 2015 the noteholder became an investor and shareholder of the Company and the amount of $35,000 due under the note agreement was repaid as a credit to the amount of funds due per the stock subscription agreement. No interest was accrued or paid on the note.

An unsecured loan in the amount of $8,500 due a former director and shareholder who is now deceased has been reclassified as a note due unrelated party. The note is interest free, not deemed assignable to successors by the Company, and held as a contingent liability until resolved.
NOTE 12. CONVERTIBLE DEBENTURES – RELATED PARTY
On January 27, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Wainwright Holdings, an affiliate of our shareholder and C.E.O., that resulted in the funding of $450,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.10 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.
On April 8, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Gerber Irrevocable Family Trust, an affiliate of our shareholder and C.E.O., that resulted in the funding of $350,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.

On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Wainwright Holdings, an affiliate of our shareholder and C.E.O., that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.
On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Schoenberger Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note.
Interest expense for all related party convertible debentures,unaudited supplemental pro forma information for the year ended June 30, 2016 amounted2018 assumes the acquisition of the Original Sprout LLC assets had occurred as of July 1, 2017, giving effect on a pro forma basis to $13,136purchase accounting adjustments such as depreciation of property and was $5,102equipment, amortization of intangible assets, and acquisition related costs. The pro forma data is for information purposes only and may not necessarily reflect the year ended June 30, 2015.actual results of operations had the assets of Original Sprout LLC been operated as part of the Company since July 1, 2017. Furthermore, the pro forma results do not intend to predict the future results of operations of the Company.

  

Year Ended

 
  

June 30, 2018

 
  

Pro Forma(1)

 

Net Revenues

 $30,782,940 

Net Income

 $2,044,203 

Basic Earnings per Share

 $0.07 

Diluted Earnings per Share

 $0.05 

(1)

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

 

NOTE13. CONVERTIBLE DEBENTURE
On February 18, 2014 the Company entered into a series of agreements, including a convertible debenture, that resulted in a funding of $53,000. The debenture is convertible, at the option of the debenture holder, to restricted common shares after August 18, 2014 at a conversion price calculated on a prescribed discount to the trailing 10-day volume weighted average market price (“VWAP”) of our shares on the date of conversion. During the initial 6 months from the date of the note the Company may repay the principal plus accrued interest at the rate of 8% per annum by applying a pre-payment penalty determined on a sliding scale tied to the aging of the note. After the initial 6-month period has elapsed the Company may not repay the note until its maturity date on November 18, 2014 at which time the note principal andinterest will become due and payable without pre-payment penalty. The Company identified embedded derivatives related to the convertible debenture. During the quarter ended September 30, 2014, at the election of the debenture holder, the Company converted$28,000 of the principal to equity through issuance of 4,346,247 shares of common stock. During the quarter ended December 31, 2014, at the election of the debenture holder, the Company converted $25,000 of the principal plus $2,120 of accrued interest to equity through issuance of 5,424,000 shares of common stock. The debenture has been paid in full as of June 30, 2015.

On March 28, 2014 the Company entered into a series of agreements, including a convertible debenture, that resulted in a funding of $32,500. The note is convertible, at the option of the debenture holder, to restricted common shares after September 23, 2014 at a conversion price calculated on a prescribed discount to the trailing 10-day VWAP of our shares on the date of conversion. During the initial 6 months from the date of the note the Company may repay the principal plus accrued interest at the rate of 8% per annum by applying a pre-payment penalty determined on a sliding scale tied to the aging of the note. After the initial 6-month period has elapsed the Company may not repay the note until its maturity date on January 2, 2015 at which time the note principal and interest will become due and payable without pre-payment penalty. The Company identified embedded derivatives related to the convertible debenture. As of June 30, 2015 the debenture was repaid in full with cash of $32,500 plus accrued interest of $1,995.

On April 25, 2014 the Company entered into a series of agreements, including a convertible debenture, that resulted in a funding of $32,500. The note is convertible, at the option of the debenture holder, to unregistered common shares after October 22, 2014 at a conversion price calculated on a prescribed discount to the trailing 10-day VWAP of our shares on the date of conversion. During the initial 6 months from the date of the note the Company may repay the principal plus accrued interest at the rate of 8% per annum by applying a pre-payment penalty determined on a sliding scale tied to the aging of the note. After the initial 6-month period has elapsed the Company may not repay the note until its maturity date on January 25, 2015 at which time the note principal and interest will become due and payable without pre-payment penalty. The Company identified embedded derivatives related to the convertible debenture. As of June 30, 2015 the debenture was repaid in full with cash of $32,500 plus accrued interest of $1,995.
The Company identified embedded derivatives related to all the three convertible debenture mentioned above. The embedded derivatives included certain conversion features.  The accounting treatment of derivative financial instruments required that the Company record the derivatives at their fair values as of the inception date and at fair value as of each subsequent balance sheet date.  Any change in fair value was recorded as non-operating, non-cash income or expense at each reporting date.  If the fair value of the derivatives was higher at the subsequent balance sheet date, the Company recorded a non-operating, non-cash charge.  If the fair value of the derivatives was lower at the subsequent balance sheet date, the Company recorded non-operating, non-cash income.  The derivatives were classified as short-term liabilities. The debentures were repaid in full with cash as of June 30, 2015 and the derivative liability was eliminated on the consolidated balance sheet at June 30, 2015.

NOTE 14.13.         STOCKHOLDERS' EQUITY TRANSACTIONS

Shares issued for cash
On January 26, 2015, the Company issued, in the aggregate, 400,000,000 shares of common stock for $1,160,000 to two separate trust entities. The beneficiaries of the trusts were subsequently appointed directors on the Company’s board of directors and the Company’s Chief Executive Officer.
On January 26, 2015, the Company also issued 32,451,499 shares, in the aggregate, of Series B Voting, Convertible Preferred stock at $0.0567per share for $1,840,000 to the same entities as described in the preceding paragraph. Each share of Series B Voting, Convertible Preferred stock has twenty votes on all matters submitted to a vote of the common stockholders and is convertible into twenty shares of common stock at any time after the issuance date. The beneficial conversion feature on the Series B Voting, Convertible Preferred shares issued were valued at $1,470,053 on the issuance date and accounted for as a deemed dividend.
Common stock issued in conversion of preferred stock
During the year ended June 30, 2015, the company issued 88,127,280 shares of common stock for two conversions totaling 4,406,363 shares of Series B Voting, Convertible Preferred stock. The Company also converted 206,186 shares of its Series A Voting, Convertible Preferred stock to 1,030,930 shares of common stock.

Shares issued for debt settlement
The Company issued a total of 18,040,247 shares of common stock for conversion of debentures (notes 10, 11, 13).
Shares cancelled in connection with disposal of subsidiary
On May 7, 2015 completed the sale of its wholly owned subsidiary, Wireless Village, and cancelled 68,000,000 shares of common stock as consideration (Note 18). The shares were valued at the fair market price on the closing date of the transaction.

Reverse Stock Split

On November 11, 2015,17, 2017, the Board of Directors (the “Board’) of the Company approved the implementation of a one-for-tenone-for-thirty (1:10)30) reverse stock split of all of the Company’s issued and outstanding common and preferred stock (the “Reverse Stock Split”).  The Reverse Stock Split became effective when trading opened on December 15, 2015.2017. The Reverse Stock Split was previously approved by the Company’s shareholders pursuant to a majority written consent and by the Board pursuant to unanimous written consent on February 26, 2015.13, 2017. The approvals provided discretion to the Board to implement the Reverse Stock Split by the end of 2015. 2017.  The number of the Company’s authorized shares of common stock did not change. All figures have been presented on the basis of reverse split where ever applicable for all the periods presented in these financial statements.

Convertible Preferred Stock

Each issued Series B Voting, Convertible Preferred Stock is convertible into 20 shares of common stock and carries a vote of 20 shares of common stock in all matters brought before the shareholders for a vote. On February 7, 2019, the Company converted 383,919 shares of Series B Voting, Convertible Preferred Stock to 7,678,380 shares of common stock per the request of the shareholder and pursuant to the stock designation. After the conversion, there remain 53,032 shares of Series B Voting, Convertible Preferred Stock outstanding as of June 30, 2019.

Accumulated Other Comprehensive Income

The following table presents activity for the years ending June 30, 2019 and June 30, 2018:

Balance as of June 30, 2017

 $119,338 

Change in short-term investment valuation before reclassification to earnings

  329,629 

Foreign currency translation (loss)

  (214,284

)

Change in short-term investment valuation due to reclassification to earnings

  (85,875

)

Balance as of June 30, 2018

  148,808 

Foreign currency translation (loss)

  (44,516)

Change in short-term investment valuation due to reclassification to earnings

  (279,951)

Balance as of June 30, 2019

 $(175,659)

 

NOTE 15.14.         INCOME TAXES

The following table summarizes income before income taxestaxes:

  

Years Ended June 30,

 
  

2019

  

2018

 

U.S.

 $414,961  $2,276,390 

Foreign

  193,902   224,892 

Income before income taxes

 $608,863  $2,501,282 
 
 
Years Ended June 30,
 
 
 
2016
 
 
2015
 
US
 $(324,936)
 $14,191 
Canada
  43,646 
  - 
New Zealand
  295,359 
  - 
Income before income taxes
 $14,070 
 $14,191 

Income Tax Provision

Provision for income tax as listed on the Consolidated Statements of Operations for the years ended June 30, 20162019 and 20152018 are $95,222$347,014 and $Nil,$766,596, respectively.

Provision for taxes consisted of the following:

  

Years Ended June 30,

 
  

2019

  

2018

 

U.S. operations

 $183,025  $658,293 

Foreign operations

  163,989   108,303 

Total

 $347,014  $766,596 

 
 
Years Ended June 30,     
 
 
 
2016  
 
 
2015   
 
US operations
 $800 
 $- 
Foreign operations
  95,222 
  - 
 
 $96,022 
 $- 
F-20

Provisions for income tax consisted of the following as of the years ended:

Deferred income

For the year ended:

 

June 30, 2019

  

June 30, 2018

 
         

Current:

        

Federal

 $149,239  $572,227 

States

  36,183   (510,765

)

Foreign

  188,009   140,142 

Total current

  373,431   201,604 

Deferred:

        

Federal

  (10,572

)

  502,364 

States

  8,175   94,467 

Foreign

  (24,020

)

  (31,839

)

Total deferred

  (26,417

)

  564,992 

Total

 $347,014  $766,596 

Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets for the years ended June 30, 2019 and 2018 are presented below:

For the year ended:

 

June 30, 2019

  

June 30, 2018

 
         

Deferred tax assets:

        

Property and equipment and intangible assets - U.S.

 $619,483  $745,420 

Net operating loss

  3,299   3,646 

Capital loss carryover

  167   10,337 

Accruals, reserves and other - foreign

  5,674   13,494 

Accruals, reserves and other - U.S.

  233,646   104,607 

Gross deferred tax assets

  862,269   877,504 

Less valuation allowance

  (2,573

)

  (12,384

)

Total deferred tax assets

 $859,696  $865,120 
         

Deferred tax liabilities:

        

Intangible assets - foreign

 $(176,578

)

 $(208,419

)

Total deferred tax liabilities

 $(176,578

)

 $(208,419

)

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of the Company’s net deferred tax assets. The Company primarily considered such factors as the Company’s history of operating losses; the nature of the Company’s deferred tax assets and liabilities 

Deferredthe timing, likelihood and amount, if any, of future taxable income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending on the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending onduring the periods in which thethose temporary differences are expected to reverse.
Through June 30, 2015,and carryforwards become deductible.  At present, the Company incurred net operating lossesdoes believe that it is more likely than not that the deferred tax assets will be realized, however, a partial valuation allowance was established for tax purposes of approximately $5,033,209 which was increased to $5,309,789 due to operating losses of $276,580 forcapital loss carryforwards. The valuation allowance decreased by $9,811 during the year ended June 30, 2016. The net operating loss carryforward for federal2019 and state purposes may be used to reduce taxable income throughdecreased by $16,693 during the year 2035.
The grossended June 30, 2018.

On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect our business, such as imposing a one-time transition tax on deemed repatriation of deferred foreign income, reducing the U.S. federal statutory tax asset balancerate, and adopting a territorial tax system. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of June 30, 2016 is approximately $2,113,296. A 100% valuation allowance has been established against2018. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, re-measuring our U.S. deferred tax assets and liabilities as well as reassessing the utilizationnet realizability of the loss carry forward cannot be reasonably assured.

Components of theour deferred tax assets are limitedand liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allowed us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As a result, we previously provided a provisional estimate of the effect of the Tax Act in our financial statements. In the fourth quarter of fiscal year 2019, we completed our analysis to determine the effect of the Tax Act and recorded immaterial adjustments as of June 30, 2019.

The TCJA reduced the U.S. federal statutory tax rate from 35% to 21% effective January 1, 2018. As a result, net deferred tax assets were re-measured, which resulted in a reduction of our deferred tax assets by approximately $504,905 for the tax year ended June 30, 2018.

Furthermore, the TCJA includes a provision to tax global intangible low-taxed income (“GILTI”) of foreign subsidiaries. The GILTI is broadly the excess income of foreign subsidiaries over a 10% rate of routine return on tangible business assets. The US taxable GILTI amount is subject to a 50% GILTI deduction allowance, with the new US federal corporate tax of 21%, the effective US tax rate on GILTI is 10.5%.  The GILTI is effective for taxable years of foreign corporation beginning after December 31, 2017. Due to the Company's net operating loss carryforwards,aggregated positive E&P of the foreign subsidiaries there is GILTI inclusion for 2018.

Income tax expense (benefit) for the years ended June 30, 2019 and are presented as follows at June 30:

 
 
2016
 
 
2015
 
Deferred tax assets:
 
 
 
 
 
 
US
 $2,113,296 
 $2,003,217 
Canada
    
    
Cumulative eligible capital
  8,449 
  -
 
Property, plant & equipment
  (1,856)
  -
 
Deferred tax liability
  (2,357)
  -
 
New Zealand
    
  -
 
Inventory
  (4,048)
  -
 
Accrued expenses
  23,549 
  -
 
Total Deferred Tax Assets
  2,137,033 
  2,003,217 
Valuation allowance, US
  (2,113,296)
  (2,003,217)
 
    
    
Net deferred tax assets
 $23,737 
 $- 

Tax Rate Reconciliation
Differences between30, 2018 differed from the benefit from income taxes and income taxes atamounts computed by applying the statutory federal income tax rate of 21.00% and 27.50%, respectively, to pretax income (loss) as a result of the following:

For the year ended:

 

June 30, 2019

  

June 30, 2018

 
         

Federal tax expense (benefit) at statutory rate

 $127,861  $687,853 

State income taxes

  36,760   (437,242

)

Permanent differences

  112,814   (46,251

)

Deferred tax impact of the Tax Act

  -   504,905 

U.S. toll charge (net of FTC)

  -   1,112 
Foreign tax credit  (43,930)    

Change in valuation allowance

  (9,761

)

  9,761 

Foreign rate differential

  123,270   46,458 

Total tax expense

 $347,014  $766,596 

For the year ended:

 

June 30, 2019

  

June 30, 2018

 
  

%

  

%

 

Federal tax expense (benefit) at statutory rate

  21.00%  27.50%

State income taxes

  6.04%  (17.48

 

%)

Permanent differences

  18.52%  (1.85

 

%)

Deferred tax impact of the Tax Act

  -   20.19%

Foreign rate differential

  20.25%  1.86%

U.S. toll charge (net of FTC)

  -   0.04%
Foreign tax credit  (7.22%)  - 

Change in valuation allowance

  (1.60

 

%)		  0.39%

Total tax expense

  56.99%  30.65%

Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as followsthe largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The aggregate changes in the balance of gross unrecognized tax benefits, which includes interest and penalties, for the years ended June 30:30, 2019 and 2018 are as follows:

Balance at June 30, 2018

 $264,543 

Additions based on tax positions taken during a prior period

  12,597 

Reductions based on tax positions taken during a prior period

  - 

Additions based on tax positions taken during the current period

  - 

Reductions based on tax positions taken during the current period

  - 

Reductions related to settlement of tax matters

  - 

Reductions related to a lapse of applicable statute of limitations

  - 

Balance at June 30, 2019

 $277,140 
 
 
2016
 
 
2015
 
 
 
Amount
 
 
Rate
 
 
Amount
 
 
Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax expense (benefit) at federal statutory rate
 $(96,803)
 -35.0%
 $28,617 
  -35.0%
State taxes, net of federal benefit
  (13,276)
  -4.8%
  7,228 
  .-8.8%
Beneficial conversion expense
  - 
    
  (27,028)
  8.4%
Minimum franchise tax
  800 
  0.3%
  - 
  0.0%
Change in valuation allowance
  110,076 
  39.8%
  (8,816)
  35.4%
Foreign earnings taxed at different rates
  97,857 
  28.9%
  -
 
  -
 
Other adjustments – foreign
  (2,635)
  -0.9%
  -
 
  -
 
Foreign tax at effective tax rate
 $96,022 
  28.4%
 $- 
  0.0%

The Company recordsfiles income tax returns in the United States, and various state and foreign jurisdictions. The federal, state and foreign income tax returns are subject to tax examinations for the tax years 2015 through 2018 as of year ended June 30, 2019. To the extent the Company has tax attribute carry forwards, the tax years in which the attribute was generated may still be adjusted upon examination by the U.S. Internal Revenue Service, state or foreign tax authorities to the extent utilized in a liability for uncertainfuture period.  There were no ongoing examinations by taxing authorities as of June 30, 2019.

The Company had $251,946 of unrecognized tax positions when it is probablebenefits as of June 30, 2019 and $251,946 as of June 30, 2018 that if recognized would affect the effective tax rate.  The Company does not anticipate a loss has been incurred andsignificant change to its unrecognized tax benefits in the amount can be reasonably estimated. year ending June 30, 2019.

The Company recognizes interest accruedand penalties related to unrecognizeduncertain tax benefitspositions in interest expense and penalties in operating expenses.

NOTE 16.
 FAIR VALUE MEASUREMENT
The Company adopted the provisions of ASC 825-10 on January 1, 2008.  ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.  ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities;
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.
Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the consolidated financial statements.
The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings, and other current assets and liabilities approximate fair value, because of their short-term maturity.
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of June 30, 2015:
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Instruments
Inputs
Inputs
Level 1
Level 2
Level 3
Total

$–
$-
$-
$-
Roll-forward of Balance 
Derivative liability for Convertible Debentures
67,571
Change in value of derivative liability during the period ended June 30, 2015
-67,571
Balance, June 30, 2015
-

The Company's derivative liability was valued using pricing models, and the Company generally uses similar models to value similar instruments.  Where possible, the Company verifies the values produced by its pricing models to market prices.  Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs.  These financial liabilities do not trade in liquid markets, and, as such, model inputs cannot generally be verified and do involve significant management judgment.  Such instruments are typically classified within Level 3 of the fair value hierarchy.  The change in fair value of the derivative liability is included as a component of other income in the consolidated statements of operations. The derivative liability was calculated using the Black-Scholes option-pricing model with the following assumptions: expected lives range of less than a month; 110.48% stock price volatility; risk-free interest rate of 0.110% and no dividends during the expected term.
NOTE 17.
BUSINESS COMBINATIONS
On May 28, 2015 Concierge Technologies, Inc. (the “Company”) entered into an agreement to acquire the assets of Gourmet Foods, Ltd., a New Zealand corporation, subject to satisfactory completion of due diligence and other customary criteria for a transaction of this kind. Gourmet Foods is a baker of New Zealand meat pies and other confections distributed to major grocery stores, convenience stores, restaurants and other retailers throughout New Zealand. The Company placed a cash deposit with Gourmet Foods in accordance with the provisions of the asset purchase agreement, however the parties later elected to change the nature of the transaction to a stock purchase agreement. The Stock Purchase Agreement (the “SPA”) was entered into on July 28, 2015 and was set to close on July 31, 2015 subject to final adjustments to accounts receivable, accounts payable, inventory, employee entitlements and other current assets and liabilities. The Company paid a purchase consideration of NZ$2,597,535 (approximately US$1,753,428) in cash. An independent evaluation was conducted in order to obtain a fair market value of the fixed assets and intangible assets acquired. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
On August 11, 2015 the parties reached agreement to close the SPA based on the balance sheet information as of July 31, 2015, subject to further adjustments if necessary once certain balances became known without dispute, and the Company remitted the remainder of the purchase price in cash to an account in New Zealand established for the benefit of the shareholders of Gourmet Foods, Ltd. The operations of Gourmet Foods, Ltd. was consolidated going forward with those of the Company as of August 1, 2015.
The following table summarizes the value of the net assets acquired as of the Acquisition Date:
Cash
$50,695
Accounts Receivable
259,662
Prepaid Expenses
11,246
Inventory
256,271
Property and Equipment
1,207,762
Intangible Assets
170,784
Goodwill
97,647
   Total Assets
$2,054,067
Accounts Payable
$253,951
Employee Entitlements
46,688
   Total Liabilities
$300,639
Consideration Paid for Net Assets
$1,753,428

On June 2, 2016 the Company closed a Stock Purchase Agreement transaction which resulted in the acquisition of all the outstanding and issued stock of Brigadier Security Systems, a Canadian corporation located in Saskatoon, Saskatchewan. The total purchase price was CD$2,010,266 (approximately US$1,540,830) in cash, payable in several stages.tax expense. As of June 30, 2016, consideration of CD$1,000,000 (US$756,859) was paid in cash2019, and CD$733,000 (US$569,935) was deposited in an attorney client trust account in Canadian currency (to be paid to Brigadier, on the 183rd day following the Closing Date if net sales meeting the minimum threshold of $1,500,000 CDN (the "Sales Goal") is achieved; if the Sales Goal is not reached by the l83rd day following the Closing Date, then the payment is to be remitted on the 365th day following the Closing Date). The audit of Brigadier resulted in an upwards adjustment of the purchase price by CD$277,266 (US$214,035) which has been recorded as of June 30, 20162018, the Company accrued and recognized as Purchase Consideration Payablea liability $25,194 and was subsequently paid in October 2016. Under the acquisition method$12,597, respectively, of accounting, the total purchase consideration is allocatedinterest and penalties related to Brigadier Security Systems net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The following table summarizes the value of the net assets acquired as of the Acquisition Date:uncertain tax positions.  

 
Assets
Cash
80,391
Accounts Receivable
431,656
Inventory
238,148
Prepaid Expenses & Other Assets
20,001
Property, plant and equipment
20,455
Intangible Assets
875,087
Goodwill
121,609
Total Assets
1,787,348
Liabilities
Accounts Payable
187,925
Income Tax Payable
55,953
Customer Deposits
2,640
Total Liabilities
246,518
Consideration paid for net assets
1,540,830

NOTE 18. DISCONTINUED OPERATIONS
On February 26, 2015, the Company entered into a Stock Redemption Agreement with two of its shareholders (the “Shareholders”) and its wholly-owned subsidiary Wireless Village, Inc. dba Janus Cam (“Janus Cam”), a Nevada corporation (the “Agreement”) whereby the Company will cancel 68,000,000 shares of the Company’s common stock held by the Shareholders in exchange for all of the outstanding shares of common stock of Wireless Village held by the Company and the forgiveness of certain “Inter-Company Debt” of $344,052 advanced to Janus Cam by the Company (the “Transaction”). On May 7, 2015, the Company completed the closing of the transaction.
Assets of the divested subsidiary consisted of the following as of May 7, 2015:
May 7, 2015
Cash and cash equivalents
$130,052
Accounts receivable, net
66,015
Due from related party
167,443
Inventory, net
190,499
Pre-Paid inventory, advance to supplier
219,149
Payroll advance
1,935
Current assets of subsidiary
$775,093
Security deposits
11,222
Equipment
2,483
Network/office equipment
34,589
Accumulated depreciation
(30,820
Non-Current assets of subsidiary
$17,473
Total Assets of subsidiary
$792,567
Liabilities of the divested subsidiary consisted of the following:
May 7, 2015
Accounts payable
$285,512
Sales tax liability
3,914
CA income tax provision
-
Payroll taxes payable
529
Total Accrued Expenses
289,955
Customer advances
82,475
Notes payable-related parties
-
Notes payable
-
Debt payable to Concierge
344,052
Total liabilities of subsidiary
$716,482

Net income and gain from the sale of subsidiary
The common shares redeemed in the transaction were valued at the fair market price of $0.0089 on the date of closing resulting in $605,200 in consideration. The debt payable to Concierge amounting to $344,052 as of the closing date was forgiven. The disposal of subsidiary resulted in a gain on disposal of $109,600. The income from discontinued operations for the period July 1, 2014 through May 7, 2015 was $108,807 resulting in a total gain on the disposal of the subsidiary of $218,407.

NOTE 19.15.         COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases various facilities and offices throughout the world including the following subsidiary locations:

Gourmet Foods. Ltd. (“GFL”)Foods has operating leases for its office, factory and warehouse facilities located in Tauranga, New Zealand, as well as for certain equipment including vehicles. These leases are generally for three-year terms, with options to renew for additional three-year periods. The leases mature between September 20162019 and August 2021,September 2022, and require monthly rental payments of approximately US$11,225 per month11,561 translated to USU.S. currency as of June 30, 2016.

2019.

Brigadier leases office and storage facilities as well as certain office equipment in Saskatoon and Regina, Saskatchewan. As of June 30, 2019, the Company had entered into an agreement to purchase its leased facility in Saskatoon effective July 1, 2019 (see Note 17-Subsequent Events). The minimum lease obligations for the Regina facility and office equipment require monthly payments of approximately US$2,725 translated to U.S. currency as of June 30, 2019.

Original Sprout currently leases office and warehouse space in San Clemente, CA under a three-year lease agreement expiring or renewing at March 1, 2021. Minimum monthly lease payments are approximately $7,837 with increases annually.

Wainwright leases office space in Walnut Creek, California under an operating lease which expires in December 2024. Minimum monthly lease payments are approximately $12,000 with increases annually.

For the years ended June 30, 2019 and 2018, the combined lease payments of the Company and its subsidiaries totaled $413,429 and $254,150, respectively.

Future minimum consolidated lease payments for Gourmet FoodsConcierge and its subsidiaries are as follows:

Year Ended June 30,

 

Lease Amount

 

2020

 $412,025 

2021

  384,248 

2022

  243,412 

2023

  206,502 

2024

  109,958 
2025  584 

Total minimum lease commitment

 $1,356,729 

F-23
Year Ended June 30,
 
Lease Amount
 
2017
 $134,705 
2018
  134,705 
2019
  59,480 
2020
  18,353 
2021
  9,197 
2022
  2,299 
Total Minimum Lease Commitment
 $358,739 
Table of Contents
GFL

Additionally, Gourmet Foods entered into a General Security Agreement in favor of the Gerald O’Leary Family Trust and registered on the Personal Property Securities Register for a priority sum of NZ$110,000 (approximately US$84,915)73,901) to secure the lease of its primary facility. In addition, a NZ$20,000 (approximately US$15,439)13,436) bond has been posted through ANZ Bank and secured with a cash deposit of equal amount to secure a separate facilities lease. The General Security Agreement and the cash deposit will remain until such time as the respective leases are satisfactorily terminated in accordance with their terms. Interest from the cash deposit securing the lease accumulates to the benefit of GFLGourmet Foods and is listed as a component of interest income/expense on the accompanying Consolidated Statements of Operations.


Brigadier Security Systems (“BSS”) leases office

Other Agreements and storage facilities in Saskatoon, Saskatchewan as well as vehicles used for installations and service and various office equipment. The minimum lease obligations through their expiry dates are indicated as below and require monthly payments of approximately US$11,883.

Future minimum lease payments for Brigadier Security Systems are as follows:
Year Ended June 30,
 
Lease Amount
 
2017
 $86,438 
2018
  33,753 
2019
  30,940 
Total Minimum Lease Commitment
 $151,131 
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. As of May 7, 2012, the judgment had lapsed due to the passage of time and the creditor’s failure to renew. Although a new court action would be required by the plaintiff in order to seek legal remedies, the Company has accrued the amount of $135,000 in the accompanying financial statements as accrued expenses asCommitments 

USCF manages four funds (BNO, CPER, UGA, UNL) which have expense waivers provisions, whereby USCF will reimburse funds when fund expenditure levels exceed certain threshold amounts.As of June 30, 2016.2019 and June 30, 2018 the expense waiver payable was $0.3 million and $0.7 million, respectively. USCF has no obligation to continue such payments for these four funds into subsequent periods.

USCF Advisers previously managed one mutual fund, the USCF Commodity Strategy Fund ("USCFX" and USCIX") until it was liquidated on March 21, 2019. Prior to liquidation, USCF Advisers had an expense waiver provision for the USCF Commodity Strategy Fund, whereby, USCF Advisers reimbursed the USCF Commodity Strategy Fund when fund expenditure levels exceeded a certain threshold amount.  The expense fee waiver terminated upon the liquidation of the fund on March 21, 2019. 

Litigation

From time to time, the Company is involved in legal proceedings arising mainly from the ordinary course of its business. Currently, there are no legal proceedings pending.

Retirement Plan

Wainwright's wholly owned subsidiary USCF, has a 401(k) Profit Sharing Plan covering its employees who are over 21 years of age and who have completed a minimum of 1,000 hours of service and have worked for USCF for one or more years. Participants may make contributions pursuant to a salary reduction agreement. In addition, USCF makes an safe harbor matching contribution. Quarterly profit sharing contributions paid totaled approximately $158 thousand and $95 thousand for each of the years ended June 30, 2019 and 2018, respectively.

 

NOTE 20.16.         SEGMENT REPORTING

With the acquisition of Wainwright Holdings, Gourmet Foods, Ltd., Brigadier, and Brigadier Security Systems,the launch of the Original Sprout business unit of Kahnalytics, the Company has identified threefour segments for its products and services;U.S.A., investment fund management, U.S.A. beauty products, New Zealand food industry and Canada.Canada security alarm systems. Our reportable segments are business units located in different global regions. The Company’s operations in the U.S.A. include the gatheringmanufacture and wholesale distribution of live-streaming video recording data displayed online to subscribers through its wholly ownedhair and skin care products by Original Sprout and the income derived from management of various investment funds by our subsidiary Kahnalytics, Inc., inWainwright. In New Zealand operations include the production, packaging and distribution on a commercial scale of gourmet meat pies and related bakery confections through itsour wholly owned subsidiary Gourmet Foods, Ltd. and in Canada we provide security alarm system installation and monitoring sold through its wholly owned subsidiary Brigadier Security Systemsmaintenance services to residential and commercial customers.customers sold through our wholly owned subsidiary Brigadier. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. Amounts are adjusted for currency translation as of the balance sheet date and presented in US dollars.


The following table presents a summary of identifiable assets as of June 30, 20162019 and June 30, 2015:2018:

  

As of June 30, 2019

  

As of June 30, 2018

 
         

Identifiable assets:

        

Corporate headquarters

 $2,730,805  $2,123,048 

U.S.A. : fund management

  10,878,549   13,563,773 

U.S.A. : beauty products

  3,780,278   3,739,979 

New Zealand: food industry

  1,838,800   1,959,486 

Canada: security systems

  2,025,176   1,714,863 

Consolidated

 $21,253,608  $23,101,149 

F-24
 
 
As of June 30, 2016
 
 
As of June 30, 2015
 
Identifiable assets:
 
 
 
 
  
 
Corporate headquarters
 $1,521,210 
 $2,132,164 
U.S.A.
  87,790 
  202,095 
New Zealand
  2,199,128 
  -  
Canada
  956,855 
  -  
Consolidated
 $4,764,983 
 $2,334,259 
 
    
    
Table of Contents

The following table presents a summary of operating information for the yearyears ended June 30, 2016: (note: New Zealand is for a period of 11 months since acquisition2019 and Canada is for a period of 1 month since acquisition)June 30, 2018:

  

Year Ended

June 30, 2019

  

Year Ended

June 30, 2018

 

Revenues:

        

U.S.A. : beauty products

 $3,621,246  $1,694,534 

U.S.A. : investment fund management

  15,021,439   18,744,313 

New Zealand : food industry

  4,747,358   4,968,158 

Canada : security systems

  3,558,580   3,303,584 

Consolidated

 $26,948,623  $28,710,589 
         
         

Net income (loss) after taxes:

        

Corporate headquarters

 $(1,223,930

)

 $(744,992

)

U.S.A. : beauty products

  406,963   42,702

 

U.S.A. : investment fund management

  687,755   1,950,711 

New Zealand : food industry

  (13,326

)

  99,398 

Canada : security systems

  404,387   386,867 

Consolidated

 $261,849  $1,734,686 
 
 
Year Ended June 30,
2016
 
 
Year Ended June 30,
2015
 
Revenues from unaffiliated customers:
 
 
 
 
 
 
U.S.A. : data streaming and hardware
 $120,430 
 $223,565 
New Zealand : Food Industry
  3,756,402 
    
Canada
  348,553 
    
Consolidated
 $4,225,385 
 $223,565 
 
    
    
Net income (loss) after taxes:
    
    
Corporate headquarters
 $(265,123)
 $24,523 
U.S.A. : Mobile video recording devices
  (60,612)
  (10,332)
New Zealand : Food Industry
  214,467 
    
Canada : Security alarm system
  29,316 
    
Consolidated
 $(81,952)
 $14,191 

The following table presents a summary of net capital expenditures for the year ended June 30:

  

2019

  

2018

 

Capital expenditures:

        

U.S.A. : corporate headquarters

 $-  $495 

U.S.A. : beauty products

  5,501   2,707 

U.S.A.: investment fund management

  -   - 

New Zealand: food industry

  48,856   165,414 

Canada: security systems

  (4,192

)

  149,449 

Consolidated

 $50,165  $318,065 

The following table represents property, plant and equipment in use at each of the Company's locations as of June 30:

  

2019

  

2018

 

Asset Location:

        

U.S.A. : corporate headquarters

 $14,305  $14,305 

U.S.A. : beauty products

  10,745   5,244 

U.S.A.: investment fund management

  -   - 

New Zealand: food industry

  1,659,186   1,627,545 

Canada: security systems

  348,435   363,833 

Total All Locations

  2,032,671   2,010,927 

Less accumulated depreciation

  (1,275,657

)

  (930,456

)

Net property, plant and equipment

 $757,014  $1,080,471 

 
 
 
 
2016  
 
 
 
2015  
 
Capital expenditures:
 
  
 
 
  
 
Corporate headquarters
 $902 
 $- 
U.S.A
  - 
  - 
New Zealand
  102,760 
  - 
Canada
  - 
  - 
 Consolidated
 $103,662 
 $- 

NOTE 21.17.     SUBSEQUENT EVENTS

The Company evaluated subsequent events for recognition and disclosure through the date the financial statements were issued or filed. Nothing has occurred outside normal operations since that required recognition or disclosure in these financial statements other than the items noted below.

On September 19, 2016,July 2, 2019, Brigadier finalized the purchase of its office facility and land located in Saskatoon for CAN$750,000 (approximately US$572,858), funded by a bank loan of CAN$525,000 (approximately US$401,000) and CAN$225,000 (approximately US$171,858) in cash. The bank loan matures in 5 years and bears interest at the annual rate of 4.14%.

On June 24, 2019, Gourmet Foods, entered into an agreement to purchase the assets of Maketu Pies subject to, among other things, completion of due diligence. However, after completion of due diligence, the agreement was terminated by Gourmet Foods pursuant to its terms on July 31, 2019. (reference Form 8-K filed on June 27, 2019 and August 2, 2019)

USCF Advisers implemented fee waivers for all three of its exchange-traded funds ("ETFs") effective August 15, 2019: the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund ("SDCI"), the USCF SummerHaven SHPEI Index Fund ("BUY") and the he USCF SummerHaven SHPEN Index Fund ("BUYN").  The fee waivers for the three ETFs will remain in effect through October 31, 2020 and may be renewed in the future with approval from the Funds Board of Trustees of USCF ETF Trust. 

On August 15, 2019, the Company entered into a conditional Stock Purchase Agreement (the “Agreement”), dated September 19, 2016,letter of engagement with Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”Maxim Group LLC ("Maxim") and certain shareholders of Wainwright (the “Sellers”), pursuantwho is to whichprovide investment banking services. In connection with the Sellers conditionally agreedfee arrangement for services to sell, andbe provided, the Company conditionally agreedissued to purchase, shares representing approximately 97% of the total issued and outstanding common stock of Wainwright (the “Wainwright Shares”). The Company intends to make an offer to acquire the remaining WainwrightMaxim 175,000 shares of its unregistered common stock prior to the Closing.stock. 

As a result
F-26
Wainwright owns all of the issued and outstanding limited liability company membership interests of United States Commodity Funds LLC, a Delaware limited liability company (“USCF”) and USCF Advisers, LLC (“USCF Advisers”). USCF is a commodity pool operator registered with the Commodity Futures Trading Commission. USCF Advisers is an SEC registered investment adviser. USCF and USCF Advisers act as the advisers to the Funds set forth in the Agreement (each, a “Fund”, and collectively, the “Funds”).
The Closing shall occur on the later of (i) the date that is two Business Days following the date on which the last of the conditions to Closing set forth in Articles VIII and IX of the Agreement have been satisfied or, to the extent permitted by applicable Legal Requirements, waived by the relevant party, (ii) the 21st calendar following the date on which the Definitive Schedule 14C was mailed to the Concierge Shareholders, and (iii) such other time and date as the parties may agree.
The conditions to the Closing of the Contemplated Transaction are more particularly described in Articles VIII and IX of Exhibit 10.1 which is attached to the Form 8K submitted on September 19, 2016 and incorporated herein by this reference. The conditions to the Closing include, but are not limited to, the Company’s receipt of a Fairness Opinion to the effect that, as of the date of the Agreement, and based upon and subject to the limitations and assumptions set forth in such opinion, the Purchase Price to be paid by the Company pursuant to the Agreement is fair, from a financial point of view, to the holders of shares of the Company.
There is no guarantee that the Closing of the Contemplated Transaction will occur either as provided for in the Agreement or at all. There is no guarantee that either the Company or Wainwright will fulfill all conditions to Closing and that if not fulfilled, that either party will waive the outstanding condition to Closing.

 
On October 11, 2016 the Company made the adjusted payment of CD$277,266, recorded as Purchase Consideration Payable of US$241,035 in the accompanying financial Statements for the year ended June 30, 2016.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Our principal

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no disagreements or disputes with our independent accountant or any significant subsidiary has not resigned, declined to stand for re-election, or been dismissed by us during the periods for which financial statements are included herein.

accountants.

ITEM 9A. CONTROLS AND PROCEDURES.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of disclosure controlsDisclosure Controls and procedures. 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 required by Exchange Act Rule 13a-15, 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 arewere effective as of June 30, 2019 (the end of the period covered by this annual report) and provideprovided 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 officersmanagement, including the Company's chief Executive Officer and Chief Financial Officer, concluded that its disclosure controls and procedures are also effective 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 officer, to allow timely decisions regarding required disclosure. There were no significant 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.

Control Over Financial Reporting

Management’s report on internal control over financial reporting. Our management recognizes its responsibility for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Currently, the primary responsibility of the registrant is providing oversight control over its subsidiary operations which, in turn, are managed by their respective boards of directors who are appointed by the registrant for each of the subsidiaries. All debit and credit transactions with the company’s bank accounts, including those of the subsidiary companies, are reviewed by the officers as well as all communications with the company’s creditors. The directors of the subsidiary companies, which include representatives of the Company, meet frequently – as often as weekly – to discuss and review the financial status of the company and all developments. All filings of reports with the Commission are reviewed before filing by all directors.

Our internal control over financial reporting is a process designed by, or under the supervision of, our chief executive officer and chief financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (GAAP)("GAAP").  Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.


Management assessed the effectiveness of the Company’s internal control over financial reporting at the end of its most recent fiscal year, June 30, 2016.2019. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the 2013 Internal Control-Integrated Framework. Based on its evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of June 30, 2016.

2019.

Pursuant to Regulation S-K Item 308(b), this Annual Report on Form 10-K does not include an attestation report of our Company’s registered public accounting firm regarding internal control over financial reporting.

Changes in Internal Control and Financial Reporting

There have been no changes in our internal control over financial reporting induring the fiscal year ended June 30, 2016,2019, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION

Not applicable.

ITEM 10. 
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Set forth below are the names, and terms of office of each of our directors, executive officers and significant employees at June 30, 2016,2019, and a description of the business experience of each.

 
Person
 
 
Offices
 
Office Held
Since
 
Term of
Office
Scott Schoenberger
 
Director
 
2015
 
2017
Nicholas Gerber
 
CEO/Secretary and Director
 
2015
 
2017
David W. Neibert
 
C.F.O. and Director
 
2002
 
2017
Matt Gonzalez
 
Director
 
2013
 
2017


 

Person

 

Age

 

Offices

Office Held

Since

Term of

Office

Scott Schoenberger

53

Director

2015

2019

Nicholas D. Gerber

57

Chief Executive Officer / Chairman and Director

2015

2019

David W. Neibert

64

Chief Operations Officer and Secretary

2002

2019

Matt Gonzalez

55

Director

2013

2019

Stuart P. Crumbaugh

56

Chief Financial Officer

2017

2019

Kathryn D. Rooney

47

Director / Chief Communications Officer

2017

2019

Derek Mullins

46

Director

2017

2019

Kelly J. Anderson

51

Director

2019

2019

Joya Delgado Harris

46

Director

2017

2019

Erin Grogan

45

Director

2017

2019

Nicholas D. Gerber:Mr. Gerber has beenserved as the CEO, SecretaryPresident, Chief Executive Officer and directorChairman of the CompanyBoard of Concierge Technologies, Inc. (“Concierge”) since January 2015. He is currently a directorMr. Gerber has also been the Chairman of the Board of Directors of United States Commodity Funds, LLC (“USCF”), since June 2005 and portfolio manager forserved as its President and Chief Executive Officer from June 2005 through May 15, 2015 and Vice President since May 15, 2015. USCF and the Related Public Funds since April 2006. He has been listed with the CFTCserves as a Principal of the General Partner since November 29,and Manager to several related public funds. Mr. Gerber co-founded USCF in 2005 and prior to that, he co-founded Ameristock Corporation in March 1995, a California-based investment adviser registered withunder the CFTC as an Associated PersonInvestment Advisers Act of the General Partner on December 1, 2005.1940 from March 1995 until January 2013. Mr. Gerber hadhas also served as Vice President/Chief Investment Officer of Lyon’s Gate Reinsurance Company, Ltd. from June 2003 to 2009. From August 1995 to January 2013, Mr. Gerber served as Portfolio Manager of Ameristock Mutual Fund, Inc. On January 11, 2013, the Ameristock Mutual Fund, Inc. merged with and into the Drexel Hamilton Centre American Equity Fund, a series of Drexel Hamilton Mutual Funds. Drexel Hamilton Mutual Funds is not affiliated with Ameristock Corporation, the Ameristock Mutual Fund, Inc., or USCF. Mr. Gerber has also served on the USCF Advisers LLC (“USCF Advisers”) Board of Managers from June 2013 to present, as the President from June 2013 through June 18, 2015, and as Vice President from June 18, 2015 to present. USCF Advisers, an extensive background in securities portfolio management and in developing investment funds that make useaffiliate of indexing and futures contracts. HeUSCF, is also the founder of Ameristock Corporation, a California-basedan investment adviser registered under the Investment Advisers Act of 1940, that had been sponsoring and, providing portfolio management services to mutual funds from March 1995 to January 2013.since February 2017, is registered as a commodity pool operator, NFA member and swap firm. He also has also been a Trustee forserved as Chairman of the AmeristockBoards of Trustees of USCF ETF Trust since June 2006,2014 and USCF Mutual Funds Trust since October 2016, respectively, (USCF ETF Trust and together with USCF Mutual Funds Trust are referred to as the “Trusts”) and each of the Trusts are investment companies registered under the Investment Company Act of 1940, as amended. In addition, Mr. Gerber served as a portfolio manager for the Ameristock/Ryan 1Year, 2 Year, 5 Year, 10 YearPresident and 20 Year TreasuryChief Executive Officer of USCF ETF Trust from June 2007 to June 2008 when such funds were liquidated.2014 until December 2015. In these roles, Mr. Gerber has gained extensive experience in evaluating and retaining third-party service providers, including custodians, accountants, transfer agents, and distributors. Mr. Gerber passedhas been a principal of USCF listed with the Series 3 examination forCFTC and NFA since November 2005, an NFA associate member and associated personsperson of USCF since December 2005 and holdsa Branch Manager of USCF since May 2009. Additionally, effective as of January 2017, he is listed as a principal of USCF Advisers with the CFTC and NFA and, effective as of February 2017, he is also an MBANFA associated person, swap associated person, and a Branch Manager of USCF Advisers. Mr. Gerber earned an M.B.A. degree in finance from the University of San Francisco, and a BAB.A. from Skidmore College. College and holds an NFA Series 3 registration.

Scott Schoenberger: Mr. Gerber is 54 years old.

Scott Schoenberger has served on the Board of Concierge since January 2015. Mr. Schoenberger is the owner & CEOand Chief Executive Officer of KAS Engineering, a second generationsecond-generation plastic injection molding firm based in multiple southern CA locations. He also is the owner and CEOChief Executive Officer of Nica Products, another manufacturing company based in Orange County, CA. ScottMr. Schoenberger has over 30 years of business experience in manufacturing and technology. He has been involved with several startups as a consultant and/or angel level investor in such industries as medical, technology, consumer products, electronics, automotive, and securities industries. A California native, he has a BSB.S. in Environmental Studies from the University of California, Santa Barbara and is 50 years old.
Barbara.

David W. Neibert:Mr. Neibert has been a directorDirector of Concierge Technologies since June 17, 2002 and CEO2002. Mr. Neibert previously served as Chief Executive Officer of Concierge from April 2007 untilthrough January 2015, whereafter he resignedthen Chief Financial Officer from February 2015 through October 2017, and from November 2017 to present, Mr. Neibert has served as the officeChief Operating Officer. Concurrently with his service and assumed the titletenure at Concierge, Mr. Neibert has continuously served as President of CFO. He is also the president of the Company’s wholly owned subsidiary Kahnalytics, Inc., director since May 2015, nka Original Sprout; Director and CFOChief Financial Officer of Gourmet Foods Ltd. since August 2015 and a directorDirector for Brigadier Security Systems.Systems since June 2016. As Concierge’s Chief Operations Officer, Mr. Neibert is responsible for long range planning, growth and ensuring profitable operations of Concierge’s subsidiaries including, but not limited to, the selection and retention of their respective management teams, accounting practices and processes in accordance with U.S. GAAP. Mr. Neibert is also responsible for the presidentprimary due diligence efforts, contract negotiations, and on-boarding of The Wallen Group, a general partnership providing management consulting and bookkeeping services to small and medium sized businesses in the Southern California area.new subsidiary acquisitions for Concierge. Prior to founding The Wallen Group,joining Concierge, Mr. Neibert served as the presidentPresident of Roamer One and as a directorDirector and executive vice presidentExecutive Vice President of business developmentBusiness Development of their publicly traded parent company Intek Global Corporation. Intek Global Corporation, manufactured, sold and distributeda global distributor of 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 Corporation was subsequently acquired by its majority shareholder, Securicor plc of Sutton Surrey, England.products. Mr. Neibert reported to offices located inattended the University of California Los Angeles CA, Kansas City, MO, New York City, NY,from 1973-1978 with a focus on business management and Sutton Surrey, England during period from 1992 – 1998 before locating The Wallen Group in Southern California. Mr. Neibert is 61 years old.developmental psychology.

24

Matt Gonzalez: MattMr. Gonzalez has served as a Director of Concierge since 2013.  He is an accomplished attorney with experience handling both civil and criminal matters in both the state and federal courts. He has a BA from Columbia University (1987) and JD from Stanford Law School (1990). Since early 2011 he has served as the Chief Attorney of the San Francisco Public Defender's Office where he oversees an office of over 90100 trial lawyers.

He previously served as an elected member of the San Francisco Board of Supervisors from 2001-2005, and served as the president of the body from 2003-2005. Mr. Gonzalez is a partner inat Gonzalez & Kim, a California partnership providingwith multiple business holdings in the transportation services to a number of entities.sector. He is a co-owner of Flywheel Taxi (formerly DeSoto Taxi) in San Francisco. He joined Concierge as an investor in 2010 and became a director duringbefore becoming its Director in 2013. Mr. Gonzalez earned his B.A. from Columbia University and his Juris Doctor from Stanford Law School.

Erin Grogan: Ms. Grogan has served as Director of Concierge since 2017.  Ms. Grogan serves as the Chief Financial Officer of the Association for California School Administrators. Previously, Ms. Grogan served as head of Finance and Operations at YouCaring, a fundraising platform for personal and charitable causes, until it was acquired by GoFundMe. Prior to joining YouCaring, Ms. Grogan was the Director of Finance and Planning as well as an adjunct faculty member at the University of San Francisco, School of Management, from 2012 until 2016. Ms. Grogan has over 20 years of experience in management and finance, including positions at ON24, Inc., Mooreland Partners, Cadbury Schweppes, Asbury Automotive Group, Banc of America Securities, PricewaterhouseCoopers, and American International Group. Ms. Grogan earned her B.A. from Columbia University and an M.B.A. in finance from the New York University Leonard N. Stern School of Business. 

Derek Mullins: Mr. Mullins has served as Director of Concierge since 2017 and currently serves as Co-Founder and Managing Partner of PINE Advisor Solutions. Previously he was the Director of Operations at ArrowMark Colorado Holdings LLC and the Chief Financial Officer and Treasurer of Meridian Fund, Inc. and Destra Investment Trust. Mr. Mullins also served as Director of Operations at Black Creek Capital and Dividend Capital from 2004 to 2009 and as Manager of Fund Administration at ALPS Fund Services from 1996 to 2004. Mr. Mullins brings over 20 years of operations, accounting, finance and compliance experience to the Board. Mr. Mullins earned a B.S. in Finance from the University of Colorado, Boulder and a Master’s degree in Finance from the University of Colorado, Denver.

Kathryn D. Rooney: Ms. Rooney has served as Director of Concierge and as the Company’s Chief Communications Officer since January 2017.  Ms. Rooney also serves as the Chief Marketing Officer of USCF and brings over 20 years of experience in marketing and investor relations. Ms. Rooney is 51responsible for marketing, brand management for Concierge and USCF and overall product distribution for USCF. Prior to joining USCF and Concierge, Ms. Rooney was Director of Business Development for the Ameristock Mutual Fund. She also served as National Sales Director for ALPS Mutual Fund Services and as a Trust Officer for Fifth Third Bank. Ms. Rooney received her B.A. in Economics and Psychology with a minor in Art History from Wellesley College. Ms. Rooney is a registered representative of ALPS Distributors, Inc.

Joya Delgado Harris: Ms. Harris has served as Director of Concierge since 2017.  She has been the Director of Research Integration for the American Cancer Society since 2012. In this role she provides oversight and management of the integration of Extramural Grants Department research and training program outcomes into enterprise-wide organization and mission objectives. Before joining the American Cancer Society, Ms. Harris worked for Y-ME National Breast Cancer Organization. From 2008 to 2011, Ms. Harris has over a decade of experience in non-profit management, previously serving as the Executive Director for the Association of Village PRIDE and as the Director of Product Development for the Metropolitan Atlanta Chapter of the American Red Cross. Her experience and demonstrated accomplishments in key leadership functions including program development, implementation, and evaluation; curriculum design; grant-writing and resource development; meeting planning; board cultivation and management; and developing business partnerships. Ms. Harris has also served as a Consumer Peer Reviewer for the Congressionally Directed Medical Research Programs (CDMRP), administered by the Department of Defense, sitting alongside scientists to review and evaluate innovative breast cancer research grant proposals. Ms. Harris earned a B.A. from Wellesley College, and received a Masters of Public Health degree with concentration in public health policy and management from the Rollins School of Public Health of Emory University. She serves as the immediate Past President of the Atlanta Wellesley Club.

Kelly J. Anderson: Ms. Anderson has been a Director since May 2019. Ms. Anderson has over 35 years old.of experience in finance, accounting and operations roles in various industries.  Since 2015, Ms. Anderson has been a managing partner in C Suite Financial Partners, a financial consulting services company dedicated to serving private, public, private equity, entrepreneurial, family office and government-owned firms in all industries. Between July 2014 and March 2015, Ms. Anderson was CFO of Mavenlink, a SaaS company. Between October 2012 and January 2014, Ms. Anderson was Chief Accounting Officer of Fisker Automotive. Between April 2010 and February 2012, Ms. Anderson was the President and Chief Financial Officer of T3 Motion, Inc., (“T3”), an electric vehicle technology company. Between March 2008 and April 2010, she served as T3’s Executive Vice President and Chief Financial Officer, and as a director from January 2009 until January 2010. From 2006 until 2008, Ms. Anderson was Vice President at Experian, a leading credit reporting agency. From 2004 until 2006, Ms. Anderson was Chief Accounting Officer for TripleNet Properties and its affiliates. From 1996 to 2004, Ms. Anderson held senior financial positions with The First American Corp., a Fortune 500 title insurance company. Ms. Anderson has served on the board of directors for Tomi Environmental Services (OCTQB: TOMZ) since 2016. Ms. Anderson is a CPA (Inactive). Ms. Anderson holds a B.A. degree in Business Administration with an accounting concentration from California State University Fullerton

Stuart P. Crumbaugh: Mr. Crumbaugh has served as the Chief Financial Officer of Concierge Technologies, Inc., the parent of Wainwright Holdings, Inc. (“Wainwright”) and its subsidiaries since December 2017, and also the Chief Financial Officer, Secretary and Treasurer of USCF, a subsidiary of Wainwright, since May 2015. In addition, Mr. Crumbaugh has served as a Director of Wainwright, the parent and sole member of USCF, since December 2016. Mr. Crumbaugh has been a principal of USCF listed with the CFTC and NFA since July 1, 2015 and, as of January 2017, he is a principal of USCF Advisers LLC. USCF Advisers LLC, an affiliate of USCF, is an investment adviser registered under the Investment Advisers Act of 1940, and, as of February 2017, is registered as a commodity pool operator, NFA member and swap firm. Since June 2015, Mr. Crumbaugh has been the Treasurer and Secretary of USCF Advisers LLC. He also serves as a Management Trustee of USCF ETF Trust from May 2015 to present and as Management Trustee of the USCF Mutual Funds Trust from October 2016 to present. Mr. Crumbaugh joined USCF as the Assistant Chief Financial Officer on April 6, 2015. Prior to joining USCF, Mr. Crumbaugh was the Vice President Finance and Chief Financial Officer of Sikka Software Corporation, a software service healthcare company providing optimization software and data solutions from April 2014 to April 6, 2015. Mr. Crumbaugh served as a consultant providing technical accounting, IPO readiness and M&A consulting services to various early stage companies with the Connor Group, a technical accounting consulting firm, for the periods of January 2014 through March 2014; October 2012 through November 2012; and January 2011 through February 2011. From December 2012 through December 2013, Mr. Crumbaugh was Vice President, Corporate Controller and Treasurer of Auction.com, LLC, a residential and commercial real estate online auction company. From March 2011 through September 2012, Mr. Crumbaugh was Chief Financial Officer of IP Infusion Inc., a technology company providing network routing and switching software enabling software-defined networking solutions for major mobile carriers and network infrastructure providers. Mr. Crumbaugh earned a B.A. in Accounting and Business Administration from Michigan State University in 1987 and is a Certified Public Accountant – Michigan (inactive).

Conflicts of Interest

. Our officers and directors who are not employees of our subsidiary company will not devote more than a portion of their time to our affairs. There will be occasions when the time requirements of Concierge's business conflict with the demands of their other business and investment activities. Such conflicts may require that we 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.

Our officers and directors may be directors or principal shareholders of other companies and, therefore, could face conflicts of interest with respect to potential acquisitions. In addition, our officers and directors may in the future participate in business ventures, which could be deemed to compete directly with Concierge. Additional conflicts of interest and non-armsnon-arm's length transactions may also arise in the future in the event our officers or directors are involved in the management of any firm with which we transact business. In addition, if Concierge and other companies with which our officers and directors are affiliated both desire to take advantage of a potential business opportunity, then our 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.

Our 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 our 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 our officers and directors to acquire their shares creates a potential conflict of interest for them in satisfying their fiduciary duties to us and our 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 Concierge and Concierge’s other shareholders, rather than their own personal pecuniary benefit.

No executive officer, director, person nominated to become a director, promoter or control person of Concierge 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 Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law.

●

Bankruptcy

●

Criminal proceedings (excluding traffic violations and other minor offenses), or

●

Proceedings permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her 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 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 other than the following: Nicholas Gerber, our CEO and member of our Board of Directors, is a director of United Sates Commodity Funds LLC which is the commodity pool operator and general partner or sponsor of 11 commodity based exchange traded products that are registered under Section 12 of the Exchange Act, and is also a director of USCF ETF Trust, a registered investment company under the Investment Company Act of 1940, which currently has one exchange traded fund and is advised by USCF Advisers LLC, a registered investment adviser.

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:

26
●
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 propertyTable 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;Contents
●
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:
●
Other than Nicholas Gerber, through his involvement as a director of United Sates Commodity Funds LLC which is the commodity pool operator and general partner or sponsor of 11 commodity based exchange traded products that are registered under Section 12 of the Exchange Act, and as a director of USCF ETF Trust, a registered investment company under the Investment Company Act of 1940, which currently has one exchange traded fund and is advised by USCF Advisers LLC, a registered investment adviser, 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.

●

Other than Nicholas Gerber, through his involvement as a director of United Sates Commodity Funds LLC which is the commodity pool operator and general partner or sponsor of 13 commodity based exchange traded products that are registered under Section 12 of the Exchange Act, and as a director of USCF ETF Trust, a registered investment company under the Investment Company Act of 1940, which currently has one exchange traded fund and is advised by USCF Advisers LLC, a registered investment adviser, 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.

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 iswas filed as an exhibit to our Form 10-KSB10-K Annual Report for the year ended June 30, 2004 (Exhibit 14 incorporated herein by reference)2018.  See, "ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, Exhibit Number 14.1."  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 companyCompany at its address at 29115 Valley Center Rd., K-206, Valley Center, CA 92082.

1202 Puerta Del Sol, San Clemente, California 92673.

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. 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) of the Securities Exchange Act.

Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Act during its most recent fiscal year and Forms 5 furnished to us with respect to our most recent fiscal year and any written representations received by us from persons required to file such forms, the following persons – either officers, directors or beneficial owners of more than ten percent of any class of equity of Concierge registered pursuant to Section 12 of the Act – failed to file on a timely basis reports required by Section 16(a) of the Act during the most recent fiscal year or prior fiscal years:

 

 

Name

 

 

 

 

No. of Late Reports

 

 

 

No. of Transactions

Not Timely Reported

 

 

No. of Failures

to File a

Required Report

 

-

 

 

 

0

 

 

 

0

 

 

 

0

 

27
 
 
Name
 
 
 
No. of Late Reports
 
 
No. of Transactions
Not Timely Reported
 
No. of Failures
to File a
Required Report
-
 
0
 
0
 
0

ITEM 11.         EXECUTIVE COMPENSATION.

COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the compensation paid to our executive officers for the fiscal years ended June 30, 20162019 and 2015.2018. Unless otherwise specified, the term of each executive officer is that as set forth under that section entitled, “Directors, Executive Officers, Promoters and Control Persons -- Term of Office”.

Name and Principal Position
Year Ended
June 30,
Salary
($)
Bonus
($)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($)
Nonqualified Deferred
Compensation Earnings
($)
All Other
Compensation on ($)
Total ($)
David Neibert (1)
Chief Financial Officer
201575,000NilNilNilNilNilNil75,000
201681,250NilNilNilNilNilNil81,250
Nicholas Gerber
Chief Executive Officer and Secretary
2015NilNilNilNilNilNilNilNil
2016NilNilNilNilNilNilNilNil

Name and

Principal Position

Year

Ended

June 30,

 

 

Salary

($)

 

 

Bonus

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)

 

 

Non-Equity

Incentive Plan

Compensation

 

 

Nonqualified

Deferred

Compensation

Earnings

 

 

All Other

Compensation

($)

 

 

Total

($)

 

David W. Neibert

2018

 

 

 

169,500

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

53,834

 

 

 

223,334

 

Chief Operations Officer(1)

2019

 

 

 

200,000

   

25,000

   Nil   Nil   Nil   Nil   Nil   

225,000

 

Nicholas D. Gerber(2)

2018

 

 

 

400,000

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

400,000

 

Chief Executive Officer

2019

   

400,000

   Nil   Nil   Nil   Nil   Nil   Nil   400,000

 

John P. Love (3)

2018

 

 

 

406,250

 

 

 

67,000

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

473,250

 

Chief Executive Officer - USCF

2019

   

450,000

   

37,500

   Nil   Nil   Nil   Nil   Nil   

487,500

 

Stuart P. Crumbaugh (4)

2018

 

 

 

272,500

 

 

 

46,000

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

Nil

 

 

 

318,500

 

Chief Financial Officer

2019

   

286,000

   

28,600

   

Nil

   

Nil

   

Nil

   

Nil

   

Nil

   

314,600

 

(1)The Wallen Group, a California general partnership controlled by DavidMr. Neibert was paid $81,250 during the current fiscalalso reimbursed approximately $34,426 for health insurance premiums making his total $259,426 for 2019.

(2) USCF pays Mr. Gerber a salary of $400,000.

(3) USCF pays Mr. Love a salary of $450,000 per year for consulting and administrative services.


which increased from $400,000 per year effective May 2018.

(4) USCF pays Mr. Crumbaugh a salary of $286,000 per year which increased from $272,500 per year effective April 2018.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

There were no unexercised stock options, stock that has not vested, or equity incentive plan awards for any named officer outstanding at the end of the last fiscal year:

year.

Compensation of Directors

Our directors received the

The following compensation in FY 2015was paid to our directors 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. Neibert0000000
Nicholas Gerber0000000
Scott Schoenberger0000000
Matt Gonzalez0000000
Ourdirectors for the fiscal year ended June 30, 2019. Only our independent directors receive no compensationcompensation. Independent directors receive an annual retainer, paid quarterly, plus reimbursement for their services as directors.
approved Board meeting travel and related out-of-pocket expenses.

DIRECTOR COMPENSATION

Name

 

Fees

Earned

or Paid

in Cash

($)

 

 

Stock

Awards

($)

 

 

Option

Awards

($)

 

 

Non-Equity

Incentive

Plan

Compensation

($)

 

Nonqualified

Deferred

Compensation

Earnings

($)

 

All Other

Compensation

($)

 

 

Total

($)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David W. Neibert

 

0

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

0

Nicholas D. Gerber

 

0

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

0

Scott Schoenberger

 

0

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

0

Matt Gonzalez

 

10,000

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

10,000

Erin Grogan

 

10,000

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

10,000

Kathryn D. Rooney

 

0

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

0

Derek Mullins

 

10,000

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

10,000

Kelly J. Anderson

 

4,167

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

4,167

Joya Delgado Harris

 

10,000

 

 

0

 

 

0

 

 

0

 

0

 

0

 

 

10,000

Stock Options.

During the last two fiscal years, tourour officers and directors have received no Stock Options and no stock options are outstanding.

28

Equity Compensation Plans.

We have no equity compensation plans.

ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

MATTERS

The following table below sets forth the ownership,information as of October 3, 2016,September 27, 2019, with respect to the beneficial ownership (as defined in Rule 13d-3 of the Exchange Act) of the Company’s common stock by (1) each individualdirector of the Company, (2) the named Executive Officers of the Company, (3) each person or group of persons known to usby the Company to be the beneficial owner of moregreater than five percent5% of Concierge’sthe Company’s outstanding common stock,(5), by and (4) all directors and named executive officers individually andof the Company as a group.


group:

Name and Address of

Beneficial Owner

 

Amount

Owned

 

 

Percent of

Class (5)

 

Gonzalez & Kim

1202 Puerta Del Sol

San Clemente CA 92673

 

 

233,400

 (1) 

 

 

.61

%

Nicholas D. Gerber

1202 Puerta Del Sol

San Clemente CA 92673

 

 

18,130,015

 (2) 

 

 

47.12

%

David W. Neibert

1202 Puerta Del Sol

San Clemente CA 92673

 

 

36,248

 (3) 

 

 

0.09

%

Scott Schoenberger

1202 Puerta Del Sol

San Clemente CA 92673

 

 

4,697,993

 (4) 

 

 

12.21

%

Kathryn D. Rooney

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Derek Mullins

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Erin Grogan

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Kelly J. Anderson

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Joya Harris

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Stuart P. Crumbaugh

1202 Puerta Del Sol

San Clemente CA 92673

 

 

-

 

 

 

-

%

Officers and Directors

as a Group

 

 

23,097,656

 (5) 

 

 

60.03

%

Eliot and Sheila Gerber

 

 

3,543,603

 

 

 

9.21

%

Gerber Family Trust

 

 

5,623,543

 

 

 

14.62

%

Name

(1)

Mr. Gonzalez is a member of the Board of the Company. Mr. Gonzalez and Address of

Beneficial Owner
Amount
Owned
Percent of
 Class(5)
Mr. Hansu Kim are 50% partners and share voting and dispositive power in Gonzalez & Kim,
150 Clement St.
San Francisco, CA 94118
7,001,720(1)
4.89%
a California general partnership, which holds 11,670 shares of Series B Preferred Stock (which after giving effect to their conversion would total 233,400 shares of Common Stock) constituting 0.61% of the outstanding shares of Common Stock which percentage is based on 38,473,159 outstanding shares of Common Stock (giving effect to the conversion of all Series B Preferred Stock).

Nicholas Gerber
29115 Valley Center Rd., #K-206
Valley Center, CA 92082

69,935,327(2)

48.90%

David W. Neibert
29115 Valley Center Rd., #K-206
Valley Center, CA 92082

1,048,253(3)

(2)

0.73%

Mr. Gerber is the President and Chief Executive Officer of the Company and Chairman of the Board. Mr. Gerber’s shares are held by the Nicholas and Melinda Gerber Living Trust (the “Gerber Trust”) and Mr. and Mrs. Gerber serve as trustees of the Gerber Trust, which owns a total 18,130,015 shares, representing 47.12% of the outstanding shares of Common Stock (giving effect to the conversion of all Series B Preferred Stock). As such, the Gerber Trust and Mr. Gerber share power to vote or to direct the vote of the shares and share power to dispose or to direct the disposition of these shares.

Scott Schoenberger
29115 Valley Center Rd., #K-206
Valley Center, CA 92082
34,967,674(4)
24.45%
Officers

(3)

Mr. Neibert is the Chief Operations Officer of the Company and Directorsa member of the Board. Mr. Neibert owns an aggregate 36,248 shares. Mr. Neibert’s total beneficial ownership constitutes 0.09% of the outstanding shares of Common Stock which percentage is based on 38,473,159 outstanding shares of Common Stock (giving effect to the conversion of all Series B Preferred Stock).

(4)

Mr. Schoenberger is a member of the Board of the Company. Mr. Schoenberger’s shares are held by the Schoenberger Family Trust (the “Schoenberger Trust”) and Mr. Schoenberger serves as sole trustee of the Schoenberger Trust, and total 4,697,993 shares, representing 12.21% of the outstanding shares of Common Stock which percentage is based on 38,473,159 outstanding shares of Common Stock (giving effect to the conversion of all Series B Preferred Stock). As such, the Schoenberger Trust and Mr. Schoenberger share power to vote or to direct the vote of the shares and share power to dispose or to direct the disposition of these shares.

(5)

The percentage of class is calculated pursuant to Rule 13d-3(d) of the Exchange Act which percentages are calculated on the basis of the amount of outstanding securities, plus securities deemed outstanding pursuant to Rule 13d-3(d)(1). The percentage of common stock outstanding is as of September 24, 2019, and based upon 37,412,519 shares of common outstanding and 53,032 shares of Series B Preferred Stock, giving effect to the conversion of all Series B Preferred Stock at a Group

112,782,719(5)
78.85%
ratio of 20:1, for a total issued and outstanding amount of 38,473,159 shares.

29
Gonzalez & Kim is

Upon acquiring their shares of Voting Stock, Messrs. Gerber and Schoenberger have voted all shares of Voting Stock concurringly on matters submitted to the Company’s stockholders. Pursuant to a California general partnership whose partners are Hansu Kimvoting agreement, (the “Voting Agreement”), the Gerber Trust and Matt Gonzalez. Mr. Gonzalez is a directorSchoenberger Trust will continue to vote all shares of Voting Stock owned by them to elect each of Messrs. Gerber and Schoenberger to the Board along with other designees mutually agreed upon. By virtue of the company. Their ownership is in the form of 350,086 shares of Concierge Series B Voting Convertible, Preferred stock that, when converted at a ratio of 1:20, would equal to 7,001,720 shares of common stock. Their ownership rights are equal, thus Mr. Gonzalez is listed herein as a beneficial owner of 7,001,720 shares of common stock.

(2)
Mr.Agreement, Messrs. Gerber is a beneficiaryand Schoenberger will represent 22,828,008, or 59.33% of the Nicholas and Melinda Living Trust which holds 26,666,667 shares of common stock and 2,163,433 shares of Series B Voting Convertible Preferred stock that,Stock when converted at a ratio of 1:20, would equal 43,268,660 shares of common stock.
(3)
Mr. Neibert owns 877,322 shares in his own name, and for the purposes hereof, includes 676 shares of common stock held in the name of his minor child included in the calculation.
(4)
Mr. Schoenberger is a beneficiary of the Schoenberger Family Trust which holds 13,333,334 shares of common stock and 1,081,717 shares of Concierge Series B Voting, Convertible, Preferred stock that, when converted at a ratio of 1:20, would be equal to 21,634,340 shares of common stock.
(5)
For purposes of calculating total shares of common stock, all 3,754,355 Series B issued shares are treated as though they have been converted into common stock. As of October 13, 2016, there were 67,953,870 shares of common stock issued and outstanding.
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 Concierge. 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.
on director nominees.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

��
INDEPENDENCE

Director Independence

For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2).Section 803 of the NYSE American Company Guide. The OTCQB on which our shares of common stock are quoted does not have any director independence requirements. The NASDAQNYSE American definition of “Independent Director” means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.


According to

The Board does not currently have any standing committees. The Board will review the NASDAQ definition, David Neibertappropriateness of forming standing audit, nominating, corporate governance and Nicholas Gerber are not independent directors because each is also an executive officercompensation committees in light of the Company. Additional, Mr. Schoenberger is also not an independent director due toCompany’s growth and will form such standing or ad hoc committees as the formation of a “group” under Section 13(d)(3) with Mr. Gerber. According to the NASDAQ Matt Gonzalez is the only independent director.

We do not have a standing audit, compensation or nominating committee, but our entire board of director’s acts in such capacities.  We believe that our members of our board of directors are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.
Board deems appropriate.

Related Party Transactions

During the previous two fiscal years preceding our last fiscal year, to present, there have been nowe did not enter into any transactions with related persons, promoters or certain control persons as covered by Item 404 of Regulation S-K. However, in connection with that certain Securities Purchase Agreement with Nicholas Gerber and Scott Schoenberger, certain now current executive officers and directors may have formed a “group” under Section 13(d)(3) of the Act which may result in related party transactions in the future. These affiliations are disclosed herein

herein.

On January 26, 2015, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with two accredited investors, Nicholas Gerber and Scott Schoenberger, (the “Purchasers”) pursuant to which we agreed to sell and the Purchasers agreed to purchase 400,000,000approximately 13,333,333 shares of common stock and 32,451,499approximately 108,172 shares of Series B preferred stock of the Company (adjusted for the effect of the 1:10 reverse stock split in December 2015 and the 1:30 reverse stock split in December 2017) in exchange for $3,000,000 USD. Pursuant to the terms of the Securities Purchase Agreement, Purchasers acquired a controlling interest in the Company pursuant to the issuance of the above shares which constituted approximately 70.0% of the voting control of the Company. Following the closing of the Securities Purchase Agreement, Mr. Gerber and Schoenberger became officers and directors of the Company.

On April 8, 2016 and May 25, 2016, the Company entered into convertible promissory note agreements (the “Promissory Notes”) with the Gerber Irrevocable Family Trust, an affiliate of our shareholder and CEO, that resulted in the funding of $350,000 and with the Schoenberger Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000, respectively. The Promissory Notes bear interest at four percent (4%) per annum and increases to nineteen percent (19%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of 0.01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4% annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Notes.

On September 19, 2016, the Company entered into a conditional Stock Purchase Agreement (the “Agreement”), dated September 19, 2016, with Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”) and certain shareholders of Wainwright (the “Sellers”), pursuant to which the Sellers conditionally agreed to sell, and the Company conditionally agreed to purchase, shares representing approximately 97% of the total issued and outstanding common stock of Wainwright (the “Wainwright Shares”). The Company intends

In connection with the acquisition of Wainwright on December 9, 2016 the Promissory Notes were subsequently amended to make an offer to acquireremove the remaining Wainwright shares of common stock prior to the Closing.


Asconversion feature. Additionally, as a result of the transaction completed on December 9, 2016, current shareholders of Wainwright will becomebecame shareholders of the Company. Prior to the transaction, Mr. Gerber, along with certain family members and certain other Wainwright shareholders, currently ownowned the majority of the common stock in the Company as well as Wainwright. Following the closing of this transaction, he and those shareholders will continue to own the majority of the Company voting shares.
Wainwright owns all Mr. Gerber and Mr. Schoenberger (and the through the control of the issued and outstanding limited liability company membership interests of United States Commodity Funds LLC, a Delaware limited liability company (“USCF”) and USCF Advisers, LLC (“USCF Advisers”). USCF is a commodity pool operator registered with the Commodity Futures Trading Commission. USCF Advisers is an SEC registered investment adviser. USCF and USCF Advisers act as the advisers to the Funds set forththeir respective trusts which hold stock in the Company) entered into a Voting Agreement (each, a “Fund”, and collectively, the “Funds”).
The Closing shall occur on the later of (i) the date that is two Business Days following the date on which the last of the conditions to Closing set forth in Articles VIII and IX of the Agreement have been satisfied or, to the extent permitted by applicable Legal Requirements, waived by the relevant party, (ii) the 21st calendar following the date on which the Definitive Schedule 14C was mailed to the Concierge Shareholders, and (iii) such other time and date as the parties may agree.
The conditions to the Closing of the Contemplated Transaction are more particularly described in Articles VIII and IX of Exhibit 10.1 which is attached to the Form 8K submitted on September 19, 2016 and incorporated herein by this reference. The conditions to the Closing include, but are not limited to, the Company’s receiptreflective of a Fairness Opinionsimilar Voting Agreement in place for Wainwright wherein they have agreed to vote in concert with regard to all matters that come before the effect that,shareholders or the board of directors for a vote. This Voting Agreement establishes them as of the date of the Agreement, and based upon and subject to the limitations and assumptions set forth in such opinion, the Purchase Price to be paid by the Company pursuant to the Agreement is fair, from a financial point of view, to the holders of shares of the Company.
There is no guarantee that the Closing of the Contemplated Transaction will occur either as provided for in the Agreement or at all. There is no guarantee that either the Company or Wainwright will fulfill all conditions to Closing and that if not fulfilled, that either party will waive the outstanding condition to Closing.

control group.

Any future transactions by and among the parties mentioned above may qualify as related party transactions and will be disclosed accordingly.

We have adopted a policy that any transactions with directors, officers or entities of which they are also officers or directors or in which they have a financial interest, will only be on terms consistent with industry standards and approved by a majority of the disinterested directors of the Board of Directors and based upon a determination that these transactions are on terms no less favorable to us than those which could be obtained by unaffiliated third parties. This policy could be terminated in the future. In addition, interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which approves such a transaction.

ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES


Audit Fees. Our principal independent accountant billed us, for each of the last two fiscal years, the following aggregate fees for its professional services rendered for the audit of our annual financial statements and review of financial statements included in our Form 10-Q reports or other services normally provided in connection with statutory and regulatory filings or engagements for those two fiscal years:

 Fiscal Year ended June 30, 2016
$41,000
 Fiscal Year ended June 30,2015
$37,000

          Fiscal Year ended June 30, 2019          $342,597

          Fiscal Year ended June 30, 2018          $333,191

Audit-Related Fees. Our principal independent accountant, and those secondary accountants performing audit reviews of our subsidiaries on our behalf, billed us, for each of the last two fiscal years, the following aggregate fees for assurance and related services reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees”:

 Fiscal Year ended June 30, 2016
$22,032
 Fiscal Year ended June 30, 2015
$-0-

          Fiscal Year ended June 30, 2019          $nil 

          Fiscal Year ended June 30, 2018          $29,975

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, 2016
$-0-
 Fiscal Year ended June 30, 2015
$-0-

          Fiscal Year ended June 30, 2019          $158,477 

          Fiscal Year ended June 30, 2018          $  75,353

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, 2016
$-0-
 Fiscal Year ended June 30, 2015
$-0-

          Fiscal Year ended June 30, 2019          $nil

          Fiscal Year ended June 30, 2018          $nil

Pre-Approval of Audit and Non-Audit Services.The Audit Committee, and in our case the board of directors, require that it pre-approve all audit, review and attest services and non-audit services before such services are engaged.

31

PART IV

ITEM 15.                                 EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed 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.+
  3.9 
- 
Certificate of Designation (Series of Preferred Stock) filed with the Secretary of State of Nevada on September 23, 2010.
  3.10 
- 
Certificate of Amendment of Articles of Incorporation (increasing authorized stock) filed with the Secretary of State of Nevada on December 20, 2010.
10.1 
- 
Agreement of Merger between Starfest, Inc. and Concierge, Inc.*
10.2 
- 
Securities Purchase Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers.****

10.3 
- 
Registration Rights Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers. .****
10.4 
- 
Consulting Agreement, dated January 26, 2015, by and between Concierge Technologies, Inc. and David Neibert. .****
10.5 
- 
Stock Redemption Agreement, dated February 26, 2015, by and among Concierge Technologies, Inc. the Shareholders and Janus Cam. ..**(**
10.6 
- 
Distribution Agreement, dated March 4, 2015, by and between Concierge Technologies, Inc. and Janus Cam. *****
10.7
- 
Convertible Promissory Note by and between Wainwright Holdings, Inc. and Concierge Technologies, Inc. dated January 27, 2016. ******
10.8
- 
Stock Purchase Agreement, dated May 27, 2016, by and among Concierge Technologies, Inc., Brigadier Security Systems (2000) Ltd., and the shareholders of Brigadier Security Systems (2000) Ltd. *******
10.9 
- 
Stock Purchase Agreement By and Among Concierge Technologies, Inc., Wainwright Holdings, Inc. and Each of the Individuals and Entities Executing Signature Pages Attached Thereto********
14
- 
Code of Ethics for CEO and Senior Financial Officers.***
31.1 
- 
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 
- 
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.

101.INS

Exhibit

Number

-

Description of Document

2.1

Agreement for Sale and Purchase of a Business, dated May 29, 2015, by and between Gourmet Foods Ltd. and Concierge Technologies, Inc.3

2.2

Stock Purchase Agreement, dated May 27, 2016, by and among Concierge Technologies, Inc., Brigadier Security Systems (2000) Ltd., and the shareholders of Brigadier Security Systems (2000) Ltd.5

2.3

Stock Purchase Agreement, dated September 19, 2016 by and among Concierge Technologies, Inc., Wainwright Holdings, Inc. and Each of the Individuals and Entities Executing Signature Pages Attached Thereto6

2.4Asset Purchase Agreement, dated June 24, 2019, by and between Concierge Technologies, Inc., through its wholly owned subsidiary Gourmet Foods Ltd. and RG & MK Wilson Limited.11
2.5Termination of Asset Purchase Agreement, dated June 24, 2019, by and between Concierge Technologies, Inc., through its wholly owned subsidiary Gourmet Foods Ltd. and RG & MK Wilson Limited.12

3.1

Certificate of Designation (Series of Preferred Stock) filed with the Secretary of State of Nevada on September 23, 2010.1

3.2

Amended Articles of Incorporation of Concierge Technologies, Inc., a Nevada corporation, filed with the Secretary of State of Nevada on April 17, 2017.7

3.3

Amended Bylaws of Concierge Technologies, Inc. effective on March 20, 2017.7

10.1

Securities Purchase Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers.2

10.2

Registration Rights Agreement, dated January 26, 2015, by and among Concierge Technologies, Inc. and Purchasers.2

10.3

Convertible Promissory Note, dated January 27, 2016, by and between Wainwright Holdings, Inc. and Concierge Technologies, Inc.4

10.4

Amended and Restated Asset Purchase Agreement, dated November 20, 2017, by and between The Original Sprout, LLC and each of the Individual Members of Original Sprout LLC and Kahnalytics, Inc.8

14.1(1)

Code of Business Conduct and Ethics10

16.1

Letter dated April 6, 2017, from Kabani and Company, Inc.9

21.1(1)Concierge Technologies, Inc. - Subsidiary List(1)13

31.1(1)

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2(1)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1(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(1)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document#

101.SCH

-

XBRL Taxonomy Extension Schema Document#

101.CAL

-

XBRL Taxonomy Extension Calculation Linkbase Document#

101.LAB

-

XBRL Taxonomy Extension Labels Linkbase Document#

101.PRE

-

XBRL Taxonomy Extension Presentation Linkbase Document#

101.DEF

-

XBRL Taxonomy Extension Definition Linkbase Document#

# Filed Herewith. Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

*

(1)

Filed herewith.

1Previously filed with Report on Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913, incorporated herein.

**Previously filed with Form 8-K on April 2, 2002; Commission File No. 000-29913, incorporated herein.
***Previously filed with Form 10-KSB10-K on October 20, 2004; Commission File No. 000-29913,8, 2010 and incorporated by reference herein.
+Previously filed with Form 10-KSB FYE 06-30-06 on October 20, 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.
****

2Previously filed with Current Report on Form 8-K on January 29, 2015 and incorporated by reference herein.

*****

3Previously filed with Current Report on Form 8-K on March 4,June 2, 2015 and incorporated by reference herein.

******

4Previously filed with Current Report on Form 8-K on February 2, 2016 and incorporated by reference herein.

32
*******

5Previously filed with Current Report on Form 8-K on June 8, 2016 and incorporated by reference herein.

********

6Previously filed with Current Report on Form 8-K on September 19,20, 2016 and incorporated by reference herein.


7Previously filed with Definitive Proxy Materials on Schedule 14A on February 28, 2017 and incorporated by reference herein.


8Previously filed with Current Report on Form 8-K on November 21, 2017 and incorporated by reference herein. 

9Previously filed with Current Report on Form 8-K on April 6, 2017 and incorporated by reference herein.

10Previously filed with Current Report on Form 10-K on September 28, 2018 and incorporated by reference herein.

11Previously filed with Current Report on from 8-K on June 27, 2019 and incorporated by referencence herein.

12Previously filed with Current Report on from 8-K on August 2, 2019 and incorporated by referencence herein.

13Concierge Technologies, Inc. - Subsidiary List

ITEM 16.

FORM 10-K SUMMARY

Not applicable.

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.

CONCIERGE TECHNOLOGIES, INC.

Date: October 21, 2016

By:  
/s/Nicholas Gerber

Date: September 30, 2019

/s/ Nicholas D. Gerber

Nicholas D. Gerber, CEO

In accordance with the Exchange Act, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: September 30, 2019

/s/ David W. Neibert

Date: October 21, 2016

/s/

David W. Neibert,

David W. Neibert, C.F.O. and Director
Date: October 21, 2016
/s/Nicholas Gerber
Nicholas Gerber, CEO/C.O.O., Secretary and Director

Date: October 21, 2016
/s/Scott Schoenberger

Date: September 30, 2019

/s/ Scott Schoenberger

Scott Schoenberger, Director

Date: October 21, 2016
/s/ Matt Gonzalez,

Date: September 30, 2019

/s/ Matt Gonzalez

Matt Gonzalez, Director

Date: September 30, 2019

/s/ Derek Mullins

Derek Mullins, Director

Date: September 30, 2019

/s/ Kathryn D. Rooney

Kathryn D. Rooney, Director

Date: September 30, 2019

/s/ Erin Grogan

Erin Grogan, Director

Date: September 30, 2019

/s/ Kelly J. Anderson

Kelly J. Anderson, Director

Date: September 30, 2019

/s/ Joya Delgado Harris

Joya Delgado Harris, Director

69

34