U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended DecemberMarch 31, 20142015
OR
o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________


Commission File No. 000-29913

CONCIERGE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

State of Incorporation:  Nevada
IRS Employer I.D. Number:  95-4442384

29115 Valley Center Rd. K-206
Valley Center, CA 92082
866-800-2978

(Address and telephone number of registrant's principal
executive offices and principal place of business)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x   No  o

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  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filero     Accelerated filero
Non-accelerated filero        Smaller reporting companyx

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yeso  No x

As of February 11, 2014,May 6, 2015, there were 746,505,368 shares of the Registrant’s Common Stock, $0.001 par value, outstanding and 206,186 shares of its Series A Convertible Voting Preferred Stock, par value $0.001, outstanding and 37,543,544 shares of its Series B Convertible Voting Preferred Stock, par value $0.001.
 

 
 
 

TABLE OF CONTENTS
     Page
      
PART I - FINANCIAL INFORMATION    
 
      
Item 1.Financial Statements (Unaudited)     43
      
Item 2.
Management’s Discussion and Analysis of Financial Condition
  16
and Results of Operations  15
  
      
Item 3.ControlsQuantitative and ProceduresQualitative Disclosures About Market Risk.  18
    17
Item 4.Controls and Procedures.   18
      
PART II – Other Information     
      
Item 1.Legal Proceedings    19
Item 4.Legal Proceedings     18
Item 1A.Risk Factors  19
  
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds  19
Item 3.Defaults Upon Senior Securities  20
      
Item 5.Other Information      1920
      
Item 6.Exhibits   21
      
SIGNATURES      22


 
2
 


PART I – FINANCIAL INFORMATION

Item 1.                                Financial Statements
 
Page

Consolidated Balance Sheets (Unaudited)4

Consolidated Statements of Operations for the Three and Six-MonthNine-Month Periods Ended DecemberMarch 31, 20142015 and 20132014 (Unaudited)
5
Consolidated Statements of Cash Flows for the Six-MonthNine-Month Periods Ended DecemberMarch 31, 20142015 and 20132014 (Unaudited)
6

Notes to Unaudited Financial Statements7
 

 
 
3
 
 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(UNAUDITED) 
  
  
       
  March 31, 2015  June 30, 2014 
 ASSETS      
CURRENT ASSETS:      
Cash & cash equivalents $2,353,378  $15,731 
Other current assets  32,100   - 
Assets of subsidiary held for sale  772,844   652,173 
Total current assets  3,158,323   667,904 
         
Non-current assets of subsidiary held for sale  19,102   23,678 
Total assets $3,177,425  $691,581 
         
     LIABILITIES AND STOCKHOLDERS' DEFICIT        
         
CURRENT LIABILITIES:        
Accounts payable and accrued expenses $234,392  $276,208 
Notes payable - related parties  8,500   38,000 
Notes payable  8,500   - 
Convertible Debenture, net  -   118,000 
Related party convertible debenture, net  -   204,700 
Liabilities of subsidiary held for sale  506,580   744,122 
Total liabilities  757,972   1,381,030 
         
STOCKHOLDERS' DEFICIT        
Preferred stock, 50,000,000 authorized par $0.001        
Series A: 206,186 shares issued and outstanding at March 31, 2015 and June 30, 2014  206   206 
Series B: 37,543,544 shares issued and outstanding at March 31, 2015 and 9,498,409 June 30, 2014  37,544   9,498 
Common stock, $0.001 par value; 900,000,000 shares authorized; 746,505,368 shares issued and outstanding at March 31, 2015 and 240,337,841 shares issued and outstanding at at June 30, 2014  746,505   240,339 
Additional paid-in capital  8,115,695   3,954,217 
Accumulated deficit  (6,480,496)  (4,893,709)
Total  2,419,453   (689,449)
Total liabilities and Stockholders' deficit
 $3,177,425  $691,581 
         
The accompanying notes are an integral part of these unaudited consolidated financial statements.     
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
  December 31, 2014  June 30, 2014 
 ASSETS      
CURRENT ASSETS:      
Cash & cash equivalents $86,883  $20,454 
Accounts receivable, net allowance for doubtful accounts of $25,186  56,080   159,047 
Due from related party  80,994   12,084 
Inventory, net  187,696   474,034 
Other current assets  3,054   2,285 
Total current assets  414,707   667,904 
         
Security deposits  11,222   11,222 
Property and equipment, net  9,260   12,456 
Total assets $435,189  $691,582 
         
     LIABILITIES AND STOCKHOLDERS' DEFICIT        
         
CURRENT LIABILITIES:        
Accounts payable and accrued expenses $750,213  $953,578 
Advance from customers  2,708   6,753 
Notes payable - related parties  38,000   48,000 
Notes payable  85,000   50,000 
Convertible Debenture, net  63,229   118,000 
Derivative Liability  48,877     
Related party convertible debenture, net  204,700   204,700 
Total liabilities  1,192,727   1,381,031 
         
STOCKHOLDERS' DEFICIT        
Preferred stock, 50,000,000 authorized par $0.001        
Series A: 206,186 shares issued and outstanding at December 31, 2014 and June 30, 2014  206   206 
Series B: 5,092,045 shares issued and outstanding at December 31, 2014 and 9,498,409 June 30, 2014  5,092   9,498 
Common stock, $0.001 par value; 900,000,000 shares authorized; 338,235,368 shares issued and outstanding at December 31, 2014 and 240,337,841 shares issued and outstanding at at June 30, 2014  338,236   240,339 
Additional paid-in capital  3,983,417   3,954,217 
Accumulated deficit  (5,084,489)  (4,893,709)
Total  (757,538)  (689,449)
Total liabilities and Stockholders' deficit
 $435,189  $691,582 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

 
4
 
 
CONCIERGE TECHNOLOGIES, I+B1:L30NC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(UNAUDITED) 
  
  
             
  For the Three-Month Periods Ended  For the Nine-Month Periods Ended 
  March 31,  March 31, 
  2015  2014  2015  2014 
 Net revenue  $-   $-   $-   $- 
             
Operating expense            
             
General & administrative expense  7,837   36,132   70,713   81,441 
                 
Operating loss  (7,837)  (36,132)  (70,713)  (81,441)
                 
Other income (expense)                
Other income  5,086   -   5,086   - 
Interest expense  (2,168)  (3,627)  (77,417)  (9,717)
Change in fair value of derivative  48,877   -   -   - 
Total other income (expense)  51,795   (3,627)  (72,331)  (9,717)
                 
Income (Loss) from continuing operations before income taxes  43,959   (39,760)  (143,044)  (91,159)
                 
Provision of income taxes  -   -   -   - 
                 
Income (Loss) from continuing operations  43,959   (39,760)  (143,044)  (91,159)
                 
Income (Loss) from subsidiary held for sale  30,087   (26,757)  26,310   (102,762)
                 
Net Income (Loss)  74,046   (66,517)  (116,734)  (193,921)
                 
Weighted average shares of common stock                
Basic  631,822,784   240,308,347   393,811,216   240,292,119 
Diluted  884,595,812   240,308,347   393,811,216   240,292,119 
                 
Net Income (loss) per common share - continuing operations             
Basic $0.000  $(0.000) $(0.000) $(0.000)
Diluted $0.000  $(0.000) $(0.000) $(0.000)
                 
Net Income (loss) per common share - discontinued operations             
Basic $0.000  $(0.000) $0.000  $(0.000)
Diluted $0.000  $(0.000) $0.000  $(0.000)
                 
The accompanying notes are an integral part of these unaudited consolidated financial statements. 
 
  For the Three-Month Periods Ended  For the Six-Month Periods Ended 
  December 31,  December 31, 
  2014  2013  2014  2013 
Net revenue $380,384  $513,751  $800,823  $1,075,650 
                 
Cost of revenue  224,282   296,794   508,169   648,352 
                 
Gross profit  156,102   216,957   292,654   427,298 
                 
Operating expense                
                 
General & administrative expense  141,096   291,831   356,243   600,378 
                 
Operating Profit (Loss)  15,006   (74,874)  (63,589)  (173,080)
                 
Other income (expense)                
Other income  1,189   3,699   2,250   53,148 
Interest expense  (31,230)  (3,688)  (79,764)  (6,672)
Change in fair value of derivative  (14,112)  -   (48,877)  - 
Total other income (expense)  (44,153)  11   (126,391)  46,476 
                 
Loss from  operations before income taxes  (29,147)  (74,863)  (189,980)  (126,604)
                 
Provision of income taxes  -   -   800   800 
                 
Net Loss  (29,147)  (74,863)  (190,780)  (127,404)
                 
Weighted average shares of common stock *                
Basic & Diluted  336,924,071   240,284,270   333,259,611   240,284,270 
Diluted  336,924,071   240,284,270   333,259,611   240,284,270 
                 
Net loss per common share - continuing operations             
Basic & Diluted $(0.000) $(0.000) $(0.00) $(0.00)
Diluted $(0.000) $(0.000) $(0.00) $(0.00)
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
5
 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX-MONTH PERIODS ENDED DECEMBER 31, 2014 AND 2013
(UNAUDITED)
 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIESCONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE NINE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2014FOR THE NINE-MONTH PERIODS ENDED MARCH 31, 2015 AND 2014 
(UNAUDITED)(UNAUDITED) 
 
 
      
 For the Six-Month Periods Ended December 31,  For the Nine-Month Periods Ended March 31, 
 2014  2013  2015  2014 
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net Income (Loss) $(190,780) $(127,404)
Net loss $(116,734)  (193,921)
Adjustments to reconcile net income (loss) to net cash used in operating activitiesAdjustments to reconcile net income (loss) to net cash used in operating activities     Adjustments to reconcile net income (loss) to net cash used in operating activities     
Depreciation  4,047   3,592 
Beneficial conversion feature expense  67,571   - 
Change in fair value of derivative liability  (18,699)  - 
Amortization of debt issuance cost  67,921   -   67,571   - 
Share based compensation  -   750 
(Increase) decrease in current assets:                
Accounts receivable  102,967   (53,296)
Inventory  286,338   (82,203)
Other current assets  (769)  2,965   (32,100)  2,965 
Increase (decrease) in current liabilities:                
Accounts payable & accrued expenses  (203,360)  149,320   (19,452)  264,212 
Advances from customers  (4,045)  9,915 
Cash provided by/(used in) operating activities - continuing operations  (100,716)  74,006 
Cash used in operating activities - subsidary held for sale  (160,229)  (252,588)
Net cash used in operating activities  111,191   (97,111)  (260,945)  (178,582)
                
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of equipment  (851)  (1,426)  -   (751)
Due from related party  (68,910)  (505)
Cash used in investing activities - continuing operations  -   (751)
Cash used in investing activities - subsidiary held for sale  (133,408)  (4,406)
Net cash used in investing activities  (69,761)  (1,931)  (133,408)  (5,157)
                
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from related party notes payable      10,000 
Proceeds from related party debts  -   10,000 
Repayments of related party debts  (21,000)  - 
Proceeds from notes payable & debentures  35,000   50,000   35,000   85,500 
Repayments to related parties  (10,000)  - 
Net cash provided by financing activities  25,000   60,000 
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   - 
Cash provided by financing activities - continuing operations  2,792,000   95,500 
Cash provided by/(used in) financing activities - subsidiary held for sale  (60,000)  90,000 
Net cash used in financing activities  2,732,000   185,500 
                
NET DECREASE IN CASH & CASH EQUIVALENTS  66,429   (39,042)
NET INCREASE IN CASH & CASH EQUIVALENTS  2,337,647   1,761 
                
CASH & CASH EQUIVALENTS, BEGINNING BALANCE  20,454   39,444   15,731   39,444 
                
CASH & CASH EQUIVALENTS, ENDING BALANCE $86,883  $402  $2,353,378   41,205 
                
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                
Cash paid during the period for:                
Interest paid $4,515  $- 
Income taxes paid $26,550   $- 
Interest paid - continuing operations $7,989   - 
Interest paid - subsidiary held for sale $4,103   1,615 
Income taxes paid - subsidiary held for sale $35,538   800 
             
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:        SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:     
Issuance of common stock in settlement of convertible debenture $55,120  $- 
Gain on debt settlement with related parties $69,861   - 
Issuance of common stock in settlement of convertible debentures $88,200   - 
        
The accompanying notes are an integral part of these unaudited consolidated financial statements.The accompanying notes are an integral part of these unaudited consolidated financial statements.     
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
 
6
 
 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1.  ORGANIZATION AND DESCRIPTION OF BUSINESS

Concierge Technologies, Inc., (the “Company��“Company”), 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 equipment through its wholly owned subsidiary Wireless Village doing business as Janus Cam
 
NOTE 2.  ACCOUNTING POLICIES

Accounting Principles

In the opinion of management, the accompanying balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s 2014 Form 10-K filed on October 10, 2014 with the U.S. Securities and Exchange Commission.
Concentrations of Risk

The Company maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation up to $250,000 per depositor. The Company’s uninsured cash balance was $2,103,378 at March 31, 2015.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Concierge Technologies, Inc. (parent), and its wholly owned subsidiary, Wireless Village. All significant inter-company transactions and accounts have been eliminated in consolidation. dba/Janus Cam.

Use of Estimates

The preparation of consolidated financial statements is in conformity with accounting principles generally accepted in the United States of America 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 statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists: An unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For example, an entity should not evaluate whether the deferred tax asset expires before the statute of limitations on the tax position or whether the deferred tax asset may be used prior to the unrecognized tax benefit being settled. The amendments in this Update do not require new recurring disclosures. ASU Topic No. 2013 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.
7
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
 
In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360)."  ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations.  Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014.  The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP.  The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  Early adoption is not permitted.  . The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.
7
 
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 that could 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 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 Entities 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 conditions 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 our 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 Concept of Extraordinary Items (ASU 2015-01).  The amendment eliminates from U.S. GAAP the concept of extraordinary items.  This guidance is effective for the Company in the first quarter of fiscal 2017. Early adoption is permitted and allows the Company to apply the amendment prospectively or retrospectively. The adoption of this guidance is not expected to have a material impact on the Company’s 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, financial position or disclosures.

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.

 
 
8
 
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 3.  GOING CONCERN

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of $5,084,489$6,480,496 as of DecemberMarch 31, 2014,2015, including a net loss of $190,780$116,734 during the six-monthnine-month period ended DecemberMarch 31, 2014.2015 and a deemed dividend as a result of the beneficial conversion feature expense of $1,470,053 recorded as a result of an equity investment transaction. The historical losses have adversely affected the liquidity of the Company. Although losses are expected to be curtailed during the current fiscal year due to increased product sales,the planned divestiture of the wholly owned subsidiary, Janus Cam, 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, and successfully compete for customers.success in sourcing additional revenue streams through strategic mergers, acquisitions or other business combinations.

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 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 DecemberMarch 31, 2014,2015, towards (i) establishment of sales distribution channels for its products,sourcing additional working capital including the $3,000,000 equity investment  completed during the current quarter, (ii) management of accrued expenses and accounts payable, (iii) initiation of the business strategy to divest ownership of its subsidiary, experiencing continuing operating losses, and (vi) identifying sources of investment capital, and (vii) acquisition of suitable synergistic partners for business opportunities in mobile incident reporting that generate immediate revenues.

Management believes that the above actions will allow the Company to continue operations for the next 12 months.

NOTE 4.  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2014 and June 30, 2014:

  December 31, 2014  June 30, 2014 
Furniture & Office Equipment $15,392  $15,392 
Network Hardware & Software  34,339   33,488 
Total Fixed Assets  49,791   48,880 
Accumulated Depreciation  (40,471)  (36,425)
Total Fixed Assets, Net $9,260  $12,456 

Depreciation expense amounted to $4,048 and $3,592 for the six-month periods ended December 31, 2014 and 2013, respectively.
9
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 5.4.  RELATED PARTY TRANSACTIONS

Due from Related Party

Notes receivable from related party is comprised of two notes of $5,000 each. The principal of these notes were due and payable on or before May 1, 2012. The notes are unsecured and non-interest bearing until maturity, after which time interest is calculated at 10% per annum. Total interest due as of December 31, 2014 was $2,588.

On October 6, 2014 the company suspended the salaries of Janus Cam executive management until such time as negotiations resulted in a new rate of pay as provided for under applicable employment contracts. During the current period the company agreed to loan funds to them that, in the aggregate, totaled less than their previous salaries and such loans would be applied as an offset to their salaries once reinstated. As of December 31, 2014 Janus Cam has loaned a total of $68,406 interest-free to the management which is due upon reinstatement and calculation of salaries under their respective employment agreements.

Notes Payable - Related Parties

Current related party notes payable for Concierge Technologies consist of the following:


  
March 31, 2015
  June 30, 2014 
Notes payable to director/shareholder, noninterest-bearing, unsecured and payable on demand
     8,500 
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004  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 director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 .  -   5,000 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 .  -   5,000 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 .  -   1,000 
Notes payable to director/shareholder, interest rate of 6%, unsecured and payable on January 8, 2015  -   10,000 
         
         
  $8,500  $38,000 
  
December 31, 2014
  June 30, 2014 
Notes payable to director/shareholder, noninterest-bearing, unsecured and payable on demand
  8,500   8,500 
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004  5,000   5,000 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)  3,500   3,500 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)  5,000   5,000 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)  5,000   5,000 
Notes payable to director/shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due)  1,000   1,000 
Notes payable to director/shareholder, interest rate of 6%, unsecured and payable on January 8, 2015  10,000   10,000 
Notes payable to directors/shareholder, interest rate of 10%, unsecured and payable on demand  -   10,000 
         
         
  $38,000  $48,000 
 
 
109
 
 
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 becomes 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 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 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.

As a result of the death of a related party noteholder, the note payable of $8,500 was reclassified as a note payable-unrelated party and has been removed from the related party notes payable disclosure listing.

Interest expense for all related party notes payable, including the related party convertible debenture, for the six-month periodsnine-month period ended DecemberMarch 31, 2015 amounted to $6,433 and was $7,324 for the nine-month period ended March 31, 2014 and 2013 amounted to $6,241and $6,090.for Concierge Technologies
 
NOTE 6.5.  ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

  December 31, 2014  June 30, 2014 
Accounts payable $543,398  $677,563 
Sales Tax payable  1,531   1,181 
Accrued judgment  135,000   135,000 
Accrued interest  38,252   35,154 
Auditing  3,500   24,500 
Payroll Tax Liability  28,532   55,453 
State income tax      24,727 
Total $750,213  $953,578 
  March 31, 2015  June 30, 2014 
Accounts payable $87,345  $84,708 
Accrued judgment  135,000   135,000 
Accrued interest  8,547   31,999 
Accrued auditing fees  3,500   24,500 
Total Accrued Expenses $234,392  $276,208 


NOTE 7.6.  NOTES PAYABLE

On November 8, 2013 Janus Cam entered into a short term Note Agreement with an unaffiliated individual in the amount of $50,000, the proceeds of which were used to pay down inventory purchase costs. Interest on the Note accrues at an annualthe rate of 10% per annum and is payable in monthly installments with a maturity date of February 19, 2014. On February 19, 2014 the lenderunaffiliated individual agreed to extend the maturity date to June 1, 2014 and 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 haswas subsequently been extended to mature on January 5, 2015, and athen again to mature on February 27, 2015 provided Concierge Technologies guaranteed the repayment on behalf of Janus Cam. A fee in the amount of 1%, or $500, was paid in cash to the noteholder.noteholder by Janus Cam in exchange for the agreement to extend the maturity date. On February 13, 2015 the note was repaid in full. The amount of the note principal, $50,000, has been eliminated in the consolidated balance sheet as of June 30, 2014 and is included in the total of liabilities of subsidiary held for sale.

On December 24, 2014 the companyCompany 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. The note and accrued interest is 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.

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.

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.

 
1110
 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 8.7.  CONVERTIBLE DEBENTURES

On February 18, 2014 the companyCompany entered into a series of agreements, including a convertible debenture, that resulted in a funding of $53,000. The note is convertible, at the option of the debenture holder, to unregisteredrestricted 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 and interest will become due and payable without pre-payment penalty. The Company identified embedded derivatives related to the convertible debenture. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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, 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 DecemberMarch 31, 2014.2015.

On March 28, 2014 the companyCompany 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 unregisteredrestricted common shares after September 23, 2014 at a conversion price calculated on a prescribed discount to the trailing 10-day volume weighted average market priceVWAP 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. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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.date, however as of March 31, 2015 the debenture was repaid in full with cash of $32,500 plus accrued interest of $1,995 and no fair value of the derivative was recorded.

On April 25, 2014 the companyCompany 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 volume weighted average market priceVWAP 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. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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.date, however as of March 31, 2015 the debenture was repaid in full with cash of $32,500 plus accrued interest of $1,995 and no fair value of the derivative was recorded.
 
NOTE 9.8.                 DERIVATIVE FINANCIAL INSTRUMENTS

The Company's derivative financial instruments consisted of embedded derivatives related to the Convertible Debentures issued in 2014 as stated in Note 8.  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.  Theliabilities.The debentures were repaid in full with cash as of March 31, 2015 and the derivative liability was eliminated on the consolidated balance sheet at DecemberMarch 31, 3014 was $48,8772015.
 
 
1211
 

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 10.9.  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 DecemberMarch 31, 2014:2015:
 
 Quoted Prices          
 in Active Significant        
 Markets for Other Significant      
 Identical Observable Unobservable      
 Instruments Inputs Inputs      
 Level 1 Level 2 Level 3 Total    
Derivative Liability $–  $–  $48,877  $48,877 
 Roll-forward            
 of Balance            
Derivative liability for Convertible Debentures  67,571              
Change in value of derivative liability during the period ended December 31, 2014  -18,694              
Balance, December 31, 2014 $48,877              
 Quoted Prices       
 in Active Significant     
 Markets for Other Significant   
 Identical Observable Unobservable   
 Instruments Inputs Inputs   
 Level 1 Level 2 Level 3 Total 
Derivative Liability $–  $–  $-   $- 
 Roll-forward              
 of Balance              
Derivative liability for Convertible Debentures  67,571           
Change in value of derivative liability during the period ended March 31, 2015  -67,571           
Balance, March 31, 2015 $-           
 
13
CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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.

12

NOTE 10.                      ASSETS & LIABILITIES OF SUBSIDIARY HELD FOR SALE

On February 26, 2015, Concierge Technologies, Inc. (the “Corporation”), a Nevada corporation, 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 Corporation will redeem and cancel 68,000,000 shares of the Corporation’s common stock held by the Shareholders in exchange for all of the outstanding shares of common stock of Janus Cam held by the Corporation and the forgiveness of certain “Inter-Company Debt” of $300,000 advanced to Janus Cam by the Corporation (the “Transaction”).  At the closing of the Transaction, Janus Cam will no longer be affiliated with or a subsidiary of the Corporation and will instead be under the control of the Shareholders. On May 7, 2015, the Company completed the closing of the transaction.

Assets of subsidiary held for sale consisted of the following as of March 31, 2015 and June 30, 2014:
 
  March 31, 2015  June 30, 2014 
Cash and cash equivalents $120,691  $4,723 
Accounts receivable, net  82,267   159,048 
Due from related party  144,391   12,084 
Inventory, net  227,875   474,034 
Pre-Paid inventory, advance to supplier  195,685   - 
Payroll advance  1,935   2,285 
Current assets of subsidiary $772,844  $652,173 
Security deposits  11,222   11,222 
Equipment  2,483   2,483 
Network/office equipment  34,589   33,488 
Accumulated depreciation  (29,192)  (23,515)
Non-Current assets of subsidiary $19,102  $23,678 

Due from Related Party

Notes receivable from related party to Janus Cam is comprised of two notes of $5,000 each. The principal of these notes were due and payable on or before May 1, 2012. The notes are unsecured and non-interest bearing until maturity, after which time interest is calculated at 10% per annum. Total interest due to Janus Cam as of March 31, 2015 was $2,835. The interest and the principal due Janus Cam was eliminated from the consolidated balance sheet and included in the total of assets of subsidiary held for sale.

On October 6, 2014 the Company suspended the salaries of Janus Cam executive management until such time as negotiations resulted in a new rate of pay as provided for under applicable employment contracts. During the nine-month period ended March 31, 2015 Janus Cam agreed to loan funds to them that, in the aggregate, totaled less than their previous salaries and such loans would be applied as an offset to their salaries once reinstated. As of March 31, 2015 Janus Cam has loaned a total of $131,556 interest-free to the management which is due upon reinstatement and calculation of salaries under their respective employment agreements.

Depreciation expense for subsidiary held for sale amounted to $5,677 and $5,500 for the nine-month periods ended March 31, 2015 and 2014, respectively.
13

Liabilities of Janus Cam, subsidiary held for sale, consisted of the following:

  March 31, 2015  June 30, 2014 
Accounts payable $348,705  $596,009 
Sales tax liability  5,926   1,181 
Accrued interest  663   - 
CA income tax provision  -   24,727 
Payroll taxes payable  -   55,453 
Total Accrued Expenses  355,294  $677,370 
Customer advances $151,286  $6,752 
Notes payable-related parties  -   10,000 
Notes payable  -   50,000 
Total liabilities of subsidiary $506,580  $744,122 
NOTE 11.  EQUTY TRANSACTIONS

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.

During the nine months period ended March 31, 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. There were also 18,040,247 shares of common stock issued for conversion of debentures (note 4 and 7). The shares issued in connection with debt settlement were valued at the fair market price on the settled dates.
NOTE 11.12.  COMMITMENTS AND CONTINGENCIES

Lease Commitment of Subsidiary Held for Sale
 
During the prior fiscal year the Company, through its subsidiary Wireless Village dba/Janus Cam (a subsidiary held for sale), restructured its office leases such that it is no longer a tenant but rather a sub-tenant on a month-to-month basis for facilities located at 31 Airport Blvd. Suites G2, G3 and H. Although on a month-to-month basis, Janus Cam has agreed with the sub-landlord to assume the obligations under the lease and to pay rent directly to the landlord for the duration of the lease term, which expired in November 2014. The Company continues to occupy the space on a month-to-month basis.

Rent expense for Janus Cam amounted to $20,840$30,095 and $18,595$28,435 for the six-monthnine-month periods ended DecemberMarch 31, 20142015 and 2013,2014, respectively.

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 as of DecemberMarch 31, 20142015.

14

NOTE 12.13.  SUBSEQUENT EVENTS

On January 2,May 7, 2015, the company paid KBM Worldwide $34,495 representing payment in fullCompany completed the closing of that certain Stock Redemption Agreement transaction entered into as of February 26, 2015 by and among the Company, two shareholders of the convertible denture entered into on March 28, 2014, including accrued interest of $1,995

On January 14, 2015Company (the “Shareholders”) and its wholly-owned subsidiary Wireless Village, Inc. dba Janus Cam (“Janus Cam”). At the company entered into an unsecured promissory note agreement with an unaffiliated individual forclosing, the principal amount of $65,000 plus interest to accrue at the rate of 6% per annum on the unpaid principal. The noteCompany formally redeemed and accrued interest is due and payable on or before June 30, 2015. The proceedscanceled 68,000,000 shares of the loan were reserved in anticipation ofCompany’s common stock held by the need to pay a convertible debenture maturing in January 2015.

On January 22, 2015 the company paid KBM Worldwide $34,495 representing payment in full of the convertible denture entered into on April 25, 2014, including accrued interest of $1,995.

On January 26, 2015 the company entered into a Securities Purchase Agreement and related agreements that resulted in the cash infusion of $3,000,000 to the companyShareholders in exchange for issuanceall of 400,000,000the outstanding shares of common stock and 32,451,499 shares of Series B voting, Convertible Preferred stock. The issuance of the shares resulted in a change of control with approximately 70% of the issued and outstanding shares beingJanus Cam held by the new investors. SubsequentCompany and the forgiveness of certain “Inter-Company Debt” in the amount of $300,000 advanced to Janus Cam by the issuance of shares, Samuel Wu and Hansu Kim resigned as membersCompany (the “Transaction”).  As a result of the board of directors and Nicholas Gerber and Scott Schoenberger were elected to replace them. Nicholas Gerber was appointed Chief Executive Officer, President and Secretary and David Neibert was appointed Chief Financial Officer effective January 26, 2015. The detailsclosing of the transaction were disclosed on form 8K filed January 29, 2015.
In connectionTransaction, Janus Cam is no longer affiliated with or a subsidiary of the fundingCompany and is now formally under the control of $3,000,000 as referenced above, the promissory notes of December 24, 2014 and January 14, 2015 totaling $100,000 were retired.Shareholders.

On January 26,April 9, 2015, the company issued 8,270,000 sharesCompany received its first orders for installation of common stock to Polly Force Co., Ltd., an affiliate of former director Samuel Wu, as partial settlement of an outstanding convertible debenture of $204,700 net.  A payment of $122,000 wasJanus V2HD cameras. The cameras are made in cash on February 10, 2015available through a non-exclusive supply and distribution agreement entered into between Janus Cam and the debenture is now settledCompany on March 4, 2015. The Company has placed orders for camera inventory and has contracted with a third party for installation services to be provided to end users of the product. The Company has initiated, but not yet completed, the process to form a new wholly owned subsidiary domiciled in full.the state of California to conduct the business of camera and related item sales.

 
1415
 

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company, through Planet Halo and Wireless Village, had been selling subscriptions to its wireless Internet access service in various increments, including daily, weekly, monthly and yearly since 2007. During the fiscal year ending June 30, 2011, we completed the transition away from this business and refocused our efforts through our majority owned subsidiary Wireless Village now called Janus Cam, on the sale and distribution of mobile video surveillance systems, generically known as “drive cams”. Planet Halo had been accumulating debt, through loans where proceeds were used for further product development and research. On January 31, 2013Wireless Village, now operating under the Company executed a stock redemption agreement whereby we sold the corporation in a stock-for-stock transaction to a shareholder in Concierge Technologies. As of December 31, 2014fictitious business name Janus Cam is our only subsidiary.Cam.

Since SeptemberDuring 2010 Janus Cam has brought expertise in mobile digital camera deployment into the company by partnering with several industry professionals and a manufacturer of camera and DVR products. In order to gain this expertise we conveyed approximately 49% of our equity ownership in Janus Cam to these professionals. On January 31, 2013 we effectuated an agreement to buy out the minority stakeholders in a stock exchange transaction whereby the shareholders of the non-controlling interest exchanged their shares in Janus Cam for shares in Concierge Technologies. As of March 31, 2015 Janus Cam is wholly owned and our only operating subsidiary.

On February 26, 2015 the Company entered into an agreement that will result in the sale of Janus Cam to its president and its chief financial officer in exchange for a redemption of shares held in the Company and certain cash consideration in the form of debt forgiveness. As a result, the assets, liabilities and operating results of Janus Cam have been presented in the consolidated financial statements as separate line items described as “subsidiary held for sale”. The net income attributed to Janus Cam for the three and nine-month periods ending March 31, 2015 was $30,087 and $26,310 respectively. The current assets of Janus Cam on March 31, 2015 and June 30, 2015 were $772,844 and $652,173 with non-current assets of $19,102 as of March 31, 2015 and $23,678 at June 30, 2014. Liabilities for Janus Cam as of March 31, 2015 were $506,580 and $744,122 at June 30, 2014. The detail of these items is as described below.

Subsidiary Held for Sale: Janus Cam purchases hardware, including cabling, connectors, hard drives, wireless transceivers, cameras and various other hardware items, for configuration prior to release to end users. These 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 with resulting revenues recorded as hardware sales. 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 arrange for their own installation of the product in their vehicles. In some instances, installation services were supplied along with the sale of the new camera, or other product, which may include pre-programming of functions prior to shipment. The charges for services such as these are recorded as support services and are usually insignificant when compared to net revenues with totals for the six-monthnine-month periods ending DecemberMarch 31, 2015 and 2014 as $84,675 and $560 respectively. The totals for the three-month periods ending March 31, 2015 and March 31, 2014 were $32,965 and 2013 as $51,710 and $381$179 respectively. These revenues are combined with hardware sales for Janus Cam, which for the six-monthnine-month period ended DecemberMarch 31, 2014,2015, including cameras, were down 30%26% to $749,113$1,283,783 as compared to the six-monthnine-month period ending DecemberMarch 31, 20132014 where hardware sales were recorded as $1,075,269.$1,743,650. Combined sales for the six-monthnine-month period ending DecemberMarch 31, 20142015 were $800,823,$1,368,458, down 25%21% over the same period ending DecemberMarch 31, 20132014 where combined sales were $1,075,650.$1,744,210. Quarterly combined sales for the three-month period ending DecemberMarch 31, 2015 and March 31, 2014 were $567,635 and December 31, 2013 were $380,384 and $513,751$668,560 respectively, a decline of approximately 26%15% for the current period. Management attributes the decrease in sales revenues during the current six-monthnine-month period when compared to the prior year six-monthnine-month period revenues to several key factors; depletion of inventory not allowing fulfillment of sales orders and, secondarily, cost cutting initiatives deployed by our primary customers in an effort to remain competitive within an increasingly competitive industry. Moreover, local government regulatory agencies have been slower than anticipated to adopt and approve devices such as those Janus Cam offers for deployment in licensed taxi cabs and limousines. As a result, owners of these businesses have elected to wait until the licensing agencies either mandate or approve such devices for deployment, and to determine that the Janus Cam devices are indeed approved for use in their respective areas of operation. Management believes this downward turn to be relatively short-lived as local regulations together with pressure from insurance agencies cause for vehicles to be equipped with video recording devices in the near term. InsuranceJanus Cam has also taken steps to increase its inventory to readily fulfill sales orders when received. Moreover, insurance companies have begun to recognize the benefit of having in-vehicle video recorders for their insured clients to such an extent that Janus Cam is now selling its Janus V2HD product to one insurance carrier in particular that requires its use in all insured’s vehicles. This sales channel has resulted in somewhat lower profit margins as devices are sold at wholesale prices, however installation service revenues have risen as noted above from $381$560 for the six-monthnine-month period ended DecemberMarch 31, 20132014 to $51,710$84,675 for the six-monthnine-month period ended DecemberMarch 31, 20142015 as Janus Cam provides installation and maintenance services to insurance company clientele.
15

In addition to revenues from hardware sales and support services, income not included in the net revenue total but listed as other income totaled $2,250$1,541 and $53,148$4,763 for the six-monththree-month periods ending DecemberMarch 31, 2015 and 2014 respectively. For the three-month period ending March 31, 2015 other income was comprised entirely of recovered shipping expenses charged to customers, whereas for the three-month ending March 31, 2014 and 2013 respectively.other income included $2,663 in recovered shipping expenses plus $2,100 in cash-back allowances from credit card companies. Other income is comprised offor the nine-month periods ending March 31, 2015 and March 31, 2014 totaled $3,791 and $57,910 respectively. For the nine-month periods ending March 31, 2015 and March 31, 2014 other income included recovered shipping expenses charged to Janus Cam customers of $1,876$3,616 and $7,399 for the six-month periods ended December 31, 2014 and 2013$10,062 respectively. The differencedecrease in recovered shipping expenses is attributed mainly to the proximity of customers during the current period and the decline in unit sales as compared to the previous six-monthnine-month period ending on DecemberMarch 31, 2013.2014. The remaining balance of $45,749$47,849 recorded for other income for the six-monthnine-month period ended DecemberMarch 31, 20132014 was attributed to a one-time adjustment in sales tax payable of $44,649, cash back allowances from credit card companies of $2,100, and a reversal of an account payable due to errordownward adjustment in accrued expenses of $1,100. For the six-monthnine-month period ending DecemberMarch 31, 20142015 the remaining balance of $374$175 was comprised of credits applied from company credit card accounts. Accounts receivable, net allowance for doubtful accounts of $25,186, at DecemberMarch 31, 20142015 and June 30, 2014 were recorded at $56,080$82,267 and $159,047 respectively, a decrease of $102,967$76,780 or 65%48%. The decrease is primarily due to receipt of structured payments from customers on payment plans and through more aggressive collection efforts as well as lower sales volumes. The overall aging of accounts or the risk of collection has not been materially affected.

16
Overall, consolidatedcombined net revenues for Janus Cam, including other income and adjustments, of $803,073$1,372,249 for the six-monthnine-month period ending DecemberMarch 31, 20142015 were down $325,725$429,871 from $1,128,798,$1,802,120 for the nine-month period ending March 31, 2014, a decrease of 29%24%. Combined net revenues for Janus Cam, including other income and adjustments, of $569,176 for the three-month period ending March 31, 2015 were down $104,147 from $673,323 for the three-month period ending March 31, 2014, a decrease of 15%. Cost of revenues for the six-monthnine-month periods ending DecemberMarch 31, 2015 and 2014 were $884,950 and 2013 were $508,169 and $648,352$1,010,538 respectively, representing a drop in gross profit of approximately 3%7% due in part to the product sold at wholesale and a slight increase in the cost of various accessory components sold during the period. Similarly, the cost of revenues for the three-month periods ending March 31, 2015 and March 2014 were $376,781 and $362,187 respectively, representing a drop in gross profit of approximately 12% due to a temporary increase in camera cost incurred for expedited inventory deliveries.

Continuing Operations: The company incurredhad an operating loss from continuing operations (before provisions for income taxes, other income and expenses)expenses, and after eliminating the operating results of the subsidiary held for sale) for the six-month period ended Decemberthree-month periods ending March 31, 2015 and March 31, 2014 of $63,589$7,837 and $36,132 respectively. With the elimination of the subsidiary held for sale, there were no revenues and all loses are attributed to general and administrative expenses. The nine-month period ended March 31, 2015 resulted in an operating loss of $70,713 as compared to a netan operating loss of $173,080$81,441 for the six-monthnine-month period ended DecemberMarch 31, 2013.2014 and again was comprised entirely of general and administrative expenses with no revenues. This represents a decrease in operating losses of $109,689$10,728 over the current six-monthnine-month period when compared to the same period of the previous year. Other income and expenses incurred duringfor the six-monththree-month period ending DecemberMarch 31, 2014 of $126,391 were2015 was comprised of income from recovered shipping for $1,876,$5,086 of debt forgiveness, less interest charges incurred from the initial valuation of embedded derivatives within our convertible debentures of plus accrued interest from otheron notes payable, of $79,764 less adjustments toplus a change in the fair value of the derivatesderivatives of $48,877 previously recorded for a total of $126,391.  When combined with the operating loss of $63,589 plus the provision for income tax of $800, a net loss of $190,780 was recorded$51,795. Comparatively, other expense for the six-monththree-month period ending DecemberMarch 31, 2014 was $3,627 and comprised entirely of interest on notes payable. The net operating income from continuing operations for the three-month period ending March 31, 2015 was $43,959 as compared to a net loss of $127,404 for the six-monththree-month period ending DecemberMarch 31, 2013.2014 of $39,760. Other expenses recorded during the nine-month period ending March 31, 2015 of $72,331 was comprised of income realized from forgiveness of $5,086 in accrued interest by noteholders less the derivative and interest expense from settlement of convertible debentures with shares of common stock plus accrued interest on other notes totaling $77,417. The increasenet operating loss, after other expenses, for continuing operations for the nine-month period ended March 31, 2015 was $143,044 as compared to the net loss from continuing operations of $91,159 for the nine-month period ended March 31, 2014 where our only other expense was $9,717 in interest on outstanding notes payable.

Consolidated Income (loss) Summary: The net income from continuing operations for the three-month period ending March 31, 2015 of $43,959 combined with the net income from subsidiary held for sale of $30,087 resulting in a net income of $74,046 compared with the three-month period ending March 31, 2014 where net loss from continuing operations of $39,760 combined with $26,757 of net loss from subsidiary held for sale produced a consolidated net loss of $66,571. The net loss from continuing operations for the nine-months ended March 31, 2015 of $143,044 combined with the net income for the subsidiary held for sale of $26,310 resulted in a consolidated net loss of $116,734. Consolidated net loss for the nine-month period ended March 31, 2014 was comprised of a net loss from continuing operations of $91,159 plus a net loss from the subsidiary held for sale of $102,762 for a consolidated net loss of $193,921. The decrease in net loss, $63,376for$146,248, was primarily attributed to the comparison periods is due primarilyelimination of executive salaries for the Janus Cam from October 2014 through March 31, 2015. In lieu of cancelling employment agreements, the Company agreed to allow the management team to borrow funds until such time as the salaries would be renegotiated downwards or the employment terminated. As of March 31, 2015 there had been $144,391 advanced as loans to the management staff. This amount appears on the Janus Cam balance sheet as an asset, however when negotiations are concluded or employment terminated, this amount will be expensed as well as the addition of employment taxes as applicable. Until such time as a resolution is reached, the expense associatedamount cannot be expensed as there is no certainty that an agreement can be reached or what the settlement amount may be at conclusion.

Liquidity

On January 26, 2015 we completed an equity round of financing totaling $3,000,000. Proceeds from the investment were used to pay off outstanding notes and convertible debentures as well as significant trade debt. It was determined that our wholly owned subsidiary, Janus Cam, required significant additional capital as well as the cooperation of the management staff of Janus Cam with regard to their employment contracts in order to bring the derivative liabilitiesoperations to a profitable level. These two factors as well as other considerations lead us to the decision to divest ownership of Janus Cam to Peter Park and Nelson Choi, both officers of Janus Cam and shareholders of the Company. Accordingly, a stock redemption agreement was entered into on February 26, 2015 that called for, among other closing conditions, the period ending Decemberadvance and subsequent forgiveness of $300,000 in intercompany loans from Concierge Technologies to Janus Cam. Concierge Technologies also agreed to pay off a note payable due an unrelated party on behalf of Janus Cam. Other proceeds from the invested $3,000,000 were used to pay transaction costs and expenses related to regulatory filings and legal documentation of these transactions. As of March 31, 2014 coupled with2015 the added income from a sales tax liability adjustment recorded forcompany has retained $2,353,378 in cash which management feels will be sufficient to execute our current business plan and to continue to pay its financial obligations throughout the six-month period ended December 31, 2013.current fiscal year.

 
 
1617
 
 
Liquidity

During the current fiscal year we have maintained our revenue stream and continued progression towards overall profitability while paying our contractors, commissioned sales people, advisors and vendors as remittance has become due. In an effort to further improve our profitability, our management team at Janus Cam have agreed to suspend their salaries during the three-month period ended December 31, 2014 until such time as new terms are negotiated. We have reacted to cash shortfalls by borrowing funds on short term loan agreements from insiders or persons known to management to be interested in such investments and also from unrelated third parties through funding of convertible debentures. During the current quarter we borrowed $35,000 from an unrelated party and will use the proceeds to pay in full a convertible debenture as it matures on January 2, 2015. Another of the convertible debentures for a net principal amount plus interest was converted to equity during the six-month period ended December 31, 2014. To date we have been able to repay other loans when due from operating revenues, but may find need to increase our short term borrowing in order to purchase inventory of next generation product in anticipation of growing sales demand. Management believes that, through execution of our current business plan, the Company will be able to continue to pay its financial obligations and to begin reduction of its accrued liabilities in the current fiscal year.
Item 3.
Item 3.                                Quantitative and Qualitative Disclosures about Market Risk.

The Company is a smaller reporting company and is not required to provide the information required by this item.

Item 4.
Item 4.                                Controls and Procedures

Evaluation of disclosure controls and procedures.  The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective and are designed to provide reasonable assurances that the information the Company is required to disclose in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period required by the Commission's rules and forms.  Further, the Company’s officers concluded that its disclosure controls and procedures are also 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.
 
 
1718
 

PART II - OTHER INFORMATION

Item 1.
Item 1.                                Legal Proceedings

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, by operation of law, this judgment is of no further effect and has expired due to passage of time and a failure to renew by Brookside. Regardless that there is no longer a default judgment enforceable against the Company, we continue to carry the liability as recorded on May 2, 2002. Brookside had entered into a subscription agreement with Concierge, Inc., which called for, among other things, the pending merger between Starfest and Concierge to be completed within 180 days of the investment. The merger was not completed within 180 days and Brookside sought a refund of their investment, which Concierge was unable to provide. The amount of $135,000 is included in accrued expenses as of DecemberMarch 31, 2014.2015.

Item 1A.Risk Factors.

The Company is a smaller reporting company and is not required to provide the information required by this item.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

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 proceeds were used to pay vendor invoices for Janus Cam and certain professional fees incurred by Concierge Technologies. The note was convertible, at the option of the debenture holder, to unregistered 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 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 and interest will become due and payable without pre-payment penalty. The Company identified embedded derivatives related to the convertible debenture. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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. However, as the debenture holder had no right to convert their debt to equity prior to August 19, 2014, the Company did not record a derivative liability for balance sheet dates prior to the three-month period ending September 30, 2014. As of December 30, 2014 the debenture holder has converted $53,000 of principal and $2,120 of accrued interest to equity through receipt of 9,770,247 shares of Concierge Technologies common stock per the following description.
 
Date No of Shares Shareholder Type of Consideration Value  No of Shares Shareholder Type of Consideration Value 
8/19/2014  2,142,857 Asher Enterprises debt forgiveness $15,000   2,142,857 Asher Enterprises Debt forgiveness $15,000 
9/22/2014  2,203,390 Asher Enterprises debt forgiveness $13,000   2,203,390 Asher Enterprises Debt forgiveness $13,000 
10/10/2014  5,424,000 Asher Enterprises Debt forgiveness $27,120   5,424,000 Asher Enterprises Debt forgiveness $27,120 
Total  9,770,247     $55,120   9,770,247     $55,120 

On January 26, 2015 the Company entered into a series of agreements that resulted in the sale of 400,000,000 shares of common stock and 32,451,499 shares of series B preferred stock in exchange for $3,000,000 in cash per the following description.
Date 
No of Shares
Class
 Shareholder Type of Consideration Value 
1/26/2015 266,666,667 common stock Nicholas and Melinda Gerber Living Trust Cash $773,333 
1/26/2015 133,333,333 common stock Schoenberger Family Trust Cash $386,667 
1/26/2015 21,634,332 Series B preferred Nicholas and Melinda Gerber Living Trust Cash $1,226,667 
1/26/2015 10,817,167 Series B preferred Schoenberger Family Trust Cash $613,333 
      Total Consideration $3,000,000 

19
On December 19, 2014 the Company entered into an amendment to a convertible debenture held by a related party. The amended provided for a settlement of the amount due under the terms of the debenture, and also amended the maturity date to be June 1, 2015. On January 26, pursuant to the terms of the amendment, the Company paid the debenture in full by payment of $122,000 in cash and issuance of 8,270,000 shares of common stock per the following description.

Date 
No of Shares
Class
 Shareholder Type of Consideration Value 
1/26/2015 8,270,000 common stock Polly Force Co Debt forgiveness $102,941 

All of the above sales were made pursuant to the exemption from registration provided by the Commission’s Regulation D, Rule 506.  All purchasers were either accredited investors or, if not, were provided copies of the company’s recent filings with the Commission including financial statements meeting the requirements of the Commission’s Item 310 of Regulation S-B.  All purchasers were provided the opportunity to ask questions of Concierge’s management.
18


Item 3.
Item 3.                                Defaults Upon Senior Securities.
 
None.

Item 4.                                (Removed and Reserved).

Item 5.
                                Other Information

None.
 
On November 8, 2013 Janus Cam entered into a short term Note Agreement with an unaffiliated individual in the amount of $50,000, the proceeds of which were used to pay down inventory purchase costs. Interest on the Note accrues at an annual rate of 10% and is payable in monthly installments with a maturity date of February 19, 2014. On February 19, 2014 the lender agreed to extend the maturity date to June 1, 2014 and 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. On August 25, 2014 the maturity date was further amended to be January 5, 2015 and a fee of $500 was paid to the note holder.

On January 8, 2014 Concierge Technologies entered into a Note Agreement with an affiliate of the Company in the amount of $10,000 bearing interest at the annual rate of 6% with a maturity date of July 31 2014. The proceeds of the Note were used to engage the services of a professional investor relations firm. On July 31, 2014 the maturity date was amended to be January 8, 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 unregistered common shares after September 23, 2014 at a conversion price calculated on a prescribed discount to the trailing 10-day volume weighted average market price 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. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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, hence the Company has accounted for the embedded derivative as of December 31, 2014.
19

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 volume weighted average market price 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. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company 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. hence the Company has accounted for the embedded derivative as of December 31, 2014.

On May 12, 2014 the Company convened a telephonic board meeting, after notice duly given, wherein Matt Gonzalez was nominated and appointed as temporary Chief Financial Officer to perform all duties of the office, including review of form 10Q for the three-month period ended September 30, 2014, and until such time as our duly appointed Chief Financial Officer, Allen Kahn, has recovered from his recent medical related impairments. Mr. Kahn died on July 26, 2014 and Mr. Gonzalez assumed the office of Chief Financial Officer for the remainder of Mr. Kahn’s term.

On August 27, 2014 Peter Park and Nelson Choi resigned from the board of directors. As of December 31, 2014 the vacancies created by their resignations have not been filled. Mr. Park and Mr. Choi continue as employees and directors on the board of directors of Janus Cam, a wholly owned subsidiary of Concierge Technologies.

On January 26, 2015 Hansu Kim and Samuel Wu resigned from the board of directors and David Neibert and Matt Gonzalez resigned from their respective offices as Chief Executive Officer and Chief Financial Officer. Nicholas Gerber was elected to the board of directors and appointed Chief Executive Officer and Secretary/Treasurer, Scott Schoenberger was elected to the board of directors and David Neibert was appointed Chief Financial Officer. The changes to the board of directors and officers, as well as other matters connected with an investment transaction, were described in the form 8K filed on January 29, 2015 and further discussed in Note 12 of the Notes to the Condensed Consolidated Financial Statements incorporated herein.
 
 
20
 
 

Item 6.
                                Exhibits

The following exhibits are filed, by incorporation and by reference, as part of this Form 10-Q:

Exhibit                                           Item

   22.1-Stock Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS Capital, Inc.*

   22.2-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-Amendment to Articles of Incorporation as filed with the Definitive Information Schedule 14c filed with the SEC on December 3, 2010 and with the Nevada Secretary of State on December 23, 2010.

 10.1-Agreement of Merger between Starfest, Inc. and Concierge, Inc.*
 
 14   
14.1
-Code
Agreement for Sale and Purchase of Ethics for CEO and Senior Financial Officers.***a Business, May 19, 2015
 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.
 
 
*Previously filed with Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913, incorporated herein.
 
 **Previously filed with Form 8-K on April 2, 2002; Commission File No. 000-29913, incorporated herein.

 ***Previously filed with Form 10-K FYE 06-30-04 on October 13, 2004; Commission File No. 000-29913, incorporated herein.

 +Previously filed with Form 10-K FYE 06-30-06 on October 13, 2006; Commission File No. 000-29913, incorporated herein.

 ++Previously filed on November 5, 2007 as Exhibit 10.2 to Concierge Technologies’ Form 8-K for the Current Period 10-30-07; Commission File No. 000-29913, incorporated herein.


 
21
 

SIGNATURES

Pursuant to the requirements of the Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
CONCIERGE TECHNOLOGIES, INC.
 
    
Dated: February 17, 2014May 20, 2015
By:/s/ Nicholas Gerber, 
  Nicholas Gerber, 
  Chief Executive Officer 
    

 
 
22