Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2016 | Nov. 14, 2016 | |
RelatedPartyNotesPayableCurrent9 | ||
Entity Registrant Name | CONCIERGE TECHNOLOGIES INC | |
Entity Central Index Key | 1,005,101 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 67,593,870 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
CURRENT ASSETS: | ||
Cash & cash equivalents | $ 991,800 | $ 1,060,184 |
Accounts receivable, net | 804,949 | 839,220 |
Inventory, net | 445,575 | 436,541 |
Other current assets | 20,847 | 24,876 |
Total current assets | 2,263,171 | 2,360,821 |
Restricted cash | 14,568 | 0 |
Property and equipment, net | 1,152,717 | 1,166,693 |
Goodwill | 219,256 | 219,256 |
Intangible assets - net | 988,235 | 1,018,213 |
Total assets | 4,637,947 | 4,764,983 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 1,001,603 | 997,644 |
Purchase consideration payable | 214,035 | 214,035 |
Notes payable - related parties | 303,500 | 308,500 |
Notes payable | 8,500 | 8,500 |
Convertible Promissory Note payable - related parties, net | 1,300,000 | 1,300,000 |
Total liabilities | 2,827,639 | 2,828,680 |
COMMITMENT & CONTINGENCY | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, 50,000,000 authorized par $0.001 Series B: 3,754,355 issued and outstanding at September 30, 2016 and June 30, 2016 | 3,754 | 3,754 |
Common stock, $0.001 par value; 900,000,000 shares authorized; 67,953,870 shares issued and outstanding at September 30, 2016 and at June 30, 2016 | 67,954 | 67,954 |
Additional paid-in capital | 8,325,620 | 8,325,620 |
Accumulated other comprehensive income (loss) | (39,241) | (29,503) |
Accumulated deficit | (6,547,778) | (6,431,522) |
Total Stockholders' equity | 1,810,307 | 1,936,303 |
Total liabilities and Stockholders' equity | $ 4,637,947 | $ 4,764,983 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2016 | Jun. 30, 2016 |
Stockholders equity: | ||
Preferred stock Series B, par value | $ 0.001 | $ 0.001 |
Preferred stock Series B, authorized shares | 50,000,000 | 50,000,000 |
Preferred stock Series B, issued shares | 3,754,355 | 3,754,355 |
Preferred stock Series B, outstanding shares | 3,754,355 | 3,754,355 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 900,000,000 | 900,000,000 |
Common stock, issued shares | 67,953,870 | 67,953,870 |
Common stock, outstanding shares | 67,953,870 | 67,953,870 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||
Net revenue | $ 2,095,232 | $ 721,725 |
Cost of revenue | 1,126,502 | 557,950 |
Gross profit | 968,730 | 163,774 |
Operating expense | ||
General & administrative expense | 1,033,266 | 238,187 |
Total operating expenses | 1,033,266 | 238,187 |
Loss from Operations | (64,536) | (74,412) |
Other income (expense) | ||
Other income | 4,916 | 0 |
Interest income | 0 | 1,406 |
Interest expense | (13,256) | 0 |
Total other income (expense) | (8,340) | 1,406 |
Loss before income taxes | (72,876) | (73,006) |
Provision of income taxes | (43,380) | 0 |
Net Loss | (116,256) | (73,006) |
Other Comprehensive Income (Loss) | ||
Foreign currency translation gain (loss) | (9,738) | (86,204) |
Comprehensive Loss | $ (125,995) | $ (159,210) |
Weighted average shares of common stock | ||
Basic and diluted | 67,953,870 | 67,953,870 |
Net income (loss) per common share | ||
Basic and Diluted | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (116,256) | $ (73,006) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation | 99,512 | 37,329 |
Loss on disposal of equipment | 8,183 | 0 |
(Increase) decrease in current assets: | ||
Accounts receivable | 32,688 | 180,067 |
Inventory | (8,519) | 36,706 |
Other assets | (10,098) | (60,747) |
Increase (decrease) in current liabilities: | ||
Accounts payable & accrued expenses | 1,504 | 1,072 |
Net cash provided by operating activities | 7,015 | 121,420 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for acquisition of subsidiary net of subsidiary cash acquired | 0 | (1,519,802) |
Purchase of equipment | (40,357) | (38,361) |
Net cash used in investing activities | (40,357) | (1,558,163) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of related party loan | (5,000) | 0 |
Net cash used in financing activities | (5,000) | 0 |
Effect of exchange rate change on cash and cash equivalents | (30,041) | (42,034) |
NET DECREASE IN CASH & CASH EQUIVALENTS | (68,383) | (1,478,776) |
CASH & CASH EQUIVALENTS, BEGINNING BALANCE | 1,060,184 | 1,970,062 |
CASH & CASH EQUIVALENTS, ENDING BALANCE | 991,800 | 491,286 |
Cash paid during the period for: | ||
Interest paid - continuing operations | 5,000 | 0 |
Income taxes paid-discontinued operations | $ 800 | $ 0 |
1. ORGANIZATION AND DESCRIPTION
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | Concierge Technologies, Inc., (the “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 Gourmet Foods, a manufacturer and distributor of meat pies in New Zealand, Brigadier Security Systems, a provider of security alarm installation and monitoring located in Canada, and |
2. ACCOUNTING POLICIES
2. ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
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 2016 Form 10-K filed on October 21, 2016 with the U.S. Securities and Exchange Commission. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Concierge Technologies, Inc. and its wholly owned subsidiaries, Kahnalytics, Inc., Brigadier Security Systems and Gourmet Foods, Ltd. All significant inter-company transactions and accounts have been eliminated in consolidation. Other Comprehensive Income (Loss) and Foreign Currency We record foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation. The accounts of Gourmet Foods, Ltd. use the New Zealand dollar as the functional currency. The accounts of Brigadier Security System use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation loss classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet was $39,241 as of September 30, 2016. 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. 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 in the United States was $66,005 at September 30, 2016. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s uninsured cash balance in Canada was CD$276,147 (approximately US$210,032) at September 30, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company maintains cash balances, are not covered by insurance. As of September 30, 2016, the Company had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $564,216. The Company has not experienced any losses in such accounts. Major customers & suppliers Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its single-source sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. No single customer accounts for a significant percentage of sales or accounts receivable. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the 3-month period ended September 30, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for 3-month period ended September 30, 2015. Sales of these products were discontinued during the current fiscal year. Concierge, through Brigadier Security Systems, is dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customers, which includes contracts and recurring monthly residuals from the monitoring company, totaled 51% of the total revenues for the three-month period ended September 30, 2016, and accounted for approximately 35% of accounts receivable as of the balance sheet date of September 30, 2016 Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the 3-month period ending and balance sheet date of September 30, 2016, our largest customer in the grocery industry, who operates through a number independently branded stores, accounted for approximately 20% of our gross sales revenues and 28% of our accounts receivable. The second largest in the grocery industry accounted for approximately 11% of our gross revenues but less than 10% of our accounts receivable. In the gasoline convenience store market we supply two major accounts. The largest is a marketing consortium of gasoline dealers accounting for approximately 41% of our gross sales revenues and 23% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 14% of accounts receivable. The third category of independent retailers accounted for the balance of our gross sales revenue however the group is fragmented and no one customer accounts for a significant portion of our revenues. For the three-month period ending September 30, 2015 and the balance sheet date of September 30, 2015 largest customer in the grocery industry accounted for approximately 14% of revenues and 27% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 42% of revenues and 17% of accounts receivable (though no single member of the consortium accounted for more than 2% of accounts receivable). Independent retail stores accounted for approximately 11% of revenues however no single store accounted for any significant amount of the accounts receivable. The balance of the revenues and accounts receivable were not dominated by any significant single source for the three-month period ended September 30, 2015. Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise. Reclassifications For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current year. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, 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. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (FAS 13) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements. |
3. GOING CONCERN
3. GOING CONCERN | 3 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of $6,547,778 as of September 30 2016, including a net loss of $116,256 during the 3-month period ended September 30, 2016. 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 the increasing revenues of its wholly owned subsidiaries, along with the planned acquisition of other revenue producing subsidiaries, the Company faces continuing significant business risks, which include, but are not limited to, its ability to maintain vendor and supplier relationships by making timely payments when due, continue product research and development efforts at Kahnalytics, and successfully compete for customers within the areas of interest for its Canadian and New Zealand held subsidiaries. In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to increase profitability from its subsidiary operations, obtain financing, and succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts or classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. Management devoted considerable effort from inception through the period ended September 30, 2016, towards (i) sourcing additional working capital including $200,000 debt issuance completed subsequent to September 30, 2016, (ii) management of accrued expenses and accounts payable, (iii) acquisition of profit producing subsidiaries, and (iv) other business combinations between entities where we have a common controlling interest such as Wainwright Holdings. Management believes that the above actions will allow the Company to continue operations for the next 12 months. |
4. INVENTORY
4. INVENTORY | 3 Months Ended |
Sep. 30, 2016 | |
InventoryAbstract | |
INVENTORIES | Inventories consisted of the following :- September 30, June 30, 2016 2016 Raw materials $ 48,817 $ 50,023 Supplies and packing materials 96,782 77,497 Finished goods 299,977 357,351 445,575 484,871 Less impairment finished goods - (48,330 ) Total $ 445,575 $ 436,541 |
5. PROPERTY AND EQUIPMENT
5. PROPERTY AND EQUIPMENT | 3 Months Ended |
Sep. 30, 2016 | |
Property And Equipment | |
PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of September 30, 2016 and June 30, 2016: September 30, 2016 June 30, 2016 Plant and Equipment $ 1,346,524 $ 1,477,411 Furniture & Office Equipment 150.549 119,123 Vehicles 81,516 58,850 Total Property and Equipment, Gross 1,578,589 1,655,384 Accumulated Depreciation (425,872 ) (488,691 ) Total Property and Equipment, Net $ 1,152,717 $ 1,166,693 Depreciation expense amounted to $69,533 and $37,329 for the three-month periods ended September 30, 2016 and 2015, respectively. |
6. GOODWILL
6. GOODWILL | 3 Months Ended |
Sep. 30, 2016 | |
GoodwillAbstract | |
GOODWILL | Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in business combinations. Goodwill comprised of the following amounts: September 30, 2016 June 30, 2016 Trained workforce – Gourmet Foods $ 51,978 $ 51,978 Trained workforce - Brigadier 75,795 75,795 Goodwill – Gourmet Foods 45,669 45,669 Goodwill - Brigadier 45,814 45,814 $ 219,256 $ 219,256 The Company tests for goodwill impairment at each reporting unit. There was no goodwill impairment for the three-month period ended September 30, 2016. |
7. INTANGIBLE ASSETS
7. INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2016 | |
Intangible Assets | |
INTANGIBLE ASSETS | Intangible assets consisted of the following: September 30, June 30, 2016 2016 Brand name $ 402,123 $ 402,123 Domain name 36,913 36,913 Customer relationships 500,252 500,252 Non-compete agreement 84,982 84,982 Recipes 21,601 21,601 Total 1,045,871 1,045,871 Less : Accumulated Amortization (57,636 ) (27,658 ) Net Intangibles $ 988,235 $ 1,018,213 CUSTOMER RELATIONSHIP On August 11, 2105, the Company acquired Gourmet Foods, Ltd. The fair value on the acquired customer relationships was estimated to be $66,153 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be $434,098 and is amortized over the remaining useful life of 10 years. September 30, 2016 June 30, 2016 Customer relationships $ 500,252 $ 500,252 Less: accumulated amortization (22,268 ) (9,659 ) Total customer relationships, net $ 477,984 $ 490,593 BRAND NAME On August 11, 2105, the Company acquired Gourmet Foods, Ltd. The fair value on the acquired brand name was estimated to be $61,429 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be $340,694 and is amortized over the remaining useful life of 10 years. September 30, June 30, 2016 2015 Brand name $ 402,123 $ 402,123 Less: accumulated amortization (18,583 ) (8,447 ) Total brand name, net $ 383,540 $ 393,696 DOMAIN NAME On August 11, 2105, the Company acquired Gourmet Foods, Ltd. The fair value on the acquired domain name was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired domain name was estimated to be $15,312 and is amortized over the remaining useful life of 5 years. September 30, 2016 June 30, 2015 Domain Name $ 36,913 $ 36,913 Less: accumulated amortization (6,054 ) (4,193 ) Total brand name, net $ 30,859 $ 32,720 RECIPES On August 11, 2105, the Company acquired Gourmet Foods, Ltd. The fair value on the recipes was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. September 30, 2016 June 30, 2016 Recipes $ 21,601 $ 21,601 Less: accumulated amortization (5,026 ) (3,937 ) Total Recipes, net $ 16,575 $ 17,664 NON-COMPETE AGREEMENT On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired non-compete agreement was estimated to be $104,122 and is amortized over the remaining useful life of 5 years. September 30, June 30, 2016 2015 Non-compete agreement $ 84,982 $ 84,982 Less: accumulated amortization (5,705 ) (1,421 ) Total non-compete agreement, net $ 79,277 $ 83,561 AMORTIZATION EXPENSE The amortization expense for the 3-month period ended September 30, 2016 was $29,979. Estimated amortization expenses of intangible assets for the next five twelve months periods ended September 30, are as follows: Years Ending September 30, Expense 2017 $ 118,937 2018 $ 118,937 2019 $ 118,937 2020 $ 117,469 2021 $ 103,592 |
8. ACCOUNTS PAYABLE AND ACCRUED
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses consisted of the following: September 30, 2016 June 30, 2016 Accounts payable $ 221,825 $ 288,170 Accrued judgment 135,000 135,000 Accrued interest 33,208 13,918 Taxes payable 202,718 167,683 Accrued payroll and vacation 151,173 127,271 Accrued expenses 257,679 265,502 Total $ 1,001,603 $ 997,644 |
9. RELATED PARTY TRANSACTIONS
9. RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Notes Payable - Related Parties Current related party notes payable consist of the following: September 30, 2016 June 30, 2016 Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due) $ - $ 5,000 Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due) 3,500 3,500 Notes payable to affiliate of director/shareholder, interest rate of 4%, unsecured and payable on June 30, 2017 300,000 300,000 $ 303,500 $ 308,500 On July 7, 2016 the Company repaid the outstanding note due to a related party totaling $5,000 in principal and $5,000 in accrued interest. A total of $2,075 in accrued interest was forgiven by the noteholder in settlement of the debt. Interest expense for all related party notes for the three-month period ending September 30, 2016 and 2015 were $3,096 and $197 respectively. Convertible Promissory Note Payable –Related Parties On January 27, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Wainwright Holdings, an affiliate of our shareholder and C.E.O., that resulted in the funding of $450,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.10 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note. On April 8, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Gerber Irrevocable Family Trust, an affiliate of our shareholder and C.E.O., that resulted in the funding of $350,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note. On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Wainwright Holdings, an affiliate of our shareholder and C.E.O., that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note. On May 25, 2016 the Company entered into a convertible promissory note (the “Promissory Note”) with Schoenberger Family Trust, an affiliate of our shareholder and director, that resulted in the funding of $250,000. The Promissory Note bears interest at four percent (4%) per annum and increases to eight percent (8%) in the event of default by the Company. The Company and the noteholder negotiated the interest rate at arm’s length relying upon the available market rate for long-term deposits at financial institutions as well as the current rate of return realized by the noteholder for cash deposits currently held. Larger deposits traditionally fall into a “Jumbo” rate category with marginally higher returns. Interest ranged from annual percentage rates of .01% at the lowest to 1.75% at the highest. Recognizing the unsecured nature of the promissory note, and the historical record of continued operating losses by the Company, a rate of 4 percent annual interest was agreed upon in light of the heightened default risk over traditional investment instruments. The Promissory Note may be prepaid at any time in whole or in part by the Company and is convertible into restricted common stock of the Company at the election of Promissory Note holder on the date which is 180 days following issuance of the Promissory Note at a conversion price of $0.13 per share. The conversion price is subject to adjustment for mergers, consolidations, share exchanges, recapitalizations or similar events. The Promissory Note matures five (5) years from issuance and is unsecured. Proceeds from the Promissory Note are intended to be used for transactions involving acquisitions of unrelated companies by Concierge Technologies that meet the criteria as determined by the Board of Directors. There was no beneficial conversion feature identified as of the date of issuance of the Promissory Note. Interest expense for all related party convertible debentures, for the three-month periods ended September 30, 2016 and 2015 amounted to $13,106 and was $0 respectively. |
10. NOTE PAYABLE
10. NOTE PAYABLE | 3 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | An unsecured loan in the amount of $8,500 due a former director and shareholder who is now deceased has been reclassified as a note due unrelated party. The note is interest free, not deemed assignable to successors by the Company, and held as a contingent liability until resolved. |
11. BUSINESS COMBINATIONS
11. BUSINESS COMBINATIONS | 3 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | On May 28, 2015 Concierge Technologies, Inc. (the “Company”) entered into an agreement to acquire the assets of Gourmet Foods, Ltd., a New Zealand corporation, subject to satisfactory completion of due diligence and other customary criteria for a transaction of this kind. Gourmet Foods is a baker of New Zealand meat pies and other confections distributed to major grocery stores, convenience stores, restaurants and other retailers throughout New Zealand. The Company placed a cash deposit with Gourmet Foods in accordance with the provisions of the asset purchase agreement, however the parties later elected to change the nature of the transaction to a stock purchase agreement. The Stock Purchase Agreement (the “SPA”) was entered into on July 28, 2015 and was set to close on July 31, 2015 subject to final adjustments to accounts receivable, accounts payable, inventory, employee entitlements and other current assets and liabilities. The Company paid a purchase consideration of NZ$2,597,535 (approximately US$1,753,428) in cash. An independent evaluation was conducted in order to obtain a fair market value of the fixed assets and intangible assets acquired. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. On August 11, 2015 the parties reached agreement to close the SPA based on the balance sheet information as of July 31, 2015, subject to further adjustments if necessary once certain balances became known without dispute, and the Company remitted the remainder of the purchase price in cash to an account in New Zealand established for the benefit of the shareholders of Gourmet Foods, Ltd. The operations of Gourmet Foods, Ltd. was consolidated going forward with those of the Company as of August 1, 2015. The following table summarizes the value of the net assets acquired as of the Acquisition Date: Cash $ 50,695 Accounts Receivable 259,662 Prepaid Expenses 11,246 Inventory 256,271 Property and Equipment 1,207,762 Intangible Assets 170,784 Goodwill 97,647 Total Assets $ 2,054,067 Accounts Payable $ 253,951 Employee Entitlements 46,688 Total Liabilities $ 300,639 Consideration Paid for Net Assets $ 1,753,428 On June 2, 2016 the Company closed a Stock Purchase Agreement transaction which resulted in the acquisition of all the outstanding and issued stock of Brigadier Security Systems, a Canadian corporation located in Saskatoon, Saskatchewan. The total purchase price was CD$2,010,266 (approximately US$1,540,830) in cash, payable in several stages. The consideration of CD$1,000,000 (US$756,859) was paid in cash and CD$733,000 (US$569,935) was deposited in an attorney client trust account in Canadian currency (to be paid to Brigadier, on the 183rd day following the Closing Date if net sales meeting the minimum threshold of $1,500,000 CDN (the "Sales Goal") is achieved; if the Sales Goal is not reached by the 183rd day following the Closing Date, then the payment is to be remitted on the 365th day following the Closing Date). The audit of Brigadier resulted in an upwards adjustment of the purchase price by CD$277,266 (US$214,035) which has been recorded as of September 30, 2016 as Purchase Consideration Payable and was subsequently paid in October 2016. Under the acquisition method of accounting, the total purchase consideration is allocated to Brigadier Security Systems net tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The following table summarizes the value of the net assets acquired as of the Acquisition Date: Assets Cash 80,391 Accounts Receivable 431,656 Inventory 238,148 Prepaid Expenses & Other Assets 20,001 Property, plant and equipment 20,455 Intangible Assets 875,087 Goodwill 121,609 Total Assets 1,787,348 Liabilities Accounts Payable 187,925 Income Tax Payable 55,953 Customer Deposits 2,640 Total Liabilities 246,518 Consideration paid for net assets 1,540,830 The unaudited pro forma financial information below represents the combined results of our operations as if 3-month Period Ended September 30, 2016 3-month Period Ended September 30, 2015 (Unaudited) (Unaudited) Revenue $ 2,095,232 $ 1,891,231 Income (Loss) from operations $ (64,536 ) $ 65,989 Net loss $ (116,256 ) $ (57,789 ) Net loss per share available to common stockholders, basic and diluted $ (0.00 ) $ (0.00 ) |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Lease Commitment Gourmet Foods. Ltd. (“GFL”) has operating leases for its office, factory and warehouse facilities located in Tauranga, New Zealand, as well as for certain equipment including vehicles. These leases are generally for three-year terms, with options to renew for additional three-year periods. The leases mature between September 2016 and August 2021, and require monthly rental payments of approximately US$11,459 per month translated to US currency as of September 30, 2016. Future minimum lease payments for Gourmet Foods are as follows: Year Ended June 30, Lease Amount 2017 $ 103,127 2018 137,503 2019 60,715 2020 18,734 2021 9,388 2022 2,347 Total Minimum Lease Commitment $ 331,814 GFL entered into a General Security Agreement in favor of the Gerald O’Leary Family Trust and registered on the Personal Property Securities Register for a priority sum of NZ$110,000 (approximately US$80,126) to secure the lease of its primary facility. In addition, a NZ$20,000 (approximately US$14,568) bond has been posted through ANZ Bank and secured with a cash deposit of equal amount to secure a separate facilities lease. The General Security Agreement and the cash deposit will remain until such time as the respective leases are satisfactorily terminated in accordance with their terms. Interest from the cash deposit securing the lease accumulates to the benefit of GFL and is listed as a component of interest income/expense on the accompanying Consolidated Statements of Operations. Brigadier Security Systems (“BSS”) leases office and storage facilities in Saskatoon, Saskatchewan as well as vehicles used for installations and service and various office equipment. The minimum lease obligations through their expiry dates are indicated as below and require monthly payments of approximately US$11,708. Future minimum lease payments for Brigadier Security Systems are as follows: Year Ended June 30, Lease Amount 2017 $ 54,604 2018 33,256 2019 30,484 Total Minimum Lease Commitment $ 118,344 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 September 30, 2016. |
13. SEGMENT REPORTING
13. SEGMENT REPORTING | 3 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | With the acquisition of Gourmet Foods, Ltd. and Brigadier Security Systems, the Company has identified three segments for its products and services;U.S.A., New Zealand and Canada. Our reportable segments are business units located in different global regions. The Company’s operations in the U.S.A. include the gathering of live-streaming video recording data displayed online to subscribers through its wholly owned subsidiary Kahnalytics, Inc., in New Zealand include the production, packaging and distribution on a commercial scale of gourmet meat pies and related bakery confections through its wholly owned subsidiary Gourmet Foods, Ltd. and in Canada security alarm system installation and monitoring sold through its wholly owned subsidiary Brigadier Security Systems to residential and commercial customers. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. Amounts are adjusted for currency translation as of the balance sheet date and presented in US dollars. The following table presents a summary of identifiable assets as of September 30, 2016 and June 30, 2016: As of September 30, 2016 As of June 30, 2016 Identifiable assets: Corporate headquarters $ 1,524,134 $ 1,521,210 U.S.A. 86,944 87,790 New Zealand 2,024,002 2,199,128 Canada 1,002,866 956,855 Consolidated $ 4,637,947 $ 4,764,983 The following table presents a summary of operating information for the 3-month periods ended September 30, 2016 and 2015: (note: New Zealand revenues are for a period of 2 months for 2015 and Canadian interests had not yet been acquired in 2015) 3-Months Ended September 30, 2016 3-Months Ended September 30, 2015 Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 64,528 $ 121,200 New Zealand : Food Industry 1,205,639 600,525 Canada 825,065 - Consolidated $ 2,095,232 $ 721,725 Net income (loss) after taxes: Corporate headquarters $ (189,443 ) $ (73,071 ) U.S.A. : Mobile video recording devices (16,832 ) (1,670 ) New Zealand : Food Industry (25,107 ) 2,367 Canada : Security alarm monitoring 115,125 - Consolidated $ (116,256 ) $ (73,006 ) The following table presents a summary of capital expenditures for the 3-months ended June 30: 2016 2015 Capital expenditures: Corporate headquarters $ - $ 1,519,802 U.S.A - - New Zealand 40,357 38,361 Canada - - Consolidated $ 40,357 $ 1,558,163 |
14. REVERSE STOCK SPLIT
14. REVERSE STOCK SPLIT | 3 Months Ended |
Sep. 30, 2016 | |
Reverse Stock Split | |
REVERSE STOCK SPLIT | On November 11, 2015, the Board of Directors (the “Board’) of the Company approved the implementation of a one-for-ten (1:10) reverse stock split of all of the Company’s issued and outstanding common and preferred stock (the “Reverse Stock Split”). The Reverse Stock Split became effective when trading opened on December 15, 2015. The Reverse Stock Split was previously approved by the Company’s shareholders pursuant to a majority written consent and by the Board pursuant to unanimous written consent on February 26, 2015. The approvals provided discretion to the Board to implement the Reverse Stock Split by the end of 2015. The number of the Company’s authorized shares of common stock did not change. All figures have been presented on the basis of reverse split wherever applicable for all the periods presented in these financial statements. |
15. SUBSEQUENT EVENTS
15. SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | On September 19, 2016, the Company entered into a conditional Stock Purchase Agreement (the “Agreement”), dated September 19, 2016, with Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”) and certain shareholders of Wainwright (the “Sellers”), pursuant to which the Sellers conditionally agreed to sell, and the Company conditionally agreed to purchase, shares representing approximately 97% of the total issued and outstanding common stock of Wainwright (the “Wainwright Shares”). The Company intends to make an offer to acquire the remaining Wainwright shares of common stock prior to the Closing. As a result of the transaction, current shareholders of Wainwright will become shareholders of the Company. Mr. Gerber, along with certain family members and certain other Wainwright shareholders, currently own the majority of the common stock in the Company as well as Wainwright. Following the closing of this transaction, he and those shareholders will continue to own the majority of the Company voting shares. Wainwright owns all of the issued and outstanding limited liability company membership interests of United States Commodity Funds LLC, a Delaware limited liability company (“USCF”) and USCF Advisers, LLC (“USCF Advisers”). USCF is a commodity pool operator registered with the Commodity Futures Trading Commission. USCF Advisers is an SEC registered investment adviser. USCF and USCF Advisers act as the advisers to the Funds set forth in the Agreement (each, a “Fund”, and collectively, the “Funds”). The Closing shall occur on the later of (i) the date that is two Business Days following the date on which the last of the conditions to Closing set forth in Articles VIII and IX of the Agreement have been satisfied or, to the extent permitted by applicable Legal Requirements, waived by the relevant party, (ii) the 21st calendar following the date on which the Definitive Schedule 14C was mailed to the Concierge Shareholders, and (iii) such other time and date as the parties may agree. The conditions to the Closing of the Contemplated Transaction are more particularly described in Articles VIII and IX of Exhibit 10.1 which is attached to the Form 8K submitted on September 19, 2016 and incorporated herein by this reference. The conditions to the Closing include, but are not limited to, the Company’s receipt of a Fairness Opinion to the effect that, as of the date of the Agreement, and based upon and subject to the limitations and assumptions set forth in such opinion, the Purchase Price to be paid by the Company pursuant to the Agreement is fair, from a financial point of view, to the holders of shares of the Company. There is no guarantee that the Closing of the Contemplated Transaction will occur either as provided for in the Agreement or at all. There is no guarantee that either the Company or Wainwright will fulfill all conditions to Closing and that if not fulfilled, that either party will waive the outstanding condition to Closing. As of November 15, 2016 the Company has not completed the steps necessary to close the proposed transaction. On October 11, 2016 the Company made the adjusted payment of CD$277,266, recorded as Purchase Consideration Payable of US$214,035 in the accompanying financial Statements. On November 1, 2016 the Company entered into a promissory note agreement with Wainwright Holdings, Inc. in the amount of $200,000. Wainwright Holdings, Inc. is an affiliate of our CEO, Nicholas Gerber, who is also the CEO of Wainwright Holdings, Inc. The note accrues interest on the unpaid principal at the rate of 4% per annum until maturity at November 1, 2017, or the date of repayment. In the event of a default the interest rate increases to 8% per annum on the unpaid principal amount due past the maturity date. The note is unsecured. |
2. ACCOUNTING POLICIES (Policie
2. ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
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 2016 Form 10-K filed on October 21, 2016 with the U.S. Securities and Exchange Commission. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Concierge Technologies, Inc. and its wholly owned subsidiaries, Kahnalytics, Inc., Brigadier Security Systems and Gourmet Foods, Ltd. All significant inter-company transactions and accounts have been eliminated in consolidation. |
Other Comprehensive Income (Loss) and Foreign Currency | We record foreign currency translation adjustments and transaction gains and losses in accordance with SFAS 52, Foreign Currency Translation. The accounts of Gourmet Foods, Ltd. use the New Zealand dollar as the functional currency. The accounts of Brigadier Security System use the Canadian dollar as the functional currency. Assets and liabilities are translated at the exchange rate on the balance sheet date, and operating results are translated at the average exchange rate throughout the period. Accumulated translation loss classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet was $39,241 as of September 30, 2016. |
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. |
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 in the United States was $66,005 at September 30, 2016. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s uninsured cash balance in Canada was CD$276,147 (approximately US$210,032) at September 30, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company maintains cash balances, are not covered by insurance. As of September 30, 2016, the Company had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $564,216. The Company has not experienced any losses in such accounts. |
Major customers & suppliers | Concierge, through Kahnalytics as a licensed user of a proprietary software application, is dependent on the continued support of this online platform and the adherence to the license contract terms between Kahnalytics and the foreign-based licensor. Kahnalytics is also largely dependent on its single-source sales channel to continue to expand its dealer network of resellers who, in turn, activate subscribers to the Kahnalytics service. No single customer accounts for a significant percentage of sales or accounts receivable. Hardware sold by Kahnalytics is currently supplied by one source, however in the event this source proves to be inadequate there are other alternative sources of equal or comparable devices as needed by Kahnalytics. During the 3-month period ended September 30, 2015 Kahnalytics had just one customer accounting for 100% of its sales. Correspondingly, Kahnalytics had only two suppliers of the hardware it sold with the larger of the suppliers accounting for 92% of the cost of goods sold for 3-month period ended September 30, 2015. Sales of these products were discontinued during the current fiscal year. Concierge, through Brigadier Security Systems, is dependent upon its contractual relationship with the alarm monitoring company who purchases the monitoring contracts and provides monitoring services to Brigadier’s customers. In the event this contract is terminated Brigadier would be compelled to find an alternate source of alarm monitoring, or establish such a facility itself. Management believes that the contractual relationship is sustainable, and has been for many years, with alternate solutions available should the need arise. Sales to the two largest customers, which includes contracts and recurring monthly residuals from the monitoring company, totaled 51% of the total revenues for the three-month period ended September 30, 2016, and accounted for approximately 35% of accounts receivable as of the balance sheet date of September 30, 2016 Concierge, through Gourmet Foods, has three major customer groups comprising the gross revenues to Gourmet Foods; 1) grocery, 2) gasoline convenience stores, 3) independent retailers. The grocery and food industry is dominated by several large chain operations, which are customers of Gourmet Foods, and there are no long term guarantees that these major customers will continue to purchase products from Gourmet Foods, however the relationships have been in place for sufficient time to give management reasonable confidence in their continuing business. For the 3-month period ending and balance sheet date of September 30, 2016, our largest customer in the grocery industry, who operates through a number independently branded stores, accounted for approximately 20% of our gross sales revenues and 28% of our accounts receivable. The second largest in the grocery industry accounted for approximately 11% of our gross revenues but less than 10% of our accounts receivable. In the gasoline convenience store market we supply two major accounts. The largest is a marketing consortium of gasoline dealers accounting for approximately 41% of our gross sales revenues and 23% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 14% of accounts receivable. The third category of independent retailers accounted for the balance of our gross sales revenue however the group is fragmented and no one customer accounts for a significant portion of our revenues. For the three-month period ending September 30, 2015 and the balance sheet date of September 30, 2015 largest customer in the grocery industry accounted for approximately 14% of revenues and 27% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 42% of revenues and 17% of accounts receivable (though no single member of the consortium accounted for more than 2% of accounts receivable). Independent retail stores accounted for approximately 11% of revenues however no single store accounted for any significant amount of the accounts receivable. The balance of the revenues and accounts receivable were not dominated by any significant single source for the three-month period ended September 30, 2015. Gourmet Foods is not dependent upon any one major supplier as many alternative sources are available in the local market place should the need arise. |
Reclassifications | For comparative purposes, prior year’s condensed consolidated financial statements have been reclassified to conform to report classifications of the current year. |
Recent Accounting Pronouncements | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, 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. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, and is to be applied using one of two retrospective application methods, with early application not permitted. The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements. In January 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items In February, 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. In September, 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805). In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (FAS 13) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share Based Payment Accounting No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements. |
4. INVENTORY (Tables)
4. INVENTORY (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Inventory Tables | |
Inventories | September 30, June 30, 2016 2016 Raw materials $ 48,817 $ 50,023 Supplies and packing materials 96,782 77,497 Finished goods 299,977 357,351 445,575 484,871 Less impairment finished goods - (48,330 ) Total $ 445,575 $ 436,541 |
5. PROPERTY AND EQUIPMENT (Tabl
5. PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Property And Equipment Tables | |
PROPERTY AND EQUIPMENT | September 30, 2016 June 30, 2016 Plant and Equipment $ 1,346,524 $ 1,477,411 Furniture & Office Equipment 150.549 119,123 Vehicles 81,516 58,850 Total Property and Equipment, Gross 1,578,589 1,655,384 Accumulated Depreciation (425,872 ) (488,691 ) Total Property and Equipment, Net $ 1,152,717 $ 1,166,693 |
6. GOODWILL (Tables)
6. GOODWILL (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Goodwill Tables | |
Goodwill | September 30, 2016 June 30, 2016 Trained workforce – Gourmet Foods $ 51,978 $ 51,978 Trained workforce - Brigadier 75,795 75,795 Goodwill – Gourmet Foods 45,669 45,669 Goodwill - Brigadier 45,814 45,814 $ 219,256 $ 219,256 |
7. INTANGIBLE ASSETS (Tables)
7. INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Intangible Assets Tables | |
Intangible assets | September 30, June 30, 2016 2016 Brand name $ 402,123 $ 402,123 Domain name 36,913 36,913 Customer relationships 500,252 500,252 Non-compete agreement 84,982 84,982 Recipes 21,601 21,601 Total 1,045,871 1,045,871 Less : Accumulated Amortization (57,636 ) (27,658 ) Net Intangibles $ 988,235 $ 1,018,213 |
Customer relationships | September 30, 2016 June 30, 2016 Customer relationships $ 500,252 $ 500,252 Less: accumulated amortization (22,268 ) (9,659 ) Total customer relationships, net $ 477,984 $ 490,593 |
Brand Name | September 30, June 30, 2016 2015 Brand name $ 402,123 $ 402,123 Less: accumulated amortization (18,583 ) (8,447 ) Total brand name, net $ 383,540 $ 393,696 |
Domain Name | September 30, 2016 June 30, 2015 Domain Name $ 36,913 $ 36,913 Less: accumulated amortization (6,054 ) (4,193 ) Total brand name, net $ 30,859 $ 32,720 |
Recipes | September 30, 2016 June 30, 2016 Recipes $ 21,601 $ 21,601 Less: accumulated amortization (5,026 ) (3,937 ) Total Recipes, net $ 16,575 $ 17,664 |
Non-Compete Agreements | September 30, June 30, 2016 2015 Non-compete agreement $ 84,982 $ 84,982 Less: accumulated amortization (5,705 ) (1,421 ) Total non-compete agreement, net $ 79,277 $ 83,561 |
Amortization Expense | Years Ending September 30, Expense 2017 $ 118,937 2018 $ 118,937 2019 $ 118,937 2020 $ 117,469 2021 $ 103,592 |
8. ACCOUNTS PAYABLE AND ACCRU26
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | September 30, 2016 June 30, 2016 Accounts payable $ 221,825 $ 288,170 Accrued judgment 135,000 135,000 Accrued interest 33,208 13,918 Taxes payable 202,718 167,683 Accrued payroll and vacation 151,173 127,271 Accrued expenses 257,679 265,502 Total $ 1,001,603 $ 997,644 |
9. RELATED PARTY TRANSACTIONS (
9. RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Current related party notes payable | September 30, 2016 June 30, 2016 Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due) $ - $ 5,000 Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due) 3,500 3,500 Notes payable to affiliate of director/shareholder, interest rate of 4%, unsecured and payable on June 30, 2017 300,000 300,000 $ 303,500 $ 308,500 |
11. BUSINESS COMBINATIONS (Tabl
11. BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Business Combinations Tables | |
Fair value estimate of the net assets acquired | Cash $ 50,695 Accounts Receivable 259,662 Prepaid Expenses 11,246 Inventory 256,271 Property and Equipment 1,207,762 Intangible Assets 170,784 Goodwill 97,647 Total Assets $ 2,054,067 Accounts Payable $ 253,951 Employee Entitlements 46,688 Total Liabilities $ 300,639 Consideration Paid for Net Assets $ 1,753,428 Assets Cash 80,391 Accounts Receivable 431,656 Inventory 238,148 Prepaid Expenses & Other Assets 20,001 Property, plant and equipment 20,455 Intangible Assets 875,087 Goodwill 121,609 Total Assets 1,787,348 Liabilities Accounts Payable 187,925 Income Tax Payable 55,953 Customer Deposits 2,640 Total Liabilities 246,518 Consideration paid for net assets 1,540,830 |
Proforma results | 3-month Period Ended September 30, 2016 3-month Period Ended September 30, 2015 (Unaudited) (Unaudited) Revenue $ 2,095,232 $ 1,891,231 Income (Loss) from operations $ (64,536 ) $ 65,989 Net loss $ (116,256 ) $ (57,789 ) Net loss per share available to common stockholders, basic and diluted $ (0.00 ) $ (0.00 ) |
12. COMMITMENTS AND CONTINGEN29
12. COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Tables | |
Future minimum lease payments | Year Ended June 30, Lease Amount 2017 $ 103,127 2018 137,503 2019 60,715 2020 18,734 2021 9,388 2022 2,347 Total Minimum Lease Commitment $ 331,814 Year Ended June 30, Lease Amount 2017 $ 54,604 2018 33,256 2019 30,484 Total Minimum Lease Commitment $ 118,344 |
13. SEGMENT REPORTING (Tables)
13. SEGMENT REPORTING (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Segment Reporting Tables | |
Segments | The following table presents a summary of identifiable assets as of September 30, 2016 and June 30, 2016: As of September 30, 2016 As of June 30, 2016 Identifiable assets: Corporate headquarters $ 1,524,134 $ 1,521,210 U.S.A. 86,944 87,790 New Zealand 2,024,002 2,199,128 Canada 1,002,866 956,855 Consolidated $ 4,637,947 $ 4,764,983 The following table presents a summary of operating information for the 3-month periods ended September 30, 2016 and 2015: (note: New Zealand revenues are for a period of 2 months for 2015 and Canadian interests had not yet been acquired in 2015) 3-Months Ended September 30, 2016 3-Months Ended September 30, 2015 Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 64,528 $ 121,200 New Zealand : Food Industry 1,205,639 600,525 Canada 825,065 - Consolidated $ 2,095,232 $ 721,725 Net income (loss) after taxes: Corporate headquarters $ (189,443 ) $ (73,071 ) U.S.A. : Mobile video recording devices (16,832 ) (1,670 ) New Zealand : Food Industry (25,107 ) 2,367 Canada : Security alarm monitoring 115,125 - Consolidated $ (116,256 ) $ (73,006 ) The following table presents a summary of capital expenditures for the 3-months ended June 30: 2016 2015 Capital expenditures: Corporate headquarters $ - $ 1,519,802 U.S.A - - New Zealand 40,357 38,361 Canada - - Consolidated $ 40,357 $ 1,558,163 |
3. GOING CONCERN (Details Narra
3. GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | |
Amount | |||
Accumulated deficit | $ 6,547,778 | $ 6,431,522 | |
Net Loss attributable to Concierge Technologies | $ 116,256 | $ 73,006 |
4. INVENTORY (Details)
4. INVENTORY (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2016 | Jun. 30, 2016 | |
Inventory Details | ||
Raw materials | $ 48,817 | $ 50,023 |
Supplies and packing materials | 96,782 | 77,497 |
Finished goods | 299,977 | 357,351 |
Subtotal | 445,575 | 484,871 |
Less: Impairment of Finished Goods | 0 | (48,330) |
Total | $ 445,575 | $ 436,541 |
5. PROPERTY AND EQUIPMENT (Deta
5. PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Total Property and Equipment, Gross | $ 1,578,589 | $ 1,655,384 |
Accumulated depreciation | (57,636) | (27,658) |
Total Property and Equipment, Net | 1,152,717 | 1,166,693 |
Plant and Equipment [Member] | ||
Total Property and Equipment, Gross | 1,346,524 | 1,477,411 |
Furniture & Office EquipmentMember] | ||
Total Property and Equipment, Gross | 150,549 | 119,123 |
Vehicles [Member] | ||
Total Property and Equipment, Gross | $ 81,516 | $ 58,850 |
5. PROPERTY AND EQUIPMENT (De34
5. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Property And Equipment Details Narrative | ||
Depreciation expense | $ 69,533 | $ 37,329 |
6. GOODWILL (Details)
6. GOODWILL (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Goodwill, net | $ 219,256 | $ 219,256 |
Trained Workforce Gourmet Foods | ||
Goodwill, net | 51,978 | 51,978 |
Trained Workforce Brigadier | ||
Goodwill, net | 75,795 | 75,795 |
Goodwill Gourmet Foods | ||
Goodwill, net | 45,669 | 45,669 |
Goodwill Brigadier | ||
Goodwill, net | $ 45,814 | $ 45,814 |
7. INTANGIBLE ASSETS (Details)
7. INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Intangible assets, gross | $ 1,045,871 | $ 1,045,871 |
Less: Accumulated depreciation | (57,636) | (27,658) |
Net intangibles | 988,235 | 1,018,213 |
Brand name [Member] | ||
Intangible assets, gross | 402,123 | 402,123 |
Less: Accumulated depreciation | (18,583) | (8,447) |
Net intangibles | 383,540 | 393,696 |
Domain Name [Member] | ||
Intangible assets, gross | 36,913 | 36,913 |
Less: Accumulated depreciation | (6,054) | (4,193) |
Net intangibles | 30,859 | 32,720 |
Customer Relationships [Member] | ||
Intangible assets, gross | 500,252 | 500,252 |
Less: Accumulated depreciation | (22,268) | (9,659) |
Net intangibles | 477,984 | 490,593 |
Non-compete agreement [Member] | ||
Intangible assets, gross | 84,982 | 84,982 |
Less: Accumulated depreciation | (5,705) | (1,421) |
Net intangibles | 79,277 | 83,561 |
Recipes [Member] | ||
Intangible assets, gross | 21,601 | 21,601 |
Less: Accumulated depreciation | (5,026) | (3,937) |
Net intangibles | $ 16,575 | $ 17,664 |
7. INTANGIBLE ASSETS (Details 1
7. INTANGIBLE ASSETS (Details 1) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Intangible asset gross | $ 1,045,871 | $ 1,045,871 |
Less: Accumulated depreciation | 57,636 | 27,658 |
Intangible assets, net | 988,235 | 1,018,213 |
Brand name [Member] | ||
Intangible asset gross | 402,123 | 402,123 |
Less: Accumulated depreciation | 18,583 | 8,447 |
Intangible assets, net | 383,540 | 393,696 |
Domain Name [Member] | ||
Intangible asset gross | 36,913 | 36,913 |
Less: Accumulated depreciation | 6,054 | 4,193 |
Intangible assets, net | 30,859 | 32,720 |
Non-compete agreement [Member] | ||
Intangible asset gross | 84,982 | 84,982 |
Less: Accumulated depreciation | 5,705 | 1,421 |
Intangible assets, net | 79,277 | 83,561 |
Recipes [Member] | ||
Intangible asset gross | 21,601 | 21,601 |
Less: Accumulated depreciation | 5,026 | 3,937 |
Intangible assets, net | 16,575 | 17,664 |
Customer Relationships [Member] | ||
Intangible asset gross | 500,252 | 500,252 |
Less: Accumulated depreciation | 22,268 | 9,659 |
Intangible assets, net | $ 477,984 | $ 490,593 |
7. INTANGIBLE ASSETS (Details 2
7. INTANGIBLE ASSETS (Details 2) | Jun. 30, 2016USD ($) |
Intangible Assets Details 2 | |
2,017 | $ 118,937 |
2,018 | 118,937 |
2,019 | 118,937 |
2,020 | 117,469 |
2,021 | $ 103,592 |
8. ACCOUNTS PAYABLE AND ACCRU39
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Accounts Payable And Accrued Expenses Details | ||
Accounts payable | $ 221,825 | $ 288,170 |
Accrued judgment | 135,000 | 135,000 |
Accrued interest | 33,208 | 13,918 |
Taxes payable | 202,718 | 167,683 |
Accrued payroll and vacation | 151,173 | 127,271 |
Accrued Expenses | 257,679 | 265,502 |
Total | $ 1,001,603 | $ 997,644 |
9. RELATED PARTY TRANSACTIONS40
9. RELATED PARTY TRANSACTIONS (Details) - USD ($) | Sep. 30, 2016 | Jun. 30, 2016 |
Related Party Transactions Details | ||
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due) | $ 0 | $ 5,000 |
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due) | 3,500 | 3,500 |
Notes payable to affiliate of director/shareholder, interest rate of 4%, unsecured and payable on June 30, 2017 | 300,000 | 300,000 |
Notes payable - related parties | $ 303,500 | $ 308,500 |
11. BUSINESS COMBINATIONS (Deta
11. BUSINESS COMBINATIONS (Details) | Sep. 30, 2016USD ($) |
Gourmet Foods | |
Cash | $ 50,695 |
Accounts Receivable | 259,662 |
Pre Payments | 11,246 |
Inventory | 256,271 |
Property and Equipment | 1,207,762 |
Intangible Assets | 170,784 |
Goodwill | 97,647 |
Total Assets | 2,054,067 |
Accounts Payable | 253,951 |
Employee Entitlements | 46,688 |
Total Liabilities | 300,639 |
Purchase Consideration Paid for Acquisition of Net Assets | 1,753,428 |
Brigadier | |
Cash | 80,391 |
Accounts Receivable | 431,656 |
Pre Payments | 20,001 |
Inventory | 238,148 |
Property and Equipment | 20,455 |
Intangible Assets | 875,087 |
Goodwill | 121,609 |
Total Assets | 1,787,348 |
Accounts Payable | 187,925 |
Income Tax Payable | 55,953 |
Customer Deposits | 2,640 |
Total Liabilities | 246,518 |
Purchase Consideration Paid for Acquisition of Net Assets | $ 1,540,830 |
11. BUSINESS COMBINATIONS (De42
11. BUSINESS COMBINATIONS (Details 1) - USD ($) | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combinations Details 1 | ||
Revenue | $ 2,095,232 | $ 1,891,231 |
Income (Loss) from operations | (64,536) | 65,989 |
Net loss | $ (116,256) | $ (57,789) |
Net loss per share available to common stockholders, basic and diluted | $ 0 | $ 0 |
12. COMMITMENTS AND CONTINGEN43
12. COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2016USD ($) |
Gourmet Foods | |
2,017 | $ 103,127 |
2,018 | 137,503 |
2,019 | 60,715 |
2,020 | 18,734 |
2,021 | 9,388 |
2,022 | 2,347 |
Total | 331,814 |
Brigadier | |
2,017 | 54,604 |
2,018 | 33,256 |
2,019 | 30,484 |
Total | $ 118,344 |
13. SEGMENT REPORTING (Details)
13. SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | |
Identifiable assets | $ 4,637,947 | $ 4,764,983 | |
Revenues | 2,095,232 | $ 721,725 | |
Corporate Headquarters | |||
Identifiable assets | 1,524,134 | 1,521,210 | |
Net income (loss) after tax | (189,443) | (73,071) | |
Capital expenditures | 0 | 1,519,802 | |
U.S.A. | |||
Identifiable assets | 86,944 | 87,790 | |
Revenues | 64,528 | 121,200 | |
Net income (loss) after tax | (16,832) | (1,670) | |
Capital expenditures | 0 | 0 | |
New Zealand | |||
Identifiable assets | 2,024,002 | 2,199,128 | |
Revenues | 1,205,639 | 600,525 | |
Net income (loss) after tax | (25,107) | 2,367 | |
Capital expenditures | 40,357 | 38,361 | |
Canada | |||
Identifiable assets | 1,002,866 | 956,855 | |
Revenues | 825,065 | 0 | |
Net income (loss) after tax | 115,125 | 0 | |
Capital expenditures | 0 | 0 | |
Consolidated | |||
Identifiable assets | 4,637,947 | $ 4,764,983 | |
Revenues | 2,095,232 | 721,725 | |
Net income (loss) after tax | (116,256) | (73,006) | |
Capital expenditures | $ 40,357 | $ 1,558,163 |