Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2016 | Feb. 10, 2017 | |
RelatedPartyNotesPayableCurrent9 | ||
Entity Registrant Name | CONCIERGE TECHNOLOGIES INC | |
Entity Central Index Key | 1,005,101 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 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 | 886,753,847 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
CURRENT ASSETS: | ||
Cash & cash equivalents | $ 7,080,786 | |
Accounts receivable, net | 749,423 | |
Accounts receivable, related parties | 2,202,684 | |
Inventory, net | 496,037 | |
Investments | 837,546 | |
Other current assets | 1,263,521 | |
Total current assets | 12,629,997 | |
Restricted cash | 13,847 | |
Property and equipment, net | 1,036,045 | |
Goodwill | 219,256 | |
Intangible assets - net | 958,256 | |
Long term assets | 1,723,342 | |
Total assets | 16,580,743 | |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,941,669 | |
Accounts payable, related parties | 939,385 | |
Purchase consideration payable | 0 | |
Notes payable - related parties | 3,500 | |
Notes payable | 8,500 | |
Convertible Promissory Note payable - related parties, net | 600,000 | |
Total liabilities | 4,493,054 | |
Commitments & Contingencies | ||
Convertible Preferred stock, 50,000,000 authorized par $0.001 Series B: 13,108,474 issued and outstanding at December 31, 2016 and June 30, 2016 | 13,108 | |
Total commitments and contingencies | 13,108 | |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 900,000,000 shares authorized; 886,753,846 shares issued and outstanding at December 31, 2016 and at June 30, 2016 | 886,754 | |
Additional paid-in capital | 9,058,605 | |
Accumulated other comprehensive income (loss) | (99,702) | |
Retained Earnings (Accumulated Deficit) | 2,228,923 | |
Total Stockholders' equity | 12,074,580 | |
Total liabilities and Stockholders' equity | $ 16,580,743 | |
As Adjusted | ||
CURRENT ASSETS: | ||
Cash & cash equivalents | $ 5,454,107 | |
Accounts receivable, net | 839,220 | |
Accounts receivable, related parties | 2,124,105 | |
Inventory, net | 436,541 | |
Investments | 993 | |
Other current assets | 755,509 | |
Total current assets | 9,610,477 | |
Restricted cash | 0 | |
Property and equipment, net | 1,166,693 | |
Goodwill | 219,256 | |
Intangible assets - net | 1,018,213 | |
Long term assets | 1,526,154 | |
Total assets | 13,540,793 | |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,396,017 | |
Accounts payable, related parties | 448,930 | |
Purchase consideration payable | 214,035 | |
Notes payable - related parties | 8,500 | |
Notes payable | 8,500 | |
Convertible Promissory Note payable - related parties, net | 600,000 | |
Total liabilities | 3,675,982 | |
Commitments & Contingencies | ||
Convertible Preferred stock, 50,000,000 authorized par $0.001 Series B: 13,108,474 issued and outstanding at December 31, 2016 and June 30, 2016 | 13,108 | |
Total commitments and contingencies | 13,108 | |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 900,000,000 shares authorized; 886,753,846 shares issued and outstanding at December 31, 2016 and at June 30, 2016 | 886,754 | |
Additional paid-in capital | 9,058,605 | |
Accumulated other comprehensive income (loss) | (29,503) | |
Retained Earnings (Accumulated Deficit) | (64,154) | |
Total Stockholders' equity | 9,851,702 | |
Total liabilities and Stockholders' equity | $ 13,540,793 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Dec. 31, 2016 | Jun. 30, 2016 |
Stockholders equity: | ||
Preferred stock Series B, par value | $ 0.001 | |
Preferred stock Series B, authorized shares | 50,000,000 | |
Preferred stock Series B, issued shares | 13,108,474 | |
Preferred stock Series B, outstanding shares | 13,108,474 | |
Common stock, par value | $ 0.001 | |
Common stock, authorized shares | 900,000,000 | |
Common stock, issued shares | 886,753,846 | |
Common stock, outstanding shares | 886,753,846 | |
As Adjusted | ||
Stockholders equity: | ||
Preferred stock Series B, par value | $ 0.001 | |
Preferred stock Series B, authorized shares | 50,000,000 | |
Preferred stock Series B, issued shares | 13,108,474 | |
Preferred stock Series B, outstanding shares | 13,108,474 | |
Common stock, par value | $ 0.001 | |
Common stock, authorized shares | 900,000,000 | |
Common stock, issued shares | 886,753,846 | |
Common stock, outstanding shares | 886,753,846 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenue | ||||
Fund management - Related Party | $ 6,472,531 | $ 12,840,475 | ||
Food products | 1,203,521 | 2,394,081 | ||
Security alarm monitoring | 828,114 | 1,641,660 | ||
Other | 25,039 | 89,566 | ||
Net revenue | 8,529,205 | 16,965,782 | ||
Cost of revenue | 1,077,615 | 2,190,634 | ||
Gross profit | 7,451,590 | 14,775,148 | ||
Operating expense | ||||
General & administrative expense | 1,447,595 | 2,731,254 | ||
Fund operations | 1,335,265 | 2,769,467 | ||
Marketing | 1,051,152 | 1,831,683 | ||
Depreciation | 101,188 | 199,830 | ||
Salaries and Compensation | 1,909,832 | 3,260,053 | ||
Total operating expenses | 5,845,031 | 10,792,286 | ||
Income from Operations | 1,606,559 | 3,982,862 | ||
Other income (expense) | ||||
Other income | 2,636 | 6,816 | ||
Interest income | 0 | 0 | ||
Interest expense | (5,711) | (5,689) | ||
Total other (expense) income | (3,075) | 1,127 | ||
Income before income taxes | 1,603,484 | 3,983,989 | ||
Provision of income taxes | (587,038) | (1,657,049) | ||
Net Income | 1,016,446 | 2,326,940 | ||
Other Comprehensive Income (Loss) | ||||
Foreign currency translation gain (loss) | 4,714 | (92,581) | ||
Comprehensive Income | $ 1,021,161 | $ 2,234,359 | ||
Weighted average shares of common stock | ||||
Basic | 886,753,846 | 886,753,846 | ||
Diluted | 1,153,666,000 | 1,153,666,000 | ||
Net income per common share | ||||
Basic | $ 0 | $ 0 | ||
Diluted | $ 0 | $ 0 | ||
As Adjusted | ||||
Net revenue | ||||
Fund management - Related Party | $ 5,645,696 | $ 10,941,614 | ||
Food products | 996,563 | 1,610,923 | ||
Security alarm monitoring | 0 | 0 | ||
Other | (3,500) | 117,700 | ||
Net revenue | 6,638,759 | 12,670,237 | ||
Cost of revenue | 680,083 | 1,248,184 | ||
Gross profit | 5,958,676 | 11,422,054 | ||
Operating expense | ||||
General & administrative expense | 1,103,195 | 3,788,994 | ||
Fund operations | 1,029,646 | 1,029,646 | ||
Marketing | 729,691 | 1,345,440 | ||
Depreciation | 58,487 | 96,676 | ||
Salaries and Compensation | 1,330,358 | 1,517,535 | ||
Total operating expenses | 4,251,378 | 7,778,291 | ||
Income from Operations | 1,707,299 | 3,643,763 | ||
Other income (expense) | ||||
Other income | 4,512 | 4,393 | ||
Interest income | 1,604 | 3,297 | ||
Interest expense | 0 | 0 | ||
Total other (expense) income | 6,116 | 7,689 | ||
Income before income taxes | 1,713,414 | 3,651,452 | ||
Provision of income taxes | (764,340) | (1,365,358) | ||
Net Income | 949,074 | 2,286,094 | ||
Other Comprehensive Income (Loss) | ||||
Foreign currency translation gain (loss) | 69,847 | (16,357) | ||
Comprehensive Income | $ 1,018,921 | $ 2,269,737 | ||
Weighted average shares of common stock | ||||
Basic | 886,753,846 | 886,753,846 | ||
Diluted | 1,148,923,323 | 1,148,923,323 | ||
Net income per common share | ||||
Basic | $ 0 | $ 0 | ||
Diluted | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 2,326,940 | |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 199,830 | |
Loss on disposal of equipment | 6,220 | |
(Increase) decrease in current assets: | ||
Accounts receivable | 62,600 | |
Accounts receivable - related party | (78,579) | |
Deferred taxes | (197,188) | |
Prepaid income taxes | (437,499) | |
Inventory | (74,549) | |
Other assets | (86,423) | |
Increase (decrease) in current liabilities: | ||
Accounts payable & accrued expenses | 601,393 | |
Expense waivers payable - related party | 490,455 | |
Net cash provided by operating activities | 2,813,200 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for acquisition of subsidiary net of subsidiary cash acquired | (214,035) | |
Purchase of equipment | (47,346) | |
Purchase of investments | (842,994) | |
Net cash used in investing activities | (1,104,374) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of related party loan | (5,000) | |
Purchase of treasury stock | 0 | |
Net cash used in financing activities | (5,000) | |
Effect of exchange rate change on cash and cash equivalents | (77,147) | |
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | 1,626,679 | |
CASH & CASH EQUIVALENTS, BEGINNING BALANCE | 5,454,107 | |
CASH & CASH EQUIVALENTS, ENDING BALANCE | 7,080,786 | |
Cash paid during the period for: | ||
Interest paid | 5,000 | |
Income taxes paid | $ 2,200,800 | |
As Adjusted | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 2,286,094 | |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 96,676 | |
Loss on disposal of equipment | 0 | |
(Increase) decrease in current assets: | ||
Accounts receivable | 189,464 | |
Accounts receivable - related party | (194,989) | |
Deferred taxes | 362,883 | |
Prepaid income taxes | 263,368 | |
Inventory | 74,140 | |
Other assets | (14,115) | |
Increase (decrease) in current liabilities: | ||
Accounts payable & accrued expenses | 435,981 | |
Expense waivers payable - related party | 360,973 | |
Net cash provided by operating activities | 3,860,475 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for acquisition of subsidiary net of subsidiary cash acquired | (1,519,802) | |
Purchase of equipment | (110,585) | |
Purchase of investments | (493,047) | |
Net cash used in investing activities | (2,123,434) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of related party loan | 0 | |
Purchase of treasury stock | (2,200,557) | |
Net cash used in financing activities | (2,200,557) | |
Effect of exchange rate change on cash and cash equivalents | (27,677) | |
NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS | (491,193) | |
CASH & CASH EQUIVALENTS, BEGINNING BALANCE | 3,353,274 | |
CASH & CASH EQUIVALENTS, ENDING BALANCE | 2,862,081 | |
Cash paid during the period for: | ||
Interest paid | 0 | |
Income taxes paid | $ 2,110,000 |
1. ORGANIZATION AND DESCRIPTION
1. ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | Concierge Technologies, Inc., (the “Company” or “Concierge”), a Nevada corporation, was originally incorporated in California on August 18, 1993 as Fanfest, Inc. On March 20, 2002, the Company changed its name to Concierge Technologies, Inc. The Company’s principal operations include Wainwright Holdings, Inc. a Delaware corporation (“Wainwright”). Wainwright is a holding company that currently holds both United States Commodity Funds LLC (“USCF”) and USCF Advisers LLC (“Advisers”), an investment adviser registered under the Investment Advisers Act of 1940, as amended; Gourmet Foods, Ltd. (“Gourmet Foods”), a manufacturer and distributor of meat pies in New Zealand; Brigadier Security Systems (2000) Ltd. (“Brigadier”), a provider of security alarm installation and monitoring located in Canada; and |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation and Accounting Principles The Company has prepared the accompanying financial statements on a condensed consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated 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, prepared on an accrual basis, 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 unaudited condensed consolidated interim financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Kahnalytics. Wainwright was acquired during the current quarter (Refer to Note 11). Due to the commonality of ownership and control between the two companies, the transaction has been accounted for as a transaction between entities under common control. As a result, the assets and liabilities of Wainwright have been considered at their carrying amounts. The accompanying Financial Statements as of December 31, 2016 and June 30, 2016 and for the three and six month periods ending December 31, 2016 and 2015 include the assets, liabilities and the results of operations of Wainwright at carrying amounts as though the transaction and exchange of equity interests has occurred at the beginning of the comparative period. All significant inter-company transactions and accounts have been eliminated in consolidation. Use of Estimates The preparation of the Financial Statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Other Comprehensive Income (Loss) and Foreign Currency Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30, Foreign Currency Translation. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier 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. For the periods ended December 31, 2016 and June 30, 2016, other comprehensive loss consisted of unrealized losses on investments and accumulated translation losses as noted above. Accumulated translation loss, classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet, was $99,702 as of December 31, 2016. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Concierge’s corporate office maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor. The corporation’s uninsured cash balance in the United States was $0 at December 31, 2016. The Company’s subsidiary, Wainwright, also maintains cash balances at various high credit quality institutions and from time to time those deposits exceed the FDIC coverage amount of $250,000. As of December 31, 2016 the uninsured amount totaled $5,673,920, though no losses have been realized and none are expected. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan by the Company’s subsidiary. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s subsidiary had an uninsured cash balance in Canada of CD$438,067 (approximately US$325,988) at December 31, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company’s subsidiary maintains cash balances, are not covered by insurance. As of December 31, 2016, the Company’s subsidiary had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $335,010. The Company has not experienced any losses in such accounts. Accounts Receivable, Related Parties Accounts receivable primarily consists of fund management fees receivable from the Wainwright business. Management fees receivable generally consist of one month of management fees which are collected in the month after they are earned. Management closely monitors receivables and records an allowance for any balances that are determined to be uncollectible. As of December 31, 2016 and June 30, 2016, the Company considered all remaining accounts receivable to be fully collectible. Major Customers & Suppliers – Concentration of Credit Risk 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 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 six-month period ended December 31, 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 the six-month period ended December 31, 2015. Sales of these products were discontinued during the current fiscal year. Concierge, through Brigadier, 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 53% of the total revenues for the six months ended December 31, 2016, and accounted for approximately 26% of accounts receivable as of the balance sheet date of December 31, 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 six-month period ending and balance sheet date of December 31, 2016, our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 18% of our gross sales revenues and 29% 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 42% of our gross sales revenues and 26% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 15% 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 six months ended December 31, 2015 and the balance sheet date of December 31, 2015 our largest customer in the grocery industry accounted for approximately 13% of revenues and 26% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 45% of revenues and 20% of accounts receivable (though no single member of the consortium accounted for more than 3% of accounts receivable). Independent retail stores accounted for approximately 12% 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 six months ended December 31, 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. For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated accounts receivable as of December 31, 2106 and June 30, 2016 as depicted below. December 31, 2016 Fund Accounts Receivable USO $ 1,256,213 57% USCI 445,163 20% UNG 303,354 14% All Others 197,954 9% Total $ 2,202,684 100% June 30, 2016 Fund Accounts Receivable USO $ 1,245,396 59% USCI 400,258 19% UNG 280,431 13% All Others 198,020 9% Total $ 2,124,105 100% Reclassifications For comparative purposes, prior year’s 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 January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities 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 On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 including interim periods within those fiscal years. Earlier adoption is permitted. The adoption of ASU 2016-18 is not expected to have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. The Company does not expect the adoption to have any significant impact on its Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company will apply this guidance to applicable impairment tests after the adoption date. No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements. |
3. INVENTORY
3. INVENTORY | 6 Months Ended |
Dec. 31, 2016 | |
Inventory | |
INVENTORIES | Inventories consisted of the following: December 31, June 30, 2016 2016 As Adjusted Raw materials $ 46,711 $ 50,023 Supplies and packing materials 119,734 77,497 Finished goods 332,366 357,351 498,811 484,871 Less impairment finished goods (2,774 ) (48,330 ) Total $ 496,037 $ 436,541 |
4. PROPERTY AND EQUIPMENT
4. PROPERTY AND EQUIPMENT | 6 Months Ended |
Dec. 31, 2016 | |
Property And Equipment | |
PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of December 31, 2016 and June 30, 2016: December 31, 2016 June 30, 2016 As Adjusted Plant and Equipment $ 1,236,138 $ 1,477,411 Furniture & Office Equipment 146,076 119,123 Vehicles 82,491 58,850 Total Property and Equipment, Gross 1,464,705 1,655,384 Accumulated Depreciation (428,660 ) (488,691 ) Total Property and Equipment, Net $ 1,036,045 $ 1,166,693 Depreciation expense amounted to $139,873 and $96,676 for the six months ended December 31, 2016 and 2015, respectively. |
5. GOODWILL
5. GOODWILL | 6 Months Ended |
Dec. 31, 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: December 31, June 30, 2016 2016 As Adjusted 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 months ended December 31, 2016. |
6. INTANGIBLE ASSETS
6. INTANGIBLE ASSETS | 6 Months Ended |
Dec. 31, 2016 | |
Intangible Assets | |
INTANGIBLE ASSETS | Intangible assets consisted of the following: December 31, June 30, 2016 2016 As Adjusted 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 (87,615 ) (27,658 ) Net Intangibles $ 958,256 $ 1,018,213 CUSTOMER RELATIONSHIP On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired customer relationships was estimated to be $66,153 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired customer relationships was estimated to be $434,098 and is amortized over the remaining useful life of 10 years. December 31, June 30, 2016 2016 As Adjusted Customer relationships $ 500,252 $ 500,252 Less: accumulated amortization (34,877 ) (9,659 ) Total customer relationships, net $ 465,375 $ 490,593 BRAND NAME On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the acquired brand name was estimated to be $61,429 and is amortized over the remaining useful life of 10 years. On June 2, 2016, the Company acquired Brigadier Security Systems. The fair value on the acquired brand name was estimated to be $340,694 and is amortized over the remaining useful life of 10 years. December 31, June 30, 2016 2016 As Adjusted Brand name $ 402,123 $ 402,123 Less: accumulated amortization (28,719 ) (8,447 ) Total brand name, net $ 373,404 $ 393,696 DOMAIN NAME On August 11, 2015, the Company acquired Gourmet Foods. 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. December 31, June 30, 2016 2016 As Adjusted Domain Name $ 36,913 $ 36,913 Less: accumulated amortization (7,915 ) (4,193 ) Total brand name, net $ 28,998 $ 32,720 RECIPES On August 11, 2015, the Company acquired Gourmet Foods. The fair value on the recipes was estimated to be $21,601 and is amortized over the remaining useful life of 5 years. December 31, June 30, 2016 2016 As Adjusted Recipes $ 21,601 $ 21,601 Less: accumulated amortization (6,115 ) (3,937 ) Total Recipes, net $ 15,486 $ 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. December 31, June 30, 2016 2016 As Adjusted Non-compete agreement $ 84,982 $ 84,982 Less: accumulated amortization (9,989 ) (1,421 ) Total non-compete agreement, net $ 94,993 $ 83,561 AMORTIZATION EXPENSE The total amortization expense for the six months ended December 31, 2016 was $59,957. No amortization was taken for the comparison period ending December 31, 2015. Estimated amortization expenses of intangible assets for the next five twelve month periods ending December 31, are as follows: Years Ending December 31, Expense 2017 $ 118,937 2018 $ 118,937 2019 $ 118,937 2020 $ 115,291 2021 $ 98,536 |
7. OTHER ASSETS
7. OTHER ASSETS | 6 Months Ended |
Dec. 31, 2016 | |
Other Assets [Abstract] | |
OTHER ASSETS | Other Current Assets Other current assets totaling $1,263,521 as of December 31, 2016 and $755,509 as of June 30, 2016 are comprised of various components as listed below. As of December 31, As of 2016 2016 As Adjusted Deferred tax asset $ 12,727 $ 19,501 PrePaid expenses 319,868 242,582 PrePaid income tax 930,926 493,427 Notes receivable 150,000 150,000 Total $ 1,263,521 $ 755,509 Investments Investments are comprised mainly of investments in ETF funds. Wainwright, from time to time, provides initial investments in the creation of ETF funds that Wainwright manages. Wainwright classifies these investments as current assets as these investments are generally sold within one year from the balance sheet date. Investments in which no controlling financial interest or significant influence exists are recorded at fair value with unrealized holding gains and losses included in accumulated other comprehensive income (loss) as a component of stockholders’ equity, except for unrealized losses determined to be other-than-temporary, which are included in the condensed consolidated statements of operations and comprehensive income (loss). Investments in which no controlling financial interest exists, but significant influence exists are recorded as per the Equity Method of Investment. As of December 31, 2016 and June 30, 2016, investments are approximately $0.8 million and $1 thousand, respectively. Restricted Cash At December 31, 2016 Gourmet Foods had on deposit NZ$20,000 (approximately US$13,847) securing a lease bond for one of its properties. The cash securing the bond is restricted from access or withdrawal so long as the bond remains in place. There was no bond posted by Gourmet Foods at June 30, 2016, thus the restricted cash amount was zero. Long Term Assets Long term assets totaling $1,723,342 and $1,526,154,at December 31, 2016 and June 30, 2016, respectively, were attributed to Wainwright and consisted of (i) a $500,980 as of December 31, 2016 and June 30, 2016 representing 10% equity investment in a registered investment adviser accounted for on a cost basis, (ii) $1,213,804 as of December 31, 2016 and $1,016,616 as of June 30, 2016 in net deferred tax assets and (iii) $8,558 as of December 31, 2016 and June 30, 2016 in other assets. |
8. ACCOUNTS PAYABLE AND ACCRUED
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses, included related party payables, consisted of the following: December 31, 2016 June 30, 2016 As Adjusted Accounts payable $ 1,140,125 $ 1,044,026 Accrued judgment 135,000 135,000 Accrued interest 20,369 5,238 Taxes payable 627,920 769,224 Expense waiver – Funds (related party) 939,385 448,930 Deferred rent 16,943 19,202 Accrued payroll and vacation 580,054 127,271 Accrued expenses 421,258 295,955 Total $ 3,881,054 $ 2,844,847 |
9. RELATED PARTY TRANSACTIONS
9. RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Notes Payable - Related Parties Current related party notes payable consist of the following: December 31, 2016 June 30, 2016 As Adjusted 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 $ 3,500 $ 8,500 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 December 31, 2016 and 2015 were $71 and $197 respectively and for the respective six months ended December 31, 2016 and 2015 the interest expense was $141 and $393. Convertible Promissory Note Payable – Related Parties 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 CEO, 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 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 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 months ended December 31, 2016 and 2015 amounted to $2,521 and was $0 respectively. Wainwright - Related Party Transactions The Funds managed by USCF and Advisers are deemed by management to be related parties. The Company’s Wainwright revenues, totaled $12,840,475 and $10,941,614 for the six months ended December 31, 2016 and 2015, respectively, were earned from these related parties. Accounts receivable, totaling $2,202,684 and $2,124,105 as of December 31, 2016 and June 30, 2016, respectively, were owed from these related parties. Fund expense waivers, totaling $490,455 and $363,768 for the six months ended December 31, 2016 and 2015, respectively, were incurred on behalf of these related parties. Waivers payable, totaling $939,385 and $448,930 as of December 31, 2016 and June 30, 2016, respectively, were owed to these related parties. |
10. NOTE PAYABLE
10. NOTE PAYABLE | 6 Months Ended |
Dec. 31, 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 | 6 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | On May 28, 2015, 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. The Sales Goal was achieved and the payment was released on November 23, 2016. 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 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 On December 9, 2016 the Company closed a Stock Purchase Agreement (the “Purchase Agreement”), by and among the Company and Wainwright and each of the shareholders of Wainwright common stock (the “Wainwright Sellers”), pursuant to which the Wainwright Sellers agreed to sell, and the Company agreed to purchase 1,741 shares of Wainwright common stock, par value $0.01 per share, (the “Wainwright Common Stock”), which represents all of the issued and outstanding Wainwright Common Stock, in exchange for: (i) 818,799,976 shares of Company Common Stock, and (ii) 9,354,119 shares of Company Preferred Stock (which preferred shares are convertible into 187,082,377 shares of Company Common Stock). Wainwright and the Company have a commonality of ownership and control as represented by the shareholdings, either directly or beneficially, of Nicholas Gerber and Scott Schoenberger as a group pursuant to the aforementioned Purchase Agreement and a voting agreement which gives them control of over 50% of Wainwright and over 50% of Concierge both before and after the business combination. Accordingly, the acquisition has been recorded as a transaction between entities under Common Control in the accompanying financial statements . Further, the accompanying financial statements have been adjusted to include the carrying value of assets, liabilities, equity and operations of Wainwright as if the transaction had concluded on July 1, 2015. The unaudited pro forma financial information below represents the combined results of our operations together with those of Wainwright and as if the Gourmet Foods Limited and Brigadier acquisition had occurred at the beginning of the periods presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have occurred if the acquisitions had taken place at the beginning of the period presented, nor is it indicative of future operating results. 3-mo ended December 31, 2015 6-mo ended December 31, 2015 Revenue $ 7,538,894 $ 14,624,581 Income from Operations 1,780,144 3,847,213 Net Income $ 1,009,341 $ 2,438,998 Net Income per share available to common stockholders, basic and diluted $ 0.00 $ 0.00 |
12. COMMITMENTS AND CONTINGENCI
12. COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2016 | |
Commitments & Contingencies | |
COMMITMENTS AND CONTINGENCIES | Lease Commitments Gourmet Foods has operating leases for its office, factory and warehouse facilities located in Tauranga, New Zealand, as well as for certain equipment including vehicles. These leases are generally for three-year terms, with options to renew for additional three-year periods. The leases mature between August 2018 and August 2021, and require monthly rental payments of approximately US$10,891 translated to U.S. currency as of December 31, 2016. Future minimum lease payments for Gourmet Foods are as follows: Year Ended June 30, Lease Amount 2017 $ 65,345 2018 130,690 2019 57,707 2020 17,806 2021 1,487 Total Minimum Lease Commitment $ 273,035 Gourmet Foods entered into a General Security Agreement in favor of the Gerald O’Leary Family Trust and registered on the Personal Property Securities Register for a priority sum of NZ$110,000 (approximately US$76,156) to secure the lease of its primary facility. In addition, a NZ$20,000 (approximately US$13,847) 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 Gourmet Foods and is listed as a component of interest income/expense on the accompanying Consolidated Statements of Operations. Brigadier 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$11,455 translated to U.S. currency as of December 31, 2016. Future minimum lease payments for Brigadier are as follows: Year Ended June 30, Lease Amount 2017 $ 23,524 2018 32,537 2019 29,826 Total Minimum Lease Commitment $ 85,887 Wainwright leases office space in Oakland, California under an operating lease, which expires in October 2018. Rent expense was $63,994 and $64,648 for the six months ended December 31, 2016 and 2015, respectively. Future minimum rental payments required under the operating lease, which has remaining non-cancellable lease terms in excess of one year, are as follows: Year ended June 30, Lease Amount 2017 $ 66,002 2018 134,645 2019 45,322 Total minimum lease commitment $ 245,969 Litigation On May 6, 2002, a default judgment was awarded to Brookside Investments Ltd. against, jointly and severally, Concierge, 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 December 31, 2016. From time to time, the Company is involved in legal proceedings arising mainly from the ordinary course of its business. In management’s opinion, the legal proceedings are not expected to have a material effect on the Company’s financial position or results of operations. Retirement Plan Wainwright’s wholly owned subsidiary USCF, has a 401(k) Profit Sharing Plan covering its employees who are over 21 years of age and who have completed a minimum of 1,000 hours of service and have worked for USCF for one or more years. Participants may make contributions pursuant to a salary reduction agreement. In addition, USCF makes a safe harbor matching contribution. Annual matching contributions paid totaled approximately $70,000 for each of the six months ended December 31, 2016 and 2015, respectively. |
13. INCOME TAXES
13. INCOME TAXES | 6 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
INCOME TAXES | The Company accounts for income taxes under the asset and liability method, which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the tax bases of assets and liabilities and their financial statement reported amounts, and for net operating losses and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance against deferred tax assets when it is more likely than not that such asset will not be realized. The Company continues to monitor the likelihood that it will be able to recover its deferred tax assets. If recovery is not likely, the Company must increase its provision for income taxes by recording a valuation allowance against the deferred tax assets. The Company accounts for uncertain tax positions in accordance with the authoritative guidance on income taxes under which the Company may only recognize or continue to recognize tax positions that meet a "more likely than not" threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes. As of December 31, 2016, the Company's total unrecognized tax benefits were approximately $29,000, which would affect the effective tax rate if recognized. The Company will recognize interest and penalties, when they occur, related to uncertain tax provisions as a component of tax expense. There is no interest or penalties to be recognized for the quarter ended December 31, 2016. The Company is required to make its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis. The Company recorded a tax provision of $1.7 million and $1.4 million from its continuing operations for the six months ended December 31, 2016 and December 31, 2015, respectively. The Company recorded a tax provision of $0.6 million and $0.8 million from its continuing operations for the three months ended December 31, 2016 and December 31, 2015, respectively. The effective tax rate for the six months ended December 31, 2016 and three months ended September 30, 2016 differed from the statutory rate primarily due to the mix of non-deductible meals and entertainment expenses, imputed interest income and decrease in valuation allowance. The effective tax rate could fluctuate in the future due to changes in the taxable income mix between various jurisdictions. The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years 2012 through 2016 will remain open for examination by the federal and state authorities for three and four years, respectively. As of December 31, 2016, there were no active taxing authority examinations. |
14. SEGMENT REPORTING
14. SEGMENT REPORTING | 6 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | With the acquisition of Wainwright Holdings, Gourmet Foods, Ltd. and Brigadier, the Company has identified four segments for its products and services; U.S. investment fund management, U.S. data streaming and hardware, 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 our wholly owned subsidiary Kahnalytics, Inc. and the income derived from management of various investment funds by our subsidiary Wainwright. In New Zealand operations include the production, packaging and distribution on a commercial scale of gourmet meat pies and related bakery confections through our wholly owned subsidiary Gourmet Foods, Ltd. and in Canada we provide security alarm system installation and monitoring to residential and commercial customers sold through our wholly owned subsidiary Brigadier. Separate management of each segment is required because each business unit is subject to different operational issues and strategies due to their particular regional location. The Company accounts for intra-company sales and expenses as if the sales or expenses were to third parties and eliminates them in the consolidation. Amounts are adjusted for currency translation as of the balance sheet date and presented in US dollars. The following table presents a summary of identifiable assets as of December 31, 2016 and June 30, 2016: As of 2016 As of 2016 As Adjusted Identifiable assets: Corporate headquarters $ 1,299,226 $ 1,521,210 U.S.A. : fund management 12,167,931 8,575,810 U.S.A. : data streaming 82,032 87,790 New Zealand 1,916,937 2,199,128 Canada 1,114,617 956,855 Consolidated $ 16,580,743 $ 13,540,793 The following table presents a summary of operating information for the three months ended December 31, 2016 and 2015: (note: Canadian interests had not yet been acquired in 2015) 3-Months Ended December 31, 2016 3-Months Ended December 31, 2015 As Adjusted Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 25,039 $ (3,500 ) U.S.A. : investment fund management 6,472,531 5,645,696 New Zealand : Food Industry 1,203,521 996,563 Canada : Security alarm monitoring 828,114 - Consolidated $ 8,529,205 $ 6,638,759 Net income (loss) after taxes: Corporate headquarters $ (158,990 ) $ (43,459 ) U.S.A. : data streaming and hardware (16,035 ) (4,181 ) U.S.A. : investment fund management 1,068,716 966,764 New Zealand : Food Industry 17,154 29,950 Canada : Security alarm monitoring 105,603 - Consolidated $ 1,016,446 $ 949,074 The following table presents a summary of operating information for the six months ended December 31, 2016 and 2015: (note: New Zealand interest were present for only 5 months in 2015 and Canadian interests had not yet been acquired in 2015) 6-Months Ended December 31, 2016 6-Months Ended December 31, 2015 As Adjusted Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 89,566 $ 117,700 U.S.A. : investment fund management 12,840,475 10,941,614 New Zealand : Food Industry 2,394,081 1,610,923 Canada : Security alarm monitoring 1,641,660 - Consolidated $ 16,965,782 $ 12,670,237 Net income (loss) after taxes: Corporate headquarters $ (337,906 ) $ (117,161 ) U.S.A. : data streaming and hardware (32,867 ) (1,817 ) U.S.A. : investment fund management 2,486,232 2,376,828 New Zealand : Food Industry (7,640 ) 28,244 Canada : Security alarm monitoring 219,121 - Consolidated $ 2,326,940 $ 2,286,094 The following table presents a summary of capital expenditures for the six months ended December 31: Capital expenditures: 2016 2015 Corporate headquarters $ - $ 863 New Zealand 43,049 109,722 Canada 4,297 - Consolidated $ 47,346 $ 110,585 |
15. REVERSE STOCK SPLIT
15. REVERSE STOCK SPLIT | 6 Months Ended |
Dec. 31, 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. |
2. SUMMARY OF SIGNIFICANT ACC21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Principles | The Company has prepared the accompanying financial statements on a condensed consolidated basis. In the opinion of management, the accompanying unaudited condensed consolidated 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, prepared on an accrual basis, 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 unaudited condensed consolidated interim financial statements, which are referred herein as the “Financial Statements” include the accounts of Concierge and its wholly owned subsidiaries, Wainwright, Gourmet Foods, Brigadier and Kahnalytics. Wainwright was acquired during the current quarter (Refer to Note 11). Due to the commonality of ownership and control between the two companies, the transaction has been accounted for as a transaction between entities under common control. As a result, the assets and liabilities of Wainwright have been considered at their carrying amounts. The accompanying Financial Statements as of December 31, 2016 and June 30, 2016 and for the three and six month periods ending December 31, 2016 and 2015 include the assets, liabilities and the results of operations of Wainwright at carrying amounts as though the transaction and exchange of equity interests has occurred at the beginning of the comparative period. All significant inter-company transactions and accounts have been eliminated in consolidation. |
Use of Estimates | The preparation of the Financial Statements are in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Other Comprehensive Income (Loss) and Foreign Currency | Comprehensive income (loss) is the total of net income (loss) and other comprehensive income (loss). We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830-30, Foreign Currency Translation. The accounts of Gourmet Foods use the New Zealand dollar as the functional currency. The accounts of Brigadier 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. For the periods ended December 31, 2016 and June 30, 2016, other comprehensive loss consisted of unrealized losses on investments and accumulated translation losses as noted above. Accumulated translation loss, classified as an item of accumulated other comprehensive loss in the stockholders’ equity section of the consolidated balance sheet, was $99,702 as of December 31, 2016. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Concierge’s corporate office maintains cash balances at a financial institution headquartered in San Diego, California. Accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per depositor. The corporation’s uninsured cash balance in the United States was $0 at December 31, 2016. The Company’s subsidiary, Wainwright, also maintains cash balances at various high credit quality institutions and from time to time those deposits exceed the FDIC coverage amount of $250,000. As of December 31, 2016 the uninsured amount totaled $5,673,920, though no losses have been realized and none are expected. Cash balances in Canada are maintained at a financial institution in Saskatoon, Saskatchewan by the Company’s subsidiary. Each account is insured up to CD$100,000 by Canada Deposit Insurance Corporation (CDIC). The Company’s subsidiary had an uninsured cash balance in Canada of CD$438,067 (approximately US$325,988) at December 31, 2016. Balances at financial institutions within certain foreign countries, including New Zealand where the Company’s subsidiary maintains cash balances, are not covered by insurance. As of December 31, 2016, the Company’s subsidiary had uninsured deposits related to cash deposits in uninsured accounts maintained within foreign entities of approximately $335,010. The Company has not experienced any losses in such accounts. |
Accounts Receivable, Related Parties | Accounts receivable primarily consists of fund management fees receivable from the Wainwright business. Management fees receivable generally consist of one month of management fees which are collected in the month after they are earned. Management closely monitors receivables and records an allowance for any balances that are determined to be uncollectible. As of December 31, 2016 and June 30, 2016, the Company considered all remaining accounts receivable to be fully collectible. |
Major Customers & Suppliers – Concentration of Credit Risk | 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 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 six-month period ended December 31, 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 the six-month period ended December 31, 2015. Sales of these products were discontinued during the current fiscal year. Concierge, through Brigadier, 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 53% of the total revenues for the six months ended December 31, 2016, and accounted for approximately 26% of accounts receivable as of the balance sheet date of December 31, 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 six-month period ending and balance sheet date of December 31, 2016, our largest customer in the grocery industry, who operates through a number of independently branded stores, accounted for approximately 18% of our gross sales revenues and 29% 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 42% of our gross sales revenues and 26% of our accounts receivable. The second largest are independent operators accounting for less than 10% of gross sales but approximately 15% 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 six months ended December 31, 2015 and the balance sheet date of December 31, 2015 our largest customer in the grocery industry accounted for approximately 13% of revenues and 26% of accounts receivable. For the gasoline convenience store sector, the largest customer is a consortium of independent owners who accounted for approximately 45% of revenues and 20% of accounts receivable (though no single member of the consortium accounted for more than 3% of accounts receivable). Independent retail stores accounted for approximately 12% 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 six months ended December 31, 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. For our subsidiary, Wainwright, the concentration of risk and the relative reliance on major customers are found within the various funds it manages and the associated accounts receivable as of December 31, 2106 and June 30, 2016 as depicted below. December 31, 2016 Fund Accounts Receivable USO $ 1,256,213 57% USCI 445,163 20% UNG 303,354 14% All Others 197,954 9% Total $ 2,202,684 100% June 30, 2016 Fund Accounts Receivable USO $ 1,245,396 59% USCI 400,258 19% UNG 280,431 13% All Others 198,020 9% Total $ 2,124,105 100% |
Reclassifications | For comparative purposes, prior year’s 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 annualreporting 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 January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities 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 On November 17, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. It is intended to reduce diversity in the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The new standard requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017 including interim periods within those fiscal years. Earlier adoption is permitted. The adoption of ASU 2016-18 is not expected to have a material effect on the Company’s consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business, which clarifies and provides a more robust framework to use in determining when a set of assets and activities is a business. The amendments in this update should be applied prospectively on or after the effective date. This update is effective for annual periods beginning after December 15, 2017, and interim periods within those periods. Early adoption is permitted for acquisition or deconsolidation transactions occurring before the issuance date or effective date and only when the transactions have not been reported in issued or made available for issuance financial statements. The Company does not expect the adoption to have any significant impact on its Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. This ASU eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The Company will apply this guidance to applicable impairment tests after the adoption date. No other recently issued accounting pronouncements are expected to have a material impact on the Company’s consolidated financial statements. |
2. SUMMARY OF SIGNIFICANT ACC22
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Summary Of Significant Accounting Policies Tables | |
Concentration risk | December 31, 2016 Fund Accounts Receivable USO $ 1,256,213 57% USCI 445,163 20% UNG 303,354 14% All Others 197,954 9% Total $ 2,202,684 100% June 30, 2016 Fund Accounts Receivable USO $ 1,245,396 59% USCI 400,258 19% UNG 280,431 13% All Others 198,020 9% Total $ 2,124,105 100% |
3. INVENTORY (Tables)
3. INVENTORY (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Inventory Tables | |
Inventories | December 31, June 30, 2016 2016 As Adjusted Raw materials $ 46,711 $ 50,023 Supplies and packing materials 119,734 77,497 Finished goods 332,366 357,351 498,811 484,871 Less impairment finished goods (2,774 ) (48,330 ) Total $ 496,037 $ 436,541 |
4. PROPERTY AND EQUIPMENT (Tabl
4. PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Property And Equipment Tables | |
PROPERTY AND EQUIPMENT | December 31, 2016 June 30, 2016 As Adjusted Plant and Equipment $ 1,236,138 $ 1,477,411 Furniture & Office Equipment 146,076 119,123 Vehicles 82,491 58,850 Total Property and Equipment, Gross 1,464,705 1,655,384 Accumulated Depreciation (428,660 ) (488,691 ) Total Property and Equipment, Net $ 1,036,045 $ 1,166,693 |
5. GOODWILL (Tables)
5. GOODWILL (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Goodwill Tables | |
Goodwill | December 31, June 30, 2016 2016 As Adjusted 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 |
6. INTANGIBLE ASSETS (Tables)
6. INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Intangible Assets Tables | |
Intangible assets | December 31, June 30, 2016 2016 As Adjusted 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 (87,615 ) (27,658 ) Net Intangibles $ 958,256 $ 1,018,213 |
Customer relationships | December 31, June 30, 2016 2016 As Adjusted Customer relationships $ 500,252 $ 500,252 Less: accumulated amortization (34,877 ) (9,659 ) Total customer relationships, net $ 465,375 $ 490,593 |
Brand Name | December 31, June 30, 2016 2016 As Adjusted Brand name $ 402,123 $ 402,123 Less: accumulated amortization (28,719 ) (8,447 ) Total brand name, net $ 373,404 $ 393,696 |
Domain Name | December 31, June 30, 2016 2016 As Adjusted Domain Name $ 36,913 $ 36,913 Less: accumulated amortization (7,915 ) (4,193 ) Total brand name, net $ 28,998 $ 32,720 |
Recipes | December 31, June 30, 2016 2016 As Adjusted Recipes $ 21,601 $ 21,601 Less: accumulated amortization (6,115 ) (3,937 ) Total Recipes, net $ 15,486 $ 17,664 |
Non-Compete Agreements | December 31, June 30, 2016 2016 As Adjusted Non-compete agreement $ 84,982 $ 84,982 Less: accumulated amortization (9,989 ) (1,421 ) Total non-compete agreement, net $ 94,993 $ 83,561 |
Amortization Expense | Years Ending December 31, Expense 2017 $ 118,937 2018 $ 118,937 2019 $ 118,937 2020 $ 115,291 2021 $ 98,536 |
7. OTHER ASSETS (Tables)
7. OTHER ASSETS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Other Assets Tables | |
Other assets | As of December 31, As of 2016 2016 As Adjusted Deferred tax asset $ 12,727 $ 19,501 PrePaid expenses 319,868 242,582 PrePaid income tax 930,926 493,427 Notes receivable 150,000 150,000 Total $ 1,263,521 $ 755,509 |
8. ACCOUNTS PAYABLE AND ACCRU28
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | December 31, 2016 June 30, 2016 As Adjusted Accounts payable $ 1,140,125 $ 1,044,026 Accrued judgment 135,000 135,000 Accrued interest 20,369 5,238 Taxes payable 627,920 769,224 Expense waiver – Funds (related party) 939,385 448,930 Deferred rent 16,943 19,202 Accrued payroll and vacation 580,054 127,271 Accrued expenses 421,258 295,955 Total $ 3,881,054 $ 2,844,847 |
9. RELATED PARTY TRANSACTIONS (
9. RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Current related party notes payable | December 31, 2016 June 30, 2016 As Adjusted 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 $ 3,500 $ 8,500 |
11. BUSINESS COMBINATIONS (Tabl
11. BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Dec. 31, 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-mo ended December 31, 2015 6-mo ended December 31, 2015 Revenue $ 7,538,894 $ 14,624,581 Income from Operations 1,780,144 3,847,213 Net Income $ 1,009,341 $ 2,438,998 Net Income per share available to common stockholders, basic and diluted $ 0.00 $ 0.00 |
12. COMMITMENTS AND CONTINGEN31
12. COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Tables | |
Future minimum lease payments | Future minimum lease payments for Gourmet Foods are as follows: Year Ended June 30, Lease Amount 2017 $ 65,345 2018 130,690 2019 57,707 2020 17,806 2021 1,487 Total Minimum Lease Commitment $ 273,035 Future minimum lease payments for Brigadier are as follows: Year Ended June 30, Lease Amount 2017 $ 23,524 2018 32,537 2019 29,826 Total Minimum Lease Commitment $ 85,887 Future minimum rental payments required under the operating lease, which has remaining non-cancellable lease terms in excess of one year, are as follows: Year ended June 30, Lease Amount 2017 $ 66,002 2018 134,645 2019 45,322 Total minimum lease commitment $ 245,969 |
14. SEGMENT REPORTING (Tables)
14. SEGMENT REPORTING (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Segment Reporting Tables | |
Segments | The following table presents a summary of identifiable assets as of December 31, 2016 and June 30, 2016: As of 2016 As of 2016 As Adjusted Identifiable assets: Corporate headquarters $ 1,299,226 $ 1,521,210 U.S.A. : fund management 12,167,931 8,575,810 U.S.A. : data streaming 82,032 87,790 New Zealand 1,916,937 2,199,128 Canada 1,114,617 956,855 Consolidated $ 16,580,743 $ 13,540,793 The following table presents a summary of operating information for the three months ended December 31, 2016 and 2015: (note: Canadian interests had not yet been acquired in 2015) 3-Months Ended December 31, 2016 3-Months Ended December 31, 2015 As Adjusted Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 25,039 $ (3,500 ) U.S.A. : investment fund management 6,472,531 5,645,696 New Zealand : Food Industry 1,203,521 996,563 Canada : Security alarm monitoring 828,114 - Consolidated $ 8,529,205 $ 6,638,759 Net income (loss) after taxes: Corporate headquarters $ (158,990 ) $ (43,459 ) U.S.A. : data streaming and hardware (16,035 ) (4,181 ) U.S.A. : investment fund management 1,068,716 966,764 New Zealand : Food Industry 17,154 29,950 Canada : Security alarm monitoring 105,603 - Consolidated $ 1,016,446 $ 949,074 The following table presents a summary of operating information for the six months ended December 31, 2016 and 2015: (note: New Zealand interest were present for only 5 months in 2015 and Canadian interests had not yet been acquired in 2015) 6-Months Ended December 31, 2016 6-Months Ended December 31, 2015 As Adjusted Revenues from unaffiliated customers: U.S.A. : data streaming and hardware $ 89,566 $ 117,700 U.S.A. : investment fund management 12,840,475 10,941,614 New Zealand : Food Industry 2,394,081 1,610,923 Canada : Security alarm monitoring 1,641,660 - Consolidated $ 16,965,782 $ 12,670,237 Net income (loss) after taxes: Corporate headquarters $ (337,906 ) $ (117,161 ) U.S.A. : data streaming and hardware (32,867 ) (1,817 ) U.S.A. : investment fund management 2,486,232 2,376,828 New Zealand : Food Industry (7,640 ) 28,244 Canada : Security alarm monitoring 219,121 - Consolidated $ 2,326,940 $ 2,286,094 The following table presents a summary of capital expenditures for the six months ended December 31: Capital expenditures: 2016 2015 Corporate headquarters $ - $ 863 New Zealand 43,049 109,722 Canada 4,297 - Consolidated $ 47,346 $ 110,585 |
2. SUMMARY OF SIGNIFICANT ACC33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Jun. 30, 2016 | |
Accounts receivable | $ 2,202,684 | |
Accounts receivable concentration risk percent | 100.00% | |
As Adjusted | ||
Accounts receivable | $ 2,124,105 | |
Accounts receivable concentration risk percent | 100.00% | |
USO | ||
Accounts receivable | $ 1,256,213 | $ 1,245,396 |
Accounts receivable concentration risk percent | 57.00% | 59.00% |
USCI | ||
Accounts receivable | $ 445,163 | $ 400,258 |
Accounts receivable concentration risk percent | 20.00% | 19.00% |
UNG | ||
Accounts receivable | $ 303,354 | $ 280,431 |
Accounts receivable concentration risk percent | 14.00% | 13.00% |
All Others | ||
Accounts receivable | $ 197,954 | $ 198,020 |
Accounts receivable concentration risk percent | 9.00% | 9.00% |
3. INVENTORY (Details)
3. INVENTORY (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Jun. 30, 2016 | |
Raw materials | $ 46,711 | |
Supplies and packing materials | 119,734 | |
Finished goods | 332,366 | |
Subtotal | 498,811 | |
Less: Impairment of Finished Goods | (2,774) | |
Total | $ 496,037 | |
As Adjusted | ||
Raw materials | $ 50,023 | |
Supplies and packing materials | 77,497 | |
Finished goods | 357,351 | |
Subtotal | 484,871 | |
Less: Impairment of Finished Goods | (48,330) | |
Total | $ 436,541 |
4. PROPERTY AND EQUIPMENT (Deta
4. PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Total Property and Equipment, Gross | $ 1,464,705 | |
Accumulated depreciation | (428,660) | |
Total Property and Equipment, Net | 1,036,045 | |
As Adjusted | ||
Total Property and Equipment, Gross | $ 1,655,384 | |
Accumulated depreciation | (488,691) | |
Total Property and Equipment, Net | 1,166,693 | |
Plant and Equipment [Member] | ||
Total Property and Equipment, Gross | 1,236,138 | |
Plant and Equipment [Member] | As Adjusted | ||
Total Property and Equipment, Gross | 1,477,411 | |
Furniture & Office EquipmentMember] | ||
Total Property and Equipment, Gross | 146,076 | |
Furniture & Office EquipmentMember] | As Adjusted | ||
Total Property and Equipment, Gross | 119,123 | |
Vehicles [Member] | ||
Total Property and Equipment, Gross | $ 82,491 | |
Vehicles [Member] | As Adjusted | ||
Total Property and Equipment, Gross | $ 58,850 |
4. PROPERTY AND EQUIPMENT (De36
4. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property And Equipment Details Narrative | ||
Depreciation expense | $ 139,873 | $ 96,676 |
5. GOODWILL (Details)
5. GOODWILL (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Goodwill, net | $ 219,256 | |
As Adjusted | ||
Goodwill, net | $ 219,256 | |
Trained Workforce Gourmet Foods | ||
Goodwill, net | 51,978 | |
Trained Workforce Gourmet Foods | As Adjusted | ||
Goodwill, net | 51,978 | |
Trained Workforce Brigadier | ||
Goodwill, net | 75,795 | |
Trained Workforce Brigadier | As Adjusted | ||
Goodwill, net | 75,795 | |
Goodwill Gourmet Foods | ||
Goodwill, net | 45,669 | |
Goodwill Gourmet Foods | As Adjusted | ||
Goodwill, net | 45,669 | |
Goodwill Brigadier | ||
Goodwill, net | $ 45,814 | |
Goodwill Brigadier | As Adjusted | ||
Goodwill, net | $ 45,814 |
6. INTANGIBLE ASSETS (Details)
6. INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Intangible assets, gross | $ 1,045,871 | |
Less: Accumulated depreciation | (87,615) | |
Net intangibles | 958,256 | |
As Adjusted | ||
Intangible assets, gross | $ 1,045,871 | |
Less: Accumulated depreciation | (27,658) | |
Net intangibles | 1,018,213 | |
Brand name [Member] | ||
Intangible assets, gross | 402,123 | |
Less: Accumulated depreciation | (28,719) | |
Net intangibles | 373,404 | |
Brand name [Member] | As Adjusted | ||
Intangible assets, gross | 402,123 | |
Less: Accumulated depreciation | (8,447) | |
Net intangibles | 393,696 | |
Domain Name [Member] | ||
Intangible assets, gross | 36,913 | |
Less: Accumulated depreciation | (7,915) | |
Net intangibles | 28,998 | |
Domain Name [Member] | As Adjusted | ||
Intangible assets, gross | 36,913 | |
Less: Accumulated depreciation | (4,193) | |
Net intangibles | 32,720 | |
Customer Relationships [Member] | ||
Intangible assets, gross | 500,252 | |
Less: Accumulated depreciation | (34,877) | |
Net intangibles | 465,375 | |
Customer Relationships [Member] | As Adjusted | ||
Intangible assets, gross | 500,252 | |
Less: Accumulated depreciation | (9,659) | |
Net intangibles | 490,593 | |
Non-compete agreement [Member] | ||
Intangible assets, gross | 84,982 | |
Less: Accumulated depreciation | (9,989) | |
Net intangibles | 94,993 | |
Non-compete agreement [Member] | As Adjusted | ||
Intangible assets, gross | 84,982 | |
Less: Accumulated depreciation | (1,421) | |
Net intangibles | 83,561 | |
Recipes [Member] | ||
Intangible assets, gross | 21,601 | |
Less: Accumulated depreciation | (6,115) | |
Net intangibles | $ 15,486 | |
Recipes [Member] | As Adjusted | ||
Intangible assets, gross | 21,601 | |
Less: Accumulated depreciation | (3,937) | |
Net intangibles | $ 17,664 |
6. INTANGIBLE ASSETS (Details 1
6. INTANGIBLE ASSETS (Details 1) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Intangible asset gross | $ 1,045,871 | |
Less: Accumulated depreciation | (87,615) | |
Intangible assets, net | 958,256 | |
As Adjusted | ||
Intangible asset gross | $ 1,045,871 | |
Less: Accumulated depreciation | (27,658) | |
Intangible assets, net | 1,018,213 | |
Customer Relationships [Member] | ||
Intangible asset gross | 500,252 | |
Less: Accumulated depreciation | (34,877) | |
Intangible assets, net | 465,375 | |
Customer Relationships [Member] | As Adjusted | ||
Intangible asset gross | 500,252 | |
Less: Accumulated depreciation | (9,659) | |
Intangible assets, net | 490,593 | |
Brand name [Member] | ||
Intangible asset gross | 402,123 | |
Less: Accumulated depreciation | (28,719) | |
Intangible assets, net | 373,404 | |
Brand name [Member] | As Adjusted | ||
Intangible asset gross | 402,123 | |
Less: Accumulated depreciation | (8,447) | |
Intangible assets, net | 393,696 | |
Domain Name [Member] | ||
Intangible asset gross | 36,913 | |
Less: Accumulated depreciation | (7,915) | |
Intangible assets, net | 28,998 | |
Domain Name [Member] | As Adjusted | ||
Intangible asset gross | 36,913 | |
Less: Accumulated depreciation | (4,193) | |
Intangible assets, net | 32,720 | |
Recipes [Member] | ||
Intangible asset gross | 21,601 | |
Less: Accumulated depreciation | (6,115) | |
Intangible assets, net | 15,486 | |
Recipes [Member] | As Adjusted | ||
Intangible asset gross | 21,601 | |
Less: Accumulated depreciation | (3,937) | |
Intangible assets, net | 17,664 | |
Non-compete agreement [Member] | ||
Intangible asset gross | 84,982 | |
Less: Accumulated depreciation | (9,989) | |
Intangible assets, net | $ 94,993 | |
Non-compete agreement [Member] | As Adjusted | ||
Intangible asset gross | 84,982 | |
Less: Accumulated depreciation | (1,421) | |
Intangible assets, net | $ 83,561 |
6. INTANGIBLE ASSETS (Details 2
6. INTANGIBLE ASSETS (Details 2) | Dec. 31, 2016USD ($) |
Intangible Assets Details 2 | |
2,017 | $ 118,937 |
2,018 | 118,937 |
2,019 | 118,937 |
2,020 | 115,291 |
2,021 | $ 98,536 |
7. OTHER ASSETS (Details)
7. OTHER ASSETS (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Deferred tax asset | $ 12,727 | |
PrePaid expenses | 319,868 | |
PrePaid income tax | 930,926 | |
Notes receivable | 150,000 | |
Other current assets | $ 1,263,521 | |
As Adjusted | ||
Deferred tax asset | $ 19,501 | |
PrePaid expenses | 242,582 | |
PrePaid income tax | 493,427 | |
Notes receivable | 150,000 | |
Other current assets | $ 755,509 |
8. ACCOUNTS PAYABLE AND ACCRU42
8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Accounts payable | $ 1,140,125 | |
Accrued judgment | 135,000 | |
Accrued interest | 20,369 | |
Taxes payable | 627,920 | |
Expense waiver - Funds (related party) | 939,385 | |
Deferred rent | 16,943 | |
Accrued payroll and vacation | 580,054 | |
Accrued Expenses | 421,258 | |
Total | $ 3,881,054 | |
As Adjusted | ||
Accounts payable | $ 1,044,026 | |
Accrued judgment | 135,000 | |
Accrued interest | 5,238 | |
Taxes payable | 769,224 | |
Expense waiver - Funds (related party) | 448,930 | |
Deferred rent | 19,202 | |
Accrued payroll and vacation | 127,271 | |
Accrued Expenses | 295,955 | |
Total | $ 2,844,847 |
9. RELATED PARTY TRANSACTIONS43
9. RELATED PARTY TRANSACTIONS (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Notes payable to shareholder, interest rate of 10%, unsecured and payable on July 31, 2004 (past due) | $ 0 | |
Notes payable to shareholder, interest rate of 8%, unsecured and payable on December 31, 2012 (past due) | 3,500 | |
Notes payable - related parties | $ 3,500 | |
As Adjusted | ||
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 | |
Notes payable - related parties | $ 8,500 |
11. BUSINESS COMBINATIONS (Deta
11. BUSINESS COMBINATIONS (Details) | Dec. 31, 2016USD ($) |
Gourmet Foods | |
Cash | $ 50,695 |
Accounts Receivable | 259,662 |
Prepaid Expenses & Other Assets | 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 |
Brigadier | |
Cash | 80,391 |
Accounts Receivable | 431,656 |
Prepaid Expenses & Other Assets | 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 |
Consideration Paid for Net Assets | $ 1,540,830 |
11. BUSINESS COMBINATIONS (De45
11. BUSINESS COMBINATIONS (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Business Combinations Details 1 | ||
Revenue | $ 7,538,894 | $ 14,624,581 |
Income from operations | 1,780,144 | 3,847,213 |
Net Income | $ 1,009,341 | $ 2,438,998 |
Net Income per share available to common stockholders, basic and diluted | $ 0 | $ 0 |
12. COMMITMENTS AND CONTINGEN46
12. COMMITMENTS AND CONTINGENCIES (Details) | Dec. 31, 2016USD ($) |
2,017 | $ 66,002 |
2,018 | 134,645 |
2,019 | 45,322 |
Total Minimum Lease Commitment | 245,969 |
Gourmet Foods | |
2,017 | 65,345 |
2,018 | 130,690 |
2,019 | 57,707 |
2,020 | 17,806 |
2,021 | 1,487 |
Total Minimum Lease Commitment | 273,035 |
Brigadier | |
2,017 | 23,524 |
2,018 | 32,537 |
2,019 | 29,826 |
Total Minimum Lease Commitment | $ 85,887 |
14. SEGMENT REPORTING (Details)
14. SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | |
Identifiable assets | $ 16,580,743 | $ 16,580,743 | |||
Revenues | 8,529,205 | 16,965,782 | |||
As Adjusted | |||||
Identifiable assets | $ 13,540,793 | ||||
Revenues | $ 6,638,759 | $ 12,670,237 | |||
Corporate Headquarters | |||||
Identifiable assets | 1,299,226 | 1,299,226 | |||
Net income (loss) after tax | (158,990) | (337,906) | |||
Capital expenditures | 0 | ||||
Corporate Headquarters | As Adjusted | |||||
Identifiable assets | 1,521,210 | ||||
Net income (loss) after tax | (43,459) | (117,161) | |||
Capital expenditures | 863 | ||||
U.S.A. investment fund management | |||||
Identifiable assets | 82,032 | 82,032 | |||
Revenues | 6,472,531 | 12,840,475 | |||
Net income (loss) after tax | 1,068,716 | 2,486,232 | |||
U.S.A. investment fund management | As Adjusted | |||||
Identifiable assets | 8,575,810 | ||||
Revenues | 5,645,696 | 10,941,614 | |||
Net income (loss) after tax | 966,764 | 2,376,828 | |||
U.S.A. data streaming and hardware | |||||
Identifiable assets | 12,167,931 | 12,167,931 | |||
Revenues | 25,039 | 89,566 | |||
Net income (loss) after tax | (16,035) | (32,867) | |||
U.S.A. data streaming and hardware | As Adjusted | |||||
Identifiable assets | 87,790 | ||||
Revenues | (3,500) | 117,700 | |||
Net income (loss) after tax | (4,181) | (1,817) | |||
New Zealand | |||||
Identifiable assets | 1,916,937 | 1,916,937 | |||
Revenues | 1,203,521 | 2,394,081 | |||
Net income (loss) after tax | 17,154 | (7,640) | |||
Capital expenditures | 43,049 | ||||
New Zealand | As Adjusted | |||||
Identifiable assets | 2,199,128 | ||||
Revenues | 996,563 | 1,610,923 | |||
Net income (loss) after tax | 29,950 | 28,244 | |||
Capital expenditures | 109,722 | ||||
Canada | |||||
Identifiable assets | 1,114,617 | 1,114,617 | |||
Revenues | 828,114 | 1,641,660 | |||
Net income (loss) after tax | 105,603 | 219,121 | |||
Capital expenditures | 4,297 | ||||
Canada | As Adjusted | |||||
Identifiable assets | 956,855 | ||||
Revenues | 0 | 0 | |||
Net income (loss) after tax | 0 | 0 | |||
Capital expenditures | 0 | ||||
Consolidated | |||||
Identifiable assets | 16,580,743 | 16,580,743 | |||
Revenues | 8,529,205 | 16,965,782 | |||
Net income (loss) after tax | $ 1,016,446 | 2,326,940 | |||
Capital expenditures | $ 47,346 | ||||
Consolidated | As Adjusted | |||||
Identifiable assets | $ 13,540,793 | ||||
Revenues | 6,638,759 | 12,670,237 | |||
Net income (loss) after tax | $ 949,074 | 2,286,094 | |||
Capital expenditures | $ 110,858 |