Marygold Companies, Inc. - Quarter Report: 2009 December (Form 10-Q)
U.S.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
þ QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
quarterly period ended December 31, 2009
OR
o TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the
transition period from _________ to __________
Commission
File No. 000-29913
CONCIERGE
TECHNOLOGIES, INC.
|
(Exact name of registrant as specified in its charter) |
State of
Incorporation: Nevada
IRS
Employer I.D. Number: 95-4442384
3615
Superior Avenue, Suite 3100A
Cleveland,
OH 44114
866-921-9434
|
(Address
and telephone number of registrant's principal
executive
offices and principal place of
business)
|
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding twelve months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes þ
No o
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.
Large accelerated filer
o Accelerated
filer
o
Non-accelerated
filer o Smaller
reporting company þ
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No þ
As of February 8, 2010, there were
184,315,200 shares of the Registrant’s Common Stock, $0.001 par value,
outstanding, 5 million shares of its Series A Convertible Voting Preferred
Stock, par value $0.001, outstanding and 1,600,000 shares of its Series B
Convertible Voting Preferred Stock, par value $0.001, outstanding.
TABLE
OF CONTENTS
Page | ||||
PART I - FINANCIAL INFORMATION | 3 | |||
Item 1. | Financial Statements | 3 | ||
Item 2. |
Management’s
Discussion and Analysis of Financial Condition
and
Results of Operations
|
16 | ||
Item 4. | Controls and Procedures | 17 | ||
PART II – OTHER INFORMATION | 18 | |||
Item 1. | Legal Proceedings | 18 | ||
Item 2. | Unregistered Sales of Equity Securities | 18 | ||
Item 5. | Other Information | 18 | ||
Item 6. | Exhibits | 19 | ||
SIGNATURES | 21 |
2
PART
I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL
STATEMENTS
Page | ||||
Consolidated
Balance Sheets (Unaudited)
|
4 | |||
Consolidated
Statements of Operations For The Three and Six Month
|
||||
Periods
Ended December 31, 2009 and 2008
|
||||
and
the Period from September 20, 1996 (Inception) to
|
||||
December
31, 2009 (Unaudited)
|
5 | |||
Statements
of Changes in Stockholders’ Deficit For The
|
||||
Six
Month Periods Ended December 31, 2009 and 2008
|
||||
and
for the Period from September 20, 1996 (Inception) to
|
||||
December
31, 2009 (Unaudited)
|
6 | |||
Consolidated
Statements of Cash Flows For The Six Month Periods
|
||||
Ended
December 31, 2009 and 2008 and the Period from
|
||||
September
20, 1996 (Inception) to December 31, 2009
|
||||
(Unaudited)
|
8 | |||
Notes
to Unaudited Financial Statements
|
9 |
3
(A
development stage company)
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(Unaudited)
|
||||||||
December
31, 2009
|
June
30, 2009
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
& cash equivalents
|
$ | 535 | $ | 2,566 | ||||
Account
Receivable
|
3,099 | 4,145 | ||||||
Inventory
|
- | 196 | ||||||
Total
current assets
|
3,634 | 6,907 | ||||||
Property
and Equipment, net
|
12,919 | 20,744 | ||||||
Total
Assets
|
$ | 16,553 | $ | 27,651 | ||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable and accrued expenses
|
$ | 301,521 | $ | 308,525 | ||||
Due
to related party
|
3,547 | 2,398 | ||||||
Sales
paid in advance
|
2,245 | 1,976 | ||||||
Notes
payable - related parties
|
142,500 | 142,500 | ||||||
Total
current liabilities
|
449,813 | 455,399 | ||||||
COMMITMENT
|
||||||||
STOCKHOLDERS'
DEFICIT:
|
||||||||
Preferred
stock, 10,000,000 authorized par $0.001
|
||||||||
Series
A: 5,000,000 shares issued
|
5,000 | 5,000 | ||||||
Series
B: 1,600,000 shares issued
|
1,600 | 1,000 | ||||||
Common
stock, $0.001 par value; 190,000,000 shares authorized; 184,315,200 and
178,231,867 shares issued and outstanding at December 31, 2009 and June
30, 2009, respectively
|
184,315 | 178,232 | ||||||
Additional
paid-in capital
|
3,727,505 | 3,682,896 | ||||||
Deficit
accumulated during the development stage
|
(4,351,680 | ) | (4,294,876 | ) | ||||
Total
stockholders' deficit
|
(433,260 | ) | (427,748 | ) | ||||
Total
Liabilities and Stockholders' Deficit
|
$ | 16,553 | $ | 27,651 |
The
accompanying notes are an integral part of these unaudited financial
statements
4
(A
development stage company)
|
||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||||||||||||||
FOR
THE THREE AND SIX MONTH PERIODS ENDED DECEMBER 31, 2009 AND
2008
|
||||||||||||||||||||
AND
FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31,
2009
|
||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
For
The Three-Month Periods Ended
|
For
The Six Month Periods Ended
|
For
The Period From September 20, 1996 (Inception) to December 31,
2009
|
||||||||||||||||||
December
31,
|
December
31,
|
|||||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||
NET
REVENUE
|
$ | 5,700 | $ | 8,205 | $ | 13,940 | $ | 14,761 | $ | 71,562 | ||||||||||
Cost
of Revenue
|
9,228 | 13,955 | 24,051 | 22,419 | 115,252 | |||||||||||||||
GROSS
PROFIT (LOSS)
|
(3,528 | ) | (5,750 | ) | (10,110 | ) | (7,658 | ) | (43,689 | ) | ||||||||||
COSTS
AND EXPENSES
|
||||||||||||||||||||
Product
Launch Expenses
|
- | - | - | - | 1,077,785 | |||||||||||||||
Impairment
of Assets
|
- | - | - | - | 1,196,383 | |||||||||||||||
General
& Administrative Expenses
|
30,177 | 12,618 | 40,158 | 21,250 | 1,746,706 | |||||||||||||||
TOTAL
COSTS AND EXPENSES
|
30,177 | 12,618 | 40,158 | 21,250 | 4,020,874 | |||||||||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||||||
Other
Income
|
- | - | - | - | 241 | |||||||||||||||
Interest
Expense
|
(2,869 | ) | (2,869 | ) | (5,737 | ) | (5,737 | ) | (39,924 | ) | ||||||||||
Unallocated
accrued expenses reversed
|
- | - | - | - | 150,123 | |||||||||||||||
Settlement
Income/(Loss)
|
- | - | - | - | 52,600 | |||||||||||||||
Loss
on debt settlement
|
- | - | - | - | (23,033 | ) | ||||||||||||||
Litigation
Settlement
|
- | - | - | - | (135,000 | ) | ||||||||||||||
TOTAL
OTHER INCOME (EXPENSES)
|
(2,869 | ) | (2,869 | ) | (5,737 | ) | (5,737 | ) | 5,007 | |||||||||||
NET
LOSS BEFORE INCOME TAXES
|
(36,574 | ) | (21,237 | ) | (56,006 | ) | (34,646 | ) | (4,059,557 | ) | ||||||||||
Provision
of Income Taxes
|
- | - | 800 | 800 | 13,600 | |||||||||||||||
NET
LOSS
|
$ | (36,574 | ) | $ | (21,237 | ) | $ | (56,806 | ) | $ | (35,446 | ) | $ | (4,073,157 | ) | |||||
WEIGHTED
AVERAGE SHARES OF COMMON STOCK
|
||||||||||||||||||||
OUTSTANDING,
BASIC AND DILUTED
|
232,909,522 | 213,449,258 | 228,044,253 | 208,340,563 | ||||||||||||||||
*BASIC
AND DILUTED NET LOSS PER SHARE
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
*
Weighted average number of shares used to compute basic and diluted loss
per share is the same as the effect of dilutive securities are anti
dilutive.
|
The
accompanying notes are an integral part of these unaudited financial
statements
5
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||
(A
development stage company)
|
||||||||||||||||||||||||||||||||||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS' DEFICIT
|
||||||||||||||||||||||||||||||||||||||||
FOR
THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2009
|
||||||||||||||||||||||||||||||||||||||||
AND
FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31,
2009
|
||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Additional Paid In Capital |
Common
Stock
|
|||||||||||||||||||||||||||||||||||||
Number
of
|
Par
|
Number
of
|
Par
|
Shares
|
Accumulated
|
Stockholders'
|
Advance
|
Subject
to
|
||||||||||||||||||||||||||||||||
Shares
|
Value
|
Shares
|
Value
|
to
Be Issued
|
Deficit
|
Deficit
|
Subscriptions
|
Contingency
|
||||||||||||||||||||||||||||||||
Common
Stock issued for cash
|
||||||||||||||||||||||||||||||||||||||||
through
June 30, 1997
|
- | $ | - | 176,306 | $ | 1,763 | $ | 106,162 | $ | - | $ | - | $ | 107,925 | $ | - | $ | - | ||||||||||||||||||||||
Common
stock issued for services
|
||||||||||||||||||||||||||||||||||||||||
through
June 30, 1997
|
- | - | 621,545 | 6,215 | - | - | - | 6,215 | - | - | ||||||||||||||||||||||||||||||
Net
loss through June 30, 1997
|
- | - | - | - | - | - | (96,933 | ) | (96,933 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 1997
|
- | - | 797,851 | 7,978 | 106,162 | - | (96,933 | ) | 17,207 | - | - | |||||||||||||||||||||||||||||
Common
Stock issued for cash
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 1998
|
- | - | 137,475 | 1,375 | 194,650 | - | - | 196,025 | - | - | ||||||||||||||||||||||||||||||
Common
stock issued for services
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 1998
|
- | - | 22,550 | 226 | - | - | - | 226 | - | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 1998
|
- | - | - | - | - | - | (283,891 | ) | (283,891 | ) | - | - | ||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Balance
at June 30, 1998
|
- | - | 957,876 | 9,579 | 300,812 | - | (380,824 | ) | (70,433 | ) | - | - | ||||||||||||||||||||||||||||
Common
Stock issued for cash
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 1999
|
- | - | 208,000 | - | - | - | - | - | - | 60,996 | ||||||||||||||||||||||||||||||
Common
stock issued for services
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 1999
|
- | - | 450 | - | - | - | - | - | - | 4 | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 1999
|
- | - | - | - | - | - | (89,919 | ) | (89,919 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 1999
|
- | - | 1,166,326 | 9,579 | 300,812 | - | (470,743 | ) | (160,352 | ) | - | 61,000 | ||||||||||||||||||||||||||||
Acquisition
and retirement of Common shares
|
- | - | (262,000 | ) | (2,620 | ) | - | - | - | (2,620 | ) | - | - | |||||||||||||||||||||||||||
Common
Stock issued for cash
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 2000
|
- | - | 117,184 | - | - | - | - | - | - | 202,061 | ||||||||||||||||||||||||||||||
Common
stock issued for services
|
||||||||||||||||||||||||||||||||||||||||
in
the year ended June 30, 2000
|
- | - | 354,870 | - | - | - | - | - | - | 3,549 | ||||||||||||||||||||||||||||||
Post
acquisition stock subscription funds
|
||||||||||||||||||||||||||||||||||||||||
received
net of costs & expenses of $79,710
|
- | - | - | - | - | - | - | - | 1,175,790 | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2000
|
- | - | - | - | - | - | (986,986 | ) | (986,986 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2000
|
- | - | 1,376,380 | 6,959 | 300,812 | - | (1,457,729 | ) | (1,149,958 | ) | 1,175,790 | 266,610 | ||||||||||||||||||||||||||||
Post
acquisition stock subscription funds
|
||||||||||||||||||||||||||||||||||||||||
received
|
- | - | - | - | - | - | - | - | 487,500 | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2001
|
- | - | - | - | - | - | (544,080 | ) | (544,080 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2001
|
- | - | 1,376,380 | 6,959 | 300,812 | - | (2,001,809 | ) | (1,694,038 | ) | 1,663,290 | 266,610 | ||||||||||||||||||||||||||||
Recapitalization
upon merger
|
- | - | 118,681,333 | 113,099 | (300,812 | ) | - | (278,527 | ) | (466,240 | ) | - | - | |||||||||||||||||||||||||||
Stock
subscription received for 500,000 shares
|
- | - | - | - | - | 29,983 | - | 29,983 | - | - | ||||||||||||||||||||||||||||||
Stock
issued for services
|
- | - | 2,532,581 | 119,031 | - | - | - | 119,031 | - | - | ||||||||||||||||||||||||||||||
Stock
to be issued for services-3,275,472 shares
|
- | - | - | - | - | 153,947 | - | 153,947 | - | - | ||||||||||||||||||||||||||||||
Adjustment
to paid in capital on merger
|
- | - | - | (116,499 | ) | 116,499 | - | - | - | - | - | |||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2002
|
- | - | - | - | - | - | (478,229 | ) | (478,229 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2002
|
- | - | 122,590,294 | 122,590 | 116,499 | 183,930 | (2,758,565 | ) | (2,335,546 | ) | 1,663,290 | 266,610 | ||||||||||||||||||||||||||||
Stock
issued for subscription received in the prior year
|
- | - | 500,000 | 500 | 29,483 | (29,983 | ) | - | - | - | - | |||||||||||||||||||||||||||||
Stock
issued for services included in the prior period
|
- | - | 3,275,472 | 3,275 | 150,672 | (153,947 | ) | - | - | - | - | |||||||||||||||||||||||||||||
Forfeiture
of stock subscription
|
- | - | - | - | 10,000 | - | - | 10,000 | - | - | ||||||||||||||||||||||||||||||
Cancellation
of over issued shares on recapitalization
|
- | - | (73,017 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2003
|
- | - | - | - | - | - | (47,272 | ) | (47,272 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2003
|
- | - | 126,292,749 | 126,365 | 306,654 | - | (2,805,837 | ) | (2,372,818 | ) | 1,663,290 | 266,610 | ||||||||||||||||||||||||||||
Adjustment
to par value
|
- | - | - | (72 | ) | 72 | - | - | - | - | - | |||||||||||||||||||||||||||||
Issuance
of shares for cash
|
- | - | 2,000,000 | 2,000 | 18,000 | - | - | 20,000 | - | - | ||||||||||||||||||||||||||||||
Issuance
of shares for services
|
- | - | 4,000,000 | 4,000 | 212,000 | - | - | 216,000 | - | - | ||||||||||||||||||||||||||||||
Issuance
of shares for acquisition of Planet Halo
|
- | - | 9,999,998 | 10,000 | 490,000 | - | - | 500,000 | - | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2004
|
- | - | - | - | - | - | (514,639 | ) | (514,639 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2004
|
- | - | 142,292,747 | 142,293 | 1,026,726 | - | (3,320,476 | ) | (2,151,457 | ) | 1,663,290 | 266,610 |
6
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||
(A
development stage company)
|
||||||||||||||||||||||||||||||||||||||||
STATEMENTS
OF CHANGES IN STOCKHOLDERS' DEFICIT
|
||||||||||||||||||||||||||||||||||||||||
FOR
THE SIX-MONTH PERIOD ENDED DECEMBER 31, 2009
|
||||||||||||||||||||||||||||||||||||||||
AND
FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31,
2009
|
||||||||||||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Additional Paid In Capital |
Common
Stock
|
|||||||||||||||||||||||||||||||||||||
Number
of
|
Par
|
Number
of
|
Par
|
Shares
|
Accumulated
|
Stockholders'
|
Advance
|
Subject
to
|
||||||||||||||||||||||||||||||||
Shares
|
Value
|
Shares
|
Value
|
to
Be Issued
|
Deficit
|
Deficit
|
Subscriptions
|
Contingency
|
||||||||||||||||||||||||||||||||
|
- |
Reclassify
contingent liabilities to Additional Paid In Capital
|
- | - | - | - | 1,929,900 | - | - | 1,929,900 | (1,663,290 | ) | (266,610 | ) | ||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2005
|
- | - | - | - | - | - | (544,284 | ) | (544,284 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2005
|
- | - | 142,292,747 | 142,293 | 2,956,626 | - | (3,864,761 | ) | (765,841 | ) | - | - | ||||||||||||||||||||||||||||
Loans
converted to Paid in Capital
|
- | - | - | - | 281,708 | - | - | 281,708 | - | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2006
|
- | - | - | - | - | - | (44,552 | ) | (44,552 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2006
|
- | - | 142,292,747 | 142,293 | 3,238,334 | - | (3,909,313 | ) | (528,686 | ) | - | - | ||||||||||||||||||||||||||||
Issuance
of shares for services
|
- | - | 5,000,000 | 5,000 | 30,000 | - | - | 35,000 | - | - | ||||||||||||||||||||||||||||||
Issuance
of shares for cash
|
- | - | 27,027,027 | 27,027 | 62,973 | - | - | 90,000 | - | - | ||||||||||||||||||||||||||||||
Issuance
of shares for debt settlement
|
- | - | 3,003,003 | 3,003 | 30,030 | - | - | 33,033 | - | - | ||||||||||||||||||||||||||||||
Net
income for the year ended June 30, 2007
|
- | - | - | - | - | - | 38,214 | 38,214 | - | - | ||||||||||||||||||||||||||||||
Balance
at June 30, 2007
|
- | - | 177,322,777 | 177,323 | 3,361,337 | - | (3,871,095 | ) | (332,434 | ) | - | - | ||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2008
|
- | - | - | - | - | - | (350,866 | ) | (350,866 | ) | - | - | ||||||||||||||||||||||||||||
Shares
issued for cash
|
- | - | 909,090 | 909 | 9,091 | - | - | 10,000 | - | - | ||||||||||||||||||||||||||||||
Issuance
of Shares for Purchase of Wireless Village
|
5,000,000 | 5,000 | - | - | 245,000 | - | - | 250,000 | - | - | ||||||||||||||||||||||||||||||
Balance
at June 30, 2008
|
5,000,000 | 5,000 | 178,231,867 | 178,232 | 3,615,428 | - | (4,221,961 | ) | (423,301 | ) | - | - | ||||||||||||||||||||||||||||
Shares
issued for cash
|
1,000,000 | 1,000 | - | - | 49,000 | - | - | 50,000 | - | - | ||||||||||||||||||||||||||||||
Debt
settlement with a shareholder
|
- | - | - | - | 18,468 | - | - | 18,468 | - | - | ||||||||||||||||||||||||||||||
Net
loss for the year ended June 30, 2009
|
- | - | - | - | - | - | (72,915 | ) | (72,915 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at June 30, 2009
|
6,000,000 | 6,000 | 178,231,867 | 178,232 | 3,682,896 | - | (4,294,876 | ) | (427,748 | ) | - | - | ||||||||||||||||||||||||||||
Preferred
shares issued for cash
|
600,000 | 600 | - | - | 29,400 | - | - | 30,000 | - | - | ||||||||||||||||||||||||||||||
Common
shares issued for compensation
|
- | - | 6,083,333 | 6,083 | 15,209 | - | - | 21,293 | - | - | ||||||||||||||||||||||||||||||
Net
loss for the quarter ended December 31, 2009
|
- | - | - | - | - | - | (56,805 | ) | (56,805 | ) | - | - | ||||||||||||||||||||||||||||
Balance
at December 31, 2009
|
6,600,000 | $ | 6,600 | 184,315,200 | $ | 184,315 | $ | 3,727,505 | $ | - | $ | (4,351,680 | ) | $ | (433,260 | ) | $ | - | $ | - |
The accompanying notes are an integral part of
these unaudited financial statements
7
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
|
||||||||||||
(A
development stage company)
|
||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||
FOR
THE SIX-MONTH PERIODS ENDED DECEMBER 31, 2009 AND 2008
|
||||||||||||
AND
FOR THE PERIOD FROM SEPTEMBER 20, 1996 (INCEPTION) TO DECEMBER 31,
2009
|
||||||||||||
(Unaudited)
|
||||||||||||
For
the period from September 20, 1996 (inception) to December 31,
2009
|
||||||||||||
For
the Six Month Periods Ended
|
||||||||||||
December
31,
|
||||||||||||
2009
|
2008
|
|||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (56,806 | ) | (35,446 | ) | $ | (4,073,157 | ) | ||||
Adjustments
to reconcile net loss to net cash used in
|
||||||||||||
operating
activities:
|
||||||||||||
Impairment
of goodwill/asset
|
- | - | 950,583 | |||||||||
Depreciation
and amortization
|
8,956 | 6,014 | 33,483 | |||||||||
Stock
issued for services
|
21,293 | - | 552,645 | |||||||||
Loss
on settlement of debts
|
- | - | 23,033 | |||||||||
Unallocated
accrued expense reversed
|
- | - | (150,123 | ) | ||||||||
Increase
(decrease) in current assets:
|
||||||||||||
Accounts
Receivable
|
1,046 | 540 | (3,099 | ) | ||||||||
Inventory
|
196 | - | (245,801 | ) | ||||||||
Increase
(decrease) in current liabilities:
|
||||||||||||
Advance
subscription
|
269 | (381 | ) | 2,245 | ||||||||
Accounts
payable & Accrued expense
|
(7,002 | ) | (11,424 | ) | 372,465 | |||||||
Net
cash used in operating activities
|
(32,050 | ) | (40,697 | ) | (2,537,726 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Cash
received on acquisition of subsidiary
|
- | - | 34,421 | |||||||||
Note
Due - related party
|
- | (8,433 | ) | (81,808 | ) | |||||||
Purchase
of equipment
|
(1,130 | ) | - | (46,155 | ) | |||||||
Net
cash provided by (used in) investing activities
|
(1,130 | ) | (8,433 | ) | (93,542 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Due
from/to related party
|
1,149 | - | 9,023 | |||||||||
Proceeds
from Shares to be Issued
|
- | - | 737,007 | |||||||||
Proceeds
from sale of preferred stock
|
30,000 | 50,000 | 30,000 | |||||||||
Proceeds
from stock subscription forfeited
|
- | - | 10,000 | |||||||||
Proceeds
from advance subscriptions
|
- | - | 1,772,983 | |||||||||
Costs
and expenses of advance subscriptions
|
- | - | (79,710 | ) | ||||||||
Proceeds
from related party loans
|
- | - | 152,500 | |||||||||
Net
cash provided by financing activities
|
31,149 | 50,000 | 2,631,803 | |||||||||
NET
INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS
|
(2,031 | ) | 871 | 535 | ||||||||
CASH
& CASH EQUIVALENTS, BEGINNING BALANCE
|
2,566 | 5,820 | - | |||||||||
CASH
& CASH EQUIVALENTS, ENDING BALANCE
|
$ | 535 | 6,691 | $ | 535 |
The
accompanying notes are an integral part of these unaudited financial
statements
8
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.
|
DESCRIPTION
OF BUSINESS AND BASIS OF
PRESENTATION
|
Concierge
Technologies, Inc., (the “Company”), a California corporation, was incorporated
on August 18, 1993 as Fanfest, Inc. In August 1995 the Company
changed its name to Starfest, Inc. During 1998, the Company was
inactive, just having minimal administrative expenses. During 1999
the Company attempted to pursue operations in the online adult entertainment
field. There were no revenues from this endeavor. On March
20, 2002, the Company changed its name to Concierge Technologies,
Inc.
In March
2000, the Company acquired approximately 96.83 percent (8,250,000 shares) of the
common stock of MAS Acquisition XX Corp. (MAS XX) for $314,688. This
amount was expensed in March 2000 as at the time of the acquisition, MAS XX had
no assets or liabilities and was inactive. On March 21, 2002, the Company
consummated a merger with Concierge, Inc.
Concierge,
Inc. (“CI”) was a development stage enterprise incorporated in the state of
Nevada on September 20, 1996. The CI had undertaken the development
and marketing of a new technology, a unified messaging product “The Personal
Communications Attendant” (“PCA™”). “PCA™” will provide a means by which the
user of Internet e-mail can have e-mail messages spoken to him/her over any
touch-tone telephone or wireless phone in the world. To-date, the
Company has not earned any revenue from this venture.
On April
6, 2004 the Company entered into a Stock Purchase Agreement with Planet Halo,
Inc. (PHI) whereby, the Company purchased all of the outstanding and issued
shares of PHI in exchange for 10 million shares of the Company’s common stock
valued at $500,000. On May 5, 2004 the Company issued the shares on a
ratio of 8.232 shares of its common stock to each share of PHI stock to the
former shareholders of PHI. The existing PHI shares were then retired and
cancelled. The Company is now the sole shareholder of PHI, a Nevada
corporation. On May 5, 2004 the President of PHI was officially
appointed to the Board of Directors of the Company along with one other PHI
named appointee.
PHI is a
development stage company in the wireless telecommunications industry and plans
to design, construct, and operate wireless networks providing subscribers with
access to the Internet and related services. Planet Halo also retains an
exclusive North America license to a proprietary integrated wireless gateway
interface to the Internet named "Halomail”, which the company planned to
implement across its developing wireless networks.
On
October 30, 2007 the Company entered into a definitive Stock Purchase Agreement
to acquire all of the issued and outstanding shares of privately held Wireless
Village, a Nevada corporation based in Cleveland, Ohio. The transaction closed
and the purchase price was paid with 5,000,000 shares of a new class of stock,
Series A Convertible, Voting Preferred Stock, $0.001 par value, issued pro-rata
to the shareholders of Wireless Village on January 23, 2008.
9
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Wireless
Village is a privately held Nevada corporation based in Cleveland, Ohio and has
been providing technical services to Planet Halo on an ongoing basis since May
2007. Wireless Village designs, installs, maintains and operates wireless
network providing high speed Internet access to consumers and businesses.
Wireless Village also hosts web sites, provides customer service and billing
platforms for Planet Halo and other clientele.
The
Company is a development stage company as defined in Statement of Financial
Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by Development
Stage Enterprises.” The Company is devoting substantially all of its present
efforts to establishing its new business, and its planned principal operations
have not yet commenced. All losses accumulated since inception have been
considered as part of the Company's development stage activities.
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis
of Preparation
The
accompanying Interim Consolidated Financial Statements are prepared in
accordance with rules set forth in Regulation S-K of the Securities and Exchange
Commission. Accordingly, these statements do not include all
disclosures required under generally accepted principles and should be read in
conjunction with the audited financial statements included in the Company’s Form
10-K for the year ended June 30, 2009. In the opinion of management,
all adjustments consisting of normal reoccurring accruals have been made to the
financial statements. The results of operation for the six-month
period ended December 31, 2009 are not necessarily indicative of the results to
be expected for the fiscal year ending June 30, 2010.
PRINCIPLES
OF CONSOLIDATION
The
accompanying consolidated financial statements include the accounts of Concierge
Technologies, Inc. (parent) and its wholly owned subsidiaries, Planet Halo, Inc.
and Wireless Village from the date of acquisition. All significant inter-company
transactions and accounts have been eliminated in consolidation.
USE
OF ESTIMATES
The
preparation of financial statements is in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
BASIC
AND DILUTED NET LOSS PER SHARES
Net loss
per share is calculated in accordance with the Statement of financial accounting
standards No. 128 (SFAS No. 128), “Earnings per share”. SFAS No. 128 superseded
Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on
the assumption that all dilutive convertible shares and stock options were
converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock at the
average market price during the period. As of December 31, 2009 the Company does
not have any options or warrants, but has issued 5,000,000 shares of Series A
preferred stock that can be converted to common stock at a ratio of 1:5 and
1,600,000 shares of Series B preferred stock that can be converted to common
stock at a ratio of 1:20. The calculation of the weighted average number of
shares outstanding takes into account these shares as though they have already
been converted. There are no other dilutive securities outstanding.
10
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
REVENUE
RECOGNITION
The
company did not earn any revenue related to the PCA product or software since
inception through December 31, 2009 and does not intend to offer the product for
sale in the future. The remaining inventory of product has been reduced to zero
value on the financial statements.
The
Company, through Planet Halo and Wireless Village, sells subscriptions to its
wireless Internet access service in various increments, including daily, weekly,
monthly and yearly. Transactions are completed online through credit card
entries by the customer. Sales are recorded at the time the transaction is
approved by the financial institution and revenues are earned over the life of
the service term. Unearned or deferred revenues received or accounts receivable
accrued, are recorded as advance subscriptions. For the six-month periods ending
December 31, 2008 and 2009, subscription sales for Planet Halo were recorded as
$838 and $6,750 respectively, and unearned, advance subscriptions, as zero and
$1,345 respectively. Accounts receivable at June 30, 2009 and December 31, 2009
was recorded as $166 and $275, respectively.
Planet
Halo occasionally purchases consumer hardware for configuration or testing prior
to release to subscribers. These items are listed in inventory or under Cost of
Goods Sold and, when sold, recorded as hardware sales. Inventory amounts are
expected to remain insignificant as most hardware sale invoices are paid by the
customers immediately upon presentation. The Company recorded inventory at zero
and $196 at December 31, 2009 and June 30, 2009, respectively.
Wireless
Village also purchases consumer hardware for configuration prior to release to
end users. These items are either listed in inventory if held beyond the close
of the current accounting period, or summarized as “cost of goods sold” when
sold with resulting revenues recorded as hardware sales. These amounts have
historically been insignificant, but are expected to increase over time. During
the prior fiscal year, Wireless Village began selling hardware such as printers,
flat screen TVs and computers. Subcontractors supplied installation of parts and
labor. Revenue was recognized after the subcontractors performed their services
and/or the hardware was delivered, and the collectibility was reasonably
assured. For the six-month periods ending December 31, 2008 and December 31,
2009, Wireless Village subscription sales were recorded as $6,717 and $652
respectively, support services were recorded as $1,974 and $2,924 respectively,
hardware sales were recorded as $3,615 and $1,373 for the six-month period
ending December 31, 2008 and 2009, respectively, and web hosting services were
recorded as $1,618 and $1,593 respectively. Advanced, unearned, subscriptions of
web hosting and Internet access were recorded on December 31, 2008 as $999 and
on December 31, 2009 as $900, including customer deposits for support services
yet to be delivered. Accounts receivable at June 30, 2009 and December 31, 2009
was recorded at $2,242 and $2,824, respectively.
11
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
INCOME
TAXES
The
Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax bases of assets and
liabilities and their financial reporting amounts at each period end based on
enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized.
RECLASSIFICATIONS
Certain
prior period amounts have been reclassified to conform to the current period’s
presentation.
3.
|
RECENT
PRONOUNCEMENTS
|
In
October 2009, the FASB issued ASU 2009-13, “Multiple-Deliverable Revenue
Arrangements”, now codified under FASB ASC Topic 605, “Revenue Recognition”,
(“ASU 2009-13”). ASU 2009-13 requires entities to allocate revenue in an
arrangement using estimated selling prices of the delivered goods and services
based on a selling price hierarchy. The amendments eliminate the residual method
of revenue allocation and require revenue to be allocated using the relative
selling price method. ASU 2009-13 should be applied on a prospective basis for
revenue arrangements entered into or materially modified in fiscal years
beginning on or after June 15, 2010, with early adoption permitted.
Management is currently evaluating the potential impact of ASU2009-13 on our
financial statements.
In
October, 2009, the FASB issued ASU 2009-15, “Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other Financing”,
now codified under FASB ASC Topic 470 “Debt”, (“ASU 2009-15”), and provides
guidance for accounting and reporting for own-share lending arrangements issued
in contemplation of a convertible debt issuance. At the date of issuance, a
share-lending arrangement entered into on an entity’s own shares should be
measured at fair value in accordance with Topic 820 and recognized as an
issuance cost, with an offset to additional paid-in capital. Loaned shares are
excluded from basic and diluted earnings per share unless default of the
share-lending arrangement occurs. The amendments also require several
disclosures including a description and the terms of the arrangement and the
reason for entering into the arrangement. The effective dates of the amendments
are dependent upon the date the share-lending arrangement was entered into and
include retrospective application for arrangements outstanding as of the
beginning of fiscal years beginning on or after December 15, 2009. Management is
currently evaluating the potential impact of ASU 2009-15 on our financial
statements.
In
December, 2009, under FASB ASC Topic 860, “Transfers and Servicing.” New
authoritative accounting guidance under ASC Topic 860, “Transfers and
Servicing,” amends prior accounting guidance to enhance reporting about
transfers of financial assets, including securitizations, and where companies
have continuing exposure to the risks related to transferred financial assets.
The new authoritative accounting guidance eliminates the concept of a
“qualifying special-purpose entity” and changes the requirements for
derecognizing financial assets. The new authoritative accounting guidance also
requires additional disclosures about all continuing involvements with
transferred financial assets including information about gains and losses
resulting from transfers during the period. The new authoritative accounting
guidance under ASC Topic 860 will be effective January 1, 2010 and is not
expected to have a significant impact on the Company’s financial
statements.
12
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
4. GOING
CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company did not earn significant
revenue during the six-month period ended December 31, 2009. The Company has
accumulated a deficit of $4,351,680 and a net loss of $56,806 during the
six-month period ended December 31, 2009. The continuing losses have adversely
affected the liquidity of the Company. Losses are expected to continue for the
immediate future. The Company faces continuing significant business risks, which
include but are not limited to, its ability to maintain vendor and supplier
relationships by making timely payments when due.
In view
of the matters described in the preceding paragraph, recoverability of a major
portion of the recorded asset amounts shown in the accompanying balance sheet is
dependent upon continued operations of the Company, which in turn is dependent
upon the Company’s ability to raise additional capital, obtain financing and to
succeed in its future operations. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.
Management
has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted
considerable effort from inception through the period ended December 31, 2009,
towards (i) obtaining additional equity, (ii) management of accrued expenses and
accounts payable, (iii) initiation of the business strategies of the Planet Halo
and Wireless Village subsidiaries, and (vi) searching for suitable synergistic
partners for future business combinations that generate immediate
revenues.
Management
believes that the above actions will allow the Company to continue operations
through the next fiscal year.
13
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
5.
|
DUE
TO RELATED PARTY
|
Concierge
Technologies, Inc. has no bank account in its own name. Wallen Group, a
consulting company headed by the C.E.O. and director of the Company, maintains
an administrative account for the Company. As of December 31, 2009, the Wallen
Group was due $3,547 by Concierge, and as of June 30, 2009, the Company had
$2,398 due to the Wallen Group.
6. ACCOUNTS
PAYABLE AND ACCRUED EXPENSES
Accounts
payable and accrued expenses consist of the following as of December 31, 2009
and June 30, 2009:
December
31, 2009
|
June
30, 2009
|
|||||||
Account
payable
|
$ | 99,933 | $ | 98,526 | ||||
Accrued
judgment
|
135,000 | 135,000 | ||||||
Accrued
interest
|
63,088 | 57,499 | ||||||
Accrued
accounting fees
|
3,500 | 17,500 | ||||||
Total
|
$ | 301,521 | $ | 308,525 |
7. NOTES
PAYABLE – RELATED PARTIES
Notes
payable consisted of the following at:
|
December
31, 2009
|
June
30, 2009
|
||||||
Notes
payable to shareholder, interest rate of 8%, unsecured and payable on
October 1, 2006 (past due)
|
$ | 35,000 | $ | 35,000 | ||||
Notes
payable to director/shareholder, non-interest bearing unsecured and
payable on demand
|
8,500 | 8,500 | ||||||
Notes
payable to shareholder, interest rate of 10%, unsecured and payable on
July 31, 2004 (past due)
|
5,000 | 5,000 | ||||||
Notes
payable to shareholder, interest rate of 10%, unsecured and payable on
October 1, 2004 (past due)
|
28,000 | 28,000 | ||||||
Notes
payable to shareholder, interest rate of 8%, unsecured and payable on
October 1, 2004 (past due)
|
14,000 | 14,000 | ||||||
Notes
payable to director/shareholder, interest rate of 8%,
unsecured
and payable on September 1, 2004 (past due)
|
3,500 | 3,500 | ||||||
Notes
payable to shareholder, interest rate of 8%, unsecured and payable on
October 1, 2005 (past due)
|
20,000 | 20,000 | ||||||
Notes
payable to director/shareholder, interest rate of 8%, unsecured and
payable on February 1, 2006 (past due)
|
5,000 | 5,000 | ||||||
Notes
payable to director/shareholder, interest rate of 8%, unsecured and
payable on June 1, 2006 (past due)
|
5,000 | 5,000 | ||||||
Notes
payable to director/shareholder, interest rate of 8%, unsecured and
payable on February 1, 2006 (past due)
|
2,500 | 2,500 | ||||||
Notes
payable to director/shareholder, interest rate of 6%, unsecured and
payable on September 1, 2007 (past due)
|
1,000 | 1,000 | ||||||
Notes
payable to shareholder, interest rate of 8%, unsecured and payable on
November 1, 2007 (past due)
|
15,000 | 15,000 | ||||||
Total
Notes Payable
|
$ | 142,500 | $ | 142,500 |
14
CONCIERGE
TECHNOLOGIES, INC. AND SUBSIDIARIES
(A development stage
company)
NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The
Company has recorded interest expenses amounting to $5,737 for each of the
six-month periods ended December 31, 2009 and December 31, 2008.
8. COMMON
STOCK
In
September 2009, the company sold 600,000 shares of its Series B Convertible,
Voting, Preferred stock, par value $0.001. Although the company received full
payment of the subscription from a venture capital firm that was associated with
a shareholder, the share certificates were not issued as of September 30, 2009.
The Company recorded the proceeds at $30,000 as other liabilities. The shares
were subsequently issued during the current quarter and the previous recording
was adjusted to $29,400 additional paid in capital and $600 at par value issued
preferred Series B stock. These shares of the preferred stock can be converted
to common stock at a ratio of 1:20 after one year has lapsed from the date of
issue, and provided there are enough authorized, unissued, shares available to
convert all preferred stock to common stock.
On
November 5, 2009 the company issued 6,083,333 shares of common stock to its
Chairman, Allen Kahn, as compensation for his consulting services. The expense
was booked at the market value of the shares as of the time of issue, which was
November 5, 2009.
9. SUPPLEMENTAL
DISCLOSURE OF CASH FLOWS
The
Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95.
During
the six months ended December 31, 2009 and 2008 the Company did not pay any
interest or income taxes.
10. LITIGATION
On May 6,
2002, a default judgment was awarded to Brookside Investments Ltd against,
jointly and severally, Concierge, Inc, Allen E. Kahn, and The Whitehall
Companies in the amount of $135,000 plus legal fees. The Company did not defend
against the complaint by Brookside, which alleged that Brookside was entitled to
a refund of their investment as a result of a breach of contract. Brookside had
entered into a subscription agreement with Concierge, Inc., which called for,
among other things, the pending merger between Starfest and Concierge to be
completed within 180 days of the investment. The merger was not completed within
180 days and Brookside sought a refund of their investment, which Concierge was
unable to provide. The Company has accrued the judgment amount of $135,000 in
the year 2002 as litigation settlement in the accompanying financial statements.
This amount is included in accrued expenses as of December 31,
2009.
15
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company, through Planet Halo and
Wireless Village, sells subscriptions to its wireless Internet access service in
various increments, including daily, weekly, monthly and yearly. All
transactions but a few are completed online through credit card entries by the
customer. For online payments, sales are recorded at the time the transaction is
approved by the financial institution and revenues are earned over the life of
the service term. During a brief period during the fiscal year ended June 2009,
subscriber billing and customer care for Planet Halo was handed off to Wireless
Village in an attempt to streamline operating costs. Therefore, the differences
in subscriber revenues for the periods ending December 31, 2008 and December 31,
2009 were primarily attributed to allocation of those revenues between the two
subsidiaries rather than a change in overall sales performance. For the
six-month periods ending December 31, 2008 and 2009, subscription sales for
Planet Halo were recorded as $838 and $6,750, respectively, whereas the
subscription sales for Wireless Village for the same periods were $6,717 and
$652, respectively. Total subscription sales were, therefore, $7,555 and $7,402,
respectively, demonstrating a change over the year of -2%. The difference is
mainly attributed to advanced sales made during the quarter that are earned over
the coming year and booked as sales.
Wireless Village also purchases
consumer hardware for configuration prior to release to end users. These items
are either listed in inventory if held beyond the close of the current
accounting period, or summarized as “cost of goods sold” when sold with
resulting revenues recorded as hardware sales. These amounts have historically
been insignificant, but are expected to increase over time. During the prior
fiscal year, Wireless Village began selling hardware such as printers, flat
screen TVs and computers. Subcontractors supplied installation of parts and
labor. Revenue was recognized after the subcontractors performed their services
and/or the hardware was delivered, and the collectibility was reasonably
assured. Support services for the six-month periods ending December 31, 2008 and
2009 were recorded as $1,974 and $2,924, respectively, an increase of
48%. Hardware sales were recorded as $3,615 as of December 31, 2008
and $1,373 for the six-month period ending December 31, 2009, a decrease of
62%. This decline is attributed to a general softening of demand in
the marketplace and the emergence of lower price points from competitors. Web
hosting services were recorded as $1,618 and $1,593, respectively, an
insignificant difference. Consolidated advanced, unearned, subscriptions of web
hosting and Internet access were recorded on December 31, 2008 as $999 and on
December 31, 2009 as $1,345 reflecting a trend towards longer length subscriber
contracts overall. Accounts receivable for the six-month periods ending December
31, 2008 and December 31, 2009 recorded at $799 and $3,099, respectively,
attributed to invoices rendered at the close of the current quarter and not paid
until the subsequent quarter.
Overall, net revenues for the six-month
period ending December 31, 2009 declined $821 from the six-month period ending
December 31, 2008, a decrease of 6%.
16
Liquidity
Our primary source of operating capital
has been funding sourced through insiders or shareholders under the terms of
unsecured promissory notes. In several instances we have sold shares of our
common stock, or preferred stock, in exchange for cash. With the acquisition of
Wireless Village we also acquired approximately $30,000 in cash. The amount of
borrowed funds, cash through acquisitions, and funds from equity sales has been
sufficient to pay the cost of legal and accounting fees as necessary to maintain
a current reporting status with the Securities and Exchange Commission. However,
sufficient funds have been unavailable to significantly pay down other
commercial and vendor accounts payable. We have also been unable to pay
significant salaries to our officers and several of our outside consultants who
had performed services during the past and present fiscal years.
Although our management is continuing
to provide services to the Company for the near term without cash compensation,
we may still require additional funding to realize the business objectives of
the Company. Planet Halo and Wireless Village are each in need of working
capital to expand their market presence and to purchase additional network
equipment into long-term service. Until such time as definitive agreements are
reached with investors, any form of financing remains speculative. If the
financing is not available, Wireless Village may not be able to proceed with its
planned development, and Planet Halo may not be able to afford further expansion
of its wireless networks. In the event financing is not completed, liquidity
will depend upon increased operating profits from the existing infrastructure.
In the event we are unable to raise working capital, the current profits do not
increase, or we fail to source new business opportunities our funds will be
exhausted at some point and continuing operations may be
impossible.
ITEM 4. CONTROLS AND PROCEEDURES
Evaluation of disclosure
controls and procedures. The Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of the end of the period covered by this
report. Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures are effective and are designed to provide reasonable assurances that
the information the Company is required to disclose in the reports it files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time period required by the Commission's
rules and forms. Further, the Company’s officers concluded that its
disclosure controls and procedures are also effective to ensure that information
required to be disclosed in the reports that it files or submits under the
Exchange Act is accumulated and communicated to its management, including its
chief executive officer and chief financial officer, to allow timely decisions
regarding required disclosure. There were no significant changes in
the Company's internal control over financial reporting during the period
covered by this report that have materially affected, or are reasonably likely
to materially affect our internal controls over financial
reporting.
17
PART
II - OTHER INFORMATION
ITEM 1. LEGAL
PROCEEDINGS
On May 6, 2002, a default judgment was
awarded to Brookside Investments Ltd against, jointly and severally, Concierge,
Inc, Allen E. Kahn, and The Whitehall Companies in the amount of $135,000 plus
legal fees. The Company did not defend against the complaint by Brookside, which
alleged that Brookside was entitled to a refund of their investment as a result
of a breach of contract. Brookside had entered into a subscription agreement
with Concierge, Inc., which called for, among other things, the pending merger
between Starfest and Concierge to be completed within 180 days of the
investment. The merger was not completed within 180 days and Brookside sought a
refund of their investment, which Concierge was unable to provide. The Company
has accrued the judgment amount of $135,000 in the year 2002 as litigation
settlement in the accompanying financial statements. This amount is included in
accrued expenses as of December 31, 2009.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES
In October 2009 the Registrant sold for
cash 600,000 shares of its Series B Convertible, Voting Preferred Stock at $0.05
a share to a company that is associated with a shareholder of the
Registrant.
In November 2009 the Registrant issued
to Allen Kahn, its chairman, 6,083,333 shares of its Common Stock at $0.0035 a
share by way of compensating his consulting services. The issuance
price a share was at the market price on November 5, 2009, the time of
issuance.
No underwriter was employed with regard
to either issuance of shares. The shares were exempt from
registration pursuant to the provisions of Regulation D, Rule
506. The purchaser of the preferred stock was an associate of a major
shareholder of the Registrant, was provided a copy of the Registrant’s most
recent Forms 10-K and 10-Q and was given an opportunity to ask questions of our
management and to inspect any documents of the Registrant. The
purchaser of the common stock is an officer and director of the
Registrant.
ITEM 5. OTHER
INFORMATION
There remain 2 positions vacant on the
Board of Directors of Concierge Technologies, Inc. as of February 8,
2009.
18
ITEM 6.
EXHIBITS
The following exhibits are filed, by
incorporation by reference, as part of this Form 10-Q:
Exhibit | Item | ||
2 |
Stock
Purchase Agreement of March 6, 2000 between Starfest, Inc. and MAS
Capital, Inc.*
|
||
2 |
Stock
Purchase Agreement among Concierge Technologies, Inc., Wireless Village,
Inc., Bill Robb and Daniel Britt.++
|
||
3.1 |
Certificate
of Amendment of Articles of Incorporation of Starfest, Inc. and its
earlier articles of incorporation.*
|
||
3.2 |
Bylaws
of Concierge, Inc., which became the Bylaws of Concierge Technologies upon
its merger with Starfest, Inc. on March 20, 2002.*
|
||
3.5 |
Articles
of Merger of Starfest, Inc. and Concierge, Inc. filed with the Secretary
of State of Nevada on March 1, 2002.**
|
||
3.6 |
Agreement
of Merger between Starfest, Inc. and Concierge, Inc. filed with the
Secretary of State of California on March 20, 2002.**
|
||
3.7 |
Articles
of Incorporation of Concierge Technologies, Inc. filed with the Secretary
of State of Nevada on April 20, 2005.+
|
||
3.8 |
Articles
of Merger between Concierge Technologies, Inc., a California corporation,
and Concierge Technologies, Inc., a Nevada corporation, filed with the
Secretary of State of Nevada on March 2, 2006 and the Secretary of State
of California on October 5, 2006.+
|
||
10.1 |
Agreement
of Merger between Starfest, Inc. and Concierge, Inc.*
|
||
14 | Code of Ethics for CEO and Senior Financial Officers.*** | ||
31.1 |
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
19
31.2 |
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
||
32.1 |
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
||
32.2 |
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
*Previously
filed with Form 8-K12G3 on March 10, 2000; Commission File No. 000-29913,
incorporated herein.
|
|
**Previously
filed with Form 8-K on April 2, 2002; Commission File No. 000-29913,
incorporated herein.
|
|
***Previously
filed with Form 10-K FYE 06-30-04 on October 13, 2004; Commission File No.
000-29913, incorporated herein.
|
|
+Previously
filed with Form 10-K FYE 06-30-06 on October 13, 2006; Commission File No.
000-29913, incorporated herein.
|
|
++Previously
filed on November 5, 2007 as Exhibit 10.2 to Concierge Technologies’ Form
8-K for the Current Period 10-30-07; Commission File No. 000-29913,
incorporated herein.
|
20
SIGNATURES
Pursuant to the requirements of the
Exchange Act of 1934, the Registrant has caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CONCIERGE TECHNOLOGIES, INC. | |||
Dated: February
16, 2010
|
By:
|
/s/David W. Neibert | |
David W. Neibert, Chief Executive Officer | |||
21