Concierge Technologies Reports Financial Results for First Fiscal Quarter Ended September 30, 2018

San Clemente, Calif., November 14, 2018—Concierge Technologies, Inc. (OTCQB: CNCG) (the “Company” or “Concierge”), a diversified global holding firm, today announced financial results for the first fiscal quarter ended September 30, 2018.

Concierge reported revenues of $7.1 million, compared with $7.3 million for the prior year period. Pre-tax operating income for the quarter ended September 30, 2018 was $600,000, as compared with $1.4 million for the quarter ended September 30, 2017. The Company reported after-tax net income of $300,000, equal to $0.01 per share, for the most recent quarter, versus $900,000, or $0.02 per share, for the corresponding prior year period. Per share amounts were calculated on 38,298,159 shares fully diluted and outstanding for both 2018 and 2017.

The Company said results for the quarter were impacted by a lower amount of average assets under management (AUM) held by its largest business unit, USCF Investments (Wainwright Holdings), which were down from $3.9 billion last year to $3.0 billion for the quarters ended September 30, 2017 and 2018, respectively. Revenues earned by USCF Investments are directly related to AUM, which the Company believes are subject to fluctuations in the commodities market.

Concierge said its other business units—Gourmet Foods, Brigadier Security Systems and Original Sprout—all recorded increases in net revenues and net income for the current quarter. While the USCF Investments subsidiary revenues for the period were down approximately $900,000, combined revenues from the other subsidiaries were up approximately $700,000. At September 30, 2018, total assets remained at approximately $23 million, compared with the 2018 fiscal year-end at June 30, 2018.

“Our strategy of diversification is proving to be sound. Despite the lower AUM in our investment management subsidiary, USCF Investments, which was market driven, the Company overall remains profitable,” said Nicholas Gerber, Chief Executive Officer of Concierge. “The financial services business in general, and the commodities market in particular, is subject to cyclical downturns and upswings, which we have seen before, especially in the presence of uncertain or rising oil prices. As investors move from one strategy to the next, it directly affects the amount of assets in our ETF’s. We’ve seen this downturn before, and we’ve seen the follow-on upswing as well. We are more than pleased, however, that all of our other subsidiaries are performing nicely and continuing to grow revenues and profits.”

“Not as readily apparent without reading the entire report on Form 10-Q were several contributing factors,” Gerber added. “First was the implementation of new accounting standards, which required recognition of certain unrealized losses moving from the balance sheet to the income statement. The cumulative effect of this change was a further expense of approximately $100,000, finding its way to the income statement. Additionally, during the quarter, USCF Investments also incurred one-time cost of about $200,000, reflecting liquidation three funds, which historically had not attracted new assets for the firm’s overall AUM. We also had approximately $200,000 in amortization of intangible assets as a non-cash expense. Had these adjustments not been realized, we would not have been far off the performance of the prior year.”

David Neibert, Concierge’s Chief Operations Officer, said, “Although earnings were down slightly from the prior year due to fluctuations in the commodities market and currency translation, the progress made on an operational level with all subsidiaries has increased tremendously. We now have a consistent track record of continuing profits in all sectors and a solid foundation for organic growth from within each industry segment. The respective management teams of each subsidiary are now working in concert for a common goal, which is returning value to our shareholders on a consolidated basis. With the current subsidiaries now performing smoothly, we are continuing our search and vetting of acquisition targets that demonstrate sound management, sustainable business plans and profitability.”

Acquired by Concierge at the end of 2017, California-based Original Sprout, www.originalsprout.com, produces and distributes on a global basis a full line of natural, 100% vegan, safe, non-toxic hair and skin care products, including a “reef safe” sun screen, with independent distribution centers located in the U.K., the E.U., Turkey, the Middle East, Taiwan, Singapore, Hong Kong, Malaysia, Canada, New Zealand and the U.S.A. and its territories. Gourmet Foods, acquired in 2015, https://gourmetfoodsltd.co.nz/, is a commercial-scale bakery that produces and distributes iconic meat pies and pastries throughout New Zealand under the brand names Pat’s Pantry and Ponsonby Pies.

The Company’s USCF Investments operation, www.uscfinvestments.com, acquired as part of the Wainwright Holdings transaction in December 2016 and now based in Walnut Creek, California, with approximately $3 billion in AUM, serves as manager, operator or investment adviser to exchange traded funds and products, structured as limited partnerships or investment trusts that issue shares trading on the NYSE Arca. Brigadier Security Systems, www.brigadiersecurity.com, acquired in June 2016, with offices in Saskatoon and Regina, Canada, provides comprehensive security solutions to homes and businesses, government offices, schools and other public buildings throughout the province of Saskatchewan.

About Concierge Technologies, Inc.

Initially founded in 1996 and repositioned as a global holding firm in 2015, Concierge Technologies has operating subsidiaries in financial services, food manufacturing, security systems and beauty products. Offices and manufacturing operations are in the U.S., New Zealand and Canada.

Forward-Looking Statements

This press release may contain “forward-looking statements” that include information relating to Concierge Technologies’ future events and future financial and operating performance. Such forward-looking statements, including but not limited to, adding value through accretive acquisitions, should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

For a more detailed description of the risk factors and uncertainties affecting Concierge Technologies or its subsidiary companies, and more detailed information about the individual operating entities, please refer to the Company’s Securities and Exchange Commission filings, which are available on the Company’s website, (http://www.conciergetechnology.net), or at www.sec.gov.

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30, 2018 June 30, 2018
ASSETS
As Adjusted
CURRENT ASSETS:
Cash & cash equivalents
$ 7,635,899 $ 7,524,114
Accounts receivable, net
1,055,470 1,068,240
Accounts receivable, related parties
1,321,810 1,458,159
Inventory, net
1,085,993 931,065
Prepaid income tax and tax receivable
2,196,412 2,138,636
Investments
3,110,943 3,204,005
Other current assets
307,420 374,617
Total current assets
16,713,947 16,698,836
Restricted cash
13,235 13,536
Property and equipment, net
997,064 1,080,471
Goodwill
915,790 915,790
Intangible assets – net
2,910,664 2,995,231
Deferred tax assets, net
865,120 865,120
Long term assets
532,165 532,165
Deposit
Total assets
$ 22,947,985 $ 23,101,149
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses
$ 3,183,665 $ 3,249,387
Expense waivers
411,739 662,650
Purchase consideration payable
1,182,500 1,205,000
Notes payable – related parties
3,500 3,500
Equipment loans
25,749 46,705
Convertible Promissory Notes Payable – related parties, net
Total current liabilities
4,807,153 5,167,242
Notes payable – related parties
600,000 600,000
Equipment loans
82,045 149,491
Deferred tax liabilities
208,419 208,419
Total liabilities
5,697,617 6,125,151
STOCKHOLDERS’ EQUITY
Preferred stock, par value $0.001; 50,000,000 shares authorized
Series B: 436,951 issued and outstanding at June 30, 2018 and 0 at June 30, 2017
437 437
Common stock, $0.001 par value; 900,000,000 shares authorized; 29,559,139 shares issued and outstanding at June 30, 2018 and 29,559,139 at June 30, 2017 (1)
29,559 29,559
Additional paid-in capital
9,186,132 9,186,132
Accumulated other comprehensive income
(142,726 ) 148,808
Retained earnings
8,176,966 7,611,061
Total stockholders’ equity
17,250,368 16,975,997
Total liabilities, convertible preferred stock, and stockholders’ equity
$ 22,947,985 $ 23,101,149

(1) Share amounts adjusted for 1:30 reverse stock split (Note 14)

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

For the Three Month Periods Ended
September 30,
2018 2017
Net revenue
Fund management – Related Party
$ 4,222,984 $ 5,157,948
Food products
1,192,996 1,294,290
Security alarm monitoring
858,651 789,192
Beauty Products
902,328 22,855
Net revenue
7,176,959 7,264,285
Cost of revenue
1,838,384 1,271,524
Gross profit
5,338,575 5,992,761
Operating expense
General & administrative expense
1,072,932 1,239,944
Fund operations
1,265,655 1,276,543
Marketing
871,781 841,975
Depreciation
174,505 114,736
Salaries and compensation
1,384,982 1,130,134
Impairment of inventory value
Total Operating Expenses
4,769,855 4,603,330
Income from operations
568,720 1,389,430
Other income (expense)
Other income
(174,661 ) (12,049 )
Interest Income
3,779 2,188
Interest expense
(8,136 ) (11,098 )
Total other expense
(179,018 ) (20,959 )
Income before income taxes
389,702 1,368,471
Provision of income taxes
(103,748 ) (496,767 )
Net Income
$ 285,954 $ 871,704
Weighted average shares of common stock
Basic
29,559,139 29,559,139
Diluted
38,298,159 38,298,159
Net income per common share
Basic
$ 0.01 $ 0.03
Diluted
$ 0.01 $ 0.02

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended
September 30,
2018 2017
Net Income
$ 285,954 $ 871,704
Other Comprehensive Income (Loss)
Foreign currency translation gain (loss)
(11,583 ) 42,705
Changes in short term investment valuation
(44,097 )
Comprehensive Income
$ 274,370 $ 870,312

SOURCE: Concierge Technologies, Inc.