Concierge Technologies Reports Fiscal Third Quarter Financial Results

– Company continues to invest in long-term growth initiatives, with strong balance sheet, and essentially no debt –

SAN CLEMENTE, CA / ACCESSWIRE / May 15, 2020 / Concierge Technologies, Inc. (OTCQB:CNCG), a diversified global holding firm, today announced financial results for the third fiscal quarter ended March 31, 2020.

“Results for our third quarter improved over the preceding second quarter, although were slightly below the corresponding third quarter a year ago,” said Nicholas Gerber, chairman and chief executive officer.

“As compared with last year, the company’s financial performance was principally impacted by lower average assets under management (AUM) in our USCF Investments subsidiary for most of the quarter, although AUM finished the quarter significantly higher. It was a busy period, as we continued to execute strategies to expand our business. During the third quarter, we further advanced the development of our new consumer fintech app, which we expect to launch through our recently formed Marygold & Co. subsidiary this summer. We also completed the development and launched a new Original Sprout product line, ‘Worry Free,’ which is now available at select Target stores nationwide. These growth initiatives took some up-front capital, but they are expected to produce handsome returns. We had the cash reserves in the bank to make them happen, with no borrowings or equity raises.

“We also signed a definitive agreement to acquire Printstock Products, one of the product packaging suppliers to our Gourmet Foods subsidiary in New Zealand. Unfortunately, the onset of COVID-19 has now delayed the expected closing of this proposed transaction until later this year, when travel restrictions are eased,” said Gerber. “Lastly, subsequent to the close of the third quarter, we were pleased to announce that Original Sprout entered a major new retail sales channel with introduction of select products on the e-commerce site of Costco.

“While the long-term impact of the COVID-19 pandemic on the company is still unknown, we have taken stringent cautionary steps to assure the protection of all employees, as we continue to plan for the future,” Gerber added.

For the three months ended March 31, 2020, net revenues amounted to $5.9 million, compared with $6.3 million for the prior year. Net loss for the most recent three-month period amounted to $17,236, equal to break-even per share, versus income of $75,884, also equal to break-even per share, for the comparable prior-year period.

The company’s largest operating unit, USCF Investments, posted revenues of $3.0 million for the 2020 third quarter, versus $3.6 million a year ago, principally reflecting average AUM of $2.3 billion for the 2020 third quarter, versus average AUM of $2.6 billion in the same period last year. By the close of the 2020 third quarter, however, AUM had increased to $3.0 billion. USCF Investments manages nine commodity-oriented exchange-traded funds (“ETFs”) and one equity traded ETF that are listed on the New York Stock Exchange.

The company’s ‘Other’ business segment, which comprised approximately 50% of total revenues in the most recent third-quarter vs 42% at the same time last year, achieved a 5% improvement in revenues for the fiscal 2020 period. The ‘Other’ segment is comprised of Gourmet Foods, Brigadier Security Systems and Original Sprout.

Concierge’s balance sheet remained strong at quarter’s end, with cash and cash equivalents of approximately $6.0 million, total stockholders’ equity of $17.2 million, and essentially no debt.

“During the third quarter, Original Sprout paced the growth rate within our ‘Other’ business segment, with a 57% increase in revenues over the prior year, followed by an 18% revenue increase at Gourmet Foods,” said David Neibert, Concierge Technologies’ Chief Operations Officer. “Revenues were negatively impacted at our Brigadier Security Systems business by the usual Canadian winter weather disruptions, but also by adopted COVID-19 preventative measures, hampering our ability to complete installations, and resulting in a slump of approximately 20%. Overall, our diversification strategy is working quite well.”

Business Units

Gourmet Foods, https://gourmetfoodsltd.co.nz/, acquired in August 2015, 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.

Brigadier Security Systems, www.brigadiersecurity.com, acquired in June 2016 and headquartered in Saskatoon, Canada, provides comprehensive security solutions to homes and businesses, government offices, schools and other public buildings throughout the province.

The company’s USCF Investments operation, www.uscfinvestments.com, acquired as part of the Wainwright Holdings transaction in December 2016 and based in Walnut Creek, Calif., serves as manager, operator or investment adviser to 13 exchange-traded products, structured as limited partnerships or investment trusts that issue shares trading on the NYSE Arca.

Acquired by Concierge at the end of 2017, California-based Original Sprout, www.originalsprout.com, produces and distributes a full line of vegan, safe, non-toxic hair and skin care products, including a “reef safe” sunscreen, sold throughout the U.S. and distributed globally through a network of international distributors.

About Concierge Technologies, Inc.

Concierge Technologies, originally founded in 1996, was repositioned as a global holding firm in 2015, and currently 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. For more information, visit www.conciergetechnology.net.

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, the launch of the company’s fintech product through its Marygold & Co. subsidiary and closing the acquisition of Printstock Products, 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.

Financial Tables Follow:

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	March 31, 2020			June 30, 2019
				(AUDITED)
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	6,029,164		$	6,481,815
Accounts receivable, net		804,545			939,649
Accounts receivable – related parties		1,062,166			1,037,146
Inventories		1,108,434			1,008,662
Prepaid income tax and tax receivable		1,573,834			1,754,369
Investments		3,765,105			3,756,596
Other current assets		384,758			546,105
Total current assets		14,728,006			15,524,342

Restricted cash		12,016			13,436
Property and equipment, net		1,135,049			757,014
Operating lease right-of-use asset		809,990			–
Goodwill		915,790			915,790
Intangible assets, net		2,624,932			2,659,723
Deferred tax assets, net		859,696			859,696
Other assets, long – term		523,607			523,607
Total assets	$	21,609,086		$	21,253,608

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,055,110		$	2,867,081
Expense waivers – related parties		382,786			325,821
Current portion operating lease liabilities		342,869			–
Notes payable – related parties		3,500			3,500
Loans – property and equipment, current portion		12,536			26,241
Total current liabilities		2,796,801			3,222,643

LONG TERM LIABILITIES
Notes payable – related parties		600,000			600,000
Loans – property and equipment, net of current portion		348,614			61,057
Long-term operating lease liabilities, net of current portion		504,334			–
Deferred tax liabilities		176,578			176,578
Total long-term liabilities		1,629,526			837,635
Total liabilities		4,426,327			4,060,278

STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 50,000,000 authorized
Series B: 53,032 issued and outstanding at March 31, 2020 and at June 30, 2019		53			53
Common stock, $0.001 par value; 900,000,000 shares authorized; 37,412,519 shares issued and outstanding at March 31, 2020 and 37,237,519 at June 30, 2019		37,412			37,237
Additional paid-in capital		9,330,913			9,178,838
Accumulated other comprehensive loss		(301,222	)		(175,659	)
Retained earnings		8,115,603			8,152,861
Total stockholders’ equity		17,182,759			17,193,330
Total liabilities and stockholders’ equity	$	21,609,086		$	21,253,608

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three-Month Periods Ended						For the Nine-Month Periods Ended
	March 31,						March 31,
	2020			2019			2020			2019

Net revenue
Fund management – related party	$	2,986,503		$	3,567,702		$	8,866,790		$	11,729,689
Food products		1,257,205			1,114,958			3,827,564			3,471,776
Security systems		606,268			819,695			2,110,526			2,378,421
Beauty products and other		1,051,980			749,889			2,918,582			2,549,674
Net revenue		5,901,956			6,252,244			17,723,462			20,129,560

Cost of revenue		1,750,845			1,637,694			5,243,803			5,233,458

Gross profit		4,151,111			4,614,550			12,479,659			14,896,102


Operating expense
General and administrative expense		1,098,721			997,321			3,207,762			3,153,638
Fund operations		695,529			1,130,070			2,232,816			3,540,458
Marketing and advertising		604,163			678,664			1,811,249			2,313,322
Depreciation and amortization		148,131			173,387			447,955			523,595
Salaries and compensation		1,785,913			1,473,004			5,002,617			4,578,376
Total operating expenses		4,332,457			4,452,446			12,702,399			14,109,389

(Loss) income from operations		(181,346	)		162,104			(222,740	)		786,713


Other (expense) income:
Other (expense) income		(40,224	)		1,731			(61,797	)		(508,543	)
Interest and dividend income		23,806			3,011			76,078			358,425
Interest expense		(9,979	)		(7,064	)		(31,219	)		(22,436	)
Total other expense, net		(26,397	)		(2,322	)		(16,938	)		(172,554	)

(Loss) income before income taxes		(207,743	)		159,782			(239,678	)		614,159

Benefit (provision) of income taxes		190,507			(83,898	)		202,420			(189,608	)

Net (loss) income	$	(17,236	)	$	75,884		$	(37,258	)	$	424,551

Weighted average shares of common stock
Basic		37,412,519			34,045,383			37,383,246			31,021,688
Diluted		37,412,519			38,298,159			37,383,246			38,298,159

Net (loss) income per common share
Basic		(0.00	)	$	0.00		$	(0.00	)	$	0.01
Diluted	$	(0.00	)	$	0.00		$	(0.00	)	$	0.01

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Three-Month Periods Ended					For the Nine-Month Periods Ended
	March 31,					March 31,
	2020			2019		2020			2019

Net (loss) income	$	(17,236	)	$	75,884	$	(37,258	)	$	424,551

Other comprehensive (loss) income:
Foreign currency translation (loss) gain		(295,100	)		44,912		(125,563	)		(13,796	)
Comprehensive (loss) income	$	(312,336	)	$	120,796	$	(162,821	)	$	410,755

CONCIERGE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine-Month Periods Ended
	March 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(37,258	)	$	424,551
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		447,955			523,595
Stock based vendor compensation		152,250			–
Bad debt recovery		(197	)		–
Unrealized loss (gain) on investments		44,409			(29,463	)
Loss (gain) on disposal of equipment		–			(3,381	)
Operating lease right-of-use asset – non-cash lease cost		303,851			–
Decrease (increase) in current assets:
Accounts receivable		77,244			11,381
Accounts receivable – related party		(25,020	)		250,798
Prepaid income taxes and tax receivable		196,670			110,124
Inventories		(155,644	)		(284,506	)
Other current assets		(18,910	)		(109,728	)
Decrease (increase) in current liabilities:
Accounts payable and accrued expenses		(715,356	)		(350,473	)
Operating lease liabilities		(303,714	)		–
Expense waivers – related party		56,965			(200,187	)
Net cash provided by operating activities		23,245			342,711

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisition of business assets		–			(1,205,000	)
Cash paid for internally developed software		(217,990	)		–
Purchase of property and equipment – net of disposal		(455,064	)		(26,985	)
Sale of investments		1,000,000			3,197,479
Purchase of investments		(1,040,767	)		(1,000,000	)
Net cash (used in) provided by investing activities		(713,821	)		965,494

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from property and equipment loans		370,220			–
Repayment of property and equipment loans		(89,666	)		(104,272	)
Net cash provided by (used in) financing activities		280,554			(104,272	)

Effect of exchange rate change on cash and cash equivalents		(44,049	)		3,256

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(454,071	)		1,207,189

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING BALANCE		6,495,251			7,524,114

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, ENDING BALANCE	$	6,041,180		$	8,731,303

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest paid	$	12,926		$	–
Income taxes-U.S.	$	159,363		$	43,000
Non-cash financing and investing activities:
Acquisition of operating right-of-use assets through operating lease obligations	$	1,150,916		$	–
Reclassification of deposit from other current assets to property and equipment	$	178,276		$	–