Business Context and Reporting Period
This Form 8-K was filed by Concierge Technologies, Inc. (CNCG) on June 24, 2019, with a signature date of June 27, 2019. The registrant, a Nevada corporation, operates through its wholly owned subsidiary, Gourmet Foods, Ltd. (New Zealand). The filing discloses the entry into a Material Definitive Agreement to acquire the "Maketu Pies" food manufacturing business from RG & MK Wilson Limited.
Key Financial Metrics and Transaction Details
- Purchase Price: $3,015,000 NZD (approximately $2,080,000 USD).
- Payment Structure: A portion of the purchase price will be paid in shares of Concierge's common stock; the remainder will be paid in installments secured by the acquired assets.
- Financing: Concierge agreed to loan Gourmet Foods up to $1,400,000 USD at 0% interest with no maturity date to fund the purchase price.
- Stock Lock-up: Sellers agreed not to sell or transfer the common stock received as part of the purchase price for six months.
Material Changes and Transaction Terms
The primary material change is the proposed acquisition of the Maketu Pies business. Key terms include:
- Due Diligence: A 30-day period is granted for Gourmet Foods to review documents and evaluate the business.
- Closing Timeline: Scheduled to commence five business days after the completion of the due diligence period.
- Non-Compete: Sellers are subject to a three-year non-compete period and are prohibited from approaching existing customers or employees.
- Conditions: Closing is conditioned on the delivery of settlement statements, necessary consents for contract assignments, and specific certificates.
Outlook, Risks, and Contingencies
Management commentary indicates that there is no guarantee the transaction will close as provided or at all. Risks include the failure of either party to fulfill closing conditions or the occurrence of events that materially affect the value of Maketu Pies or render seller warranties untrue. The agreement allows Gourmet Foods to terminate if such events occur. Disputes are subject to mandatory arbitration.
Investor Verification Checklist
- Verify the completion of the 30-day due diligence period and the subsequent closing of the transaction.
- Confirm the exact number of Concierge common shares to be issued as part of the purchase price and the resulting dilution.
- Monitor the utilization of the $1,400,000 USD interest-free loan and its impact on the parent company's liquidity.
- Review the financial statements of Maketu Pies provided by the sellers to validate the purchase price valuation.
- Check for any waivers of closing conditions or termination of the agreement prior to settlement.