Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2014 | Nov. 05, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'PARK CITY GROUP INC | ' |
Entity Central Index Key | '0000050471 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
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 | ' | 17,176,132 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2015 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Current assets: | ' | ' |
Cash | $3,277,949 | $3,352,559 |
Receivables, net of allowance of $75,000 and $70,000 at September 30, 2014 and June 30, 2014, respectively | 2,635,208 | 2,857,983 |
Prepaid expenses and other current assets | 324,824 | 250,855 |
Total current assets | 6,237,981 | 6,461,397 |
Property and equipment, net | 667,934 | 740,753 |
Other assets: | ' | ' |
Deposits and other assets | 14,866 | 14,866 |
Note receivable | 3,458,111 | 2,996,664 |
Customer relationships | 1,812,440 | 1,918,019 |
Goodwill | 4,805,933 | 4,805,933 |
Capitalized software costs, net | ' | ' |
Total other assets | 10,091,350 | 9,735,482 |
Total assets | 16,997,265 | 16,937,632 |
Current liabilities: | ' | ' |
Accounts payable | 905,412 | 738,289 |
Accrued liabilities | 1,566,816 | 1,801,355 |
Deferred revenue | 1,754,234 | 1,840,811 |
Line of credit | 1,200,000 | 1,200,000 |
Notes payable | 169,412 | 226,900 |
Total current liabilities | 5,595,874 | 5,807,355 |
Long-term liabilities: | ' | ' |
Notes payable, less current portion | 381,751 | 422,248 |
Other long-term liabilities | 87,433 | 88,948 |
Total liabilities | 6,065,058 | 6,318,551 |
Stockholders' equity: | ' | ' |
Series B Convertible Preferred Stock, $0.01 par value, 30,000,000 shares authorized; 411,927 shares issued and outstanding at September 30, 2014 and June 30, 2014. | 4,119 | 4,119 |
Common Stock, $0.01 par value, 50,000,000 shares authorized; 17,106,645 and 16,928,025 shares issued and outstanding at September 30, 2014 and June 30, 2014, respectively | 171,066 | 169,280 |
Additional paid-in capital | 47,634,612 | 46,792,736 |
Accumulated deficit | -36,877,590 | -36,347,054 |
Total stockholders' equity | 10,932,207 | 10,619,081 |
Total liabilities and stockholders' equity | $16,997,265 | $16,937,632 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Current assets: | ' | ' |
Receivables, net of allowance | $75,000 | $70,000 |
Stockholders' equity: | ' | ' |
Series B Convertible Preferred stock, par value | $0.01 | $0.01 |
Series B Convertible Preferred stock, Authorized | 30,000,000 | 30,000,000 |
Series B Convertible Preferred stock, Issued | 411,927 | 411,927 |
Series B Convertible Preferred stock, outstanding | 411,927 | 411,927 |
Common stock, par value | $0.01 | $0.01 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 17,106,645 | 16,928,025 |
Common stock, outstanding | 17,106,645 | 16,928,025 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues: | ' | ' |
Subscription | $2,637,084 | $2,134,656 |
Other revenue | 696,435 | 641,280 |
Total revenues | 3,333,519 | 2,775,936 |
Operating expenses: | ' | ' |
Cost of services and product support | 1,348,379 | 1,209,103 |
Sales and marketing | 1,337,435 | 1,239,643 |
General and administrative | 894,972 | 1,148,473 |
Depreciation and amortization | 187,395 | 227,575 |
Total operating expenses | 3,768,181 | 3,824,794 |
(Loss) income from operations | -434,662 | -1,048,858 |
Other expense: | ' | ' |
Interest income (expense) | 58,599 | 1,493 |
(Loss) income before income taxes | -376,063 | -1,047,365 |
(Provision) benefit for income taxes | ' | ' |
Net (loss) income | -376,063 | -1,047,365 |
Dividends on preferred stock | -154,473 | -154,473 |
Net (loss) applicable to common shareholders | ($530,536) | ($1,201,838) |
Weighted average shares, basic and diluted | 17,088,000 | 16,364,000 |
Basic and diluted loss per share | ($0.03) | ($0.07) |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows From Operating Activities: | ' | ' |
Net (loss) income | ($376,063) | ($1,047,365) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' |
Depreciation and Amortization | 187,395 | 227,575 |
Stock issued for charitable contribution | ' | 96,900 |
Stock compensation expense | 543,972 | 375,515 |
Bad debt expense | 7,033 | ' |
(Increase) decrease in: | ' | ' |
Receivables | 215,742 | 2,882 |
Prepaids and other assets | -135,416 | 57,805 |
(Decrease) increase in: | ' | ' |
Accounts payable | 167,123 | -193,771 |
Accrued liabilities | -34,778 | 352,126 |
Deferred revenue | -86,577 | -466,637 |
Net cash provided by (used in) operating activities | 488,431 | -594,970 |
Cash Flows From Investing Activities: | ' | ' |
Cash from sales of property and equipment | ' | 6,505 |
Cash advanced on note receivable | -400,000 | ' |
Purchase of property and equipment | -8,997 | -66,590 |
Net cash used in investing activities | -408,997 | -60,085 |
Cash Flows From Financing Activities: | ' | ' |
Proceeds from issuance of stock | ' | 1,493,818 |
Proceeds from exercise of options and warrants | ' | 129,043 |
Proceeds from employee stock plans | 98,414 | 62,134 |
Proceeds from issuance of note payable | 8,213 | ' |
Dividends paid | -154,473 | -123,578 |
Payments on notes payable | -106,198 | -225,678 |
Net cash provided by financing activities | -154,044 | 1,335,739 |
Net (decrease) increase in cash | -74,610 | 680,684 |
Cash at beginning of period | 3,352,559 | 3,616,585 |
Cash at end of period | 3,277,949 | 4,297,269 |
Supplemental Disclosure of Cash Flow Information: | ' | ' |
Cash paid for income taxes | ' | 6,500 |
Cash paid for interest | 10,016 | 31,793 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ' | ' |
Common stock to pay accrued liabilities | 745,248 | 257,209 |
Dividends accrued on preferred stock | 154,473 | 154,473 |
Dividends paid with preferred stock | ' | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
DESCRIPTION OF BUSINESS | ' |
The Company is incorporated in the state of Nevada. The Company has two subsidiaries, PC Group, Inc. (formerly, Park City Group, Inc., a Delaware corporation), a Utah Corporation (98.76% owned), and Park City Group, Inc., (formerly, Prescient Applied Intelligence, Inc.), a wholly owned Delaware Corporation. All intercompany transactions and balances have been eliminated in consolidation. | |
The Company designs, develops, markets and supports proprietary software products. These products are designed for businesses having multiple locations to assist in the management of business operations on a daily basis and communicate results of operations in a timely manner. In addition, the Company has built a consulting practice for business improvement that centers on the Company’s proprietary software products. The principal markets for the Company's products are multi-store retail and convenience store chains, branded food manufacturers, suppliers and distributors, and manufacturing companies, which have operations in North America, Europe, Asia and the Pacific Rim. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Significant Accounting Policies | ' | ||||
SIGNIFICANT ACCOUNTING POLICIES | ' | ||||
Principles of Consolidation | |||||
The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries, including Prescient. All inter-company transactions and balances have been eliminated in consolidation. | |||||
Use of Estimates | |||||
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that materially affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its financial statements. The Securities and Exchange Commission has defined the most critical accounting policies as those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company’s most critical accounting policies include: income taxes, goodwill and other long-lived asset valuations, revenue recognition, stock-based compensation, and capitalization of software development costs. | |||||
Receivables | |||||
The Company's accounts receivable are derived from sales of products and services primarily to customers operating multi-location retail and grocery stores. Amounts that have been invoiced are recorded in accounts receivable and in deferred revenue or revenue, depending on whether the revenue recognition criteria have been met. | |||||
Trade account and notes receivable are stated at the amount the Company expects to collect. Receivables are reviewed individually for collectability. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, allowances may be required. Interest income on current notes receivable is recognized on an accrual basis at a stated interest rate of 8%. | |||||
Allowance for Doubtful Accounts Receivable | |||||
The Company offers credit terms on the sale of the Company’s products to a significant majority of the Company’s customers and requires no collateral from these customers. The Company performs ongoing credit evaluations of customers’ financial condition and maintains an allowance for doubtful accounts receivable based upon the Company’s historical experience and a specific review of accounts receivable at the end of each period. As of September 30, 2014 and 2013, the allowance for doubtful accounts was $75,000 and $190,000, respectively. | |||||
Depreciation and Amortization | |||||
Depreciation and amortization of property and equipment is computed using the straight line method based on the following estimated useful lives: | |||||
Years | |||||
Furniture and fixtures | 7-May | ||||
Computer Equipment | 3 | ||||
Equipment under capital leases | 3 | ||||
Leasehold improvements | See below | ||||
Leasehold improvements are amortized over the shorter of the remaining lease term or the estimated useful life of the improvements. | |||||
Amortization of intangible assets are computed using the straight line method based on the following estimated useful lives: | |||||
Years | |||||
Customer relationships | 10 | ||||
Acquired developed software | 5 | ||||
Developed software | 3 | ||||
Goodwill | See below | ||||
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Other intangible assets are amortized over their useful lives. | |||||
Warranties | |||||
The Company offers a limited warranty against software defects. Customers who are not completely satisfied with their software purchase may attempt to be reimbursed for their purchases outside the warranty period. For the three months ending September 30, 2014 and 2013, the Company did not incur any expense associated with warranty claims. | |||||
Revenue Recognition | |||||
We recognize revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement, (ii) the service has been provided to the customer, (iii) the collection of our fees is probable and (iv) the amount of fees to be paid by the customer is fixed or determinable. | |||||
We recognize subscription and hosting revenue ratably over the length of the agreement beginning on the commencement dates of each agreement or when revenue recognition conditions are satisfied based on their relative fair values. For a fee, subscriptions provide the customer with access to the software and data over the Internet, or on demand, and provide technical support services, premium analytical services and software upgrades when and if available. Under subscriptions, customers do not have the right to take possession of the software and such arrangements are considered service contracts. Accordingly, we recognize professional services as incurred based on their relative fair values. In situations where we have contractually committed to an individual customer specific technology, we defer all of the revenue for that customer until the technology is delivered and accepted. Once delivery occurs, we then recognize the revenue ratably over the remaining contract term. When subscription service or hosting service is paid in advance, deferred revenue is recognized and revenue is recorded ratably over the term as services are consumed. | |||||
Set up fees paid by customers in connection with subscription services are deferred and recognized ratably over the life of the applicable agreement. | |||||
Premium support and maintenance service revenue is derived from services beyond the basic services provided in standard arrangements. We recognize premium service and maintenance revenue ratably over the contract terms beginning on the commencement dates of each contract or when revenue recognition conditions are satisfied. Instances where these services are paid in advance, deferred revenue is recognized and revenue is recorded ratably over the term as services are consumed. | |||||
Professional services revenue consists primarily of fees associated with application and data integration, data cleansing, business process re-engineering, change management and education and training services. Fees charged for professional services are recognized when delivered. We believe the fees for professional services qualify for separate accounting because: (i) the services have value to the customer on a stand-alone basis, (ii) objective and reliable evidence of fair value exists for these services and (iii) performance of the services is considered probable and does not involve unique customer acceptance criteria. | |||||
The Company's revenue, to a lesser extent, is earned under license arrangements. Licenses generally include multiple elements that are delivered up front or over time. Vendor specific objective evidence of fair value of the hosting and support elements is based on the price charged at renewal when sold separately, and the license element is recognized into revenue upon delivery. The hosting and support elements are recognized ratably over the contractual term. | |||||
Software Development Costs | |||||
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached shortly after a working prototype is complete and meets or exceeds design specifications including functions, features, and technical performance requirements. Costs incurred after technological feasibility is established have been and will continue to be capitalized until such time as when the product or enhancement is available for general release to customers. | |||||
The Company completed amortization of its capitalized development costs during 2013. Capitalized development cost of $36,541 was amortized into expense. The Company amortizes its developed and purchased software on a straight-line basis over three and five years, respectively. | |||||
Earnings Per Share | |||||
Basic net income or loss per common share (“Basic EPS”) excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted net income or loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue shares of common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income (loss) per common share. | |||||
For the three months ended September 30, 2014 and 2013 warrants to purchase 317,373 and 465,196 shares of common stock, respectively, were not included in the computation of diluted EPS due to the anti-dilutive effect. Warrants to purchase shares of common stock were outstanding at prices ranging from $3.50 to $6.45 per share at September 30, 2014. | |||||
For the three months ended September 30, 2014 and 2013, 1,029,818 shares of common stock issuable upon conversion of the Company’s Series B Convertible Preferred Stock (“Series B Preferred”) were not included in the diluted EPS calculation as the effect would have been anti-dilutive. | |||||
Fair Value of Financial Instruments | |||||
The Company's financial instruments consist of cash, receivables, payables, accruals and notes payable. The carrying amount of cash, receivables, payables and accruals approximates fair value due to the short-term nature of these items. The notes payable also approximate fair value based on evaluations of market interest rates. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Sep. 30, 2014 | |
Stock-Based Compensation | ' |
STOCK-BASED COMPENSATION | ' |
The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards. The Company records compensation expense on a straight-line basis. The fair value of options granted are estimated at the date of grant using a Black-Scholes option pricing model with assumptions for the risk-free interest rate, expected life, volatility, dividend yield and forfeiture rate. |
OUTSTANDING_STOCK_OPTIONS
OUTSTANDING STOCK OPTIONS | 3 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Outstanding Stock Options | ' | ||||||||||||||||||||||
OUTSTANDING STOCK OPTIONS | ' | ||||||||||||||||||||||
The following tables summarize information about warrants outstanding and exercisable at September 30, 2014: | |||||||||||||||||||||||
Warrants | Warrants | ||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||
at September 30, 2014 | at September 30, 2014 | ||||||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||||
exercise prices | outstanding at | average | average | exercisable at | average | ||||||||||||||||||
September 30, | remaining | exercise | September 30, | exercise | |||||||||||||||||||
2014 | contractual | price | 2014 | price | |||||||||||||||||||
life (years) | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
$ | 3.50 – 3.60 | 240,629 | 3.46 | $ | 3.56 | 240,629 | $ | 3.56 | |||||||||||||||
$ | 6.45 | 76,744 | 3.91 | $ | 6.45 | 76,744 | $ | 6.45 | |||||||||||||||
317,373 | 3.57 | $ | 4.26 | 317,373 | $ | 4.26 |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
During the year ended June 30, 2014, the Company entered into to a five-year Service Agreement with Fields Management, Inc. (“FMI”), pursuant to which FMI provided certain executive management services to the Company, including designating Mr. Randall K. Fields to perform the functions of President and Chief Executive Officer for the Company. Randall K. Fields, FMI’s designated Executive, who also serves as the Company’s Chairman of the Board of Directors, controls FMI. Pursuant to the Services Agreement, FMI is paid an annual base fee of $500,000, subject to annual increases equal to 75% of the Company’s percentage annual revenue growth beginning in the 2014 fiscal year. FMI may also be eligible for an annual incentive bonus, awarded at the discretion of the Company’s Board of Directors. | |
The Company did not have any other related party transactions as of September 30, 2014. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property And Equipment | ' | ||||||||
PROPERTY AND EQUIPMENT | ' | ||||||||
Property and equipment are stated at cost and consist of the following as of: | |||||||||
30-Sep-14 | June 30, | ||||||||
(unaudited) | 2014 | ||||||||
Computer equipment | $ | 2,908,864 | $ | 2,899,867 | |||||
Furniture and fixtures | 260,574 | 260,574 | |||||||
Leasehold improvements | 231,782 | 231,782 | |||||||
3,401,220 | |||||||||
Less accumulated depreciation and amortization | -2,733,286 | -2,651,470 | |||||||
$ | 667,934 | $ | 740,753 |
ACCRUED_LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Liabilities [Abstract] | ' | ||||||||
ACCRUED LIABILITIES | ' | ||||||||
Accrued liabilities consist of the following as of: | |||||||||
30-Sep-14 | June 30, | ||||||||
(unaudited) | 2014 | ||||||||
Accrued stock-based compensation | $ | 820,912 | $ | 1,122,188 | |||||
Accrued compensation | 412,515 | 352,764 | |||||||
Accrued other liabilities | 178,916 | 171,930 | |||||||
Accrued dividends | 154,473 | 154,473 | |||||||
$ | 1,566,816 | $ | 1,801,355 | ||||||
PREFERRED_DIVIDENDS
PREFERRED DIVIDENDS | 3 Months Ended |
Sep. 30, 2014 | |
Preferred Dividends | ' |
PREFERRED DIVIDENDS | ' |
Holders of Series B Preferred are entitled to a 15.00% annual dividend payable quarterly in cash, which annual dividend increases to 18.00% effective July 1, 2015. The Company's Series B Preferred are held by affiliates of the Company, consisting of the Chief Executive Officer, his spouse, and a director. | |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2014 | |
Income Taxes | ' |
INCOME TAXES | ' |
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various states. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2009. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
We have evaluated subsequent events through the date of this filing in accordance with the Subsequent Events Topic of the FASB ASC 855, and have determined that no subsequent events are reasonably likely to impact the financial statements. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Accounting Policies [Abstract] | ' | ||||
Principles of Consolidation | ' | ||||
The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries, including Prescient. All inter-company transactions and balances have been eliminated in consolidation. | |||||
Use of Estimates | ' | ||||
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that materially affect the amounts reported in the condensed consolidated financial statements. Actual results could differ from these estimates. The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its financial statements. The Securities and Exchange Commission has defined the most critical accounting policies as those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company’s most critical accounting policies include: income taxes, goodwill and other long-lived asset valuations, revenue recognition, stock-based compensation, and capitalization of software development costs. | |||||
Allowance for Doubtful Accounts Receivable | ' | ||||
The Company offers credit terms on the sale of the Company’s products to a significant majority of the Company’s customers and requires no collateral from these customers. The Company performs ongoing credit evaluations of customers’ financial condition and maintains an allowance for doubtful accounts receivable based upon the Company’s historical experience and a specific review of accounts receivable at the end of each period. As of September 30, 2014 and 2013, the allowance for doubtful accounts was $75,000 and $190,000, respectively. | |||||
Depreciation and Amortization | ' | ||||
Depreciation and amortization of property and equipment is computed using the straight line method based on the following estimated useful lives: | |||||
Years | |||||
Furniture and fixtures | 7-May | ||||
Computer Equipment | 3 | ||||
Equipment under capital leases | 3 | ||||
Leasehold improvements | See below | ||||
Leasehold improvements are amortized over the shorter of the remaining lease term or the estimated useful life of the improvements. | |||||
Amortization of intangible assets are computed using the straight line method based on the following estimated useful lives: | |||||
Years | |||||
Customer relationships | 10 | ||||
Acquired developed software | 5 | ||||
Developed software | 3 | ||||
Goodwill | See below | ||||
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Other intangible assets are amortized over their useful lives. | |||||
Warranties | ' | ||||
The Company offers a limited warranty against software defects. Customers who are not completely satisfied with their software purchase may attempt to be reimbursed for their purchases outside the warranty period. For the three months ending September 30, 2014 and 2013, the Company did not incur any expense associated with warranty claims. | |||||
Revenue Recognition | ' | ||||
We recognize revenue when all of the following conditions are satisfied: (i) there is persuasive evidence of an arrangement, (ii) the service has been provided to the customer, (iii) the collection of our fees is probable and (iv) the amount of fees to be paid by the customer is fixed or determinable. | |||||
We recognize subscription and hosting revenue ratably over the length of the agreement beginning on the commencement dates of each agreement or when revenue recognition conditions are satisfied based on their relative fair values. For a fee, subscriptions provide the customer with access to the software and data over the Internet, or on demand, and provide technical support services, premium analytical services and software upgrades when and if available. Under subscriptions, customers do not have the right to take possession of the software and such arrangements are considered service contracts. Accordingly, we recognize professional services as incurred based on their relative fair values. In situations where we have contractually committed to an individual customer specific technology, we defer all of the revenue for that customer until the technology is delivered and accepted. Once delivery occurs, we then recognize the revenue ratably over the remaining contract term. When subscription service or hosting service is paid in advance, deferred revenue is recognized and revenue is recorded ratably over the term as services are consumed. | |||||
Set up fees paid by customers in connection with subscription services are deferred and recognized ratably over the life of the applicable agreement. | |||||
Premium support and maintenance service revenue is derived from services beyond the basic services provided in standard arrangements. We recognize premium service and maintenance revenue ratably over the contract terms beginning on the commencement dates of each contract or when revenue recognition conditions are satisfied. Instances where these services are paid in advance, deferred revenue is recognized and revenue is recorded ratably over the term as services are consumed. | |||||
Professional services revenue consists primarily of fees associated with application and data integration, data cleansing, business process re-engineering, change management and education and training services. Fees charged for professional services are recognized when delivered. We believe the fees for professional services qualify for separate accounting because: (i) the services have value to the customer on a stand-alone basis, (ii) objective and reliable evidence of fair value exists for these services and (iii) performance of the services is considered probable and does not involve unique customer acceptance criteria. | |||||
The Company's revenue, to a lesser extent, is earned under license arrangements. Licenses generally include multiple elements that are delivered up front or over time. Vendor specific objective evidence of fair value of the hosting and support elements is based on the price charged at renewal when sold separately, and the license element is recognized into revenue upon delivery. The hosting and support elements are recognized ratably over the contractual term. | |||||
Software Development Costs | ' | ||||
The Company accounts for research costs of computer software to be sold, leased or otherwise marketed as expense until technological feasibility has been established for the product. Once technological feasibility is established, all software costs are capitalized until the product is available for general release to customers. Judgment is required in determining when technological feasibility of a product is established. We have determined that technological feasibility for our software products is reached shortly after a working prototype is complete and meets or exceeds design specifications including functions, features, and technical performance requirements. Costs incurred after technological feasibility is established have been and will continue to be capitalized until such time as when the product or enhancement is available for general release to customers. | |||||
The Company completed amortization of its capitalized development costs during 2013. Capitalized development cost of $36,541 was amortized into expense. The Company amortizes its developed and purchased software on a straight-line basis over three and five years, respectively. | |||||
Earnings Per Share | ' | ||||
Basic net income or loss per common share (“Basic EPS”) excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted net income or loss per common share (“Diluted EPS”) reflects the potential dilution that could occur if stock options or other contracts to issue shares of common stock were exercised or converted into common stock. The computation of Diluted EPS does not assume exercise or conversion of securities that would have an anti-dilutive effect on net income (loss) per common share. | |||||
For the three months ended September 30, 2014 and 2013 warrants to purchase 317,373 and 465,196 shares of common stock, respectively, were not included in the computation of diluted EPS due to the anti-dilutive effect. Warrants to purchase shares of common stock were outstanding at prices ranging from $3.50 to $6.45 per share at September 30, 2014. | |||||
For the three months ended September 30, 2014 and 2013, 1,029,818 shares of common stock issuable upon conversion of the Company’s Series B Convertible Preferred Stock (“Series B Preferred”) were not included in the diluted EPS calculation as the effect would have been anti-dilutive. | |||||
Fair Value of Financial Instruments | ' | ||||
The Company's financial instruments consist of cash, receivables, payables, accruals and notes payable. The carrying amount of cash, receivables, payables and accruals approximates fair value due to the short-term nature of these items. The notes payable also approximate fair value based on evaluations of market interest rates. |
OUTSTANDING_STOCK_OPTIONS_Tabl
OUTSTANDING STOCK OPTIONS (Tables) | 3 Months Ended | ||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||
Outstanding Stock Options | ' | ||||||||||||||||||||||
Fixed stock options and warrants outstanding and exercisable | ' | ||||||||||||||||||||||
Warrants | Warrants | ||||||||||||||||||||||
Outstanding | Exercisable | ||||||||||||||||||||||
at September 30, 2014 | at September 30, 2014 | ||||||||||||||||||||||
Range of | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||||
exercise prices | outstanding at | average | average | exercisable at | average | ||||||||||||||||||
September 30, | remaining | exercise | September 30, | exercise | |||||||||||||||||||
2014 | contractual | price | 2014 | price | |||||||||||||||||||
life (years) | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
$ | 3.50 – 3.60 | 240,629 | 3.46 | $ | 3.56 | 240,629 | $ | 3.56 | |||||||||||||||
$ | 6.45 | 76,744 | 3.91 | $ | 6.45 | 76,744 | $ | 6.45 | |||||||||||||||
317,373 | 3.57 | $ | 4.26 | 317,373 | $ | 4.26 | |||||||||||||||||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property And Equipment | ' | ||||||||
Property and equipment | ' | ||||||||
30-Sep-14 | June 30, | ||||||||
(unaudited) | 2014 | ||||||||
Computer equipment | $ | 2,908,864 | $ | 2,899,867 | |||||
Furniture and fixtures | 260,574 | 260,574 | |||||||
Leasehold improvements | 231,782 | 231,782 | |||||||
3,401,220 | |||||||||
Less accumulated depreciation and amortization | -2,733,286 | -2,651,470 | |||||||
$ | 667,934 | $ | 740,753 |
ACCRUED_LIABILITIES_Tables
ACCRUED LIABILITIES (Tables) | 3 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Liabilities [Abstract] | ' | ||||||||
Accrued liabilities | ' | ||||||||
30-Sep-14 | June 30, | ||||||||
(unaudited) | 2014 | ||||||||
Accrued stock-based compensation | $ | 820,912 | $ | 1,122,188 | |||||
Accrued compensation | 412,515 | 352,764 | |||||||
Accrued other liabilities | 178,916 | 171,930 | |||||||
Accrued dividends | 154,473 | 154,473 | |||||||
$ | 1,566,816 | $ | 1,801,355 | ||||||
DESCRIPTION_OF_BUSINESS_Detail
DESCRIPTION OF BUSINESS (Details Narrative) | 3 Months Ended | |
Mar. 31, 2014 | Sep. 30, 2014 | |
Incorporated state | 'State of Nevada | ' |
Subsidiary Park City Group Inc. [Member] | ' | ' |
Incorporated state | 'State of Delaware | ' |
Ownership interest by parent | ' | 98.76% |
Subsidiary Prescient [Member] | ' | ' |
Incorporated state | 'State of Delaware | ' |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Sep. 30, 2014 | |
FurnitureAndFixtures [Member] | MinimumMember | ' |
Intangible Assets, Weighted Average Useful Life | '5 years |
FurnitureAndFixtures [Member] | MaximumMember | ' |
Intangible Assets, Weighted Average Useful Life | '7 years |
Computer Equipment [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '3 years |
Equipment [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '3 years |
Leasehold Improvements [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '10 years |
Customer Relationships [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '10 years |
Developed Software, Intangible Asset [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '5 years |
Computer Software, Intangible Asset [Member] | ' |
Intangible Assets, Weighted Average Useful Life | '3 years |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 3 Months Ended | 3 Months Ended | ||||||
Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
MinimumMember | MaximumMember | Warrant [Member] | Warrant [Member] | Convertible Preferred Stock [Member] | Convertible Preferred Stock [Member] | |||
Current notes receivable accrual basis recognize rate | '.08 | ' | ' | ' | ' | ' | ' | ' |
Allowance for doubtful accounts | $75,000 | $190,000 | ' | ' | ' | ' | ' | ' |
Capitalized development cost amortized into expense | $36,541 | ' | ' | ' | ' | ' | ' | ' |
Computation of diluted EPS due to the anti-dilutive effect shares excluded | ' | ' | ' | ' | 317,373 | 465,196 | 1,029,818 | 1,029,818 |
Warrant exercise price | ' | ' | $3.50 | $6.45 | ' | ' | ' | ' |
OUTSTANDING_STOCK_OPTIONS_Deta
OUTSTANDING STOCK OPTIONS (Details) (USD $) | 3 Months Ended |
Sep. 30, 2014 | |
Outstanding at End of Period, Shares | 317,373 |
Weighted average remaining contractual life (years), Shares Outstanding | '3 years 6 months 26 days |
Weighted average exercise price, Shares Outstanding | $4.26 |
Exercisable at End of Period, Shares | 317,373 |
Weighted average exercise price, Shares Exercisable | $4.26 |
$3.50 - $3.60 [Member] | ' |
Range of exercise prices | '3.50-3.60 |
Outstanding at End of Period, Shares | 240,629 |
Weighted average remaining contractual life (years), Shares Outstanding | '3 years 5 months 16 days |
Weighted average exercise price, Shares Outstanding | $3.56 |
Exercisable at End of Period, Shares | 240,629 |
Weighted average exercise price, Shares Exercisable | $3.56 |
$6.45 [Member] | ' |
Range of exercise prices | '6.45 |
Outstanding at End of Period, Shares | 76,744 |
Weighted average remaining contractual life (years), Shares Outstanding | '3 years 10 months 28 days |
Weighted average exercise price, Shares Outstanding | $6.45 |
Exercisable at End of Period, Shares | 76,744 |
Weighted average exercise price, Shares Exercisable | $6.45 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions Details Narrative | ' |
Related party agreement term | '5 years |
Annual base fee, services | $500,000 |
Annual service agreement increase, rate of revenue growth | 75.00% |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Property, Plant and Equipment [Abstract] | ' | ' |
Computer equipment | $2,908,864 | $2,899,867 |
Furniture and fixtures | 260,574 | 260,574 |
Leasehold improvements | 231,782 | 231,782 |
Property and equipment, gross | 3,401,220 | ' |
Less accumulated depreciation and amortization | -2,733,286 | -2,651,470 |
Property and equipment, Net | $667,934 | $740,753 |
ACCRUED_LIABILITIES_Details
ACCRUED LIABILITIES (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Payables and Accruals [Abstract] | ' | ' |
Accrued stock-based compensation | $820,912 | $1,122,188 |
Accrued compensation | 412,515 | 352,764 |
Accrued other liabilities | 178,916 | 171,930 |
Accrued dividends | 154,473 | 154,473 |
Accrued liabilities | $1,566,816 | $1,801,355 |
PREFERRED_DIVIDENDS_Details_Na
PREFERRED DIVIDENDS (Details Narrative) (Series B [Member]) | 3 Months Ended |
Sep. 30, 2014 | |
Series B [Member] | ' |
Dividends on Preferred Shares, Percentage | 15.00% |
Increase, Dividends on Preferred Shares, Percentage | 18.00% |