Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | PARK CITY GROUP INC | |
Entity Central Index Key | 50,471 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
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 | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 19,220,051 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 11,333,020 | $ 11,325,572 |
Receivables, net of allowance of $50,000 and $94,000 at March 31, 2016 and June 30, 2015, respectively | 2,830,361 | 1,640,591 |
Prepaid expense and other current assets | 414,040 | 463,427 |
Total current assets | 14,577,421 | 13,429,590 |
Property and equipment, net | 512,526 | 764,442 |
Other assets: | ||
Deposits and other assets | 14,866 | $ 14,866 |
Investments | 471,584 | |
Capitalized software costs, net | 109,895 | |
Customer relationships | 1,215,450 | $ 1,314,000 |
Goodwill | 20,883,886 | 20,883,886 |
Total other assets | 22,695,681 | 22,212,752 |
Total assets | 37,785,628 | 36,406,784 |
Current liabilities: | ||
Accounts payable | 646,383 | 817,119 |
Accrued liabilities | 1,476,750 | 2,521,111 |
Deferred revenue | 2,551,844 | 2,331,920 |
Line of credit | 2,500,000 | 2,500,000 |
Note payable | 260,091 | 227,301 |
Total current liabilities | 7,435,068 | 8,397,451 |
Long-term liabilities: | ||
Notes payable, less current portion | 536,249 | 349,192 |
Other long-term liabilities | 65,944 | 75,518 |
Total liabilities | 8,037,261 | 8,822,161 |
Stockholders' equity: | ||
Common stock, $0.01 par value, 50,000,000 shares authorized; 19,206,994 and 18,875,586 issued and outstanding at March 31, 2016 and June 30, 2015, respectively | 192,073 | 188,759 |
Additional paid-in capital | 72,833,717 | 70,296,496 |
Accumulated deficit | (43,285,205) | (42,907,628) |
Total stockholders' equity | 29,748,367 | 27,584,623 |
Total liabilities and stockholders' equity | 37,785,628 | 36,406,784 |
Series B Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred Stock: Series B Preferred stock, $0.01 par value, 700,000 shares authorized; 625,375 shares issued and outstanding at March 31, 2016 and June 30, 2015; Series B-1 Preferred stock, $0.01 par value, 300,000 shares authorized; 152,819 and 74,200 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively | 6,254 | 6,254 |
Series B1 Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred Stock: Series B Preferred stock, $0.01 par value, 700,000 shares authorized; 625,375 shares issued and outstanding at March 31, 2016 and June 30, 2015; Series B-1 Preferred stock, $0.01 par value, 300,000 shares authorized; 152,819 and 74,200 shares issued and outstanding at March 31, 2016 and June 30, 2015, respectively | $ 1,528 | $ 742 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Current assets: | ||
Receivables, net of allowance | $ 50,000 | $ 94,000 |
Stockholders' equity: | ||
Common stock, par value | $ .01 | $ 0.01 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 19,206,994 | 18,875,586 |
Common stock, outstanding | 19,206,994 | 18,875,586 |
Series B Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value | $ .01 | $ 0.01 |
Preferred stock, Authorized | 700,000 | 700,000 |
Preferred stock, Issued | 625,375 | 625,375 |
Preferred stock, outstanding | 625,375 | 625,375 |
Series B1 Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value | $ .01 | $ 0.01 |
Preferred stock, Authorized | 300,000 | 300,000 |
Preferred stock, Issued | 152,819 | 74,200 |
Preferred stock, outstanding | 152,819 | 74,200 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 3,580,329 | $ 3,390,933 | $ 10,215,752 | $ 10,204,456 |
Operating expenses: | ||||
Cost of services and product support | 1,050,074 | 1,245,353 | 3,223,548 | 3,949,136 |
Sales and marketing | 1,264,036 | 1,547,553 | 4,107,676 | 4,419,384 |
General and administrative | 807,542 | 1,026,751 | 2,317,316 | 2,908,653 |
Depreciation and amortization | 125,939 | 190,041 | 382,453 | 564,800 |
Total operating expenses | 3,247,591 | 4,009,698 | 10,030,993 | 11,841,973 |
Income (loss) from operations | 332,738 | (618,765) | 184,759 | (1,637,517) |
Other expense: | ||||
Interest income (expense) | (10,986) | $ 68,911 | 10,328 | $ 170,724 |
Gain (loss) on disposition of investment | (26,684) | (26,128) | ||
Income (loss) before income taxes | $ 295,068 | $ (549,854) | $ 168,959 | $ (1,466,793) |
(Provision) benefit for income taxes | ||||
Net income (loss) | $ 295,068 | $ (549,854) | $ 168,959 | $ (1,466,793) |
Dividends on preferred stock | $ (176,588) | (135,699) | $ (546,536) | (444,645) |
Series B Restructure | (2,141,980) | (2,141,980) | ||
Net income (loss) applicable to common shareholders | $ 118,480 | $ (2,827,533) | $ (377,577) | $ (4,053,418) |
Weighted average shares, basic | 19,196,000 | 17,334,000 | 19,128,000 | 17,204,000 |
Weighted average shares, diluted | 19,963,000 | 17,334,000 | 19,128,000 | 17,204,000 |
Basic loss per share | $ .01 | $ (.16) | $ (.02) | $ (.24) |
Diluted loss per share | $ .01 | $ (.16) | $ (.02) | $ (.24) |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||||
Net income (loss) applicable to common shareholders | $ 118,480 | $ (2,827,533) | $ (377,577) | $ (4,053,418) |
Other Comprehensive Income (Loss): | ||||
Unrealized gain (loss) on marketable securities | (26,684) | (26,128) | ||
Reclassification adjustment | $ 26,684 | $ 26,128 | ||
Net income (loss) on marketable securities | ||||
Comprehensive income (loss) | $ 118,480 | $ (2,827,533) | $ (377,577) | $ (4,053,418) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 168,959 | $ (1,466,793) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and Amortization | 382,453 | 564,800 |
Bad debt expense | $ 43,140 | 124,982 |
Charitable non-cash donations | 157,950 | |
Stock compensation expense | $ 775,202 | $ 1,796,386 |
Loss on short-term marketable securities | 26,128 | |
(Increase) decrease in: | ||
Trade receivables | (1,232,910) | $ (114,988) |
Prepaids and other assets | 49,387 | (419,887) |
(Decrease) increase in: | ||
Accounts payable | (170,736) | 84,713 |
Accrued liabilities | (59,270) | 26,004 |
Deferred revenue | 219,924 | (244,391) |
Net cash provided by operating activities | 202,277 | $ 508,776 |
Cash Flows From Investing Activities: | ||
Purchase of Marketable Securities | (4,639,036) | |
Sale of Marketable Securities | $ 4,612,908 | |
Cash advanced on note receivable | $ (1,059,460) | |
Purchase of property and equipment | $ (31,987) | $ (362,089) |
Capitalization of software costs | (109,895) | |
Purchase of long-term investments | (471,584) | |
Net cash used in investing activities | (639,594) | $ (1,421,549) |
Cash Flows From Financing Activities: | ||
Proceeds from issuance of note payable | 396,000 | 172,795 |
Proceeds from employee stock plans | 199,848 | $ 203,211 |
Proceeds from exercise of warrants | $ 33,002 | |
Proceeds from issuance of stock | $ 903,469 | |
Series B preferred redemption | (7,500) | |
Dividends paid | $ (7,932) | (154,473) |
Payments on notes payable and capital leases | (176,153) | (190,127) |
Net cash provided by (used in) financing activities | 444,765 | 927,375 |
Net increase in cash and cash equivalents | 7,448 | 14,602 |
Cash and cash equivalents at beginning of period | 11,325,572 | 3,352,559 |
Cash and cash equivalents at end of period | $ 11,333,020 | $ 3,367,161 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | $ 16,761 | $ 55,122 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Common stock to pay accrued liabilities | 1,522,281 | 1,619,962 |
Preferred stock to pay accrued liabilities | 300,000 | 300,000 |
Dividends accrued on preferred stock | 546,536 | 444,645 |
Dividends paid with preferred stock | $ 486,190 | 291,385 |
Series B Restructure | $ 2,141,980 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 9 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS | The Company is incorporated in the state of Nevada. The Company has three subsidiaries, PC Group, Inc. (formerly, Park City Group, Inc., a Delaware corporation), a Utah corporation (98.76% owned), Park City Group, Inc., (formerly, Prescient Applied Intelligence, Inc.), a wholly owned Delaware corporation, and ReposiTrak, Inc., a wholly owned Utah corporation ( ReposiTrak The Company designs, develops, markets and supports proprietary software products. These products are designed for businesses that need assistance improving their inventory management. As a result of the acquisition of ReposiTrak in June 2015, the Company also provides food retailers and suppliers with a robust solution to help them protect their brands and remain in compliance with the rapidly evolving regulations under the Food Safety Modernization Act ( FSMA hubs Our services are delivered through proprietary software products designed, developed, marketed and supported by the Company. These products are designed to facilitate improved business processes among all key constituents in the supply chain, starting with the retailer and moving back to suppliers and eventually raw material providers. In addition, the Company has also built a consulting practice for business improvement that centers on the Companys proprietary software products and through establishment of a neutral and trusted third party relationship between retailers and suppliers. 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. Recent Developments During the year ended June 30, 2015, the Company entered into agreements with each of the stockholders of ReposiTrak, including Leavitt Partners, LP and LP Special Asset 4, LLC, to acquire all of the outstanding capital stock of ReposiTrak (the ReposiTrak Shares ReposiTrak Acquisition We have accounted for the acquisition of ReposiTrak as the purchase of a business. The assets acquired and the liabilities assumed of ReposiTrak have been recorded at their respective fair values. The excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. Goodwill is attributed to buyer-specific value resulting from expected synergies, including long-term cost savings, as well as industry relationships, which are not included in the fair values of assets. Goodwill will not be amortized but will be tested for impairment at least annually or upon a material change that may impact the carrying value. The purchase price consisted of 873,438 shares of our common stock. The fair value of the shares issued was $10,821,897 and was determined using the closing price of our common stock on June 30, 2015. The price paid to acquire ReposiTrak was $10,830,897, approximately $9,000 of which was for direct transaction costs associated with the issuance of equity. The net acquisition cost of $10,799,778, which excludes $31,119 of cash acquired from ReposiTrak, was allocated based on their estimated fair value of the assets acquired and liabilities assumed, as follows: Originally Filed Adjustments* Finalized Values Receivables $ 152,340 $ - $ 152,340 Prepaid expenses 17,500 - 17,500 Customer relationships 2,006,951 (692,951 ) 1,314,000 Goodwill 15,385,002 692,951 16,077,953 Accounts payable (128,126 ) - (128,126 ) Deferred revenue (598,232 ) - (598,232 ) Net assets acquired 16,835,435 - 16,835,435 Common stock issued 10,821,897 - 10,821,897 Receivables eliminated in consolidation 6,035,657 - 6,035,657 Cash received in acquisition $ 22,119 $ - $ 22,119 *Adjustments due to finalization of valuation. The adjusted values are reflected retrospectively in the balance sheet for the period ended June 30, 2015. Unaudited pro-forma results of operations for the three and nine months ended March 31, 2015, as though ReposiTrak had been acquired as of July 1, 2014, are as follows: Three Months Ended Nine Months Ended March 31, 2015 March 31, 2015 Revenue $ 2,870,646 $ 8,630,284 Loss from Operations $ (1,302,437 ) $ (3,639,947 ) Net Loss $ (1,317,858 ) $ (3,685,202 ) Net Loss Applicable to Common Shareholders $ (3,595,537 ) $ (6,271,827 ) Basic and Diluted EPS $ (0.20 ) $ (0.35 ) Basis of Financial Statement Presentation The interim financial information of the Company as of March 31, 2016 and for the three and nine months ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of June 30, 2015 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense notes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 2 to the Notes to Financial Statements included in our Annual Report on Form 10-K for the year ended June 30, 2015. In the opinion of management, all adjustments necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the fiscal year ending June 30, 2016. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended June 30, 2015. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2016 | |
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. 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 Companys 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 Companys most critical accounting policies include: income taxes, goodwill and other long-lived asset valuations, revenue recognition, and stock-based compensation. 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 receivables are stated at the amount the Company expects to collect. Receivables are reviewed individually for collectability. If the financial condition of the Companys customers were to deteriorate, adversely affecting their ability to make payments, allowances may be required. Allowance for Doubtful Accounts Receivable The Company offers credit terms on the sale of the Companys products to a significant majority of the Companys 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 Companys historical experience and a specific review of accounts receivable at the end of each period. As of March 31, 2016 and June 30, 2015 the allowance for doubtful accounts was $50,000 and $94,000, 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 5-7 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. For the three and nine months ended March 31, 2016 and 2015, the Company did not incur any expense associated with warranty claims and no accrual for warranty claims is included in the financial statements. 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, system orientation, 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, is also 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. 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. Earnings Per Share Basic earnings per share has been computed using the weighted average number of shares of common stock outstanding during each period. Diluted earnings per share also includes the impact of our outstanding potential common shares, including warrants and in the comparable period, convertible preferred stock. Potential common shares that are anti-dilutive are excluded from the calculation of diluted net income per share. The following table presents the components of the computation of basic and diluted earnings per share for the periods indicated: Three Months Ended Nine Months Ended March 31, March 31, 2016 2015 2016 2015 Numerator Net income (loss) applicable to common shareholders $ 118,480 $ (2,827,533 ) $ (377,577 ) $ (4,053,418 ) Denominator Weighted average common shares outstanding, basic 19,196,000 17,334,000 19,128,000 17,204,000 Warrants to purchase common stock 767,000 - - - Weighted average common shares outstanding, diluted 19,963,000 17,334,000 19,128,000 17,204,000 Net income (loss) per share Basic $ 0.01 $ (0.16 ) $ (0.02 ) $ (0.24 ) Diluted $ 0.01 $ (0.16 ) $ (0.02 ) $ (0.24 ) The effect of approximately 1,426,000 outstanding potential shares of common stock were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2015, and 1,417,000 and 1,426,000 outstanding potential shares of common stock were excluded from the calculation of diluted earnings per share for the nine months ended March 31, 2016 and 2015, respectively, as they were anti-dilutive. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. Marketable Securities Management determines the appropriate classification of marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. The cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is also included as a component of interest income. Fair Value Measurement The Company measures its cash equivalents, marketable securities, and foreign currency derivative contracts at fair value. The additional disclosures regarding the Companys fair value measurements are included in Note 3 Investments. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | Investments at March 31, 2016 consisted of the following: Investment Income Investment income consists of interest income, realized gains, and realized losses on the Companys cash, cash equivalents and marketable securities. The components of investment income are presented below: Three Months Ended March 31, Nine Months Ended March 31, 2016 2015 2016 2015 Interest income $ 7,023 $ 2,698 $ 45,140 $ 9,867 Realized gains 313 1,101 Realized losses (26,997 ) (27,229 ) Total investment income $ (19,661 ) $ 2,698 $ 19,012 $ 9,867 Reclassification adjustments out of accumulated other comprehensive loss into net income (loss) were $26,684 and $0 for the three and $26,128 and $0 for the nine months ended March 31, 2016 and 2015 , respectively. Investments classified as marketable securities Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate Bonds $ - $ - $ - $ - Investments classified as equity method investments $ 470,584 $ - $ - $ 470,584 Investments classified as available-for-sale $ 1,000 $ - $ - $ 1,000 The contractual maturities of the marketable securities are 1-5 years as of March 31, 2016. The Company accounts for its marketable securities portfolio as available for sale investments. All marketable securities are recorded as current regardless of contractual maturities. All other securities are recorded long-term. All of the Companys fair value measurements for cash equivalents and marketable securities are classified within Level 1 because the Companys cash equivalents and marketable securities are valued using quoted market prices. Long-term investments are classified within Level 3, as the fair value in not easily determinable. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Other inputs that are directly or indirectly observable in the marketplace. Level 3. Unobservable inputs which are supported by little or no market activity. |
WARRANTS
WARRANTS | 9 Months Ended |
Mar. 31, 2016 | |
Warrants | |
WARRANTS | The following tables summarize information about warrants outstanding and exercisable at March 31, 2016: Warrants Warrants Outstanding Exercisable at March 31, 2016 at March 31, 2016 Range of exercise prices Warrants Number outstanding at March 31, 2016 Weighted average remaining contractual life (years) Weighted average exercise price Number exercisable at March 31, 2016 Weighted average exercise price $ 3.50 4.00 1,316,268 3.51 $ 3.92 1,316,268 $ 3.92 $ 6.45 10.00 100,481 2.74 $ 7.29 100,481 $ 7.29 1,416,749 3.46 $ 4.16 1,416,749 $ 4.16 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Services Agreement with Fields Management, Inc. During the three months ended March 31, 2016, the Company continued to be a party to a Service Agreement with Fields Management, Inc. ( FMI The Company had payables of $32,253 and $37,893 to FMI at March 31, 2016 and June 30, 2015, respectively, under this agreement. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Mar. 31, 2016 | |
Property And Equipment | |
PROPERTY AND EQUIPMENT | Property and equipment are stated at cost and consist of the following as of: March 31, 2016 (unaudited) June 30, 2015 Computer equipment $ 3,301,390 $ 3,269,403 Furniture and fixtures 260,574 260,574 Leasehold improvements 231,782 231,782 3,793,745 3,761,759 Less accumulated depreciation and amortization (3,281,219 ) (2,997,317 ) $ 512,526 $ 764,442 |
CAPITALIZED SOFTWARE COSTS
CAPITALIZED SOFTWARE COSTS | 9 Months Ended |
Mar. 31, 2016 | |
Capitalized Software Costs | |
CAPITALIZED SOFTWARE COSTS | Capitalized software costs consists of the following as of: March 31, 2016 (unaudited) June 30, 2015 Capitalized software costs $ 109,895 $ - Less accumulated amortization - - $ 109,895 $ - |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Mar. 31, 2016 | |
Accrued Liabilities [Abstract] | |
ACCRUED LIABILITIES | Accrued liabilities consist of the following as of: March 31, 2016 (unaudited) June 30, 2015 Accrued stock-based compensation $ 721,659 $ 1,665,731 Accrued compensation 370,305 506,064 Accrued other liabilities 208,196 225,140 Accrued dividends 176,590 124,176 $ 1,476,750 $ 2,521,111 |
PREFERRED DIVIDENDS
PREFERRED DIVIDENDS | 9 Months Ended |
Mar. 31, 2016 | |
Preferred Dividends | |
PREFERRED DIVIDENDS | The Company's Series B Preferred Stock ( Series B Preferred In February 2015, the Company amended the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Preferred (the Certificate of Designation PIK Shares Series B-1 Preferred |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2016 | |
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 | 9 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to March 31, 2016, the Company issued 13,057 shares of common stock in connection with issuances under the Companys Employee Stock Purchase Plan for the vesting of employee stock grants. The Company also issued 27,394 shares of Series B-1 Preferred for dividends paid in kind on the outstanding shares of Series B Preferred and for an accrued bonus. 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 additional subsequent events are reasonably likely to impact the financial statements. |
SIGNIFICANT ACCOUNTING POLICI18
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries. 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 Companys 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 Companys most critical accounting policies include: income taxes, goodwill and other long-lived asset valuations, revenue recognition, and stock-based compensation. |
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 receivables are stated at the amount the Company expects to collect. Receivables are reviewed individually for collectability. If the financial condition of the Companys customers were to deteriorate, adversely affecting their ability to make payments, allowances may be required. |
Allowance for Doubtful Accounts Receivable | The Company offers credit terms on the sale of the Companys products to a significant majority of the Companys 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 Companys historical experience and a specific review of accounts receivable at the end of each period. As of March 31, 2016 and June 30, 2015 the allowance for doubtful accounts was $50,000 and $94,000, 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 5-7 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. |
DESCRIPTION OF BUSINESS (Tables
DESCRIPTION OF BUSINESS (Tables) - ReposiTrak [Member] | 9 Months Ended |
Mar. 31, 2016 | |
Acquisition of ReposiTrak, assets acquired and liabilities assumed | Originally Filed Adjustments* Finalized Values Receivables $ 152,340 $ - $ 152,340 Prepaid expenses 17,500 - 17,500 Customer relationships 2,006,951 (692,951 ) 1,314,000 Goodwill 15,385,002 692,951 16,077,953 Accounts payable (128,126 ) - (128,126 ) Deferred revenue (598,232 ) - (598,232 ) Net assets acquired 16,835,435 - 16,835,435 Common stock issued 10,821,897 - 10,821,897 Receivables eliminated in consolidation 6,035,657 - 6,035,657 Cash received in acquisition $ 22,119 $ - $ 22,119 |
Unaudited pro-forma results of operations | Three Months Ended Nine Months Ended March 31, 2015 March 31, 2015 Revenue $ 2,870,646 $ 8,630,284 Loss from Operations $ (1,302,437 ) $ (3,639,947 ) Net Loss $ (1,317,858 ) $ (3,685,202 ) Net Loss Applicable to Common Shareholders $ (3,595,537 ) $ (6,271,827 ) Basic and Diluted EPS $ (0.20 ) $ (0.35 ) |
SIGNIFICANT ACCOUNTING POLICI20
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Significant Accounting Policies Tables | |
Estimated useful lives for depreciation and amortization of property and equipment | Years Furniture and fixtures 5-7 Computer Equipment 3 Equipment under capital leases 3 Leasehold improvements See below |
Estimated useful lives for amortization of intangible assets | Years Customer relationships 10 Acquired developed software 5 Developed software 3 Goodwill See below |
Basic and diluted earnings per share | Three Months Ended Nine Months Ended March 31, March 31, 2016 2015 2016 2015 Numerator Net income (loss) applicable to common shareholders $ 118,480 $ (2,827,533 ) $ (377,577 ) $ (4,053,418 ) Denominator Weighted average common shares outstanding, basic 19,196,000 17,334,000 19,128,000 17,204,000 Warrants to purchase common stock 767,000 - - - Weighted average common shares outstanding, diluted 19,963,000 17,334,000 19,128,000 17,204,000 Net income (loss) per share Basic $ 0.01 $ (0.16 ) $ (0.02 ) $ (0.24 ) Diluted $ 0.01 $ (0.16 ) $ (0.02 ) $ (0.24 ) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment income | Three Months Ended Nine Months Ended March 31, March 31, 2016 2015 2016 2015 Interest income $ 7,023 $ 2,698 $ 45,140 $ 9,867 Realized gains 313 - 1,101 - Realized losses (26,997) - (27,229) - Total investment income $ (19,661) $ 2,698 $ 19,012 $ 9,867 |
Marketable securities | Amortized Cost Unrealized Gains Unrealized Losses Fair Value Investments classified as marketable securities Corporate Bonds $ - $ - $ - $ - Investments classified as equity method investments $ 470,584 $ - $ - $ 470,584 Investments classified as available-for-sale $ 1,000 $ - $ - $ 1,000 |
WARRANTS (Tables)
WARRANTS (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Warrants | |
Fixed stock options and warrants outstanding and exercisable | Warrants Warrants Outstanding Exercisable at March 31, 2016 at March 31, 2016 Range of exercise prices Warrants Number outstanding at March 31, 2016 Weighted average remaining contractual life (years) Weighted average exercise price Number exercisable at March 31, 2016 Weighted average exercise price $ 3.50 4.00 1,316,268 3.51 $ 3.92 1,316,268 $ 3.92 $ 6.45 10.00 100,481 2.74 $ 7.29 100,481 $ 7.29 1,416,749 3.46 $ 4.16 1,416,749 $ 4.16 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Property And Equipment | |
Property and equipment | March 31, 2016 (unaudited) June 30, 2015 Computer equipment $ 3,301,390 $ 3,269,403 Furniture and fixtures 260,574 260,574 Leasehold improvements 231,782 231,782 3,793,745 3,761,759 Less accumulated depreciation and amortization (3,281,219 ) (2,997,317 ) $ 512,526 $ 764,442 |
CAPITALIZED SOFTWARE COSTS (Tab
CAPITALIZED SOFTWARE COSTS (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Capitalized Software Costs Tables | |
Capitalized software | March 31, 2016 (unaudited) June 30, 2015 Capitalized software costs $ 109,895 $ - Less accumulated amortization - - $ 109,895 $ - |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | March 31, 2016 (unaudited) June 30, 2015 Accrued stock-based compensation $ 721,659 $ 1,665,731 Accrued compensation 370,305 506,064 Accrued other liabilities 208,196 225,140 Accrued dividends 176,590 124,176 $ 1,476,750 $ 2,521,111 |
DESCRIPTION OF BUSINESS (Detail
DESCRIPTION OF BUSINESS (Details) - ReposiTrak [Member] | 1 Months Ended | |
Jun. 30, 2015USD ($)shares | ||
Fair value of assets and liaiblities acquired: | ||
Receivables | $ 152,340 | |
Prepaid expenses | 17,500 | |
Customer relationships | 1,314,000 | |
Goodwill | 16,077,953 | |
Accounts payable | (128,126) | |
Deferred revenue | (598,232) | |
Net assets acquired | $ 16,835,435 | |
Common stock issued | shares | 10,821,897 | |
Receivables eliminated in consolidation | $ 6,035,657 | |
Cash received in acquisition | 22,119 | |
Scenario, Previously Reported [Member] | ||
Fair value of assets and liaiblities acquired: | ||
Receivables | 152,340 | |
Prepaid expenses | 17,500 | |
Customer relationships | 2,006,951 | |
Goodwill | 15,385,002 | |
Accounts payable | (128,126) | |
Deferred revenue | (598,232) | |
Net assets acquired | $ 16,835,435 | |
Common stock issued | shares | 10,821,897 | |
Receivables eliminated in consolidation | $ 6,035,657 | |
Cash received in acquisition | $ 22,119 | |
Scenario, Adjustment [Member] | ||
Fair value of assets and liaiblities acquired: | ||
Receivables | [1] | |
Prepaid expenses | [1] | |
Customer relationships | $ (692,951) | [1] |
Goodwill | $ 692,951 | [1] |
Accounts payable | [1] | |
Deferred revenue | [1] | |
Net assets acquired | [1] | |
Common stock issued | shares | [1] | |
Receivables eliminated in consolidation | [1] | |
Cash received in acquisition | [1] | |
[1] | Adjustments due to finalization of valuation. The adjusted values are reflected retrospectively in the balance sheet for the period ended June 30, 2015. |
DESCRIPTION OF BUSINESS (Deta27
DESCRIPTION OF BUSINESS (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended |
Mar. 31, 2015 | Mar. 31, 2015 | |
Unaudited pro forma results of operations | ||
Revenue | $ 2,870,646 | $ 8,630,284 |
Loss from operations | (1,302,437) | (3,639,947) |
Net loss | $ (1,317,858) | $ (3,685,202) |
Net loss applicable to common shareholdres | $ (3,595,537) | $ (6,271,827) |
Basic and diluted loss per share | $ (0.20) | $ (.35) |
DESCRIPTION OF BUSINESS (Deta28
DESCRIPTION OF BUSINESS (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Mar. 31, 2016 | |
Incorporated state | State of Nevada | |
Common stock, par value | $ 0.01 | $ .01 |
ReposiTrak [Member] | ||
Incorporated state | Utah | |
Ownership interest by parent | 100.00% | |
Total consideration paid | $ 10,830,897 | |
Transaction costs | 9,000 | |
Cash acquired | 31,119 | |
Net acquisition cost | $ 10,799,778 | |
Shares issued for acquisition | 873,438 | |
Shares issued for acquisition, fair value | $ 10,821,897 | |
PC Group Inc. [Member] | ||
Incorporated state | Utah | |
Ownership interest by parent | 98.76% | |
Park City Group Inc. [Member] | ||
Incorporated state | Delaware | |
Ownership interest by parent | 100.00% |
SIGNIFICANT ACCOUNTING POLICI29
SIGNIFICANT ACCOUNTING POLICIES (Details) | 9 Months Ended |
Mar. 31, 2016 | |
FurnitureAndFixtures [Member] | Minimum [Member] | |
Intangible Assets, Weighted Average Useful Life | 5 years |
FurnitureAndFixtures [Member] | Maximum [Member] | |
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 |
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 POLICI30
SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Significant Accounting Policies Details 1 | ||||
Net income (loss) applicable to common shareholders | $ 118,480 | $ (2,827,533) | $ (377,577) | $ (4,053,418) |
Weighted average shares, basic | 19,196,000 | 17,334,000 | 19,128,000 | 17,204,000 |
Warrants to purchase common stock | 767,000 | |||
Weighted average shares, diluted | 19,963,000 | 17,334,000 | 19,128,000 | 17,204,000 |
Net income (loss) per share | ||||
Basic | $ .01 | $ (.16) | $ (.02) | $ (.24) |
Diluted | $ .01 | $ (.16) | $ (.02) | $ (.24) |
SIGNIFICANT ACCOUNTING POLICI31
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||||
Allowance for Doubtful Accounts | $ 50,000 | $ 94,000 | ||
Anti-dilutive securities | 1,426,000 | 1,417,000 | 1,426,000 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Interest income | $ 70,232 | $ 2,698 | $ 45,140 | $ 9,867 |
Realized gains | 313 | 1,101 | ||
Realized losses | (26,997) | (27,229) | ||
Total investment income | $ (19,661) | $ 2,698 | $ 19,012 | $ 9,867 |
INVESTMENTS (Details 1)
INVESTMENTS (Details 1) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2015 | |
Fair Value | $ 471,584 | |
Corporate Bond Securities [Member] | ||
Amortized Cost | ||
Unrealized Gains | ||
Unrealized Losses | ||
Fair Value | ||
Equity Method Investments [Member] | ||
Amortized Cost | $ 470,584 | |
Unrealized Gains | ||
Unrealized Losses | ||
Fair Value | $ 470,584 | |
Availableforsale Securities [Member] | ||
Amortized Cost | $ 1,000 | |
Unrealized Gains | ||
Unrealized Losses | ||
Fair Value | $ 1,000 |
INVESTMENTS (Details Narrative)
INVESTMENTS (Details Narrative) - Corporate Bond Securities [Member] | 9 Months Ended |
Mar. 31, 2016 | |
Minimum [Member] | |
Contractual maturities of marketable securities | 1 year |
Maximum [Member] | |
Contractual maturities of marketable securities | 5 years |
WARRANTS (Details)
WARRANTS (Details) - Warrant [Member] | 9 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Outstanding at End of Period, Shares | shares | 1,416,749 |
Weighted average remaining contractual life (years), Shares Outstanding | 3 years 5 months 15 days |
Weighted average exercise price, Shares Outstanding | $ 4.16 |
Exercisable at End of Period, Shares | shares | 1,416,749 |
Weighted average exercise price, Shares Exercisable | $ 4.16 |
$3.50-4.00 [Member] | |
Outstanding at End of Period, Shares | shares | 1,316,268 |
Weighted average remaining contractual life (years), Shares Outstanding | 3 years 6 months 3 days |
Weighted average exercise price, Shares Outstanding | $ 3.92 |
Exercisable at End of Period, Shares | shares | 1,316,268 |
Weighted average exercise price, Shares Exercisable | $ 3.92 |
$3.50-4.00 [Member] | Minimum [Member] | |
Range of exercise prices | 3.50 |
$3.50-4.00 [Member] | Maximum [Member] | |
Range of exercise prices | $ 4 |
$6.45-10.00 [Member] | |
Outstanding at End of Period, Shares | shares | 100,481 |
Weighted average remaining contractual life (years), Shares Outstanding | 2 years 8 months 28 days |
Weighted average exercise price, Shares Outstanding | $ 7.29 |
Exercisable at End of Period, Shares | shares | 100,481 |
Weighted average exercise price, Shares Exercisable | $ 7.29 |
$6.45-10.00 [Member] | Minimum [Member] | |
Range of exercise prices | 6.45 |
$6.45-10.00 [Member] | Maximum [Member] | |
Range of exercise prices | $ 10 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Due to related parties | $ 37,893 | |
FMI [Member] | ||
Due to related parties | $ 32,253 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Property, Plant and Equipment [Abstract] | ||
Computer equipment | $ 3,301,390 | $ 3,269,403 |
Furniture and fixtures | 260,574 | 260,574 |
Leasehold improvements | 231,782 | 231,782 |
Property and equipment, gross | 3,793,745 | 3,761,759 |
Less accumulated depreciation and amortization | (3,281,219) | (2,997,317) |
Property and equipment, Net | $ 512,526 | $ 764,442 |
CAPITALIZED SOFTWARE COSTS (Det
CAPITALIZED SOFTWARE COSTS (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Capitalized Software Costs Details | ||
Capitalized software costs | $ 109,895 | |
Less accumulated amortization | ||
Total | $ 109,895 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Payables and Accruals [Abstract] | ||
Accrued stock-based compensation | $ 721,659 | $ 1,665,731 |
Accrued compensation | 370,305 | 506,064 |
Accrued other liabilities | 208,196 | 225,140 |
Accrued dividends | 176,890 | 124,176 |
Accrued liabilities | $ 1,476,750 | $ 2,521,111 |
PREFERRED DIVIDENDS (Details Na
PREFERRED DIVIDENDS (Details Narrative) | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Feb. 01, 2015 | Mar. 31, 2016 | Jun. 30, 2015 | |
Dividends on Preferred Shares, Rate | 15.00% | 18.00% | |
Cash Distribution [Member] | |||
Dividends on Preferred Shares, Rate | 7.00% | ||
PIK Unit [Member] | |||
Dividends on Preferred Shares, Rate | 9.00% |