[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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37-1454128
|
|
State or other jurisdiction of incorporation
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(IRS Employer Identification No.)
|
|
299 South Main Street, Suite 2370
Salt Lake City, Utah 84111
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(435) 645-2000
|
|
(Address of principal executive offices)
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(Registrant's telephone number, including area code)
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Title of each Class
|
Name of each exchange on which registered
|
|
Common Stock, $0.01 Par Value
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NASDAQ Capital Market
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Large accelerated filer
|
[ ]
|
Accelerated filer
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[X]
|
Non-accelerated filer
(Do not check if a smaller reporting company)
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[ ]
|
Smaller reporting company
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[ ]
|
PART I
|
||
1 | ||
7 | ||
15 | ||
15 | ||
15 | ||
PART II
|
||
16 | ||
17 | ||
19 | ||
30 | ||
30 | ||
30 | ||
30 | ||
31 | ||
PART III
|
||
32 | ||
32 | ||
32 | ||
32 | ||
32 | ||
PART IV
|
||
33 | ||
34 | ||
F-1 | ||
F-4 | ||
F-5 | ||
F-7 | ||
F-8 | ||
F-10 | ||
Exhibit 31
|
Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Exhibit 32
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Certifications pursuant to 18 U.S.C. Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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BUSINESS
|
Finalized Values
|
||||
Receivables
|
$ | 152,340 | ||
Prepaid expense
|
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
|
10,821,897 | |||
Receivables eliminated in consolidation
|
6,035,657 | |||
Cash received in acquisition
|
$ | 22,119 |
Three Months Ended
|
Year
Ended
2015
|
Year
Ended
2014
|
||||||||||||||||||||||
Sep 30,
2014
|
Dec 31,
2014
|
Mar 31,
2015
|
Jun 30,
2015
|
|||||||||||||||||||||
Revenue
|
$
|
2,826,813
|
$
|
2,932,825
|
$
|
2,870,646
|
$
|
2,941,511
|
$
|
11,571,795
|
$
|
9,777,431
|
||||||||||||
Loss from Operations
|
(1,046,986
|
) |
(1,290,524
|
) |
(1,302,437
|
) |
(3,222,538
|
) |
(6,862,485
|
)
|
(5,232,552
|
)
|
||||||||||||
Net Loss
|
(1,049,834
|
) |
(1,317,510
|
) |
(1,317,858
|
) |
(3,241,545
|
) |
(6,926,747
|
)
|
(5,303,773
|
)
|
||||||||||||
Net Loss Applicable to Common Shareholders
|
(1,204,307
|
) |
(1,471,983
|
) |
(3,595,537
|
) |
(3,365,721
|
) |
(9,637,548
|
)
|
(5,921,664
|
)
|
||||||||||||
Basic and Diluted EPS
|
(0.07
|
) |
(0.08
|
)
|
(0.20
|
)
|
(0.18
|
) |
(0.53
|
)
|
(0.34
|
)
|
RISK FACTORS
|
● |
our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers' requirements;
|
● |
the renewal rates for our service;
|
● |
the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;
|
● |
changes in our pricing policies whether initiated by us or as a result of competition;
|
● |
the cost, timing and management effort for the introduction of new features to our service;
|
● |
the rate of expansion and productivity of our sales force;
|
● |
new product and service introductions by our competitors;
|
● |
variations in the revenue mix of editions or versions of our service;
|
● |
technical difficulties or interruptions in our service;
|
● |
general economic conditions that may adversely affect either our customers' ability or willingness to purchase additional subscriptions or upgrade their service, or delay a prospective customers' purchasing decision, or reduce the value of new subscription contracts or affect renewal rates;
|
● |
timing of additional investments in our enterprise cloud computing application and platform services and in our consulting service;
|
● |
regulatory compliance costs;
|
● |
the timing of customer payments and payment defaults by customers;
|
● |
extraordinary expenses such as litigation or other dispute-related settlement payments;
|
● |
the impact of new accounting pronouncements; and
|
● |
the timing of stock awards to employees and the related financial statement impact.
|
● |
it may be difficult for the Company to predict the amount of service and technological resources that will be needed by customers of ReposiTrak™ or other new offerings, and if the Company underestimates the necessary resources, the quality of its service will be negatively impacted thereby undermining the value of the product to the customer;
|
● |
the Company’s experience with ReposiTrak™ and its market acceptance is limited, and we therefore cannot accurately predict if it will be a profitable product;
|
● |
technological issues between the Company and customers may be experienced in capturing data, and these technological issues may result in unforeseen conflicts or technological setbacks when implementing additional installations of ReposiTrak™. This may result in material delays and even result in a termination of the ReposiTrak™ engagement;
|
● |
the customer’s experience with ReposiTrak™ and other new offerings, if negative, may prevent the Company from having an opportunity to sell additional products and services to that customer;
|
● |
if customers do not use ReposiTrak™ as the Company recommends and fails to implement any needed corrective action(s), it is unlikely that customers will experience the business benefits from the software service and may therefore be hesitant to continue the engagement as well as acquire any additional software services from the Company; and
|
● |
delays in proceeding with the implementation of ReposiTrak™ or other new products for a new customer will negatively affect the Company’s cash flow and its ability to predict cash flow.
|
● |
the Company’s customers may prefer one-time fees rather than monthly fees; and
|
● |
there may be a threshold level (number of locations) at which the monthly based fee structure may not be economical to the customer, and a request to convert from monthly fees to an annual fee could occur.
|
● |
development of new software, software solutions or enhancements that are subject to constant change;
|
● |
rapidly evolving technological change; and
|
● |
unanticipated changes in customer needs.
|
● |
whether or how the Company will respond to technological changes in a timely or cost-effective manner;
|
● |
whether the products or technologies developed by the Company’s competitors will render the Company’s products and services obsolete or shorten the life cycle of the Company’s products and services; and
|
● |
whether the Company’s products and services will achieve market acceptance.
|
● |
issuance of common stock in connection with funding agreements with third parties and future issuances of common and preferred stock by the Board of Directors; and
|
● |
the Board of Directors has the power to issue additional shares of common stock and preferred stock and the right to determine the voting, dividend, conversion, liquidation, preferences and other conditions of the shares without shareholder approval.
|
PROPERTIES
|
LEGAL PROCEEDINGS
|
MINE SAFETY DISCLOSURES
|
MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Quarterly Common Stock Price Ranges
|
||||||||||||||||
2016
|
2015
|
|||||||||||||||
Fiscal Quarter Ended
|
High
|
Low
|
High
|
Low
|
||||||||||||
September 30
|
$
|
13.99
|
$
|
10.01
|
$
|
11.48
|
$
|
9.31
|
||||||||
December 31
|
$
|
12.27
|
$
|
9.87
|
$
|
10.14
|
$
|
6.75
|
||||||||
March 31
|
$
|
11.82
|
$
|
5.98
|
$
|
14.87
|
$
|
8.62
|
||||||||
June 30
|
$
|
10.00
|
$
|
8.30
|
$
|
14.25
|
$
|
9.74
|
Value of Investment ($)
|
||||||||||||||||||||||||
06/30/11
|
06/30/12
|
06/30/13
|
06/30/14
|
06/30/15
|
06/30/16
|
|||||||||||||||||||
Park City Group, Inc.
|
$
|
100.00
|
$
|
83.16
|
$
|
159.58
|
$
|
229.26
|
$
|
258.74
|
$
|
188.84
|
||||||||||||
NASDAQ Composite
|
$
|
100.00
|
$
|
105.82
|
$
|
122.71
|
$
|
158.94
|
$
|
179.80
|
$
|
174.60
|
||||||||||||
Russell 2000 Index
|
$
|
100.00
|
$
|
96.50
|
$
|
118.13
|
$
|
144.18
|
$
|
151.55
|
$
|
139.22
|
SELECTED FINANCIAL DATA
|
Fiscal Year Ended June 30,
|
||||||||||||||||||||
Consolidated Statement of Operations Data
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Revenue
|
$
|
14,010,693
|
$
|
13,648,715
|
$
|
11,928,416
|
$
|
11,318,574
|
$
|
10,098,547
|
||||||||||
Operating expense (1)(2)
|
13,323,252
|
17,741,109
|
14,521,141
|
10,920,375
|
11,071,259
|
|||||||||||||||
Income (loss) from Operations
|
687,441
|
(4,092,394
|
)
|
(2,592,725
|
)
|
398,199
|
(972,712
|
)
|
||||||||||||
Net income (loss)
|
666,503
|
(3,849,773
|
)
|
(2,490,145
|
)
|
257,487
|
(858,667
|
)
|
As of June 30
|
||||||||||||||||||||
Consolidated Balance Sheet Data
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Cash and Cash Equivalents
|
$
|
11,443,388
|
$
|
11,325,572
|
$
|
3,352,559
|
$
|
3,616,585
|
$
|
1,106,176
|
||||||||||
Working Capital
|
7,845,826
|
5,032,139
|
654,042
|
1,124,476
|
(2,354,977
|
)
|
||||||||||||||
Total Assets
|
38,589,892
|
36,406,784
|
16,937,632
|
15,932,898
|
11,936,230
|
|||||||||||||||
Total Liabilities
|
8,087,333
|
8,822,161
|
6,318,551
|
5,691,526
|
6,626,109
|
|||||||||||||||
Deferred Revenue
|
2,717,094
|
2,331,920
|
1,840,811
|
1,777,326
|
2,081,459
|
|||||||||||||||
Total Debt (current and long-term)
|
3,230,452
|
3,076,493
|
1,849,148
|
2,062,063
|
2,710,275
|
|||||||||||||||
Capital Leases (current and long-term)
|
-
|
-
|
-
|
-
|
41,201
|
|||||||||||||||
Stockholders' Equity (deficit)
|
30,502,559
|
27,584,623
|
10,619,081
|
10,241,372
|
5,310,121
|
Fiscal Year Ended June 30
|
||||||||||||||||||||
Operating Data
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Adjusted EBITDA (3)
|
$
|
2,273,339
|
$
|
1,118,583
|
$
|
192,719
|
$
|
2,287,868
|
$
|
1,098,877
|
||||||||||
Non-GAAP income per diluted common share (4)
|
$
|
0.06
|
$
|
0.01
|
$
|
(0.05
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
|
(1)
|
Includes stock-based compensation expense as follows:
|
Fiscal Year Ended June 30
|
||||||||||||||||||||
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Stock-based compensation expense
|
$
|
1,010,312
|
$
|
2,760,329
|
$
|
1,719,375
|
$
|
843,645
|
$
|
911,094
|
|
(2)
|
For 2015, there was a one-time impairment of intangibles charge of $1,495,703, related to the customer list acquired in the Prescient acquisition.
|
|
(3)
|
Adjusted EBITDA consists of net income plus depreciation and amortization, interest expense, interest income, stock-based compensation expense and other adjustments as necessary for a fair presentation. We use Adjusted EBITDA as a measure of operating performance because it assists us in comparing performance on a consistent basis, as it removes the impact of our capital structure from our operating results. We believe Adjusted EBITDA is useful to an investor in evaluating our operating performance because it is widely used to measure a company’s operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, and to present a meaningful measure of corporate performance exclusive of our capital structure. The following table provides a reconciliation of net income to Adjusted EBITDA:
|
|
Fiscal Year Ended June 30
|
|||||||||||||||||||
2016
|
2015
|
2014
|
2013
|
2012
|
||||||||||||||||
Net income (loss)
|
$ | 666,503 | $ | (3,849,773 | ) | $ | (2,490,145 | ) | $ | 257,487 | $ | (858,667 | ) | |||||||
Depreciation and amortization
|
507,446 | 768,165 | 879,329 | 901,407 | 900,093 | |||||||||||||||
Interest (income) loss, net
|
(5,190 | ) | (242,621 | ) | (102,580 | ) | 140,712 | 205,227 | ||||||||||||
Other
|
94,268 | 1,682,483 | 186,740 | 144,617 | (58,870 | ) | ||||||||||||||
EBITDA
|
1,263,027 | (1,641,746 | ) | (1,526,656 | ) | 1,444,223 | 187,783 | |||||||||||||
Stock-based compensation expense
|
1,010,312 | 2,760,329 | 1,719,375 | 843,645 | 911,094 | |||||||||||||||
Adjusted EBITDA
|
$ | 2,273,339 | $ | 1,118,583 | $ | 192,719 | $ | 2,287,868 | $ | 1,098,877 |
|
(4)
|
Non-GAAP income per share consists of net income plus stock-based compensation expense and amortization expense related to intangible assets divided by the weighted average number of shares of common stock outstanding during each period. We believe non-GAAP income per share is useful to an investor because it is widely used to measure a company’s operating performance. The following table provides a reconciliation of net income to non-GAAP income per share:
|
|
Fiscal Year Ended
June 30, 2016
|
|||||||||||||||||||
2016
|
2015
|
2014
|
2013
|
2012 | ||||||||||||||||
Net income (loss)
|
$ | 666,503 | $ | (3,849,773 | ) | $ | (2,490,145 | ) | $ | 257,487 | $ | (858,667 | ) | |||||||
Stock-based compensation expense
|
1,010,312 | 2,760,329 | 1,719,375 | 843,645 | 911,094 | |||||||||||||||
Acquisition related amortization
|
131,400 | 1,918,019 | 462,557 | 502,798 | 502,798 | |||||||||||||||
Other
|
26,128 | - | - | - | (319,272 | ) | ||||||||||||||
Preferred Dividends
|
(729,288 | ) | (568,821 | ) | (617,891 | ) | (911,580 | ) | (834,687 | ) | ||||||||||
Non-GAAP net income to common shareholders
|
$ | 1,105,055 | $ | 259,754 | $ | (926,104 | ) | $ | 692,350 | $ | (598,734 | ) | ||||||||
Non-GAAP income per share
|
||||||||||||||||||||
Basic
|
19,151,000 | 17,375,000 | 16,710,000 | 13,246,000 | 11,780,000 | |||||||||||||||
Diluted
|
19,332,000 | 18,253,000 | 16,710,000 | 13,253,000 | 11,780,000 | |||||||||||||||
Shares used to compute non-GAAP income per share
|
||||||||||||||||||||
Basic
|
$ | 0.06 | $ | 0.01 | $ | (0.06 | ) | $ | 0.05 | $ | (0.05 | ) | ||||||||
Diluted
|
$ | 0.06 | $ | 0.01 | $ | (0.06 | ) | $ | 0.05 | $ | (0.05 | ) |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Revenue
|
Year Ended
June 30, 2016
|
$
Change
|
%
Change
|
Year Ended
June 30, 2015
|
$
Change
|
%
Change
|
Year Ended
June 30, 2014
|
|||||||||||||||||||||
Revenue
|
$
|
14,010,693
|
$
|
361,978
|
3
|
%
|
$
|
13,648,715
|
$
|
1,720,299
|
14
|
%
|
$
|
11,928,416
|
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Cost of service and product support
|
$ | 4,279,724 | $ | (976,527 | ) | -19 | % | $ | 5,256,251 | $ | 168,278 | 3 | % | $ | 5,087,973 | |||||||||||||
Percent of total revenue
|
31 | % | 39 | % | 43 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Sales and marketing
|
$ | 5,371,005 | $ | (570,344 | ) | -10 | % | $ | 5,941,349 | $ | 1,199,775 | 25 | % | $ | 4,741,574 | |||||||||||||
Percent of total revenue
|
38 | % | 44 | % | 40 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
General and administrative
|
$ | 3,165,077 | $ | (1,114,564 | ) | -26 | % | $ | 4,279,641 | $ | 467,376 | 12 | % | $ | 3,812,265 | |||||||||||||
Percent of total revenue
|
23 | % | 31 | % | 32 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Depreciation and amortization
|
$ | 507,446 | $ | (260,719 | ) | -34 | % | $ | 768,165 | $ | (111,164 | ) | -13 | % | $ | 879,329 | ||||||||||||
Percent of total revenue
|
4 | % | 6 | % | 7 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 20015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Other (expense) and income
|
$ | (20,938 | ) | $ | (263,559 | ) | -109 | % | $ | 242,621 | $ | 140,041 | 137 | % | $ | 102,580 | ||||||||||||
Percent of total revenue
|
>0 % | 2 | % | 1 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Preferred dividends
|
$ | 729,288 | $ | 160,467 | 28 | % | $ | 568,821 | $ | (49,070 | ) | -8 | % | $ | 617,891 | |||||||||||||
Percent of total revenue
|
5 | % | 4 | % | 5 | % |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Cash and Cash Equivalents
|
$ | 11,443,388 | $ | 117,816 | 1 | % | $ | 11,325,572 | $ | 7,973,013 | 238 | % | $ | 3,352,559 |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Cash flows provided by (used in) operating activities
|
$ | 503,223 | $ | (1,204,374 | ) | -71 | % | $ | 1,707,597 | $ | 1,800,131 | N/A | % | $ | (92,534 | ) |
2016
|
2015
|
2014
|
||||||||||
Net income (loss)
|
$
|
666,503
|
$
|
(3,849,773
|
)
|
$
|
(2,490,145
|
)
|
||||
Noncash expense and income, net
|
1,612,026
|
5,368,927
|
2,882,344
|
|||||||||
Net changes in operating assets and liabilities
|
(1,775,306)
|
188,443
|
(484,733
|
)
|
||||||||
$
|
503,223
|
$
|
1,707,597
|
$ |
(92,534
|
)
|
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Cash flows used in investing activities
|
$ | 365,641 | (2,241,236 | ) | -86 | % | $ | 2,606,877 | $ | 954,152 | 58 | % | $ | 1,652,725 |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Cash flows (used in) provided by financing activities
|
$ | (19,766 | ) | $ | (8,892,059 | ) | -100 | % | $ | 8,872,293 | $ | 7,391,060 | 499 | % | $ | 1,481,233 |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2015
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Current assets
|
$ | 15,384,631 | $ | 1,955,041 | 15 | % | $ | 13,429,590 | $ | 6,968,193 | 108 | % | $ | 6,461,397 |
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2016
|
$
Change
|
%
Change
|
Year Ended June 30, 2014
|
|||||||||||||||||||||
Current liabilities
|
$ | 7,538,805 | $ | (858,646 | ) | -10 | % | $ | 8,397,451 | $ | 2,590,096 | 45 | % | $ | 5,807,355 |
Payment Due by Year
|
||||||||||||||||||||
Total
|
Less than
1 Year
|
1-3 Years
|
3-5 Years
|
More than
5 Years
|
||||||||||||||||
Operating lease obligations
|
$ | 736,931 | 236,784 | 441,069 | 59,078 | - |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
CONTROLS AND PROCEDURES
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Management's Annual Report on Internal Control over Financial Reporting.
|
(c)
|
Changes in Internal Controls over Financial Reporting.
|
OTHER INFORMATION
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
EXECUTIVE COMPENSATION
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
Description
|
|
2.1
|
Agreement and Plan of Merger and Reorganization, Dated August 28, 2008 (1)
|
|
2.2
|
Form of Stock Purchase Agreement (1)
|
|
2.3
|
Form of Stock Voting Agreement (1)
|
|
2.4
|
Form of Promissory Note (2)
|
|
3.1
|
Articles Of Incorporation (3)
|
|
3.2
|
Certificate Of Amendment (4)
|
|
3.3
|
Certificate of Amendment (5)
|
|
3.4
|
Bylaws (3)
|
|
4.1
|
Certificate of Designation of the Series A Convertible Preferred Stock (6)
|
|
4.2
|
Certificate of Designation of the Series B Convertible Preferred Stock (7)
|
|
4.3
|
Fourth Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B Preferred Stock of Park City Group, Inc. (17)
|
|
4.4
|
First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock of Park City Group, Inc. (18)
|
|
10.1
|
Subordinated Promissory Note, dated April 1, 2009, issued to Riverview Financial Corporation (8)
|
|
10.2
|
Amendment to Loan Agreement and Note, by and between U.S. Bank National Association and the Company, dated September 15, 2009 (9)
|
|
10.3
|
Term Loan Agreement, by and between U.S. Bank National Association and the Company, dated May 5, 2010 (10)
|
|
10.4
|
Amendment to Loan Agreement and Note, by and between U.S. Bank National Association and the Company, dated May 5, 2010 (10)
|
|
10.5
|
Promissory Note, dated August 25, 2009, issued to Baylake Bank (10)
|
|
10.6
|
ReposiTrak Omnibus Subscription Agreement (11)
|
|
10.7
|
ReposiTrak Promissory Note (11)
|
|
10.8
|
Fields Employment Agreement(14)
|
|
10.9
|
Services Agreement(14)
|
|
10.10
|
Form of Securities Purchase Agreement (15)
|
|
10.11
|
Employment Agreement by and between Todd Mitchell and Park City Group, Inc., dated September 28, 2015 (16)
|
|
14.1
|
Code of Ethics and Business Conduct (12)
|
|
21
|
List of Subsidiaries (13)
|
|
23
|
Consent of Haynie & Company, dated September 7, 2016 *
|
|
31.1
|
Certification of Principal Executive Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
|
|
31.2
|
Certification of Principal Financial Officer pursuant to Section 302 of Sarbanes Oxley Act of 2002
|
|
32.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350
|
(1)
|
Incorporated by reference from our Form 8-K dated September 3, 2008.
|
(2)
|
Incorporated by reference from our Form 8-K dated September 15, 2008.
|
(3)
|
Incorporated by reference from our Form DEF 14C dated June 5, 2002.
|
(4)
|
Incorporated by reference from our Form 10-QSB for the year ended Sept 30, 2005.
|
(5)
|
Incorporated by reference from our Form 10-KSB dated September 29, 2006.
|
(6)
|
Incorporated by reference from our Form 8-K dated June 27, 2007.
|
(7)
|
Incorporated by reference from our Form 8-K dated July 21, 2010.
|
(8)
|
Incorporated by reference from our Form 8-K dated September 30, 2009.
|
(9)
|
Incorporated by reference from our Form 8-K dated October 1, 2009.
|
(10)
|
Incorporated by reference from our Form 8-K dated August 25, 2009.
|
(11)
|
Incorporated by reference from our Annual Report on Form 10-K dated September 23, 2014.
|
(12)
|
Incorporated by reference from our Form 10-KSB dated September 30, 2008.
|
(13)
|
Incorporated by reference from our Form 10-K dated September 13, 2011.
|
(14)
|
Incorporated by reference from our Form 10-K dated September 11, 2014.
|
(15)
|
Incorporated by reference from our Form 8-K dated May 13, 2015.
|
(16)
|
Incorporated by reference from our Form 8-K dated September 30, 2015.
|
(17)
|
Incorporated by reference from our Form 8-K dated January 14, 2016.
|
(18)
|
Incorporated by reference from our Form 8-K dated January 14, 2016.
|
*
|
Filed herewith
|
PARK CITY GROUP, INC. | |
(Registrant)
|
|
Date: September 7, 2016
|
By: /s/ Randall K. Fields
|
Principal Executive Officer,
Chairman of the Board and Director
|
Signature
|
Title
|
Date
|
/s/ Randall K. Fields
|
Chairman of the Board and Director,
|
September 7, 2016
|
Randall K. Fields
|
Chief Executive Officer
(Principal Executive Officer)
|
|
/s/ Todd Mitchell
|
Chief Financial Officer
|
September 7, 2016
|
Todd Mitchell
|
(Principal Financial Officer &
Principal Accounting Officer)
|
|
/s/ Robert W. Allen
|
Director, and Compensation
|
September 7, 2016
|
Robert W. Allen
|
Committee Chairman
|
|
/s/ William S. Kies, Jr.
|
Director
|
September 7, 2016
|
William S. Kies, Jr.
|
||
/s/ Richard Juliano
|
Director
|
September 7, 2016
|
Richard Juliano
|
||
/s/ Austin F. Noll, Jr.
|
Director
|
September 7, 2016
|
Austin F. Noll, Jr.
|
||
/s/ Ronald C. Hodge
|
Director, and Audit Committee Chairman
|
September 7, 2016
|
Ronald C. Hodge
|
Assets
|
June 30, 2016
|
June 30, 2015
|
||||||
Current Assets
|
||||||||
Cash
|
$
|
11,443,388
|
$
|
11,325,572
|
||||
Receivables, net allowance
|
3,547,968
|
1,640,591
|
||||||
Prepaid expense and other current assets
|
393,275
|
463,427
|
||||||
Total Current Assets
|
15,384,631
|
13,429,590
|
||||||
Property and equipment, net
|
469,383
|
764,442
|
||||||
Other Assets:
|
||||||||
Deposits and other assets
|
14,866
|
14,866
|
||||||
Investments
|
471,584
|
-
|
||||||
Customer relationships
|
1,182,600
|
1,314,000
|
||||||
Goodwill
|
20,883,886
|
20,883,886
|
||||||
Capitalized software costs, net
|
182,942
|
-
|
||||||
Total Other Assets
|
22,735,878
|
22,212,752
|
||||||
Total Assets
|
$
|
38,589,892
|
$
|
36,406,784
|
||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable
|
$
|
580,309
|
$
|
817,119
|
||||
Accrued liabilities
|
1,502,203
|
2,521,111
|
||||||
Deferred revenue
|
2,717,094
|
2,331,920
|
||||||
Lines of credit
|
2,500,000
|
2,500,000
|
||||||
Current portion of notes payable
|
239,199
|
227,301
|
||||||
Total current liabilities
|
7,538,805
|
8,397,451
|
||||||
Long-term liabilities
|
||||||||
Notes payable, less current portion
|
491,253
|
349,192
|
||||||
Other long term liabilities
|
57,275
|
75,518
|
||||||
Total liabilities
|
8,087,333
|
8,822,161
|
||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.01 par value, 30,000,000 shares authorized;
|
||||||||
625,375 and 625,375 shares of Series B Preferred issued and outstanding at June 30, 2016 and 2015 respectively
|
6,254
|
6,254
|
||||||
180,213 and 74,200 shares of Series B1 Preferred issued and outstanding at June 30, 2016 and 2015 respectively
|
1,802
|
742
|
||||||
Common stock, $0.01 par value, 50,000,000 shares authorized; 19,229,313 and 18,875,586 issued and outstanding at June 30, 2016 and 2015, respectively
|
192,296
|
188,759
|
||||||
Additional paid-in capital
|
73,272,620
|
70,296,496
|
||||||
Accumulated deficit
|
(42,970,413
|
)
|
(42,907,628
|
)
|
||||
Total stockholders equity
|
30,502,559
|
27,584,623
|
||||||
Total liabilities and stockholders' equity
|
$
|
38,589,892
|
$
|
36,406,784
|
For the Years Ended June 30,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Revenue
|
$
|
14,010,693
|
$
|
13,648,715
|
$
|
11,928,416
|
||||||
Operating expense:
|
||||||||||||
Cost of revenue and product support
|
4,279,724
|
5,256,251
|
5,087,973
|
|||||||||
Sales and marketing
|
5,371,005
|
5,941,349
|
4,741,574
|
|||||||||
General and administrative
|
3,165,077
|
4,279,641
|
3,812,265
|
|||||||||
Depreciation and amortization
|
507,446
|
768,165
|
879,329
|
|||||||||
Impairment of intangibles
|
-
|
1,495,703
|
-
|
|||||||||
Total operating expense
|
13,323,252
|
17,741,109
|
14,521,141
|
|||||||||
Income (loss) from operations
|
687,441
|
(4,092,394
|
)
|
(2,592,725
|
)
|
|||||||
Other (expense) income:
|
||||||||||||
Interest income (expense), net
|
5,190
|
242,621
|
102,580
|
|||||||||
Loss on disposition of Investment
|
(26,128)
|
-
|
-
|
|||||||||
Income (loss) before income taxes
|
666,503
|
(3,849,773
|
)
|
(2,490,145
|
)
|
|||||||
Provision for income taxes
|
-
|
-
|
-
|
|||||||||
Net income (loss)
|
666,503
|
(3,849,773
|
)
|
(2,490,145
|
)
|
|||||||
Dividends on preferred stock
|
(729,288)
|
(568,821
|
)
|
(617,891
|
)
|
|||||||
Restructuring of Series B Preferred
|
-
|
(2,141,980
|
)
|
-
|
||||||||
Net loss applicable to common shareholders
|
$
|
(62,785)
|
$
|
(6,560,574
|
)
|
$
|
(3,108,036
|
)
|
||||
Weighted average shares, basic and diluted
|
19,151,000
|
17,375,000
|
16,710,000
|
|||||||||
Basic and diluted loss per share
|
$
|
(0.00)
|
$
|
(0.38
|
)
|
$
|
(0.19
|
)
|
For the Years Ended June 30,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net income (loss)
|
$
|
666,503
|
$
|
(3,849,773)
|
$
|
(2,490,145)
|
||||||
Other Comprehensive Income (Loss):
|
||||||||||||
Unrealized loss on marketable securities
|
(26,128)
|
-
|
-
|
|||||||||
Reclassification adjustment
|
26,128
|
-
|
-
|
|||||||||
Net income (loss) on marketable securities
|
-
|
-
|
-
|
|||||||||
Comprehensive income (loss)
|
$
|
666,503
|
$
|
(3,849,773)
|
$
|
(2,490,145)
|
Series B
Preferred Stock
|
Series B-1
Preferred Stock
|
Common Stock |
Additional Paid-In
|
Accumulated
|
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Balance, June 30, 2013
|
411,927 | 4,119 | - | - | 16,128,530 | $ | 161,285 | $ | 43,314,986 | $ | (33,239,018 | ) | $ | 10,241,372 | ||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Stock issued for:
|
||||||||||||||||||||||||||||||||||||
Compensation
|
- | - | - | - | 312,364 | 3,124 | 1,089,574 | - | 1,092,698 | |||||||||||||||||||||||||||
Cash
|
- | - | - | - | 277,092 | 2,771 | 1,659,922 | - | 1,662,693 | |||||||||||||||||||||||||||
Charitable Contribution
|
- | - | - | - | 15,000 | 150 | 96,750 | - | 96,900 | |||||||||||||||||||||||||||
Preferred Dividends-Declared
|
- | - | - | - | - | - | - | (617,891 | ) | (617,891 | ) | |||||||||||||||||||||||||
Exercise of Options/Warrants
|
- | - | - | - | 195,039 | 1,950 | 631,504 | - | 633,454 | |||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (2,490,145 | ) | (2,490,145 | ) | |||||||||||||||||||||||||
Balance, June 30, 2014
|
411,927 | 4,119 | - | - | 16,928,025 | 169,280 | 46,792,736 | (36,347,054 | ) | 10,619,081 | ||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Series B Restructure
|
214,198 | 2,142 | - | - | - | - | 2,139,838 | (2,141,980 | ) | - | ||||||||||||||||||||||||||
Series B Redemption
|
(750 | ) | (7 | ) | - | - | - | - | (7,493 | ) | - | (7,500 | ) | |||||||||||||||||||||||
Stock issued for:
|
||||||||||||||||||||||||||||||||||||
Accrued compensation
|
- | - | 30,000 | 300 | 366,033 | 3,664 | 2,156,229 | - | 2,160,193 | |||||||||||||||||||||||||||
Cash
|
- | - | - | - | 693,090 | 6,931 | 7,802,664 | - | 7,809,595 | |||||||||||||||||||||||||||
Charitable Contribution
|
- | - | - | - | 15,000 | 150 | 157,800 | - | 157,950 | |||||||||||||||||||||||||||
Preferred Dividends-PIK
|
- | - | 44,200 | 442 | - | - | 441,560 | - | 442,002 | |||||||||||||||||||||||||||
Acquisition
|
- | - | - | - | 873,438 | 8,734 | 10,813,162 | - | 10,821,896 | |||||||||||||||||||||||||||
Preferred Dividends-Declared
|
(568,821 | ) | (568,821 | ) | ||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (3,849,773 | ) | (3,849,773 | ) | |||||||||||||||||||||||||
Balance, June 30, 2015
|
625,375 | 6,254 | 74,200 | 742 | 18,875,586 | 188,759 | 70,296,496 | (42,907,628 | ) | 27,584,623 | ||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Stock issued for:
|
||||||||||||||||||||||||||||||||||||
Accrued compensation
|
- | - | 40,000 | 400 | 320,770 | 3,208 | 2,084,133 | - | 2,087,741 | |||||||||||||||||||||||||||
Cash
|
- | - | - | - | 23,528 | 235 | 199,613 | - | 199,848 | |||||||||||||||||||||||||||
Preferred Dividends-PIK
|
- | - | 66,013 | 660 | - | - | 659,470 | - | 660,130 | |||||||||||||||||||||||||||
Preferred Dividends-Declared
|
- | - | - | - | - | - | - | (729,288 | ) | (729,288 | ) | |||||||||||||||||||||||||
Exercise of Option/Warrant
|
- | - | - | - | 9,429 | 94 | 32,908 | - | 33,002 | |||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | - | - | 666,503 | 666,503 | |||||||||||||||||||||||||||
Balance, June 30, 2016
|
625,375 | $ | 6,254 | 180,213 | $ | 1,802 | 19,229,313 | $ | 192,296 | $ | 73,272,620 | $ | (42,970,413 | ) | $ | 30,502,559 |
For the Years Ended June 30,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$
|
666,503
|
$
|
(3,849,773
|
)
|
$
|
(2,490,145
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
507,446
|
768,165
|
879,329
|
|||||||||
Impairment of intangibles
|
-
|
1,495,703
|
-
|
|||||||||
Bad debt expense
|
68,140
|
186,780
|
186,740
|
|||||||||
Stock compensation expense
|
1,010,312
|
2,760,329
|
1,719,375
|
|||||||||
Charitable non-cash donations
|
-
|
157,950
|
96,900
|
|||||||||
Loss on short-term marketable securities
|
26,128
|
-
|
-
|
|||||||||
Decrease (increase) in:
|
||||||||||||
Trade receivables
|
(1,975,517)
|
710,302
|
(661,357
|
)
|
||||||||
Prepaids and other assets
|
70,152
|
(501,957
|
)
|
(20,747
|
)
|
|||||||
Increase (decrease) in:
|
||||||||||||
Accounts payable
|
(236,810)
|
(49,296
|
)
|
84,634
|
||||||||
Accrued liabilities
|
(18,305)
|
136,517
|
49,252
|
|||||||||
Deferred revenue
|
385,174
|
(107,123
|
)
|
63,485
|
||||||||
Net cash provided by (used in) operating activities
|
503,223
|
1,707,597
|
(92,534
|
)
|
||||||||
Cash flows from investing activities:
|
||||||||||||
Cash from sale of marketable securities
|
4,612,908
|
-
|
-
|
|||||||||
Payments received on notes receivable
|
-
|
300,000
|
-
|
|||||||||
Net cash received in acquisition
|
-
|
22,119
|
-
|
|||||||||
Cash advanced on Note Receivable
|
-
|
(2,559,460
|
)
|
(1,200,000
|
)
|
|||||||
Cash from sale of property & equipment
|
- |
-
|
6,505
|
|||||||||
Purchase of property and equipment
|
(80,987)
|
(369,536)
|
(459,230)
|
|||||||||
Capitalization of software costs
|
(182,942
|
) |
-
|
-
|
||||||||
Purchase of long-term investments
|
(75,584
|
) |
-
|
-
|
||||||||
Purchase of marketable securities
|
(4,639,036
|
) |
-
|
-
|
||||||||
Net cash used in investing activities
|
(365,641
|
) |
(2,606,877
|
)
|
(1,652,725
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from employee stock plans
|
199,848
|
203,211
|
153,875
|
|||||||||
Proceeds from exercises of options and warrants
|
33,002
|
-
|
633,454
|
|||||||||
Proceeds from issuance of note payable | - | 172,795 | 338,287 | |||||||||
Proceeds from issuance of stock
|
-
|
7,606,384
|
1,493,818
|
|||||||||
Net increase in lines of credit
|
-
|
1,300,000
|
-
|
|||||||||
Preferred stock redemption
|
-
|
(7,500
|
)
|
-
|
||||||||
Dividends paid
|
(10,575)
|
(157,147
|
)
|
(586,999
|
)
|
|||||||
Payments on notes payable and capital leases
|
(242,041)
|
(245,450
|
)
|
(551,202
|
)
|
|||||||
Net cash (used in) provided by financing activities
|
(19,766
|
) |
8,872,293
|
1,481,233
|
||||||||
Net increase (decrease) in cash and cash equivalents
|
117,816
|
7,973,013
|
(264,026
|
)
|
||||||||
Cash and cash equivalents at beginning of period
|
11,325,572
|
3,352,559
|
3,616,585
|
|||||||||
Cash and cash equivalents at end of period
|
$
|
11,443,388
|
$
|
11,325,572
|
$
|
3,352,559
|
||||||
Supplemental Disclosure of Cash Flow Information
|
||||||||||||
Cash paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
6,634
|
||||||
Cash paid for interest
|
$
|
46,508
|
$
|
80,534
|
$
|
75,343
|
||||||
Supplemental Disclosure of Non-Cash Investing and Financing Activities
|
||||||||||||
Preferred Stock to pay accrued liabilities
|
$
|
400,000
|
$
|
300,000
|
$
|
-
|
||||||
Common Stock to pay accrued liabilities
|
$
|
1,687,741
|
$
|
1,860,191
|
$
|
1,107,698
|
||||||
Dividends accrued on preferred stock
|
$
|
729,288
|
$
|
568,821
|
$
|
617,891
|
||||||
Dividends paid with preferred stock
|
$
|
660,130
|
$
|
442,002
|
$
|
-
|
||||||
Conversion of accounts receivable into notes receivable
|
$
|
-
|
$
|
-
|
$
|
1,622,863
|
||||||
Series B restructure
|
$
|
-
|
$
|
2,141,980
|
$
|
-
|
||||||
Note payable for long-term investment | $ | 396,000 | $ | - | $ | - |
Receivables
|
$
|
152,340
|
||
Prepaid expense
|
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
|
10,821,897
|
|||
Receivables eliminated in consolidation
|
6,035,657
|
|||
Cash received in acquisition
|
$
|
22,119
|
NOTE 1.
|
DESCRIPTION OF BUSINESS AND ACQUISITION OF REPOSITRAK, INC.
|
NOTE 2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
Years
|
||||
Furniture and fixtures
|
5-7
|
|||
Computer Equipment
|
3
|
|||
Equipment under capital leases
|
3
|
|||
Leasehold improvements
|
See below
|
Years
|
||||
Customer relationships
|
10
|
|||
Acquired developed software
|
5
|
|||
Developed software
|
3
|
|||
Goodwill
|
See below
|
Year ended
June 30, 2016
|
Year ended
June 30, 2015
|
Year ended June 30, 2014 | ||||||||||
Dilutive effect of warrants
|
-
|
-
|
-
|
|||||||||
Weighted average shares outstanding assuming dilution
|
19,151,000
|
17,375,000
|
16,710,000
|
NOTE 3.
|
INVESTMENTS |
NOTE 4.
|
RECEIVABLES
|
2016
|
2015
|
|||||||
Accounts receivable
|
$
|
3,622,968
|
$
|
1,734,591
|
||||
Allowance for doubtful accounts
|
(75,000)
|
(94,000
|
)
|
|||||
$
|
3,547,968
|
$
|
1,640,591
|
NOTE 5.
|
PROPERTY AND EQUIPMENT
|
2016
|
2015
|
|||||||
Computer equipment
|
$
|
3,350,390
|
$
|
3,269,403
|
||||
Furniture and fixtures
|
260,574
|
260,574
|
||||||
Leasehold improvements
|
231,782
|
231,782
|
||||||
3,842,746
|
3,761,759
|
|||||||
Less accumulated depreciation and amortization
|
(3,373,363
|
)
|
(2,997,317
|
)
|
||||
$
|
469,383
|
$
|
764,442
|
NOTE 6.
|
CAPITALIZED SOFTWARE COSTS
|
2016
|
2015
|
|||||||
Capitalized software costs
|
$
|
2,626,070
|
$
|
2,443,128
|
||||
Less accumulated amortization
|
(2,443,128)
|
(2,443,128
|
)
|
|||||
$
|
182,942
|
$
|
-
|
NOTE 7.
|
ACQUISITION RELATED INTANGIBLE ASSETS, NET
|
2016
|
2015
|
|||||||
Customer relationships
|
$ |
5,537,161
|
$ |
5,537,161
|
||||
Less accumulated amortization
|
(4,354,561
|
) |
(2,727,458
|
)
|
||||
Less impairment charge
|
-
|
(1,495,703
|
)
|
|||||
$
|
1,182,600
|
$
|
1,314,000
|
Years ending June 30:
|
||||
2017
|
131,400
|
|||
2018
|
131,400
|
|||
2019
|
131,400
|
|||
2020
|
131,400
|
|||
Thereafter
|
657,000
|
NOTE 8.
|
ACCRUED LIABILITIES
|
2016
|
2015
|
|||||||
Accrued stock-based compensation
|
$
|
768,055
|
$
|
1,665,731
|
||||
Accrued compensation
|
336,957
|
506,064
|
||||||
Accrued other liabilities
|
214,432
|
225,140
|
||||||
Accrued dividends
|
182,759
|
124,176
|
||||||
$
|
1,502,203
|
$
|
2,521,111
|
NOTE 9.
|
NOTES PAYABLE
|
Notes Payable:
|
2016
|
2015
|
||||||
Note payable to a bank, due in monthly installments of $7,860 bearing interest at 3.73% due February 9, 2017, this note is a conversion of a multi-advance note payable initially put in place on February 19, 2012, secured by related capital equipment purchases.
|
62,445
|
152,530
|
||||||
Note payable to a bank, due in monthly installments of $7,860 bearing interest at 4.17% due August 26, 2018, this note is a conversion of a multi-advance note payable initially put in place on August 26, 2013, secured by related capital equipment purchases.
|
187,799
|
272,191
|
||||||
Note payable to a bank, due in monthly installments of $4,932 bearing interest at 4.91% due March 18, 2018, secured by related capital equipment purchases.
|
98,980
|
151,772
|
||||||
Note payable to an entity, due in monthly installments of $4,009 bearing interest at 4.00% due July 1, 2019, secured by long-term investments.
|
381,228
|
-
|
||||||
730,452
|
576,493
|
|||||||
Less current portion notes payable
|
(239,199)
|
(227,301
|
)
|
|||||
$
|
491,253
|
$
|
349,192
|
Year ending June 30:
|
||||
2017
|
$
|
239,199
|
||
2018
|
$
|
170,232
|
||
2019
|
$
|
44,200
|
||
2020
|
$
|
276,821
|
||
2021
|
$
|
-
|
NOTE 10.
|
LINES OF CREDIT
|
NOTE 11.
|
DEFERRED REVENUE
|
2016
|
2015
|
|||||||
Subscription
|
$
|
2,221,264
|
$
|
1,742,909
|
||||
Other
|
495,830
|
589,011
|
||||||
$
|
2,717,094
|
$
|
2,331,920
|
NOTE 12.
|
INCOME TAXES
|
2016
|
2015
|
|||||
Deferred tax assets:
|
||||||
NOL carryover
|
$ |
48,359,356
|
$
|
45,886,227
|
||
Amortization
|
- |
21,115
|
||||
Allowance for bad debts
|
29,250 |
19,500
|
||||
Accrued expense
|
254,971 |
649,635
|
||||
Deferred revenue
|
1,059,667 |
676,138
|
||||
Deferred tax liabilities:
|
||||||
Depreciation
|
(88,495 | ) |
(140,838
|
)
|
||
Amortization
|
(184,989 | ) |
-
|
|||
Valuation allowance
|
(49,429,760 | ) |
(47,211,777
|
)
|
||
Net deferred tax asset
|
$ |
-
|
$
|
-
|
2016
|
2015
|
|||||||
Book income (loss)
|
$
|
259,941 |
$
|
(1,500,591
|
)
|
|||
Stock for services
|
134,721 |
172,502
|
||||||
Stock for charity
|
- |
61,601
|
||||||
Intangible impairment
|
- |
583,324
|
||||||
Change in accrual stock
|
(394,664 | ) |
211,982
|
|||||
Life insurance
|
26,438 |
26,438
|
||||||
Meals & entertainment
|
10,785 |
12,885
|
||||||
Change in deferred revenue
|
383,528 |
(41,778
|
)
|
|||||
Change in allowance for doubtful accounts
|
(7,410 | ) |
(7,800
|
|
||||
Change in depreciation | 103,589 | (137,747 | ) | |||||
NOL utilization
|
(516,928 | ) |
-
|
|||||
Valuation allowance
|
- |
619,719
|
||||||
$
|
-
|
$
|
- |
NOTE 13.
|
COMMITMENTS AND CONTINGENCIES
|
Year ending June 30:
|
||||
2017
|
$
|
165,024
|
||
2018
|
$
|
169,993
|
||
2019
|
$
|
73,847
|
||
2020
|
$
|
-
|
||
2021
|
$
|
-
|
NOTE 14.
|
EMPLOYEE BENEFIT PLAN
|
NOTE 15.
|
STOCKHOLDERS EQUITY
|
●
|
Annual cash compensation of $10,000 payable at the rate of $2,500 per quarter. The Company has the right to pay this amount in the form of shares of the Company’s common stock.
|
●
|
Upon appointment, outside independent directors receive a grant of $150,000 payable in shares of the Company’s restricted Common Stock calculated based on the market value of the shares of Common Stock on the date of grant. The shares vest ratably over a five-year period.
|
●
|
Reimbursement of all travel expenses related to performance of Directors’ duties on behalf of the Company.
|
Restricted Stock Units
|
Weighted Average Grant Date Fair Value ($/share)
|
|||||||
Outstanding at July 1, 2014
|
1,586,964 | $ | 5.05 | |||||
Granted
|
145,339 | 9.54 | ||||||
Vested and issued
|
(348,186 | ) | 4.74 | |||||
Forfeited
|
(33,147 | ) | 9.35 | |||||
Outstanding at June 30, 2015
|
1,350,970 | 5.51 | ||||||
Granted
|
48,228 | 10.51 | ||||||
Vested and issued
|
(311,538 | ) | 5.10 | |||||
Forfeited
|
(36,516 | ) | 6.51 | |||||
Outstanding at June 30, 2016
|
1,051,144 | $ | 5.82 |
Warrants Outstanding
at June 30, 2016
|
Warrants Exercisable
at June 30, 2016
|
|||||||||||||||||||||
Range of
exercise prices
|
Number
Outstanding
|
Weighted average
remaining contractual life (years)
|
Weighted average exercise price
|
Number
exercisable
|
Weighted average
exercise price
|
|||||||||||||||||
$
|
3.50 – 4.00
|
1,316,268
|
3.26
|
$
|
3.92
|
1,316,268
|
$
|
3.92
|
||||||||||||||
$
|
6.45 – 10.00
|
100,481
|
2.49
|
$
|
7.29
|
100,481
|
$
|
7.29
|
||||||||||||||
1,416,749
|
3.21
|
$
|
4.16
|
1,416,749
|
$
|
4.16
|
NOTE 16.
|
ACQUISITION OF REPOSITRAK
|
Receivables
|
$
|
152,340
|
||
Prepaid expense
|
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
|
10,821,897
|
|||
Receivables eliminated in consolidation
|
6,035,657
|
|||
Cash received in acquisition
|
$
|
22,119
|
Three Months Ended
|
||||||||||||||||||||||||
Sep 30,
2014
|
Dec 31,
2014
|
Mar 31,
2015
|
Jun 30,
2015
|
Year Ended
2015
|
Year Ended
2014
|
|||||||||||||||||||
Revenue
|
$
|
2,826,813
|
$
|
2,932,825
|
$
|
2,870,646
|
$
|
2,941,511
|
$
|
11,571,795
|
$
|
9,777,431
|
||||||||||||
Loss from Operations
|
(1,046,986
|
) |
(1,290,524
|
) |
(1,302,437
|
) |
(3,222,538
|
) |
(6,862,485
|
)
|
(5,232,552
|
)
|
||||||||||||
Net Loss
|
(1,049,834
|
) |
(1,317,510
|
) |
(1,317,858
|
) |
(3,241,545
|
) |
(6,926,747
|
)
|
(5,303,773
|
)
|
||||||||||||
Net Loss Applicable to Common Shareholders
|
(1,204,307
|
) |
(1,471,983
|
) |
(3,595,537
|
) |
(3,365,721
|
) |
(9,637,548
|
)
|
(5,921,664
|
)
|
||||||||||||
Basic and Diluted EPS
|
(0.07
|
) |
(0.08
|
)
|
(0.20
|
)
|
(0.18
|
) |
(0.53
|
)
|
(0.34
|
)
|
NOTE 17.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
NOTE 18.
|
RELATED PARTY TRANSACTIONS
|
NOTE 19.
|
SUBSEQUENT EVENTS
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended June 30, 2016 of Park City Group, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Randall K. Fields
|
1.
|
I have reviewed this annual report on Form 10-K for the period ended June 30, 2016 of Park City Group, Inc.;
|
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Todd Mitchell
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ Randall K. Fields
|
/s/ Todd Mitchell
|
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Sep. 07, 2016 |
Dec. 31, 2015 |
|
Document And Entity Information | |||
Entity Registrant Name | PARK CITY GROUP INC | ||
Entity Central Index Key | 0000050471 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 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 | 19,286,430 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2016 | ||
Entity Public Float | $ 153,106,000 | ||
Entity Trading Symbol | PCYG |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Stockholders' equity: | ||
Preferred stock, par value | $ .01 | $ .01 |
Preferred stock, Authorized | 30,000,000 | 30,000,000 |
Common stock, par value | $ .01 | $ .01 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 19,229,313 | 18,875,586 |
Common stock, outstanding | 19,229,313 | 18,875,586 |
Series B Preferred [Member] | ||
Stockholders' equity: | ||
Preferred stock, Issued | 625,375 | 625,375 |
Preferred stock, outstanding | 625,375 | 625,375 |
Series B-1 Preferred [Member] | ||
Stockholders' equity: | ||
Preferred stock, Issued | 180,213 | 74,200 |
Preferred stock, outstanding | 180,213 | 74,200 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Income Statement [Abstract] | |||
Revenue | $ 14,010,693 | $ 13,648,715 | $ 11,928,416 |
Operating expense: | |||
Cost of revenue and product support | 4,279,724 | 5,256,251 | 5,087,973 |
Sales and marketing | 5,371,005 | 5,941,349 | 4,741,574 |
General and administrative | 3,165,077 | 4,279,641 | 3,812,265 |
Depreciation and amortization | 507,446 | 768,165 | 879,329 |
Impairment of intangibles | 0 | 1,495,703 | 0 |
Total operating expenses | 13,323,252 | 17,741,109 | 14,521,141 |
Income (loss) from operations | 687,441 | (4,092,394) | (2,592,725) |
Other (expense) income: | |||
Interest income (expense), net | 5,190 | 242,621 | 102,580 |
Loss on disposition of Investment | (26,128) | 0 | 0 |
Income (loss) before income taxes | 666,503 | (3,849,773) | (2,490,145) |
Provision for income taxes | 0 | 0 | 0 |
Net income (loss) | 666,503 | (3,849,773) | (2,490,145) |
Dividends on preferred stock | (729,288) | (568,821) | (617,891) |
Restructuring of Series B Preferred | 0 | (2,141,980) | 0 |
Net loss applicable to common shareholders | $ (62,785) | $ (6,560,574) | $ (3,108,036) |
Weighted average shares, basic and diluted | 19,151,000 | 17,375,000 | 16,710,000 |
Basic and diluted loss per share | $ 0.00 | $ (0.38) | $ (0.19) |
Consolidated Statements of Comprehensive Income - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Income Statement [Abstract] | |||
Net income (loss) | $ 666,503 | $ (3,849,773) | $ (2,490,145) |
Other Comprehensive Income (Loss): | |||
Unrealized loss on marketable securities | (26,128) | 0 | 0 |
Reclassification adjustment | 26,128 | 0 | 0 |
Net income (loss) on marketable securities | 0 | 0 | 0 |
Comprehensive income (loss) | $ 666,503 | $ (3,849,773) | $ (2,490,145) |
DESCRIPTION OF BUSINESS AND ACQUISITION OF REPOSITRAK, INC. |
12 Months Ended |
---|---|
Jun. 30, 2016 | |
Notes to Financial Statements | |
DESCRIPTION OF BUSINESS AND ACQUISITION OF REPOSITRAK, INC. | Summary 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 Utah Corporation (98.76% owned), and Park City Group, Inc., (formerly, Prescient Applied Intelligence, Inc.), a Delaware Corporation (100% owned) and ReposiTrak, Inc., a Utah corporation (100% owned). 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 Companys 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. As a result of the acquisition of ReposiTrak, Inc. (ReposiTrak) in June 2015, as more particularly described below, the Company also provides food, pharmaceutical, and dietary supplement retailers and suppliers with a robust cloud-based solution to help protect their brands and remain in compliance with business records and regulatory requirements, such as the Food Safety Modernization Act (FSMA) and the Drug Quality and Security Act (DQSA). |
SIGNIFICANT ACCOUNTING POLICIES |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation
The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries, including ReposiTrak and 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 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, stock-based compensation, and capitalization of software development costs.
Concentration of Credit Risk and Significant Customers
The Company maintains cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of trade receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which when realized have been within the range of management's expectations. The Company does not require collateral from its customers.
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.
During the years ended June 30, 2016, there were no customers that accounted for greater than 10% of total revenue. During the years ended June 30, 2015 and 2014, the Company had one customer, ReposiTrak, Inc. (acquired on June 30, 2015) that accounted for greater than 10% of total revenue in both years.
Receivables
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 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 June 30, 2016, 2015 and 2014, the allowance for doubtful accounts was $75,000, $94,000, and $70,000, 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:
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:
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Other intangible assets are amortized over their useful lives. See Note 7 regarding impairment charges for the year ended June 30, 2015.
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 years ending June 30, 2016, 2015 and 2014, the Company did not incur any expense associated with warranty claims.
Revenue Recognition
The Company recognizes 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.
The Company recognizes subscription, hosting, premium support, and maintenance revenue ratably over the length of the agreement beginning on the commencement dates of each agreement or when revenue recognition conditions are satisfied. Revenue from license and professional services agreements are recognized as delivered.
Revenue from license and professional services agreements are recognized as delivered.
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.
Agreements with multiple deliverables such as subscriptions, support, and professional services, are accounted for separately if the deliverables have standalone value upon delivery. Subscription services have standalone value as the services are typically sold separately. When considering whether professional services have standalone value, the Company considers the following factors: (i) availability of services from other vendors, (ii) the nature and timing of professional services, and (iii) sales of similar services sold separately. Multiple deliverable arrangements are separated into units of accounting and the total contract consideration is allocated to each unit based on relative selling prices.
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.
During 2016, 2015 and 2014 capitalized development costs of $0, $0, and $73,082 respectively, were amortized into expense. The Company amortizes its developed and purchased software on a straight-line basis over three and five years, respectively.
Research and Development Costs
Research and development costs include personnel costs, engineering, consulting, and contract labor and are expensed as incurred for software that has not achieved technological feasibility.
Advertising Costs
Advertising is expensed as incurred. Advertising costs were approximately $113,000, $21,000, and $14,000 for the years ended June 30, 2016, 2015 and 2014, respectively.
Income Taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities.
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 year ended June 30, 2016, 2015 and 2014 warrants to purchase 1,416,749, 1,426,178 and 317,373 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 $10.00 per share at June 30, 2016.
1,029,818 shares of common stock issuable upon conversion of the Companys Series B Preferred were not included in the diluted EPS calculation for the year ended June 30, 2014, as the effect would have been anti-dilutive. Series B Preferred was no longer convertible to common stock for the year ended June 30, 2016 and 2015.
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.
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 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 of Financial Instruments
The Company's financial instruments consist of cash, cash equivalents, receivables, payables, accruals and notes payable. The carrying amount of cash, cash equivalents, 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.
Reclassifications
Certain prior-year amounts have been reclassified to conform with the current year's presentation. |
INVESTMENTS |
12 Months Ended |
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Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee companys board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee companys accounts are not reflected within the Companys consolidated balance sheets and statements of operations; however, the Companys share of the earnings or losses of the investee company is reflected in the consolidated statements of operations. The Companys carrying value in an equity method investee company is reflected in the caption Investments in the Companys consolidated balance sheets.
As of June 30, 2016, investments represent a 36% ownership in a privately-held corporation, and represents initial (January 2016) and subsequent investments there were nominal earnings for the year ended June 30, 2016.
When the Companys carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Companys consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.
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RECEIVABLES |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
RECEIVABLES | Accounts receivable consist of the following:
Accounts receivable consist of trade accounts receivable and unbilled amounts recognized as revenue during the year for which invoicing occurs subsequent to year-end. 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.
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | Property and equipment are stated at cost and consist of the following at June 30:
Depreciation expense for the years ended June 30, 2016 and 2015 was $376,046 and $345,847, respectively.
|
CAPITALIZED SOFTWARE COSTS |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||
CAPITALIZED SOFTWARE COSTS | Capitalized software costs consist of the following at June 30:
Amortization expense for the years ended June 30, 2016 and 2015 was $0 and $0, respectively.
|
ACQUISITION RELATED INTANGIBLE ASSETS, NET |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITION RELATED INTANGIBLE ASSETS, NET | Customer relationships consist of the following at June 30:
Amortization expense for the years ended June 30, 2016 and 2015 was $131,400 and $422,316, respectively.
The Company recognized a non-cash impairment charge of $1.5 million during the year ended June 30, 2015, due principally to decreased margins on customers acquired in connection with the Prescient acquisition. In managements determination, the carrying value of these relationships exceeded their estimated fair values as determined by future discounted cash flow projections. When projecting the stream of future cash flows for purposes of determining long-lived asset recoverability, management makes assumptions, incorporating market conditions, sales growth rates, and operating expense.
Estimated aggregate amortization expense per year are as follows:
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ACCRUED LIABILITIES |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED LIABILITIES |
Accrued liabilities consist of the following at June 30, 2016 and 2015:
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NOTES PAYABLE |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE | The Company had the following notes payable obligations at June 30, 2016 and 2015:
Maturities of notes payable and capital leases at June 30, 2016 are as follows:
|
LINES OF CREDIT |
12 Months Ended |
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Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
LINES OF CREDIT | The Companys line of credit with a bank has an annual interest rate of 1.71% + the greater of zero percent or LIBOR. The line of credit is scheduled to mature on December 27, 2016. The balance on the line of credit was $2,500,000 at June 30, 2016 and June 30, 2015.
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DEFERRED REVENUE |
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Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
DEFERRED REVENUE | Deferred revenue consisted of the following at June 30:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Net deferred tax liabilities consist of the following components at June 30:
The income tax provision differs from the amounts of income tax determined by applying the US federal income tax rate to pretax income from continuing operations for the years ended June 30, 2016 and 2015 due to the following:
At June 30, 2016, the Company had net operating loss carry-forwards of approximately $123,998,300 that may be offset against past and future taxable income from the year 2013 through 2035. No tax benefit has been reported in the June 30, 2016 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. In January 2009 the Company acquired Prescient Applied Intelligence, Inc., which had significant net operating loss carry-forwards. Due to change in ownership, Prescients net operating loss carryforwards may be limited as to use in future years. The limitation will be determined on a year-to-year basis.
The Company determines whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, the Company measures the tax position to determine the amount to recognize in the financial statements. The Company performed a review of its material tax positions in accordance with these recognition and measurement standards.
The Company has concluded that there are no significant uncertain tax positions requiring disclosure, and there are not material amounts of unrecognized tax benefits.
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of June 30, 2016, the Company had no accrued interest or penalties related to uncertain tax positions.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. 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 June 30, 2012. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | Operating Leases
In September, 2012, the Company entered into an office lease at 299 So. Main Street, Suite 2370, Salt Lake City, Utah, 84111, providing for the lease of approximately 5,300 square feet for a period of seven years, commencing on November 1, 2012. The monthly rent is $13,122.
Minimum future rental payments under the non-cancelable operating leases are as follows:
From time to time the Company may enter into or exit from diminutive operating lease agreements for equipment such as copiers, temporary back up servers, etc. These leases are not of a material amount and thus will not in the aggregate have a material adverse effect on our business, financial condition, results of operation or liquidity. |
EMPLOYEEE BENEFIT PLAN |
12 Months Ended |
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Jun. 30, 2016 | |
Notes to Financial Statements | |
EMPLOYEEE BENEFIT PLAN | The Company offers an employee benefit plan under Benefit Plan Section 401(k) of the Internal Revenue Code. Employees who have attained the age of 18 are eligible to participate. The Company, at its discretion, may match employees contributions at a percentage determined annually by the Board of Directors. The Company does not currently match contributions. There were no expenses for the years ended June 30, 2016 and 2015. |
STOCKHOLDERS EQUITY |
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STOCKHOLDERS EQUITY | Officers and Directors Stock Compensation
Effective November 2008, the Board of Directors approved the following compensation for directors who are not employed by the Company:
Officers, Key Employees, Consultants and Directors Stock Compensation.
In January 2013, the Board of Directors approved the Second Amended and Restated the 2011 Stock Plan (the Amended 2011 Plan), which Amended 2011 Plan was approved by shareholders on March 29, 2013. Under the terms of the Amended 2011 Plan, all employees, consultants and directors of the Company are eligible to participate. The maximum aggregate number of shares of common stock that may be granted under the 2011 Plan was increased from 250,000 shares to 550,000 shares. A Committee of independent members of the Companys Board of Directors administers the 2011 Plan. The exercise price for each share of common stock purchasable under any incentive stock option granted under the 2011 Plan shall be not less than 100% of the fair market value of the common stock, as determined by the stock exchange on which the common stock trades on the date of grant. If the incentive stock option is granted to a shareholder who possesses more than 10% of the Company's voting power, then the exercise price shall be not less than 110% of the fair market value on the date of grant. Each option shall be exercisable in whole or in installments as determined by the Committee at the time of the grant of such options. All incentive stock options expire after 10 years. If the incentive stock option is held by a shareholder who possesses more than 10% of the Company's voting power, then the incentive stock option expires after five years. If the option holder is terminated, then the incentive stock options granted to such holder expire no later than three months after the date of termination. For option holders granted incentive stock options exercisable for the first time during any fiscal year and in excess of $100,000 (determined by the fair market value of the shares of common stock as of the grant date), the excess shares of common stock shall not be deemed to be purchased pursuant to incentive stock options.
During the year ended June 30, 2016 the Company issued 37,729 shares to its directors and 278,000 shares to employees and consultants under these plans, 311,538 of which are included in the rollforward of Restricted Stock units below.
Restricted Stock Units
The number of restricted stock units outstanding at June 30, 2016 included 2,000 units that have vested but for which shares of common stock had not yet been issued pursuant to the terms of the agreement.
As of June 30, 2016, there was approximately $6.1 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight line basis over a weighted average period of 5.19 years.
Warrants Outstanding warrants were issued in connection with private placements of the Company's common stock and with the Series B Preferred Restructure. The following table summarizes information about fixed stock warrants outstanding at June 30, 2016:
Preferred Stock
The Companys certificate of incorporation currently authorizes the issuance of up to 30,000,000 shares of blank check preferred stock with designations, rights, and preferences as may be determined from time to time by the Companys Board of Directors, of which 700,000 shares are currently designated as Series B Preferred Stock (Series B Preferred) and 300,000 shares are designated as Series B-1 Preferred Stock (Series B-1 Preferred). As of June 30, 2016, a total of 625,375 shares of Series B Preferred and 180,213 shares of Series B-1 Preferred were issued and outstanding. Both classes of Series B Preferred Stock pay dividends at a rate of 7% per annum if paid by the Company in cash, or 9% if paid by the Company in PIK Shares, the Company may elect to pay accrued dividends on outstanding shares of Series B Preferred in either cash or by the issuance of additional shares of Series B Preferred (PIK Shares).
During the year ended June 30, 2016, the Company issued 66,013 shares for dividends in kind and 40,000 shares in satisfaction of an accrued bonus payable to the Company's CEO.
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ACQUISITION OF REPOSITRAK |
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Acquisition Of Repositrak | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITION OF REPOSITRAK | On June 30, 2015, the Company consummated the acquisition of 100% of the outstanding capital stock of ReposiTrak, Inc. The accompanying audited consolidated financial statements of the Company as of and for the year ended June 30, 2015 contain the results of operations of ReposiTrak from June 30, 2015. We issued 873,438 shares of our common stock in connection with this acquisition.
We have accounted for the acquisition 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 that are not included in the fair values of assets. Goodwill will not be amortized, but tested annually for impairment.
The purchase price consisted of the 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 were allocated based on their estimated fair value of the assets acquired and liabilities assumed, as follows:
Unaudited pro-forma results of operations for the twelve months ended June 30, 2015 and 2014, as though ReposiTrak had been acquired as of July 1, 2013, are as follows:
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RECENT ACCOUNTING PRONOUNCEMENTS |
12 Months Ended |
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Jun. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | In May 2014, August 2015, April 2016 and May 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, ASU 2015-14 (ASC Topic 606) Revenue from Contracts with Customers, Deferral of the Effective Date, ASU 2016-10 (ASC Topic 606) Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing , and ASU 2016-12 (ASC Topic 606) Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, respectively. ASC Topic 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted for annual periods beginning after December 15, 2016. This standard may be applied retrospectively to all prior periods presented, or retrospectively with a cumulative adjustment to retained earnings in the year of adoption. The Company is in the process of assessing the impact, if any, on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09 (ASC Topic 718), Stock CompensationImprovements to Employee Share-Based Payment Accounting. The amendments in this ASU are intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax consequences, classification on the consolidated statement of cash flows and treatment of forfeitures. The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is in the process of assessing the impact, if any, of this ASU on its consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02 (ASC Topic 842), Leases. The ASU amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding lease liability, measured at the present value of the lease payments. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of assessing the impact on its consolidated financial statements.
In April 2015 and August 2015, the FASB issued ASU 2015-03 (ASC Subtopic 835-30),Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs and ASU 2015-15 (ASC Subtopic 835-30),Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements- Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, respectively. The ASUs require that debt issuance costs related to a recognized debt liability, with the exception of those related to line-of-credit arrangements, be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. The amendments in these ASUs are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this new guidance is not expected to have a material impact on the Company's consolidated financial statements and disclosures. |
RELATED PARTY TRANSACTIONS |
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Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Series B Restructuring
On February 4, 2015, holders of the Companys Series B Convertible Preferred Stock (Series B Preferred), consisting of Randall K. Fields, the Companys Chief Executive Officer, his spouse, and Robert W. Allen, a director of the Company (the Holders), entered into a restructuring agreement (the Restructuring Agreement), pursuant to which the Holders consented to the filing of an amendment (the Series B Amendment) to the Certificate of Designation of the Relative Rights, Powers and Preference of the Series B Preferred (the Series B Certificate of Designation), pursuant to which (i) the rate at which the Series B Preferred accrues dividends was lowered to 7% per annum if paid by the Company in cash, or 9% if paid by the Company in PIK Shares (as defined below), (ii) the Company may now elect to pay accrued dividends on outstanding shares of Series B Preferred in either cash or by the issuance of additional shares of Series B Preferred (PIK Shares), (iii) the conversion feature of the Series B Preferred was eliminated, and (iv) the number of shares of the Company's preferred stock designated as Series B Preferred was increased from 600,000 to 900,000 shares (the Series B Restructuring). In consideration for the Series B Restructuring, the Company issued to the Holders: (y) an aggregate of 214,198 additional shares of Series B Preferred, which shares had a stated value equal to the amount that, but for the Series B Restructuring, would have been paid to the Holders as dividends over the next five years (Additional Shares), and (z) five-year warrants to purchase an aggregate of 1,085,068 shares of common stock for $4.00 per share (Series B Warrants), an amount and per share purchase price equal to what the Holders would otherwise be entitled to receive upon conversion of their shares of Series B Preferred (Warrant Shares).
The terms of the Series B Restructuring were amended on March 31, 2015 as follows: (i) the Series B Certificate of Designation was further amended (the Second Series B Amendment) to (x) reduce the number of shares of the Companys preferred stock designated thereunder from 900,000 to 700,000, (y) require that, should the Company pay dividends on the Series B Preferred in PIK Shares, shares Series B-1 Preferred will be issued, rather than shares of Series B Preferred, and (z) in the event any Holder elects to exercise a Series B Warrant, one share of Series B Preferred will be automatically converted into one share of Series B-1 Preferred for every 2.5 Warrant Shares received by such Holder; and (ii) the Restructuring Agreement was amended to substitute the Additional Shares for shares of Series B-1 Preferred. The Second Series B Amendment was filed with the Nevada Secretary of State on March 31, 2015.
The Company issued 58,103 and 7,910 PIK Shares to Messrs. Fields and Allen in the year ended June 30, 2016, and 38,055, 5,488, and 657 PIK Shares to Messrs. Fields, Allen, and Ms. Fields in the year ended June 30, 2015, respectively.
Service Agreement. During the year ended June 30, 2016, the Company was a party to a 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, FMIs designated Executive, who also serves as the Companys Chairman of the Board of Directors, controls FMI.
The Company had payables of $32,253 and $37,893 to FMI at June 30, 2016 and 2015 respectively, under this Agreement.
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SUBSEQUENT EVENTS |
12 Months Ended |
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Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to June 30, 2016, the Company issued 57,117 shares of common stock in connection with issuances under the Company's Employee Stock Purchase Plan and for the vesting of employee stock grants. The Company also issued 28,011 shares of Series B-1 Preferred for dividends paid in kind on the outstanding shares of Series B Preferred, and for an accrued bonus.
In accordance with the Subsequent Events Topic of the FASB ASC 855, we have evaluated subsequent events, through the filing date and noted no additional subsequent events that are reasonably likely to impact the financial statements. |
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Principles of Consolidation | The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries, including ReposiTrak and Prescient. All inter-company transactions and balances have been eliminated in consolidation. |
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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 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, stock-based compensation, and capitalization of software development costs. |
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Concentration of Credit Risk and Significant Customers | The Company maintains cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.
Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of trade receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which when realized have been within the range of management's expectations. The Company does not require collateral from its customers.
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.
During the years ended June 30, 2016, there were no customers that accounted for greater than 10% of total revenue. During the years ended June 30, 2015 and 2014, the Company had one customer, ReposiTrak, Inc. (acquired on June 30, 2015) that accounted for greater than 10% of total revenue in both years. |
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Receivables | 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 Companys customers were to deteriorate, adversely affecting their ability to make payments, allowances may be required.
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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 June 30, 2016, 2015 and 2014, the allowance for doubtful accounts was $75,000, $94,000, and $70,000, respectively. |
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Depreciation and Amortization | Depreciation and amortization of property and equipment is computed using the straight line method based on the following estimated useful lives:
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:
Goodwill and intangible assets deemed to have indefinite lives are subject to annual impairment tests. Other intangible assets are amortized over their useful lives. See Note 7 regarding impairment charges for the year ended June 30, 2015. |
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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 years ending June 30, 2016, 2015 and 2014, the Company did not incur any expense associated with warranty claims. |
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Revenue Recognition | The Company recognizes 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.
The Company recognizes subscription, hosting, premium support, and maintenance revenue ratably over the length of the agreement beginning on the commencement dates of each agreement or when revenue recognition conditions are satisfied. Revenue from license and professional services agreements are recognized as delivered.
Revenue from license and professional services agreements are recognized as delivered.
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.
Agreements with multiple deliverables such as subscriptions, support, and professional services, are accounted for separately if the deliverables have standalone value upon delivery. Subscription services have standalone value as the services are typically sold separately. When considering whether professional services have standalone value, the Company considers the following factors: (i) availability of services from other vendors, (ii) the nature and timing of professional services, and (iii) sales of similar services sold separately. Multiple deliverable arrangements are separated into units of accounting and the total contract consideration is allocated to each unit based on relative selling prices. |
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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.
During 2016, 2015 and 2014 capitalized development costs of $0, $0, and $73,082 respectively, were amortized into expense. The Company amortizes its developed and purchased software on a straight-line basis over three and five years, respectively. |
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Research and Development Costs | Research and development costs include personnel costs, engineering, consulting, and contract labor and are expensed as incurred for software that has not achieved technological feasibility. |
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Advertising Costs | Advertising is expensed as incurred. Advertising costs were approximately $113,000, $21,000, and $14,000 for the years ended June 30, 2016, 2015 and 2014, respectively. |
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Income Taxes | The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of temporary differences between tax bases and financial reporting bases of other assets and liabilities. |
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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 year ended June 30, 2016, 2015 and 2014 warrants to purchase 1,416,749, 1,426,178 and 317,373 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 $10.00 per share at June 30, 2016.
1,029,818 shares of common stock issuable upon conversion of the Companys Series B Preferred were not included in the diluted EPS calculation for the year ended June 30, 2014, as the effect would have been anti-dilutive. Series B Preferred was no longer convertible to common stock for the year ended June 30, 2016 and 2015.
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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 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. |
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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.
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Fair Value of Financial Instruments | The Company's financial instruments consist of cash, cash equivalents, receivables, payables, accruals and notes payable. The carrying amount of cash, cash equivalents, 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. |
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Reclassifications | Certain prior-year amounts have been reclassified to conform with the current year's presentation. |
SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization of property and equipment | Depreciation and amortization of property and equipment is computed using the straight line method based on the following estimated useful lives:
|
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Amortization of intangible assets | Amortization of intangible assets are computed using the straight line method based on the following estimated useful lives:
|
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Diluted EPS |
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RECEIVABLES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||
Accounts receivable | Accounts receivable consist of the following:
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PROPERTY AND EQUIPMENT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and equipment | Property and equipment are stated at cost and consist of the following at June 30:
|
CAPITALIZED SOFTWARE COSTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||
Capitalized software costs | Capitalized software costs consist of the following at June 30:
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ACQUISITION RELATED INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||
Customer relationships | Customer relationships consist of the following at June 30:
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Estimated aggregate amortization expense | Estimated aggregate amortization expenses per year are as follows:
|
ACCRUED LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued liabilities | Accrued liabilities consist of the following at June 30, 2016 and 2015:
|
NOTES PAYABLE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | The Company had the following notes payable obligations at June 30, 2016 and 2015:
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Maturities of notes payable and capital leases | Maturities of notes payable and capital leases at June 30, 2016 are as follows:
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DEFERRED REVENUE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Deferred Revenue Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Deferred revenue | Deferred revenue consisted of the following at June 30:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net deferred tax liabilities | Net deferred tax liabilities consist of the following components at June 30:
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Summary of income tax |
|
COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||
Minimum future rental payments | Minimum future rental payments under the non-cancelable operating leases are as follows:
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STOCKHOLDERS EQUITY (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted stock units |
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Fixed stock options and warrants outstanding | The following table summarizes information about fixed stock warrants outstanding at June 30, 2016:
|
ACQUISITION OF REPOSITRAK, INC. (Tables) - ReposiTrak [Member] |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of ReposiTrak, assets acquired and liabilities assumed | The purchase price consisted of the 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 were allocated based on their estimated fair value of the assets acquired and liabilities assumed, as follows:
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Unaudited pro-forma results of operations | Unaudited pro-forma results of operations for the twelve months ended June 30, 2015 and 2014, as though ReposiTrak had been acquired as of July 1, 2013, are as follows:
|
DESCRIPTION OF BUSINESS AND ACQUISITION OF REPOSITRAK, INC. (Details Narrative) |
12 Months Ended |
---|---|
Jun. 30, 2016 | |
Incorporated state | Nevada |
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% |
ReposiTrak [Member] | |
Incorporated state | Utah |
Ownership interest by parent | 100.00% |
SIGNIFICANT ACCOUNTING POLICIES (Details) |
12 Months Ended |
---|---|
Jun. 30, 2016 | |
Furniture and fixtures [Member] | MinimumMember | |
Property plant and equipment useful life | 5 years |
Furniture and fixtures [Member] | MaximumMember | |
Property plant and equipment useful life | 7 years |
ComputerEquipment [Member] | |
Property plant and equipment useful life | 3 years |
Equipment Under Capital Leases [Member] | |
Property plant and equipment useful life | 3 years |
SIGNIFICANT ACCOUNTING POLICIES (Details 1) |
12 Months Ended |
---|---|
Jun. 30, 2016 | |
Customer Relationships [Member] | |
Amortization of intangible asset useful life | 10 years |
Acquired Developed Software [Member] | |
Amortization of intangible asset useful life | 5 years |
Developed Software [Member] | |
Amortization of intangible asset useful life | 3 years |
SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Accounting Policies [Abstract] | |||
Dilutive effect of options and warrants | 0 | 0 | 0 |
Weighted average shares outstanding assuming dilution | 19,151,000 | 17,375,000 | 16,710,000 |
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $ 75,000 | $ 94,000 | $ 70,000 |
Capitalized development costs | 0 | 0 | 73,082 |
Advertising expense | $ 113,000 | $ 21,000 | $ 14,000 |
Computation of diluted EPS due to the anti-dilutive effect | 1,416,749 | 1,426,178 | 317,373 |
RECEIVABLES (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Accounting Policies [Abstract] | ||
Accounts receivable | $ 3,622,968 | $ 1,734,591 |
Allowance for doubtful accounts | (75,000) | (94,000) |
Accounts receivable, Net | $ 3,547,968 | $ 1,640,591 |
PROPERTY AND EQUIPMENT (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Property, Plant and Equipment [Abstract] | ||
Computer equipment | $ 3,350,390 | $ 3,269,403 |
Furniture and fixtures | 260,574 | 260,574 |
Leasehold improvements | 231,782 | 231,782 |
Property and equipment, gross | 3,842,746 | 3,761,759 |
Less accumulated depreciation and amortization | (3,373,363) | (2,997,317) |
Property and equipment, Net | $ 469,383 | $ 764,442 |
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Property And Equipment Details Narrative | ||
Depreciation expense | $ 376,046 | $ 345,847 |
CAPITALIZED SOFTWARE COSTS (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Notes to Financial Statements | ||
Capitalized software costs | $ 2,626,070 | $ 2,443,128 |
Less accumulated amortization | (2,443,128) | (2,443,128) |
Capitalized software costs, Net | $ 182,942 | $ 0 |
CAPITALIZED SOFTWARE COSTS (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Notes to Financial Statements | |||
Amortization expense | $ 0 | $ 0 | $ 73,082 |
ACQUISITION RELATED INTANGIBLE ASSETS, NET (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Notes to Financial Statements | ||
Customer relationships | $ 5,537,161 | $ 5,537,161 |
Less accumulated amortization | (4,354,561) | (2,727,458) |
Less impairment charge | 0 | (1,495,703) |
Total | $ 1,182,600 | $ 1,314,000 |
ACQUISITION RELATED INTANGIBLE ASSETS, NET (Details 1) |
Jun. 30, 2016
USD ($)
|
---|---|
Notes to Financial Statements | |
2017 | $ 131,400 |
2018 | 131,400 |
2019 | 131,400 |
2020 | 131,400 |
Thereafter | $ 657,000 |
ACQUISITION RELATED INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Notes to Financial Statements | |||
Amortization expense | $ 131,400 | $ 422,316 | |
Non-cash impairment charge | $ 0 | $ 1,495,703 | $ 0 |
ACCRUED LIABILITIES (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued stock-based compensation | $ 768,055 | $ 1,665,731 |
Accrued compensation | 336,957 | 506,064 |
Accrued other liabilities | 214,432 | 225,140 |
Accrued dividends | 182,759 | 124,176 |
Accrued liabilities | $ 1,502,203 | $ 2,521,111 |
NOTES PAYABLE (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Notes payable | $ 730,452 | $ 576,493 |
Less current portion of capital lease obligations and notes payable | (239,199) | (227,301) |
Non current capital lease obligations and notes payable | 491,253 | 349,192 |
Bank 1 [Member] | ||
Notes payable | 62,445 | 152,530 |
Monthly debt payment installment | $ 7,860 | $ 7,860 |
Annual interest rate | 3.73% | 3.73% |
Bank 2 [Member] | ||
Notes payable | $ 187,799 | $ 272,191 |
Monthly debt payment installment | $ 7,860 | $ 7,860 |
Annual interest rate | 4.17% | 4.17% |
Bank 3 [Member] | ||
Notes payable | $ 98,980 | |
Monthly debt payment installment | $ 4,932 | |
Annual interest rate | 4.91% | |
Bank 4 [Member] | ||
Notes payable | $ 381,228 | $ 0 |
Monthly debt payment installment | $ 4,009 | $ 4,009 |
Annual interest rate | 4.00% | 4.00% |
Bank3Member | ||
Notes payable | $ 151,772 | |
Monthly debt payment installment | $ 4,932 | |
Annual interest rate | 4.91% |
NOTES PAYABLE (Details 1) - Notes Payable Other Payables [Member] |
Jun. 30, 2016
USD ($)
|
---|---|
Summary of maturities of notes payable and capital leases | |
2017 | $ 239,199 |
2018 | 170,232 |
2019 | 44,200 |
2020 | 276,821 |
2021 | $ 0 |
LINES OF CREDIT (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Debt Disclosure [Abstract] | ||
Line of credit annual interest rate | 17.10% | |
Line of credit annual interest rate | the greater of zero percent or LIBOR | |
Line of Credit Maturity Date | Dec. 27, 2016 | |
Line of credit outstanding | $ 2,500,000 | $ 2,500,000 |
DEFERRED REVENUE (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Summary of deferred Revenue | ||
Deferred revenue | $ 2,717,094 | $ 2,331,920 |
Subscription [Member] | ||
Summary of deferred Revenue | ||
Deferred revenue | 2,221,264 | 1,742,909 |
Other [Member] | ||
Summary of deferred Revenue | ||
Deferred revenue | $ 495,830 | $ 589,011 |
INCOME TAXES (Details) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Deferred tax assets: | ||
NOL Carryover | $ 48,359,356 | $ 45,886,227 |
Depreciation | 0 | 0 |
Amortization | 0 | 12,115 |
Allowance for Bad Debts | 29,250 | 19,500 |
Accrued Expenses | 254,971 | 649,635 |
Deferred Revenue | 1,059,667 | 676,138 |
Deferred tax liabilities: | ||
Depreciation | (88,495) | (140,838) |
Amortization | (184,989) | 0 |
Valuation allowance | (49,429,760) | (47,211,777) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details 1) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
US federal income tax rate to pretax income from continuing operations | ||
Book Income | $ 259,941 | $ (1,500,591) |
Stock for Services | 134,720 | 172,502 |
Stock for Charity | 0 | 61,601 |
Intangible impairment | 0 | 583,324 |
Change in Accrual Stock | (394,664) | 211,982 |
Life Insurance | 26,438 | 26,438 |
Meals & Entertainment | 10,785 | 12,885 |
Change in deferred revenue | 383,528 | (41,778) |
Change in Allowance for doubtful accounts | (7,410) | (7,800) |
Change in depreciation | 103,589 | (137,747) |
NOL utilization | (516,928) | 0 |
Valuation allowance | 0 | (619,719) |
Total | $ 0 | $ 0 |
INCOME TAXES (Details Narrative) |
12 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 123,998,300 |
Carryforward expiration date | Jun. 30, 2035 |
COMMITMENTS AND CONTINGENCIES (Details) |
Jun. 30, 2016
USD ($)
|
---|---|
Minimum future rental payments under the non-cancelable operating leases | |
2017 | $ 165,024 |
2018 | 169,993 |
2019 | 73,847 |
2020 | 0 |
2021 | $ 0 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) |
12 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease expiration date | Nov. 01, 2012 |
Extended time of commercial lease | 7 years |
Operating lease monthly rent expense | $ 13,122 |
STOCKHOLDERS EQUITY (Details) - Restricted Stock [Member] - $ / shares |
12 Months Ended | |
---|---|---|
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Restricted Stock Units | ||
Outstanding, beginning of period | 1,350,970 | 1,586,964 |
Granted | 48,228 | 145,339 |
Vested and issued | (311,538) | (348,186) |
Forfeited | (36,516) | (33,147) |
Outstanding, end of period | 1,051,144 | 1,350,970 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning of period | $ 5.51 | $ 5.05 |
Granted | 10.51 | 9.54 |
Vested and issued | 5.10 | 4.74 |
Forfeited | 6.51 | 9.35 |
Outstanding, end of period | $ 5.82 | $ 5.51 |
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Annual compensation | $ 10,000 | |
Quarterly compensation payment | $ 2,500 | |
Appointment grant of shares of restricted stock | 150,000 | |
Restricted stock vesting period | 5 years | |
Shares authorized for grant | 550,000 | |
Restricted stock issuable | 2,000 | |
Unrecognized stock based compensation expense | $ 6,100,000 | |
Recognition period | 5 years 2 months 9 days | |
Preferred stock authorized | 30,000,000 | 30,000,000 |
Shares issued in kind | 66,013 | |
Shares issued for bonus payable | 40,000 | |
Restricted Stock [Member] | ||
Shares issued pursuant to Plan | 311,538 | |
Director [Member] | ||
Shares issued pursuant to Plan | 37,729 | |
Employee Stock [Member] | ||
Shares issued pursuant to Plan | 278,000 | |
Series B Preferred [Member] | ||
Preferred stock, Issued | 625,375 | 625,375 |
Preferred stock, outstanding | 625,375 | 625,375 |
Series B-1 Preferred [Member] | ||
Preferred stock, Issued | 180,213 | 74,200 |
Preferred stock, outstanding | 180,213 | 74,200 |
ACQUISITION OF REPOSITRAK, INC. (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Fair value of assets and liaiblities acquired: | ||
Receivables | $ 152,340 | $ 152,340 |
Prepaid expenses | 17,500 | 17,500 |
Customer relationships | 1,314,000 | 1,314,000 |
Goodwill | 16,077,953 | 16,077,953 |
Accounts payable | (128,126) | |
Deferred revenue | (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 paid for acquisition | $ 2,219 | $ 22,119 |
ACQUISITION OF REPOSITRAK, INC. (Details 1) - USD ($) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2015 |
Jun. 30, 2014 |
|
Unaudited pro forma results of operations | ||||||
Revenue | $ 2,941,511 | $ 2,870,646 | $ 2,932,825 | $ 2,826,813 | $ 11,571,795 | $ 9,777,431 |
Loss from operations | (3,222,538) | (1,302,437) | (1,290,524) | (1,046,986) | (6,862,485) | (5,232,552) |
Net loss | $ (3,241,545) | $ (1,317,858) | $ (1,317,510) | $ (1,049,834) | $ (6,926,747) | $ (5,303,773) |
Net loss applicable to common shareholdres | $ (3,365,721) | $ (3,595,537) | $ (1,471,983) | $ (1,204,307) | $ (9,637,548) | $ (5,921,664) |
Basic and diluted loss per share | $ (0.18) | $ (0.20) | $ (0.08) | $ (0.07) | $ (0.53) | $ (0.34) |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
Jun. 30, 2016 |
Jun. 30, 2015 |
---|---|---|
Related Party Transactions [Abstract] | ||
Related party payables | $ 32,253 | $ 37,893 |
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