-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PbUc0RSmQ8UVHypyJt1k2C8FU0SK4gC8u+Oawh28karEch8PZmRPxlcIYaacMJgA zmznvaT1aEWboIG0CuKZyQ== 0001038838-06-000735.txt : 20060914 0001038838-06-000735.hdr.sgml : 20060914 20060913200040 ACCESSION NUMBER: 0001038838-06-000735 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20060914 DATE AS OF CHANGE: 20060913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PARK CITY GROUP INC CENTRAL INDEX KEY: 0000050471 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 112050317 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-03718 FILM NUMBER: 061089440 BUSINESS ADDRESS: STREET 1: 333 MAIN STREET, SUITE 300 STREET 2: P.O. BOX 5000 CITY: PARK CITY STATE: UT ZIP: 84060 BUSINESS PHONE: 435-649-2221 MAIL ADDRESS: STREET 1: 333 MAIN STREET, SUITE 300 STREET 2: P.O. BOX 5000 CITY: PARK CITY STATE: UT ZIP: 84060 FORMER COMPANY: FORMER CONFORMED NAME: FIELDS TECHNOLOGIES INC DATE OF NAME CHANGE: 20010626 FORMER COMPANY: FORMER CONFORMED NAME: AMERINET GROUP COM INC DATE OF NAME CHANGE: 19990803 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY GROWTH SYSTEMS INC /DE/ DATE OF NAME CHANGE: 19951214 10QSB/A 1 qa093005.txt 10-QSB/A ENDED SEPTEMBER 30, 2005 FORM 10-QSB/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2005 Commission File Number 000-03718 PARK CITY GROUP, INC. (Exact name of small business issuer as specified in its charter) Nevada 37-1454128 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 333 Main Street, P.O. Box 5000; Park City, Utah 84060 (Address of principal executive offices) (435) 649-2221 (Registrant's telephone number) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of November 10, 2005 Common Stock, $.01 par value 5,665,079 2,369 shareholders Note 8 - Explanation of Restatement This Form 10-QSB/A is being filed to amend and restate the Park City Group, Inc. (the "Company") Quarterly Report on Form 10-QSB for the Three Months Ended, September 30, 2005. The restatement arose out of, and in conjunction with, a letter of comment dated September 1, 2006 received from the staff of the Securities and Exchange Commission as a result of the Company's submission and filing of Form SB-2 Registration Statement. The financial statements and references thereto have been amended and updated to reflect the effect of the 1:50 reverse stock split effective August 11, 2006 pursuant to SAB Topic 4:C. At the time of the reverse split, the Articles of Incorporation were amended to reflect authorized common shares from 500,000,000 to 50,000,000. Generally, no attempt has been made in this Form 10-QSB/A to modify or update other disclosures presented in the original report on Form 10-QSB except as required to meet the staff's comments. This Form 10-QSB/A does not reflect events occurring after the filing of the original Form 10-QSB or modify or update those disclosures. Information not affected by the amendment is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-QSB with the Securities and Exchange Commission on November 10, 2005. The following items have been amended as of result of the restatement: Quarterly Report on Form 10-QSB/A September 30, 2005 Table of Contents - (Amendments) Item 1 and 2 Reverse Stock Split 1:50 Effects to Financials Page 1-9 Item 2 Forward Looking Statements / Safe Harbor Page 9 Signature Pages Principal Executive and Principal Financial Officer Page 12 Item 3 Controls and Procedures Page 10 PARK CITY GROUP, INC. Table of Contents to Quarterly Report on Form 10-QSB PART I - FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Condensed Balance Sheet as of September 30, 2005 (Un-audited) 3 Consolidated Condensed Statements of Operations for the Quarters Ended September 30, 2005 and 2004 (Un-audited) 4 Consolidated Condensed Statements of Cash Flows for the Quarters Ended September 30, 2005 and 2004 (Un-audited) 5 Notes to Consolidated Condensed Financial Statements 6 Item 2 Management's Discussion and Analysis or Plan of Operation 10 Item 3 Controls and Procedures 11 PART II - OTHER INFORMATION Item 1 Legal Proceedings 12 Item 2 Changes in Securities 12 Item 5 Other Information 12 Item 6 Exhibits 12 Exhibit 31 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Exhibit 32 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Balance of the page intentionally left blank) 2
PARK CITY GROUP, INC. Consolidated Condensed Balance Sheet (Unaudited) September 30, 2005 (Restated) Assets Current assets: Cash $ 159,442 Receivables, net of allowance for doubtful accounts of $53,000 553,860 Prepaid expenses and other current assets 124,196 ---------------- Total current assets 837,498 ---------------- Property and equipment, net of accumulated depreciation and amortization 100,428 ---------------- Other assets: Deposits and other assets 25,000 Capitalized software costs, net of accumulated amortization of $797,636 265,879 ---------------- Total other assets 290,879 ---------------- Total assets $ 1,228,805 ================ Liabilities and Stockholders' Deficit Current liabilities: Accounts payable $ 173,914 Accrued liabilities 1,139,796 Deposits for unissued stock 36,667 Deferred revenue 1,509,513 Current portion of long-term capital lease obligations 20,493 Current portion of long-term related party debt, net of discount of $6,188 338,813 Related party lines of credit 336,187 ---------------- Total current liabilities 3,555,383 ---------------- Long-term liabilities Long-term related party debt, net of discount of $110,269 3,186,137 Capital lease obligations, less current portion 3,919 ---------------- Total long-term liabilities 3,190,056 ---------------- Total liabilities 6,745,439 ---------------- Commitments and contingencies Stockholders' deficit: Preferred stock, $0.01 par value, 30,000,000 shares authorized, none issued - Common stock , $0.01 par value, 50,000,000 shares authorized; 5,656,927 issued and outstanding 56,569 Additional paid-in capital 12,828,185 Accumulated deficit (18,401,388) ---------------- Total Stockholders' deficit (5,516,634) ---------------- $ 1,228,805 ================ See accompanying notes to consolidated condensed financial statements. 3
PARK CITY GROUP, INC. Consolidated Condensed Statements of Operations (Unaudited) For the Three Months Ended September 30, 2005 and 2004 September 30, September 30, 2005 2004 ------------- ------------- (Restated) (Restated) Revenues: Software licenses $ 2,630,453 $ 162,163 Maintenance and support 608,446 623,492 ASP 48,900 11,600 Consulting and other 411,066 192,420 ------------- ------------- Total revenues 3,698,865 989,675 Cost of revenues 404,651 300,154 ------------- ------------- Gross margin 3,294,214 689,521 Operating expenses: Research and development 235,909 256,081 Sales and marketing 283,200 293,394 General and administrative 313,155 310,109 ------------- ------------- Total operating expenses 832,264 859,584 ------------- ------------- Income (loss) from operations 2,461,950 (170,063) Interest expense (297,135) (274,558) ------------- ------------- Income (loss) before income taxes 2,164,815 (444,621) Income tax (expense) benefit - - ------------- ------------- Net Income (loss) $ 2,164,815 $ (444,621) ============= ============= Weighted average shares, basic 5,657,000 5,382,000 ============= ============= Weighted average shares, diluted 5,680,000 5,382,000 ============= ============= Basic earnings (loss) per share $ 0.38 $ (0.08) ============= ============= Diluted Earnings (loss) per share $ 0.38 $ (0.08) ============= ============= See accompanying notes to consolidated condensed financial statements. (Balance of page intentionally left blank) 4
PARK CITY GROUP, INC. Consolidated Condensed Statements of Cash Flows (Unaudited) For the Three Months Ended September 30, 2005 and 2004 September 30, September 30, 2005 2004 ------------ ------------ Cash Flows From Operating Activities: Net income (loss) $ 2,164,815 $ (444,621) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 83,571 84,321 Bad debt expense (3,000) - Stock issued for services and expenses 21,499 211,516 Amortization of discounts on debt 73,887 42,355 Decrease (increase) in: Trade receivables (194,521) (125,567) Prepaid and other assets (87,136) (6,615) Increase (decrease) in: Accounts payable (454,484) 5,737 Accrued liabilities (127,345) (172,694) Deferred revenue 626,089 (138,254) Accrued interest, related party 138,844 115,886 ------------ ------------ Net cash provided by (used in) operating activities 2,242,219 (427,936) ------------ ------------ Cash Flows From Investing Activities: Purchase of property and equipment (3,046) (8,724) ------------ ------------ Net cash used in investing activities (3,046) (8,724) ------------ ------------ Cash Flows From Financing Activities: Net (decrease) increase in line of credit - related party (283,556) 200,000 Payments on notes payable and capital leases (2,005,845) (13,007) ------------ ------------ Net cash (used in) provided by financing activities (2,289,401) 186,993 ------------ ------------ Net decrease in cash and cash equivalents (50,228) (249,667) Cash at beginning of period 209,670 312,817 ------------ ------------ Cash at end of period $ 159,442 $ 63,150 ============ ============ See accompanying notes to consolidated condensed financial statements. (Balance of page intentionally left blank) 5
PARK CITY GROUP, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS September 30, 2005 Note 1 - Unaudited Financial Statements The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for quarterly financial statements, and include all normal, recurring adjustments which in the opinion of management are necessary in order to make the financial statements not misleading. Although the Company believes that the disclosures in these unaudited financial statements are adequate to make the information presented for the interim periods not misleading, certain information and footnote information normally included in quarterly financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, and these financial statements should be read in conjunction with the Company's audited annual financial statements included in the Company's June 30, 2005 Annual Report on Form 10-KSB. Certain 2004 amounts have been reclassified to conform to 2005 classifications. Note 2 - Liquidity As shown in the consolidated financial statements, the Company had a profit for the period ending September 30, 2005 and incurred a loss for the same quarter in 2004. Current liabilities are in excess of current assets at September 30, 2005. The company did generate positive cash flow during the quarter ending September 30, 2005 and was able to retire a large amount of current debt. The company did not generate a positive cash flow however for the year ending June 30, 2005. The Company believes that cash flows from sales, as well as the ability and commitment of its majority shareholder to contribute funds necessary to continue to operate, will allow the Company to fund its currently anticipated working capital, capital spending and debt service requirements during the year ended June 30, 2006. The financial statements do not reflect any adjustments should the Company's operations not be achieved. Note 3 - Stock-Based Compensation At September 30, 2005 and 2004, the Company has issued stock options to certain of its employees. The Company accounts for these options under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net loss, as all options granted had an exercise price equal to or greater than the market value of the underlying common stock on the date of grant. Had compensation cost for the Company's stock option plans been determined based on fair value consistent with the provisions of SFAS No. 123, Accounting for Stock-Based Compensation, the Company's net loss and loss per share would have been increased to the pro forma amounts indicated below for the quarter ended September 30, 2005 and 2004:
Quarters ended September 30, 2005 September 30, 2004 ------------------ ------------------ Net income (loss) available to common shareholders, as reported $ 2,164,815 $ (444,621) Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax effects -- -- Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects (14,325) (14,325) ----------------- ----------------- Net income (loss) - pro forma $ 2,150,490 $ (458,946) ================= ================= Income (loss) per share: Basic - as reported $ 0.38 $ (0.08) ================= ================= Diluted - as reported $ 0.38 $ (0.08) ================= ================= Basic - pro forma $ 0.38 $ (0.09) ================= ================= Diluted - pro forma $ 0.38 $ (0.09) ================= =================
6 Park City Group has an employment agreement with its Vice President of Professional Services, dated effective April 11, 2005. One provision of this agreement provides for a stock bonus of 40,000 shares payable in 10,000 share increments on his next 4 anniversary dates, provided continued employment. Note 4 - Outstanding Stock Options The following tables summarize information about fixed stock options and warrants outstanding and exercisable at September 30, 2005:
Number of Options Warrants Price per Share --------- -------- --------------- Outstanding and exercisable at June 30, 2005 180,930 943,830 $1.50-7.00 Granted - - - Exercised - - - Called - - - Cancelled - - - Expired (4,300) - $1.50-2.50 --------- ---------- ---------- Outstanding and exercisable at September 30, 2005 104,630 943,830 $1.50-7.00 ========= ========== ==========
Options and Warrants Outstanding and Exercisable at September 30, 2005 Weighted average Weighted Number remaining average Range of Outstanding at contractual exercise exercise prices September 30, 2005 life(years) price --------------- ------------- ----------- ----- $1.50 - $2.50 735,611 2.34 $ 1.99 $3.50 - $4.00 302,849 2.42 3.52 $7.00 10,000 1.11 7.00 ---------- ---- ------ 1,048,460 2.35 $ 2.48 ========== ==== ====== Note 5 - Supplemental Cash Flow Information In connection with the note payable funding from Whale Investment, Ltd. the Company issued warrants and issued shares of common stock, which were recorded as a debt discount. In June 2004 the note payable to Whale Investments, LTD was extended and ownership of the note payable was transferred to Whale Investment's sister company Triplenet Investments. As consideration for the extension the Company issued cash and shares. The fair value of the cash and shares issued in connection with the extension was recorded as a discount to the note payable and added to the previous discount to be amortized over the remaining life of the note as extended. Of the debt discount amounts $54,976 and $27,488 was amortized to interest expense during the quarters ended September 30, 2005 and 2004, respectively. The Triplenet Investments loan was paid off in August 2005 with cash generated from operations. The company did pay a pre-payment penalty fee of $30,000 or one month interest on the loan. The fair value of shares issued in connection with the $345,000 note payable funding from Riverview obtained as a condition of the Whale Investment, Ltd. funding was recorded as a discount on the note payable, of which $6,188 and $2,143 was amortized into interest expense during the quarters ended September 30, 2005 and 2004, respectively. This increase is due to the fee charged for the extension of the Riverview portion of this transaction in August 2004. For the quarters ended September 30, 2005 and 2004 the Company paid cash for interest expense of $88,141 and $109,027, respectively. No cash was paid for income taxes. Note 6 - Accrued liabilities Accrued liabilities consist of the following as of September 30, 2005: Accrued interest $ 980,839 Accrued vacation 107,976 Other accrued liabilities 50,981 ---------- $1,139,796 ========== (Balance of page intentionally left blank) 7 Note 7 - Net Income (Loss) Per Common Share Basic net income (loss) per common share ("Basic EPS") excludes dilution and is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share ("Diluted EPS") reflects the potential dilution that could occur if stock options or other contracts to issue 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. Options and warrants to purchase 321,059 and 1,657,017 shares of common stock as of September 30, 2005 and 2004 , respectively, were not included in the computation of Diluted EPS due either to the dilutive effect from a net loss or a strike price in excess of market price. Using the treasury stock method 22,765 shares were assumed repurchased and added to shares outstanding for the computation of Diluted EPS for the 3 months ended September 30, 2005. (Balance of page intentionally left blank) 8 8. Explanation of Restatement In connection with the filing of an amendment to the Company's June 30, 2005 Form 10KSB/A, September 30, 2005 Form 10QSB and an amended SB-2 registration statement, the financial statements and references thereto have been amended and updated to reflect the effect of a 1:50 reverse stock split effective August 11, 2006 pursuant to SAB Topic 4:C. At the time of the reverse split, the Articles of Incorporation were amended to reflect authorized common shares from 500,000,000 to 50,000,000. These changes had the following effect on the consolidated financial statements: Effects on the Consolidated Balance Sheet
As Reported Restatements As Restated Stockholders' deficit: Preferred stock, $.01 par value, 30,000,000 shares authorized no shares issued, - - - Common stock, $.01 par value, 50,000,000 shares, authorized, 5,656,927 issued and outstanding $ 2,828,463 $ (2,771,894) $ 56,569 Additional paid-in-capital 10,056,291 2,771,894 12,828,185 Accumulated deficit (18,401,388) - (18,401,388) ---------------- -------------------- ------------------ Total stockholders' deficit $ (5,516,634) $ - $ (5,516,634) ================ ==================== ================== Effects on the Consolidated Statement of Operations 2005 2005 2004 2004 As Reported Restatements As Restated As Reported Restatements As Restated Net loss $2,164,815 - $2,164,815 $(444,621) - $(444,621) =========== =========== ========== =========== =========== ========== Weighted average shares, basic 282,850,000 (277,193,000) 5,657,000 269,105,000 (263,723,000) 5,382,000 =========== =========== ========== =========== =========== ========== Weighted average shares, diluted 283,989,000 (278,309,000) 5,680,000 269,105,000 (263,723,000) 5,382,000 =========== =========== ========== =========== =========== ========== Basic earnings (loss) per share $0.01 $0.37 $0.38 $(0.00) $(0.08) $(0.08) =========== =========== ========== =========== =========== ========== Diluted earnings (loss) per share $0.01 $0.37 $0.38 $(0.00) $(0.08) $(0.08) =========== =========== ========== =========== =========== ==========
9 Item 2. Management's Discussion and Analysis or Plan of Operation. Form 10-KSB for the year ended June 30, 2005 incorporated herein by reference. Forward-Looking Statements This quarterly report on Form 10-QSB/A contains forward looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements". Actual results could differ materially from those projected in the forward looking statements as a result of a number of risks and uncertainties, including those risks factors contained in our Form 10-KSB/A annual report at June 30, 2005, incorporated herein by reference. Statements made herein are as of the date of the filing of this Form 10-QSB with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Three Months Ended September 30, 2005 and 2004 Total revenues were $3,698,865 and $989,675 for the quarters ended September 30, 2005 and 2004, respectively, a 274% increase. Software license revenues were $2,630,453 and $162,163 for the quarters ended September 30, 2005 and 2004, respectively, a 1522% increase. This increase is primarily attributable to software license sales to one customer, Cannon Equipment, during the quarter ended September 30, 2005. Details of this software license sales transaction are incorporated herein by reference to form 8K filed on August 11, 2005. License sales in 2004 were attributed to two new and one existing customer. Maintenance and support revenues were $608,446 and $623,492 for the quarters ended September 30, 2005 and 2004, respectively, a 2% decrease. This decrease is primarily attributable to a two existing Action Manager customers reducing their maintenance fees due to store closures. Software Maintenance and support for Fresh Market Manager software increased by $51,083 during the quarter ending September 30, 2005 over the same period in 2004. This was primarily due to the Cannon Solutions Contract. The company has decided to report their ASP, (their hosted solution), sales separately starting in Fiscal Year ending June 30, 2006 instead of previously including these amounts in maintenance and support revenues. ASP revenues were $48,900 and $11,600 respectively for the quarters ending September 30, 2005 and 2004, respectively, an increase of 322%. This increase was the result of our success in the Perishable Manufacturing Channel where we have signed 4 new contracts in the last 6 months. Consulting and other revenue was $411,066 and $192,420 for the quarters ended September 30, 2005 and 2004, respectively, a 114% increase. This increase is spread evenly between increased Action Manager and FMM implementation services and income from the Cannon Equipment agreements. Cost of revenues, as a percent of total revenues was 11% and 30% for the quarters ended September 30, 2005 and 2004, respectively. This decrease in cost of revenues as a percent of total revenues is primarily attributable to the increased software license revenues during the quarter ended September 30, 2005 as compared to the same period in the prior year. Research and development expenses were $235,909 and $256,081 for the quarters ended September 30, 2005 and 2004 respectively, an 8% decrease. This decreased expense reflects the fact that both Action Manager and FMM software suites have had major releases completed in addition to the streamlining of our development process. Sales and marketing expenses were $283,200 and $293,394 for the quarters ended September 30, 2005 and 2004, respectively, a 3% decrease. This decrease is primarily due to one trade show being cancelled during September 2005 due to weather problems. The company expects a slight increase in sales costs during the second quarter due to the rescheduling of this trade show. General and administrative expenses were $313,155 and $310,109 for the quarters ended September 30, 2005 and 2004, respectively a 1% increase. Liquidity and Capital Resources The Company had a working capital deficit at September 30, 2005. The company had net income of $2,164,815 versus a net loss of $444,621 for the quarters ending September 30, 2005 and 2004 respectively. The company was able to pay off the Triplenet Incorporated debt of $2,030,000 and reduce its accounts payables from $628,398 as of June 30, 2005 to $173,914 during the quarter ended September 30, 2005. The Company had interest expense of $297,135 and $274,558 for the quarters ending September 30, 2005 and 2004 respectively, an increase of 8%. This increase occurred because the prepayment of the Triplenet Incorporated debt during the quarter ended September 30, 2005. To date, the Company has financed its operations through operating revenues, loans from directors, officers and stockholders, loans from the CEO and majority shareholder, and private placements of equity securities. The Company may be unable to raise additional equity capital until it achieves profitable operations and refinances its debt. The Company anticipates that it will meet its working capital requirements primarily through increased revenue, while controlling and reducing costs and expenses. However, no assurances can be given that the Company will be able to meet its working capital requirements. 10 Item 3 - Controls and Procedures (a) Evaluation of disclosure controls and procedures. The Company maintains disclosure controls and procedure that are designed to ensure that information required to be disclosed in the Company's reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed summarized and reported within the specified time periods. As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of these disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15(e) of the Exchange Act. Based on the evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. While the Company believes that the disclosure controls currently in place are adequate to prevent material misstatements, the Company has found significant internal control deficiencies in its accounting for pre-1999, fully aged, and fully depreciated property, plant and equipment that they will work to rectify in the coming year in preparation for section 404 of the Sarbanes Oxley Act of 2002. As previously stated in form 10-KSB/A for the Fiscal Year Ended, dateYear2005Day30Month6June 30, 2005, the nature of the deficiency is a result of disparities in the physical identification of Pre-1999, PPE and their retention in the fixed asset system. As such, the Company is reconciling those items on hand and still in use, and will need to properly account for the disposal of the fully depreciated assets that are no longer employed in the normal course and scope of the Company's operation. The Company maintains that there is no material weakness or misstatement and expects to fully reconcile the disparities by year's end while investigating and employing a more official asset tracking software and barcode system. (b) Changes in internal controls. The Company's Chief Executive Officer and Chief Financial Officer have determined that there have been no changes in the Company's internal control over financial reporting during the period covered by this report identified in connection with the evaluation described in the above paragraph that have materially affected, or are reasonably likely to materially affect, Company's internal control over financial reporting. (Balance of the page intentionally left blank) 11 Part II - OTHER INFORMATION Item 1 - Legal Proceedings None Item 2 - Changes in Securities o In July 2005 3,115 shares were issued per anti-dilution agreement with the CEO. o In August 2005 2,688 shares were issued to an employee in lieu of cash compensation. Item 5 - Other Information None Item 6 - Exhibits (for the period 7/1/05 through 9/30/05) Exhibit 3.1 Articles of incorporation (1) Exhibit 3.2 By-laws (1) Exhibit 3.3 Certificate of amendment Exhibit 10.1 License Agreement, First Right of Offer Agreement and Exclusivity Agreement with Cannon solution (2) Exhibit 10.2 Employment agreement with Aaron Prevo (3) Exhibit 14.1 Code of Ethics Exhibit 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbannes-Oxley Act of 2002. Exhibit 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbannes-Oxley Act of 2002. Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbannes-Oxley Act of 2002. Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbannes-Oxley Act of 2002. (1) Incorporated by reference to Form DEF 14C filed on June 5, 2002 (2) Incorporated by reference to Form 8K filed on August 11, 2005 (3) Incorporated by reference to Form 10KSB/A filed on October 14, 2005 for the year ended June 30, 2005 (Balance of the page intentionally left blank) 12 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: September 13, 2006 PARK CITY GROUP, INC By /s/ Randall K. Fields ----------------------------------- Randall K. Fields, Principal Executive Officer & CEO Chairman of the Board and Director Date: September 13, 2006 By /s/ William Dunlavy ----------------------------------- William Dunlavy Chief Financial Officer and Secretary (Principal Financial Officer) (Balance of the page intentionally left blank) 13 EX-31.1/ 2 ex311qa093005.txt RULE 13A-14(A)/15D-14(A) CERTIFICATIONS Exhibit 31.1 Park City Group, Inc. & Subsidiaries Certification Of Principal Executive Officer And Principal Financial Officer Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002 I, Randall K. Fields, certify that: 1. I have reviewed this quarterly report on Form 10-QSB/A for the period ended September 30, 2005 of Park City Group, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) 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 quarterly report is being prepared; b. Paragraph omitted pursuant to SEC release Nos. 33-8293 and 34-47986 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 quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. 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. Date: September 13, 2006 /s/ Randall K. Fields - ------------------------------------- Principal Executive Officer, CEO EX-31.2 3 ex312qa093005.txt RULE 13A-14(A)/15D-14(A) CERTIFICATIONS Exhibit 31.2 Park City Group, Inc. & Subsidiaries Certification Of Principal Executive Officer And Principal Financial Officer Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002 I, William Dunlavy, certify that: 1. I have reviewed this quarterly report on Form 10-QSB/A for the period ended September 30, 2005 of Park City Group, Inc.; 2. Based on my knowledge, this quarterly 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 quarterly 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 quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) 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 quarterly report is being prepared; b. Paragraph omitted pursuant to SEC release Nos. 33-8293 and 34-47986 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 quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. 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. Date: September 13, 2006 /s/ William Dunlavy - -------------------------------- Principal Financial Officer, CFO EX-32.1 4 ex321qa093005.txt SECTION 1350 CERTIFICATIONS Exhibit 32.1 Park City Group, Inc. & Subsidiaries Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 In connection with the quarterly report of Park City Group, Inc. (the "Company") on form 10-QSB/A for the quarter ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Randall K. Fields, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (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. Dated: September 13, 2006 /s/ Randall K. Fields - -------------------------------- Principal Executive Officer, CEO (Balance of page intentionally left blank) EX-32.2 5 ex322qa093005.txt SECTION 1350 CERTIFICATIONS Exhibit 32.2 Park City Group, Inc. & Subsidiaries Certification Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002 In connection with the quarterly Report of Park City Group, Inc. (the "Company") on form 10-QSB/A for the quarter ending September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, William Dunlavy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that: (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. Dated: September 13, 2006 /s/ William Dunlavy - -------------------------------- Principal Financial Officer, CFO (Balance of page intentionally left blank) -----END PRIVACY-ENHANCED MESSAGE-----