SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2016

Significant Accounting Policies

SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The financial statements presented herein reflect the consolidated financial position of Park City Group, Inc. and subsidiaries.  All inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that materially affect the amounts reported in the consolidated financial statements.  Actual results could differ from these estimates.  The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its financial statements.  The Securities and Exchange Commission has defined the most critical accounting policies as those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, the Company’s most critical accounting policies include:  income taxes, goodwill and other long-lived asset valuations, revenue recognition, stock-based compensation, and capitalization of software development costs.

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 six months ended December 31, 2015 warrants to purchase 1,426,178 shares of common stock were not included in the computation of diluted EPS due to the anti-dilutive effect.  Such warrants were outstanding at prices ranging from $3.50 to $10.00 per share.

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2016		2015		2016		2015
Numerator
Net income (loss) applicable to common shareholders	$	1,182,880	$	110,623	$	1,610,529	$	(496,057	)
Denominator
Weighted average common shares outstanding, basic		19,338,000		19,147,000		19,302,000		19,094,000
Warrants to purchase common stock		975,000		888,000		191,000		-
Weighted average common shares outstanding, diluted		20,313,000		20,034,000		19,493,000		19,094,000
Net income (loss) per share
Basic	$	0.06	$	0.01	$	0.08	$	(0.03	)
Diluted	$	0.06	$	0.01	$	0.08	$	(0.03	)

Reclassifications

            Certain prior-year amounts have been reclassified to conform with the current year's presentation.