FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended December 31, 2002
Commission File Number 000-03718
PARK CITY GROUP, INC.
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(Exact name of small business issuer as identified in its charter)
Nevada 37-1454128
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
333 Main Street, Park City, Utah 84060
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(Address of principal executive offices)
(Zip Code)
(435) 649-2221
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(Registrant's telephone number, including area code)
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.
Yes [X] 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 February 18, 2003
----------------------------- ------------------------------------
Common Stock, $.01 par value 199,719,400; 2,326 shareholders
1
PARK CITY GROUP, INC. AND SUBSUDIARIES
Index to Consolidated Condensed Financial Statements
Part 1 - Financial Information
Item 1 - Financial Statements
Consolidated Condensed Balance Sheet as of December 31, 2002
(unaudited) 3
Consolidated Condensed Statement of Operations for the three
and six months ended December 31, 2002 and 2001 (unaudited) 4
Consolidated Condensed Statement of Cash Flows for the six
months ended December 31, 2002 and 2001 (unaudited) 5
Notes to Consolidated Condensed Financial Statements 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and results of Operations 7
Item 3 - Quantitative and Qualitative disclosures about Market Risk 7
Item 4 - Controls and Procedures 8
Part 2 - Other Information 10
Item 1 - Legal Information 10
Item 2 - Changes in the Securities 10
Item 3 - Defaults Upon Senior Securities 10
Item 4 - Submission of Matter to Vote of Security Holders 10
Item 5 - Other Information 10
Item 6 - Exhibits 10
2
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
(Unaudited)
December 31, 2002
-----------------
Assets
Current assets
Cash and cash equivalents $ 224,560
Trade receivables, net of allowance of $48,683 987,046
Prepaid expenses and other current assets 139,142
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Total current assets 1,350,748
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Property and equipment, net 124,325
Other assets
Deposits and other assets 109,993
Capitalized software costs, net 3,006,855
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Total assets $ 4,591,921
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Liabilities and Stockholders' Deficit
Current liabilities
Note payable net of discount of $646,437 $ 152,978
Accounts payable 709,048
Accrued liabilities 395,188
Deferred revenue 1,733,718
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Total current liabilities 2,990,932
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Long-term liabilities
Related parties net of discount of $179,711 5,331,003
Notes payable 975,000
Accrued interest on related party notes payable 803,690
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Total long-term liabilities 6,209,693
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Total liabilities 9,200,625
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Commitments and contingencies -
Stockholders' deficit
Preferred stock, $.01 par value 30,000,000 shares authorized,
no shares issued -
Common stock, $.01 par value, 300,000,000 shares authorized,
205,533,709 shares issued and outstanding 2,056,338
Additional paid-in capital 6,960,861
Stock subscriptions receivable (1,068,200)
Treasury stock (30,000)
Accumulated deficit (12,527,703)
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Total stockholders' deficit (4,608,704)
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4,591,921
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See accompanying notes to consolidated financial statements.
3
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Operations
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
----------- ----------- ----------- -----------
Revenues
Software licenses $ 279,081 $ 362,102 $ 1,151,198 $ 1,593,660
Maintenance and support 483,522 473,929 947,522 934,858
Consulting and other 217,971 6,588 320,650 52,143
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980,574 842,619 2,419,370 2,580,661
Cost of revenues 179,467 162,952 261,874 356,062
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Gross Profit 801,107 679,667 2,157,496 2,224,599
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Research and development 205,764 142,946 325,328 380,209
Sales and marketing 336,345 426,756 716,766 780,648
General & administrative expenses 704,233 405,712 1,274,797 778,875
Income (loss) from operations (445,235) (295,747) (159,395) 284,867
----------- ----------- ----------- -----------
Other income (expense)
Interest Income (expense) (524,134) (169,761) (888,740) (330,178)
----------- ----------- ----------- -----------
(Loss) before income taxes (969,369) (465,508) (1,048,135) (45,311)
----------- ----------- ----------- -----------
(Provision) benefit for income taxes
Current - - - -
Deferred - 164,000 - -
----------- ----------- ----------- -----------
Net (loss) $ (969,369) $ (301,508) $(1,048,135) $ (45,311)
Weighted average shares, basic 196,103,000 150,392,000 189,328,000 149,834,000
=========== =========== =========== ===========
Weighted average shares, diluted 196,103,000 150,392,000 189,328,000 149,834,000
=========== =========== =========== ===========
Basic (loss) per share $ 0.00 $ 0.00 $ (0.01) $ 0.00
=========== =========== =========== ===========
Diluted (loss) per share $ 0.00 $ 0.00 $ (0.01) $ 0.00
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements
4
PARK CITY GROUP, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
(Unaudited)
Six Months Ended
December 31,
2002 2001
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Cash flows from operating activities:
Net loss $ (1,048,135) $ (45,311)
Adjustments to reconcile net loss to net
Cash provided by operating activities:
Depreciation and amortization 52,632 87,741
Bad debt expense (8,157) -
Loss on sale of assets - 4,129
Compensation expense on issuance of stock and stock options 372,988 16,000
Repricing of warrants 11,178 -
Amortization of discounts on debt 375,839 -
Decrease (increase) in:
Trade receivables (243,125) 300,797
Related party receivables - 19,032
Prepaid expenses and other current assets (22,722) (115,397)
(Decrease) increase in:
Accrued interest on long-term related party notes payable 324,521 175,380
Accrued liabilities (137,846) 5,204
Accounts payable 141,900 (36,196)
Deferred revenue 102,850 (988,030)
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Net cash used in by operating activities (78,077) (576,651)
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Cash flows from investing activities:
Purchases of property and equipment - (26,414)
Capitalization of software costs (650,048) (772,265)
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Net cash used in investing activities (650,048) (798,679)
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Cash flows from financing activities:
Proceeds from issuance of common stock - 891,870
Proceeds from collection of common stock subscriptions - 206,800
Net (payments) proceeds on line of credit (62,500) 395,000
Principal payments on capital leases (3,102) (3,328)
Principal payments on notes payable (132,685) (78,843)
Proceeds from Issuance of debt 1,010,000 -
Deposits for unissued stock - 329,880
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Net cash provided by financing activities 811,713 1,741,379
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Net increase in cash and cash equivalents 83,588 366,049
Cash and cash equivalents, beginning of period 140,972 218,482
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Cash and cash equivalents, end of period $ 224,560 $ 584,531
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See accompanying notes to consolidated financial statements.
5
PARK CITY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2002
Note 1 - Unaudited Financial Statements
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The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for quarterly financial
statements. 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, 2002 Annual Report on Form 10-KSB.
Note 2 - Non Cash Transactions
------------------------------
In connection with the Bridge Notes issued in November 2002 (see note 3), Bridge
Note A was repayed and the Company recorded a $59,917 discount related to the
7.5% interest discount at which the notes were financed. The Company also
recorded a $738,981 discount related to the warrants. For the period from the
date of the Bridge Notes to December 31, 2002, the Company amortized $223,378
and $152,461 of the interest and warrants discounts on Bridge Note A & B
respectively. The Company issued 8,625,000 shares of common stock issued
pursuant to anti-dilution rights to AW Fields Acquisition (see not 3), and was
recorded as an increase to common stock and decrease to additional paid-in
capital of $86,250. Thus increasing the shares issued under anti-dilution for AW
Fields to 17,083,334
The Company issued 4,189,285 shares of common stock pursuant to anti-dilution
rights to an officer and directors (see note 3), which was recorded as an
increase to common stock of $41,893, an increase to additional paid-in capital
of $125,678 and an expense of shares issued for services of $167,571, which was
included in general and administrative expense during the six months ended
December 31, 2002. Thus increasing the number of shares issued under
anti-dilution for an officer and directors to 8,297,620 and total expense for
these share to $372,988.
The modification of Bridge Note A warrants from an exercise price of $.07 to
$.04 resulted in an expense of $11,178 (see note 3).
During the period ending December 31, 2002 the Company obtained a $2,000,000
note payable from an entity controlled by a shareholder, a $250,000 advance from
an officer and majority shareholder and a credit facility of $200,000 from an
officer and majority shareholder. The proceeds were used to repay other
outstanding notes payable of approximately $2,119,000 and accrued interest. As a
result of the new $2,000,000 note payable, the Company incurred a finders fee
paid in 3,809,524 shares of common stock and a warrant to purchase 7,142,857
shares of common stock. The shares of common stock have a fair market value of
$152,381 which was recorded as a prepaid expense and will be amortized into
expense over the two-year term of the note payable. The fair value of the
warrants of $179,711 was recorded as a discount on the note payable and will be
amortized into interest expense over the two-year term of the note payable.
Note 3 - Related party Transactions
-----------------------------------
In November 2002 the Company issued a second Bridge Note repaying Bridge Note A
and replacing it with a new Bridge Note B valued at approximately $739,000. The
new Bridge Note carries an interest rate of 10% per annum, a due date of July
31, 2003 and was issued at a 7.5% discount. This financing carried warrants to
purchase 19,972,451 common shares at $.04 per share, expiring in November 2007.
The discount from the warrants was determined to be $738,981, which is to be
amortized into interest over the term of the Bridge Notes. Total interest
expense including the 7.5% interest discount, 10% interest and $738,981 warrants
discount is $848,829, or an effective annual interest rate of 110%. The bridge
note participants are previous investors, current directors, and an officer of
the Company. The officer advanced $230,000 to the Company, holds an approximate
$270,500 bridge note payable and was issued 6,761,614 of the attached warrants.
As a result of the price of Bridge Note B warrants being issued at $.04 per
share the anti-dilution rights associated with the warrants of the first Bridge
Note and the anti-dilution rights associated with the sale of shares made
earlier in the year ( AW Fields Acquisition and private placement including
directors and officer) were triggered. This resulted in 12,814,286 additional
shares being issued, and the number of shares to be purchased under warrants
with anti-dilution rights increased by 8,625,000 shares. The warrant price to
purchase a total of 28,750,001 and 5,350,000 common shares were reduced to $.07
and $.04 per share, respectively. The AW Fields Acquisition agreement allows for
the further anti-dilution right to $.04 per share level, but AW Fields
Acquisition has waived this right for this transaction.
In December 2002, the Company obtained a $2,000,000 note payable funding from an
entity controlled by a shareholder, a $250,000 advance from an officer and
majority shareholder and a credit facility of $200,000 from an officer and
majority shareholder. The proceeds were used to repay other outstanding notes
payable of approximately $2,119,000, and to fund working capital needs. The
$2,000,000 note payable has an interest rate of 18%, a due date of December 24,
2004, and monthly interest only payments until the due date. The $250,000
advance and the $200,000 credit facility have an interest rate that shall be no
greater than 18% and a due date no sooner than December 24, 2004. As a result of
the new $2,000,000 note payable, the Company incurred a fee paid in 3,809,524
shares of common stock and a warrant to purchase 7,142,857 shares of common
stock, exercisable at $0.07 per share, immediately exercisable and expiring in
December 2004. The discount from the warrants was determined to be $179,711,
which is to be amortized into interest expense over the two-year term of the
note. The value of the shares of common stock issued as a finders fee have a
fair market value of $152,381, which is to be amortized into expense over the
two-year term of the note. Total interest expense to be incurred over the note
term including the 18% interest and $179,711 warrants discount is $899,711, or
an effective annual interest rate of 23%.
Effective September 1, 2002 and in consideration for an extension of terms, the
interest rate on the long-term related party payable to an entity controlled by
an officer and majority shareholder increased from 10% to 12%, and interest is
now calculated on a compounded basis instead of a simple basis, adjusted
retroactively.
6
Forward-Looking Statements
--------------------------
This quarterly report on Form 10-QSB contains forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. 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" within the mea/ning of the Private
Securities Litigation Reform Act of 1995. 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 annual report at June 30, 2002. 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.
7
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Reference 10-KSB for year ending 06/30/02 - Exhibit to this filing.
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Three Months Ending December 31, 2002 and 2001
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During the three months ending December 31,2002, we had total revenues of
$980,574 compared to $842,619 for the same period in 2001. As the Fresh Market
Manager application reached market readiness, the focus of the sales
organization was directed specifically to cultivating prospects in the
perishable departments of the supermarket and grocery segment. Recognized
software license revenue decreased in the quarter ended December 31, 2002 over
the previous quarter and the previous year comparable quarter due to a more time
consuming education process for prospective customers in understanding the
benefits of the Fresh Market Manager products and the unsettled national
economy. There was no relevant change in Maintenance and Support revenue. The
average customer of Park City Group purchases maintenance support services for 5
years. Consulting revenue in the three months ending December 31,2002 increased
to $217,971 vs. $6,588 for the same period in 2001. The consulting organization
experienced an increase in revenues generated due to the services provided to
customers who had entered into Fresh Market Manager implementations that
requested data input and product configurations to meet specific business
requirements.
Research and development expenses after capitalization of software development
costs, for the three months ended December 31,2002 were $205,764 compared with
$142,946 during the comparable period in 2001. The increase in R&D expense
during this period over the prior year period can be attributed to the addition
of resources to bring Fresh Market Manager software to a market ready state and
the Company no longer capitalized costs as the product was being sold. Sales and
Marketing expenses in the period ending December 31, 2002 were $336,345 as
compared to $426,756 for the same period in 2001. This decrease can be
attributed to a Sales team reorganization and subsequent headcount reduction.
The Quarter ended December 31, 2002 had selling, general and administrative
expenses of $704,233 as compared to $405,712 for the same period ended 2001. The
increase in expenses is attributed primarily to 4,189,286 shares of common stock
issued to certain directors and an officer and majority shareholder valued at
$167,571 pursuant to anti-dilution provisions held by those individuals.
Interest expense for the three months ended December 31, 2002 was $524,124
compared to $169,761 in the comparable period in the prior year, an increase of
$354,373 or 208.7%. The increase is partially due to the amortization of the
interest and warrants discount on the bridge notes payable. For the three months
ended December 31, 2002, a total of $152,461 of interest and warrants discounts
on the bridge notes payable was amortized into interest expense. The remainder
of the increase in interest expense for the three months ended December 31, 2002
compared to the comparable period in the prior year is mostly due to interest
expense incurred on the long-term related party note payable to an entity
controlled by an officer and majority shareholder. Effective September 1, 2002
and in consideration for an extension of terms, the interest rate increased from
10% to 12%, and interest is now calculated on a compounded basis instead of a
simple basis, adjusted retroactively.
Six Months Ending December 31, 2002 and 2001
--------------------------------------------
During the six months ending December 31,2002, we had total revenues of
$2,419,370 compared to $2,580,661 for the same period in 2001 a decrease of
$161,291 or approximately 6.2%. We attribute this decrease to delays in the
prospective customer buying cycles due to the unsettled national economy, the
anticipated affect of the economic conservatism on holiday sales (which has a
very strong impact on the conditions in the retail market) and the time involved
to educate prospective users of Fresh Market Manager as to its benefits. There
was no relevant change in Maintenance and Support revenue. Consulting revenue in
the six months ending December 31,2002 increased to $320,650 from $52,132 for
the same period in 2001 or an increase of $268,518 or 515.1%. This increase is
due to new customers having shown an increased interest in the use of consulting
resources directly from the vendor and an increased number of proofs of concept
for the Fresh Market Manager application.
Research and development expenses after capitalization of software development
costs, for the six months ended December 31,2002 decreased $54,881 or
approximately 14.4% and were $325,328 as compared to $380,209 in the same period
in 2001. We attribute this decrease in the current year to the reduction in
resource requirements when compared with the prior year for development
activities for Fresh Market Manager product.
Sales and Marketing expenses in the six month period ending December 31, 2002
were $716,766 as compared to $780,648 for the same period in 2001, a decrease of
$63,882 or approximately 8.2%, This decreased can be attributed to a Sales team
reorganization and subsequent headcount reduction as well as reclassification of
a portion of an officer's salary/compensation to the newly defined category of
Sales, General and Administrative expenses.
The six months ended December 31, 2002 had selling, general and administrative
expenses of $1,274,797 as compared to $778,875 for the same period ended 2001.
The increase in expenses of $495,922 or approximately 63.7% is mainly attributed
to shares of common stock issued to certain directors and an officer and
majority shareholder due to anti-dilution provisions held by those individuals.
Other reasons include organization changes necessary to support the sales and
strategic alliances efforts of the Company and a portion of the increase has
been due to the reclassification of a portion of an officer's
salary/compensation.
Interest expense for the six months ended December 31, 2002 was $888,740
compared to $330,178 in the comparable period in the prior year, an increase of
$558,562 or 169.2%. The increase is partially due to the amortization of the
interest and warrants discount on the bridge notes payable. For the six months
ended December 31, 2002, a total of $375,839 of interest and warrants discounts
on the bridge notes payable was amortized into interest expense. The remainder
of the increase in interest expense for the six months ended December 31, 2002
compared to the comparable period in the prior year is mostly due to interest
expense incurred on the long-term related party note payable to an entity
controlled by an officer and majority shareholder. Effective September 1, 2002
and in consideration for an extension of terms, the interest rate increased from
10% to 12%, and interest is now calculated on a compounded basis instead of a
simple basis, adjusted retroactively.
8
Liquidity and Capital Resources
-------------------------------
Reference 10-KSB for year ending 06/30/02. The Company completed during the
quarter ended December 31, 2002 a key transaction to address significant
outstanding obligations and provide for increased working capital. In December
2002, the Company obtained a $2,000,000 note payable funding from a related
party, a $250,000 advance from an officer and a credit facility of $200,000 from
an officer. The proceeds were used to repay other outstanding notes payable of
approximately $2,119,000, and to fund working capital needs. Additional
description may be viewed in the 8-K dated December 31, 2002.
In February, 2003, the Company received $1,000,000 under terms of a multi year
contract from an entity that will be the exclusive re-seller of the Company's
Fresh Market Manager to the grocery industry. The Company believes this
exclusive re-seller agreement will provide additional resources to improve the
Company's liquidity and capital constraints.
Item 3 - Quantitative and Qualitative Disclosures about Market Risk
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Reference 10-KSB for year ending 06/30/02.
Item 4 - Controls and Procedures
--------------------------------
(a) Evaluation of disclosure controls and procedures.
Randall K. Fields who serves as Park City Group's chief executive officer and
Edward Dmytryk who serves as Park City Group's chief financial officer, after
evaluating the effectiveness of Park City Group's disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(c) as of a
date within 90 days of the filing date of the quarterly report (the "Evaluation
Date") concluded that as of the Evaluation Date, Park City Group's disclosure
controls and procedures were adequate and effective to ensure that material
information relating to Park City Group and its consolidated subsidiaries would
be made known to them by others within those entities, particularly during the
period in which this quarterly report was being prepared.
(b) Changes in internal controls.
There were no significant changes in Park City Group's internal controls or in
other factors that could significantly affect Park City Group's disclosure
controls and procedures subsequent to the Evaluation Date, nor any significant
deficiencies or material weaknesses in such disclosure controls and procedures
requiring corrective actions. As a result, no corrective actions were taken.
9
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
--------------------------
Debra Elenson vs. Fields Technologies, and Randall K. Fields (Filed -January
2002, in the Circuit Court of the 11th Judicial Circuit in and for Dade County,
Florida): The plaintiff alleges, among other causes of actions, that a private
placement memorandum pursuant to which the plaintiff had purchased shares of
Fields Technologies, contained financial statements which were not prepared in
accordance with generally accepted accounting principles and the requirements of
SEC regulation S-X. The plaintiff alleges fraud, misrepresentation, unregistered
sales of securities and other causes of actions. The plaintiff seeks a
rescission of her investment in the company, damages and legal fees. The
defendants deny each of plaintiff's allegations, believe that the plaintiff's
claims have no merit and will vigorously defend the matter. The case has been
removed to the federal district court in Florida.
Lawrence A. Locke et al vs. Market Watch Corporation, and Fields Technologies,
Inc. (Filed - September 2001, in the Circuit Court of Oregon in Multnomah
County): The plaintiff alleges, among other causes of action, that the
defendants sent or caused to be sent unsolicited facsimile advertisement in
violation of the Telephone Consumer Protection Act. The plaintiff is seeking to
have the case certified as a class action and is looking for damages caused by
wear and tear of his facsimile machine and use of phone lines, toner, ink,
paper, etc. This matter was settled in September 2002 for a nominal amount.
In August 2002, the Company filed legal action against The Yankee Companies,
Inc. et al. The defendants were entities and individuals involved in the
reorganization of Amerinet and its acquisition of control of Park City Group
(Delaware). These causes of actions include: violation of Florida's Securities
and investor Protection Act, Fraud, negligent misrepresentation, violation of
Federal Securities Acts 1933 and 1934 and breach of promissory note. This action
has been filed in the State of Utah but is in the preliminary stages of
discovery.
Approximately two weeks following the filing of the complaint against Yankee
Companies, the Company was served with a complaint by Yankee Companies and
others, alleging sales of unregistered securities, securities fraud,
registration violations, fraud negligent misrepresentation, and breach of loan
agreement. On or about February 5, 2003 the case was dismissed based on the fact
that the Utah case filed by the Company was filed first and all isues can be
argued in that case.
Item 2 - Changes in Securities
------------------------------
Please reference 10-KSB for year ending 6/30/02 incorporated by
reference.
Item 3 - Defaults Upon Senior Securities
----------------------------------------
Please reference 10-KSB for year ending 6/30/02 incorporated by
reference.
Item 4 - Submission of Matters to Vote of Security Holders
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Please reference 10-KSB for year ending 6/30/02 incorporated by
reference.
Item 5 - Other Information
--------------------------
Please reference 10-KSB for year ending 6/30/02 incorporated by
reference.
Item 6 - Exhibits and Reports on Form 8K (for period 7/1/02 through 9/30/02)
----------------------------------------------------------------------------
Items below incorporated by reference.
Exhibit 1 - Please reference 10-KSB for year ending 6/30/02 as an exhibit to
this filing
Exhibit 2 - On August 7, 2002 Fields Technologies Inc., issued the press release
changing its name from Fields Technologies, Inc., to Park City Group, Inc. and
reincorporated in Nevada. Incorporated by reference as an Exhibit to this
filing.
Exhibit 3 - On August 16, 2002, the Company completed a private offering
consisting of $535,000 in promissory notes and warrants to purchase 5,350,000 of
the Company's Common stock at $.10 per share. The note and warrant are a
non-registered offering made in reliance on Section 4(2) of the Securities Act
of 1933, as amended, and/or Rule 506 promulgated thereunder. The Company intends
to use the net proceeds generated from the notes for working capital, capital
expenditures and debt reduction. Incorporated by reference as an Exhibit to this
filing.
Exhibit 4 - On October 15, 2002 the Company filed a Current Report on Form 8-K
dated October 15, 2002 disclosing under Item 9 that Ed Dmytryk was appointed
acting chief financial officer and will continue to fulfill his duties on the
Board of Directors but resigned his position as Chairman and member of the
Board's Audit Committee. In addition, Anthony E. Meyer was approved as new
member of the Board of Directors, replacing the resigning Stephen D. Weinroth.
Exhibit 5 - On November 27, 2002 the Company filed a Current Report on Form 8-K
dated November 27, 2002 disclosing under Item 9 the repayment of the August 16,
2002 bridge financing and replacing it with a private offering of $798,898 in
notes payable with warrants to purchase 19,972,451 shares of common stock at
$.04 per share in bridge financing.
Exhibit 6 - On January 2, 2003, the Company filed a Current Report on Form 8-K
dated December 31, 2002 disclosing under Item 9 the restructuring of a portion
of the company's long-term debt. The company has structured a $2.25 million loan
package that retired its debt to Cooper Capital Incorporated and to Bank One
Corporation. The loan package was structured with Whale Investments, LTD.
10
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: February 20, 2003 FIELDS TECHNOLOGIES, INC.
By /s/ Randall K. Fields
---------------------------------
Randall K. Fields, President and
Chief Executive Officer
Date: February 20, 2003 By /s/ Edward C. Dmytryk
---------------------------------
Edward C. Dmytryk,
Director and acting Chief Financial
Officer
11
Park City Group, Inc. & Subsidiaries
Certification Of Chief Executive And Chief Financial Officer
Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
I, Randall K. Fields certify that I have received this quarterly report
on Form 10-Q of Park City Group, Inc.:
1. 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
quarterly report;
2. 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:
3. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act rules 13a-14 and 15d-14) for the registrant and we have:
a. Designed such disclosure controls and procedures to ensure
that materials 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. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
4. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weakness in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
5. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 20, 2003
/s/ Randall K. Fields
----------------------------------------
President and Chief Executive Officer
12
Park City Group, Inc. & Subsidiaries
Certification Of Chief Executive And Chief Financial Officer
Pursuant To Section 302 Of The Sarbanes-Oxley Act Of 2002
I, Edward C. Dmytryk I have received this quarterly report on Form 10-Q
of Park City Group, Inc.:
1. 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
quarterly report;
2. 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:
3. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act rules 13a-14 and 15d-14) for the registrant and we have:
a. Designed such disclosure controls and procedures to ensure
that materials 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. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;
4. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weakness in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
5. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: February 20, 2003
/s/ Edward C. Dmytryk
-------------------------------------------
Director and Acting Chief Financial Officer
13
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-Q for the three months ending December 31, 2002 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: February 20, 2003
/s/ Randall K. Fields
-------------------------------------
President and Chief Executive Officer
14
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-Q for the three months ending December 31, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Edward C. Dmytryk, Chief Financial 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: February 20, 2003
/s/ Edward C. Dmytryk
-------------------------------------
Director and Chief Financial Officer
15