UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
Information Statement Pursuant to Section 14 (c)
of the Securities Exchange Act of 1934 (Amendment No. ______)
Check the appropriate Box:
[X] Preliminary Information Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
PARK CITY GROUP, INC.
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(Name of Registrant As Specified In Its Charter
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-1:
(1) Title of each class of securities to which transaction applies: NA
(2) Aggregate number of securities to which transaction applies: NA
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): NA
(4) Proposed maximum aggregate value of transaction: NA
(5) Total Fee Paid: NA
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previously
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid: $0
(2) Form, Schedule or Registration Statement No. NA
(3) Filing Party: NA
(4) Date Filed: NA
Contact Person: A. O. Headman, Jr., ESQ, Cohne Rappaport & Segal
257 East 200 South, Suite 700, Salt Lake City, UT 84111;
Tel: 801-532-2666, Fax: 801-355-1813
PARK CITY GROUP, INC.
333 Main Street, Suite 300
Park City, UT 84060
NOTICE OF ACTION TO BE TAKEN WITHOUT A STOCKHOLDERS' MEETING
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TO OUR STOCKHOLDERS:
Notice is hereby given that Park City Group, Inc. plans to take certain
corporate action pursuant to the written consent of our Board of Directors and
the holders of a majority of our outstanding voting securities ("Majority
Stockholders"). The action we plan to take is to (i) amend our Articles of
Incorporation to decrease the number of shares of common stock which we are
authorized to issue from 500,000,000 to 50,000,000 (the "Decreased Capital
Proposal"), and (ii) amend our Articles of Incorporation to effect a
one-for-fifty reverse split of our issued and outstanding shares of common stock
("Reverse Split Proposal").
On June 26, 2006, our Board of Directors unanimously approved the
Decreased Capital Proposal and the Reverse Split Proposal and the Majority
Stockholders have consented in writing to each of such proposals.
Both the Decreased Capital Proposal and the Reverse Split Proposal will
be affected through amendments to our Articles of Incorporation.
The Board of Directors has fixed the close of business on July 7, 2006,
as the Record Date for determining the stockholders entitled to notice of the
foregoing.
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS' MEETING
WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN AND NO PROXY OR VOTE IS
SOLICITED BY THIS NOTICE.
July 7, 2006
By Order of the Board of Directors
PARK CITY GROUP, INC.
333 Main Street, Suite 300
Park City, UT 84060
PRELIMINARY INFORMATION STATEMENT
July 7, 2006
This Information Statement is being provided to you by the
Board of Directors of Park City Group, Inc.
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This Information Statement and the Notice of Action Taken Without a
Stockholders' Meeting (jointly, the "Information Statement") is furnished by the
Board of Directors of Park City Group, Inc. ("We," "Us" or "Park City Group"), a
Nevada corporation, to the holders of the Park City Group's common stock at July
7, 2006 (the "Record Date") to provide information with respect to action taken
by the written consent of the Majority Stockholders. The Majority Stockholders
approved by written consent, proposals to:
o amend our Articles of Incorporation to decrease the number of
shares of common stock which we are authorized to issue from
500,000,000 to 50,000,000, and
o amend our Articles of Incorporation to effect a one-for-fifty
reverse split of our common stock ("Reverse Stock Split").
Because the Reverse Split will reduce the holdings of some stockholders
to a fractional amount below one (1) share and will create for others a
fractional amount because their shareholdings before the reverse split are not
evenly divisible by 50, those shareholders with fractional shares will be
entitled, upon surrender to the exchange agent of certificates representing such
shares, to receive cash in lieu of fractional shares based on the market price
of the stock on the date the reverse stock split becomes effective. The terms of
the Reverse Split provide that each fifty (50) of the outstanding shares of our
common stock on the date of the Reverse Split will be automatically converted
into one (1) share of our common stock, thereby reducing the number of shares of
common stock issued and outstanding. The Reverse Split does not change the $0.01
par value designation of our common stock. The Reverse Split does not change the
number of shares of our common stock authorized for issuance; however, the
Decreased Capital Proposal does decrease the number of shares of our common
stock authorized from 500,000,000 to 50,000,000.
The Board of Directors decided to obtain written consent of the
Majority Stockholders in order to avoid the costs and management time required
to hold a special meeting of stockholders. All required corporate approvals of
the Decreased Capital Proposal and the Reverse Split Proposal have been
obtained, subject to furnishing this notice and 20 days elapsing from the date
of this notice. This Information Statement is furnished solely for the purpose
of informing stockholders of this corporate action in the manner required by
Rule 14c-2(b) under the Securities Exchange Act of 1934, as amended.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
THIS IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDER'S
MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
We have asked brokers and other custodians, nominees and fiduciaries to
forward this Information Statement to the beneficial owners of our common stock
held of record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
INTEREST OF CERTAIN PERSONS IN FAVOR OF OR OPPOSITION
TO MATTERS ACTED UPON
We are not aware of any interest that would be substantially affected
through the adoption of the Decreased Capital Proposal or Reverse Split Proposal
whether adversely or otherwise.
VOTING SECURITIES
As of the Record Date, our authorized capitalization consisted of
500,000,000 shares of common stock, par value $.01 per share, and 30,000,000
shares of preferred stock, par value $.01 per share. At July 5, 2006, there were
446,561,686 shares of common stock outstanding and no shares of preferred stock
outstanding.
Each share of common stock entitles its holder to one vote on each
matter submitted to the common stockholders for a vote. We have obtained the
written consent of the Majority Stockholders representing 226,943,119 votes on
the Reverse Split Proposal.
AMENDMENT TO ARTICLES OF INCORPORATION TO
DECREASE CAPITAL STOCK
General
Our Board of Directors has unanimously approved a proposal to amend our
Articles of Incorporation to decrease the number of shares of common stock which
we are authorized to issue from 500,000,000 to 50,000,000. Our Board has
recommended to our Majority Stockholders that they vote in favor of the
Decreased Capital Proposal and our Majority Stockholders have voted in favor of
the Decreased Capital Proposal. The votes of our Majority Stockholders were
obtained by written consent.
Consent Required
Approval of the Decreased Capital Proposal, through an amendment to our
Articles of Incorporation, requires the consent of the holders of a majority of
the outstanding voting shares. The Majority Stockholders beneficially own
226,943,119 shares of our common stock representing approximately 50.8% of the
votes that could be cast by the holders of our outstanding voting shares as of
the Record Date. The Majority Stockholders have given their written consent to
the Decreased Capital Proposal and accordingly, the requisite stockholder
approval of this Proposal was obtained by the execution of the Majority
Stockholders' written consent in favor of the Proposal.
Amendment
Our Board of Directors and the Majority Stockholders have voted to
amend Article V of our Articles of Incorporation to read as follows:
(Beginning of Amended Article V)
ARTICLE V
CAPITAL STOCK
The total number of shares of all classes of capital stock that the
Corporation has the authority to issue is 80,000,000 shares that are divided
into two classes as follows:(1) 30,000,000 shares of Preferred Stock (Preferred
Stock) $.01 par value per share, and (2) 50,000,000 shares of Common Stock
(Common Stock) $.01 par value per share. This Corporation is authorized to issue
two classes of shares. Except as may be otherwise required by law or this
Certificate of Incorporation, each holder of Common Stock has one vote in
respect of each share of stock held by him of record on the books of the
corporation on all matters voted upon by the Stockholders.
The Board of Directors may determine the preferences, limitations and
relative rights, to the extent permitted by the Nevada Revised Statutes, of any
class of shares of Preferred Stock before the issuance of any shares of that
class, or of one or more series within a class before the issuance of any shares
of that series. Each class or series shall be appropriately designated by a
distinguishing designation prior to the issuance of any shares thereof. The
Preferred Stock of all series shall have preferences, limitations and relative
rights identical with those of other shares of the same series and, except to
the extent otherwise provided in the description of the series, with those
shares of the series of the same class
(End of Amended Article V)
Reasons for Decrease in Capital
We currently have 500,000,000 shares of common stock authorized and
446,561,686 shares of common stock issued and outstanding. Subsequent to the
effective date of the Reverse Split, we will have approximately 8,931,234 shares
of common stock issued and outstanding and 976,793 shares issuable upon the
exercise of outstanding warrants, options and other convertible securities. We
do not anticipate that for the foreseeable future following the Reverse Split we
will need to have 50,000,000 shares authorized. By reducing the number of shares
authorized we anticipate that our filing fees in Nevada will be reduced,
Rather than reduce the number of shares of our common stock authorized
on the same basis as the Reverse Split (1-for-50), we believe that it is in the
best interests of Park City Group and its shareholders to have sufficient shares
authorized to be available, if needed, for future financings and other
transactions without the delay and expense associated with holding a special
meeting of stockholders.
We are actively seeking to expand our business by acquiring other
companies and additional shares will likely be issued as part of such an
acquisition if we are successful in obtaining other businesses. We have no other
specific plans at this time to issue additional shares of common stock.
The Board of Directors is authorized to issue any of the additional
shares of common stock and preferred stock at such times, to such persons and
for such consideration as it may determine in its discretion, except as may
otherwise be required by applicable law or the rules of any exchange on which
the common stock and preferred stock may be listed. At the present time, the
common stock and the preferred stock are not listed with any exchange.
There are certain advantages and disadvantages of maintaining
50,000,000 shares of our authorized common stock. The advantages include:
o The ability to raise capital by issuing capital stock in
financing transactions.
o The ability to fulfill our obligations by having common stock
available upon the exercise of outstanding options and
warrants.
o To have shares of common stock available to pursue business
expansion opportunities, if any.
The disadvantages include:
o The issuance of authorized but unissued stock could be used to
deter a potential takeover of Park City Group that may
otherwise be beneficial to stockholders by diluting the shares
held by a potential suitor or issuing shares to a shareholder
that will vote in accordance with our Board of Directors'
desires. A takeover may be beneficial to independent
stockholders because, among other reasons, a potential suitor
may offer such stockholders a premium for their shares of
stock compared to the then-existing market price. We do not
have any plans or proposals to adopt provisions or enter into
agreements that may have material anti-takeover consequences.
o Stockholders do not have any preemptive or similar rights to
subscribe for or purchase any additional shares of common
stock that may be issued in the future, and therefore, future
issuances of common stock may, depending on the circumstances,
have a dilutive effect on the earnings per share, voting power
and other interests of the existing stockholders.
Blank Check Preferred Stock
Neither the Decreased Capital Proposal nor the Reverse Split Proposal
will have any effect on our authorized preferred stock. We will continue to have
authorized 30,000,000 shares of preferred stock. Our class of preferred stock is
"blank check" preferred stock. The term "blank check" refers to preferred stock,
the creation and issuance of which is authorized in advance by the stockholders
and the terms, rights and features of which are determined by our Board of
Directors upon issuance without further stockholder approval. The authorization
of such blank check preferred stock permits the Board of Directors to authorize
and issue preferred stock from time to time in one or more series.
Subject to the provisions of our amended Articles of Incorporation and
the limitations prescribed by law, the Board of Directors would be expressly
authorized, at its discretion, to adopt resolutions to issue shares, to fix the
number of shares and to change the number of shares constituting any series and
to provide for or change the voting powers, designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether the dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), redemption prices, conversion rights and
liquidation preferences of the shares constituting any series of the preferred
stock, in each case without any further action or vote by the stockholders. The
Board of Directors would be required to make any determination to issue shares
of preferred stock based on its judgment as to the best interests of Park City
Group and its stockholders.
AMENDMENT TO ARTICLES OF INCORPORATION
TO EFFECT A REVERSE STOCK SPLIT OF COMMON STOCK
General
Our Board of Directors has unanimously approved a proposal to amend our
Articles of Incorporation to effect a reverse stock split, pursuant to which
every fifty (50) shares (the "Old Shares") of our outstanding common stock would
be exchanged for one new share (the "New Shares") of common stock.
The number of Old Shares for which each New Share is to be exchanged is
referred to as the "Exchange Number". The Reverse Stock Split will be affected
simultaneously for all shares of common stock and the Exchange Number will be
the same for all shares of common stock. Upon the effectiveness of the Reverse
Stock Split, each option or warrant right for common stock would entitle the
holder to acquire a number of shares equal to the number of shares which the
holder was entitled to acquire prior to the reverse stock split divided by the
Exchange Number at the exercise price in effect immediately prior to the Reverse
Stock Split, multiplied by the Exchange Number.
Our Board has recommended to our Majority Stockholders that they vote
in favor of the Reverse Split Proposal and our Majority Stockholders have voted
in favor of the Reverse Stock Split Proposal. The votes of our Majority
Stockholders were obtained by written consent.
The Board will have the authority to determine the exact timing of the
Effective Date (as defined below) of the reverse stock split, without further
stockholder approval. Such timing will be determined in the judgment of the
Board.
Consent Required
Approval of the Reverse Split Proposal, through an amendment to our
Articles of Incorporation, requires the consent of the holders of a majority of
the outstanding voting shares. The Majority Stockholders beneficially own
226,943,119 shares of our common stock representing approximately 50.8% of the
votes that could be cast by the holders of our outstanding voting shares as of
the Record Date. The Majority Stockholders have given their written consent to
this Reverse Split Proposal and accordingly, the requisite stockholder approval
of this Proposal was obtained by the execution of the Majority Stockholders'
written consent in favor of the Proposal.
Amendment
Our Board of Directors and the Majority Stockholders have voted to
further amend Article V of our Articles of Incorporation to add the following
language to the amended Article V stated above:
REVERSE STOCK SPLIT. At the effective time of the filing of the
Certificate of Amendment to Certificate of Incorporation of the
Corporation with the Secretary of State of the State of Nevada pursuant
to the General Corporation Law of the State of Nevada (the "Effective
Time"), each share of the Corporation's Common Stock, par value $0.01
per share (the "Old Common Stock"), issued and outstanding immediately
prior to the Effective Time, will be automatically reclassified as and
converted into one-fiftieth (1/50) of a share of Common Stock, par
value $0.01 per share (the "New Common Stock"), of the Corporation. Any
stock certificate that, immediately prior to the Effective Time,
represented shares of the Old Common Stock will, from and after the
Effective Time, automatically and without the necessity of presenting
the same for exchange, represent the number of shares of the New Common
Stock as equals the product obtained by multiplying the number of
shares of Old Common Stock represented by such certificate immediately
prior to the Effective Time by one- fiftieth (1/50). No fractional
shares of New Common Stock of the Corporation shall be issued. Each
holder of Old Common Stock at the Effective Time who would otherwise be
entitled to a fraction of a share shall, in lieu thereof, receive,
upon surrender to the exchange agent of certificates representing such
shares, cash in lieu of fractional shares based on the market price of
the stock on the date the reverse stock split becomes effective.
Board Discretion
The Board also reserves the right, notwithstanding stockholder approval
and without further action by the stockholders, not to proceed with the Reverse
Stock Split, if, at any time prior to filing the amendment to the Articles of
Incorporation with the Secretary of State of the State of Nevada, the Board, in
its sole discretion, determines that the Reverse Stock Split is no longer in
Park City Group's best interests or the best interests of our stockholders. The
Board may consider a variety of factors in determining whether or not to
implement the reverse stock split including, but not limited to,
o overall trends in the stock market;
o recent changes and anticipated trends in the per share market
price of the common stock, business and transactional
developments; and
o our actual and projected financial performance.
Reasons for the Reverse Stock Split
The primary purpose of the Reverse Stock Split is to increase
proportionately the per share trading price of Park City Group's common stock.
The Board of Directors believes that doing so may improve the perception of Park
City Group common stock as an investment and enable Park City Group common stock
to appeal to a broader range of investors. Park City Group believes that a
number of institutional investors are unwilling to invest, and in some cases,
have internal policies prohibiting them from investing, in lower priced stocks.
Park City Group also believes that many brokerage firms are reluctant to
recommend lower priced stocks to their clients. Because brokers' commissions on
low-priced stocks generally represent a higher percentage of the stock price
than commissions on higher priced stocks, the current share price of Park City
Group's common stock can result in shareholders paying transaction costs that
are a higher percentage of their total share value than would be the case if
Park City Group's common stock were priced substantially higher. This may limit
the willingness of investors to purchase Park City Group common stock. By
affecting the Reverse Stock Split, we believe we may be able to raise the
trading price of our common stock to a level at which Park City Group's common
stock could be viewed more favorably by potential investors. If the Reverse
Stock Split results in an increased trading price and increased investor
interest, the Board of Directors believes that shareholders may benefit from
improved trading liquidity of Park City Group's common stock.
Certain Effects of the Reverse Stock Split
The Reverse Stock Split will not affect the par value of the common
stock. As a result, on the Effective Date (as defined below) of the Reverse
Stock Split, the stated capital on the Company's balance sheet attributable to
the common stock will be reduced in proportion to the exchange ratio of one to
fifty (50), and the additional paid-in capital account shall be credited with
the amount by which the stated capital is reduced. The per share net income or
loss and net book value of our common stock will be increased because there will
be fewer shares of our common stock outstanding.
Upon the effectiveness of the Reverse Stock Split, the number of
authorized shares of common stock that are not issued or outstanding will
increase, as reflected in the following table:
PRIOR TO REVERSE AFTER REVERSE
STOCK SPLIT STOCK SPLIT
-------------------- ----------------
Number of shares of common stock:
Authorized 500,000,000 50,000,000
Outstanding 446,561,686 8,931,234
Reserved for issuance(1) 48,839,624 976,793
Available for future issuance 4,598,690 40,091,973
(1) Includes: (i) 44,841,935 shares issuable upon the exercise of outstanding
warrants and (ii) 3,997,689 shares issuable upon the exercise of outstanding
options granted under the Company's Non-Qualified Stock Option and Stock
Incentive Plan. The foregoing share amounts are as of the Record Date and do
not give effect to the reverse stock split.
As of the effective time of the Reverse Stock Split, each issued and
outstanding share of Park City Group common stock would immediately and
automatically be reclassified and reduced into one-fiftieth of a share of Park
City Group common stock.
Except to the extent that the Reverse Stock Split would result in any
shareholder receiving cash in lieu of fractional shares described below, the
reverse stock split will not:
o affect any shareholder's percentage ownership interest in Park
City Group;
o affect any shareholder's proportionate voting power;
o substantially affect the voting rights or other privileges of
any shareholder; or
o alter the relative rights of common shareholders, option
holders, warrant holders or holders of equity compensation
plan awards.
The principal effects of the reverse stock split are:
o the number of shares of common stock issued and outstanding
will be reduced by a factor of fifty;
o the per share exercise price will be increased by a factor of
fifty, and the number of shares issuable upon exercise shall
be decreased by the same factor, for all outstanding options,
restricted stock awards, restricted stock units, performance
share units, warrants and other convertible or exercisable
equity instruments entitling the holders to purchase shares of
Park City Group common stock; and
o the number of shares authorized and reserved for issuance
under Park City Group's existing equity compensation plans and
employee stock purchase plan will be reduced proportionately.
Stockholders should also recognize that if the Reverse Stock Split is
effected they will own a fewer number of shares than they presently own, equal
to the number of shares owned immediately prior to the filing of the amendment
divided by the Exchange Number. While we expect that the Reverse Stock Split
will result in an increase in the market price of the common stock, there can be
no assurance that the reverse stock split will increase the market price of the
common stock by a multiple equal to the Exchange Number or result in the
permanent increase in the market price, which is dependent upon many factors,
including our performance and prospects. Also, should the market price of the
common stock decline, the percentage decline as an absolute number and as a
percentage of our overall market capitalization may be greater than would
pertain in the absence of a Reverse Stock Split. Furthermore, the possibility
exists that liquidity in the market price of the common stock could be adversely
affected by the reduced number of shares that would be outstanding after the
Reverse Stock Split. In addition, the Reverse Stock Split will increase the
number of our stockholders who own odd lots, that is, less than 100 shares.
Stockholders who hold odd lots typically will experience an increase in the cost
of selling their shares, as well as possible greater difficulty in effecting
such sales. Consequently, there can be no assurance that the reverse stock split
will achieve the desired results that have been outlined above.
Procedure for Effecting the Reverse Stock Split and Exchange of Stock
Certificates
If the Board still believes that the Reverse Stock Split is in the best
interests of Park City Group and its stockholders, we will file the Certificate
of Amendment with the Secretary of State of the State of Nevada at such time as
the Board has determined the appropriate effective time for such split, but in
no event earlier than twenty (20) calendar days following the mailing of this
Information Statement to the stockholders of Park City Group. The reverse stock
split will become effective on the date of filing the amendment (the "Effective
Date"). Beginning on the Effective Date, each certificate representing Old
Shares will be deemed for all corporate purposes to evidence ownership of New
Shares.
As soon as practicable after the Effective Date, stockholders will be
notified that the Reverse Stock Split has been affected. Our transfer agent will
act as exchange agent for the reverse stock split for purposes of implementing
the exchange of stock certificates. Holders of Old Shares will be asked to
surrender to the exchange agent certificates representing Old Shares in exchange
for certificates representing New Shares in accordance with the procedures to be
set forth in a letter of transmittal to be sent by Park City Group. No new
certificates will be issued to a stockholder until such stockholder has
surrendered such stockholder's outstanding certificate(s), together with the
properly completed and executed letter of transmittal to the exchange agent.
Stockholders should not destroy any stock certificates and should not submit any
certificates until requested to do so.
No Fractional Shares
No scrip or fractional certificates will be issued in connection with
the reverse stock split. Stockholders who otherwise would be entitled to receive
fractional shares because they hold a number of Old Shares not evenly divisible
by the Exchange Number, will be entitled, upon surrender to the exchange agent
of certificates representing such shares, to receive cash in lieu of fractional
shares based on the market price of the stock on the date the reverse stock
split becomes effective.
Federal Income Tax Consequences of the Reverse Stock Split
The following is a summary of certain material federal income tax
consequences of the reverse stock split, and does not purport to be complete. It
does not discuss any state, local, foreign or minimum income or other U.S.
federal tax consequences. Also, it does not address the tax consequences to
holders that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding companies, foreign
entities, nonresident alien individuals, broker-dealers and tax-exempt entities.
The discussion is based on the provisions of the United States federal income
tax law as of the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the Old Shares were, and the
New Shares will be, held as a "capital asset," as defined in the Internal
Revenue Code of 1986, as amended (the "Code"), generally, property held for
investment. The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder. EACH STOCKHOLDER SHOULD
CONSULT WITH SUCH STOCKHOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE CONSEQUENCES
OF THE REVERSE STOCK SPLIT.
No gain or loss should be recognized by a stockholder of Park City
Group upon such stockholder's exchange of Old Shares for New Shares pursuant to
the reverse stock split. The aggregate tax basis of the New Shares received in
the reverse stock split, including any fraction of a New Share deemed to have
been received, will be the same as the stockholder's aggregate tax basis in the
Old Shares exchanged therefore. The stockholder's holding period for the New
Shares will include the period during which the stockholder held the Old Shares
surrendered in the reverse stock split.
DISSENTERS' RIGHTS
There are no dissenters' rights applicable to the amendment of our
Articles of Incorporation relating to Decreased Capital Proposal or the Reverse
Split Proposal.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth information regarding shares of our
Common Stock beneficially owned as of July 7, 2006 by: (1) each of our officers
and directors; (ii) all officers and directors as a group; and (iii) each person
known by us to beneficially own five percent or more of the outstanding shares
of its common stock.
Security Ownership of Certain Beneficial Owners
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of June 30, 2006, for each
person or entity that is known to beneficially own more than 5 percent of the
Common Stock. As of June 30, 2006, there were 446,561,686 shares of Common Stock
outstanding.
Amount of
Title of Beneficial Nature of Percent of
Class Name and Address of Beneficial Owner Ownership Ownership Class
----- ------------------------------------ --------- --------- -----
Common Randall K. Fields, Park City, Utah 24,360,278 Direct 5.46%
Common Riverview Financial Corp., Park City,
Utah (1) 192,256,976 (2) Direct 43.05%
----------- ------
Total 216,617,254 48.51%
=========== ======
(1) Randall K. Fields is the president and 100% shareholder of Riverview
Financial Corp.
Security Ownership of Management
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock as of June 30, 2006, for each of the
directors, each of the Named Executive Officers, and all directors and executive
officers as a group. As of June 30, 2006, there were 446,561,686 shares of
Common Stock outstanding.
Amount of
Title Name, Position and Address of Beneficial Nature of Percent of
of Class Beneficial Owner Ownership(1) Ownership Class
-------- ---------------- ------------ --------- -----
Common Randall K. Fields, CEO, Chairman and 216,617,254 (3) Direct and 48.51%
Director Indirect
Park City, Utah
Common Edward C. Dmytryk, Director 2,273,627 (4) Direct *
Ocala, Florida
Common Thomas W. Wilson Jr., Director 14,677,572 (5) Direct 3.29%
Westport, Connecticut
Common William Dunlavy, CFO 6,615,677 (6) Direct 1.48%
Park City, Utah
Common Shaun Broadhead, Director of Research 3,300,783 (7) Direct *
and Development
Heber, Utah
Common Carolyn Doll, VP of Marketing 3,150,783 (8) Direct *
Heber, Utah
Common Executive Officers & Directors as a 242,635,696 54.33%
Group ======
* Less than 1%.
(1) Beneficial ownership is determined in accordance with SEC rules and
generally includes holding voting and investment power with respect to the
securities. Shares of common stock subject to options or warrants currently
exercisable, or exercisable within 60 days, are deemed outstanding for
computing the percentage of the total number of shares beneficially owned by
the designated person, but are not deemed outstanding for computing the
percentage for any other person.
(2) Includes warrants to purchase 8,761,614 shares of common stock and 134,411
shares of common stock held in the name Fields Management Inc. a wholly
owned subsidiary of Riverview Financial Corp.
(3) Includes 192,256,976 shares of common stock beneficially owned by Riverview
Financial Corp., which is 100% owned by Randall K. Fields.
(4) Includes options to purchase 875,000 shares of common stock.
(5) Includes options and warrants to purchase 4,667,362 shares of common stock.
(6) Includes options to purchase 4,838,601 shares of common stock.
(7) Includes options to purchase 350,000 shares of common stock.
(8) Includes options to purchase 200,000 shares of common stock.
ADDITIONAL AND AVAILABLE INFORMATION
Park City Group is subject to the informational filing requirements of
the Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the SEC relating to its
business, financial condition and other matters. Such reports, proxy statements
and other information can be inspected and copied at the public reference
facility maintained by the SEC at 450 Fifth Street, N.W., Room 1024, and
Washington, D.C. 20549. Information regarding the public reference facilities
may be obtained from the SEC by telephoning 1-800-SEC-0330. Our filings are also
available to the public on the SEC's website (http://www.sec.gov). Copies of
such materials may also be obtained by mail from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549at prescribed rates.
STATEMENT OF ADDITIONAL INFORMATION
Park City Group's Annual Report on Form 10-KSB for the year ended June
30, 2005 and Quarterly Reports on Form 10-QSB's, for the quarters ended
September 30, 2005, December 31, 2005, and March 31, 2006 herein by this
reference.
We will provide without charge to each person, including any beneficial
owner of such person, to whom a copy of this Information Statement has been
delivered, on written or oral request, a copy of any and all of the documents
referred to above that have been or may be incorporated by reference herein
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference herein).
All documents filed by Park City Group pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Information Statement shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Information Statement to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Information Statement.
CONCLUSION
As a matter of regulatory compliance, we are sending you this
Information Statement which describes the purpose and effect of the Decreased
Capital Proposal and the Reverse Split Proposal. Your consent to these Proposals
is not required and is not being solicited in connection with this action. This
Information Statement is intended to provide our stockholders information
required by the rules and regulations of the Securities Exchange Act of 1934.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY. THE ATTACHED MATERIAL IS FOR INFORMATION PURPOSES ONLY.
COMPANY CONTACT INFORMATION
All inquiries regarding the Company should be addressed to the
Company's principal executive offices:
Park City Group, Inc.
333 Main Street, Suite 300
Park City, UT 84060
(435) 649-2221
By order of the Board of Directors:
/s/ Randall K. Fields
Chief Executive Officer