Park City Group

FAQ

Company Background
How big is the company and how is the staff divided?

The Company currently has 44 employees comprised in the following areas: 14 in research and development, 18 in account and customer service, 6 in sales and marketing, and 6 in administration.
Who composes the management team for Park City Group?

The Company's management team is composed of retail operations and software industry veterans who are responsible for the day-to-day operations.
Randy Fields, Chairman and CEO.
Mr. Fields career reflects his strong entrepreneurial skills. Initially leveraging his educational experience, in the early 1970's, he established a financial and economic consulting firm called Fields Investment Group. He then co-founded Mrs. Fields Cookies with Debbi Fields, and served as its chairman from 1978 to 1990. He purchased the software rights from Mrs. Fields Cookies and created Park City Group in 1990. Today, he continues to define the strategic direction of Park City Group, Inc. and shares his expertise and the collective experience through consulting and speaking, interviews and guest lecturing engagements both in the retail industry as well as in the general business environment. Mr. Fields received his B.A. magna cum laude, and his M.A. from Stanford University.

John Merrill, Chief Financial Officer.
Mr. Merrill has over 17 years experience in both the public and private sectors of finance and accounting. Prior to joining Park City Group, he was most recently Chief Financial Officer for Peak Solutions Group a consulting firm focused on providing tactical business solutions for growth oriented small business including valuations, compliance, systems integration and process consulting. From 1998 to 2003, Mr. Merrill was Regional Controller for Clear Channel Communications, Inc., a $19 billion publicly traded broadcasting and outdoor advertising company operating 1,200 radio stations in the United States. Prior to joining Clear Channel, Mr. Merrill was the Controller of the Academies Division of IMG, a $2 billion global leader in professional athlete management whose clients included Tiger Woods, Venus Williams, Pete Sampras and Anna Kournikova. Throughout his career, Mr. Merrill has had significant exposure to various sectors of both sporting goods retail and service industries. Mr. Merrill began his career with KPMG and holds a Bachelors and a Masters degree in Accounting from the University of South Florida.

Robert P. Hermanns, Senior Vice President / Director.
Mr. Hermanns joined the Company in March of 2007 as Senior Vice President. Mr. Hermanns is responsible for U.S. customer relations and corporate development and also is an acting member of the Park City Group Board of Directors. Mr. Hermanns has over 40 years experience in all phases of retail and wholesale grocery operations. Mr. Hermanns was President and Chief Executive Officer and Vice Chairman of the Board of Directors of Associated Grocers, Inc. from 2002 through 2005. He is also the former Chief Operating Officer of Weis Markets, a $2 billion NYSE company operating 163 retail food markets in the Mid-Atlantic States. Prior to joining AG and Weis Markets, Mr. Hermanns enjoyed a 30-year career with American Stores Company, an $18 billion food and drug retailer, where he held a number of executive management positions including Chief Operating Officer for Procurement and Logistics. A graduate of Western Michigan University with a BS degree in Food Marketing, Mr. Hermanns also holds an MBA from the University of Southern California.

Shaun Broadhead, Director Research and Development.
Mr. Broadhead is responsible for all the development activities for Park City Group. His team does the design and coding of the products. Shaun is the primary driver for developing new patents and is the coordinator of the activities surrounding the creation of new products concepts. Mr. Broadhead holds a B.S. in Business Information Systems from Utah State University.

Carolyn Doll, Vice President, Marketing & Education.
Ms. Doll is responsible for marketing activities including industry business marketing, investor relations activities as well as marketing materials development. Carolyn also develops and delivers product education and is the product manager for the ActionManager applications. Ms. Doll holds a B.A. in Psychological Consultation and Speech Communications and a M.A. in Organizational Communication from the University of Iowa.

Steve Lewis, Director Business Metrics Group.
Mr. Lewis has more than 12 years experience in retail grocery operations with American Stores and Safeway. He also has over 6 years of food brokerage experience representing manufacturers such as Georgia Pacific, Quaker, and ConAgra Foods. And Mr. Lewis has over 13 years in enterprise business software solutions with Radix Corporation and Siebel Systems. Mr. Lewis received his Bachelor's degree in Business Administration from University of Texas.

Pat Paterson, Director of Marketing.
Mr. Paterson has over 25 years experience in brand development and marketing for retail packaged goods, grocery retailers, and technology firms. Mr. Paterson received his Bachelor of Arts degree in Marketing Communications from St. Louis University.
Who are the Board of Directors and what are their backgrounds?

The Park City Group Board of Directors is composed of well respected and experienced executives from the retail industry:
Robert W. Allen
Mr. Allen was most recently Chief Executive Officer of Southern Belle Dairy where he established a leadership team to reposition the company and developed a position in the market place for the branding of its products. Prior to this, he was Executive Vice President of Borden, Inc. where he was recruited to turn around the largest and most trouble division of the Company. He is also the immediate past Chair of Kid Peace International, a $160 million non-profit agency assisting children in crises.

Randall Fields
Mr. Fields is Chairman and Chief Executive Officer of Park City Group.

James R. Gillis
Mr. Gillis is President, Chief Operating Officer and Co-CEO of Source Interlink Companies, Inc., a premier marketing, merchandising and fulfillment company of entertainment products. Prior to his tenure with Source, he was President, CEO, and Owner of Brand Manufacturing Corporation, a leading designer and manufacturer of retail display systems. Previously, he was Managing Partner of Aders, Wilcox, Gillis Group, a global developer of trade relationships serving major brand marketers and retailers worldwide.

Bob Hermanns
Mr. Hermanns is Senior Vice President of Park City Group.

Richard S. Krause
Mr. Krause is currently President and Chief Executive Officer of Elan Nutrition, Inc. (an affiliate of Sun Capital Partners, Inc.) a major manufacturer and formulator of sports-performance, weight management and healthy lifestyle nutrition bars. Prior to this, he was President of Cannon Solutions, Inc., a global operating group with businesses in the merchandising systems, automated distribution and retail technologies sectors serving major brand marketers and retailers.
Financial
What kind of growth can we expect over the next few years?

As we often say, our customers' success is the measure of our own economic success. Our growth over the next several years is going to come from four sources: expansion of our technology within our existing customers, the addition of new customers from our direct sales efforts, increasing revenues from our newly formed professional services team and the increase in market penetration from our alliance partners. Putting it simply, it is more important to us to focus on the success of our customers than it is to simply focus on high rates of revenue growth. If we continue to be successful with our customers, it is certainly a reasonable assumption to expect as a shareholder, improvement not only in our revenue levels but certainly in our profitability levels. Our success to date with our customers bodes well for acceleration in our growth beginning in the current fiscal year (FY08). We are confident that our shareholders will be pleased with our progress.
Will costs increase commensurately with growth in new customers and revenues?

One of the more interesting aspects of being in the software business is that we have spent a great deal of money in the last several years developing a very highly productive, proprietary JAVA based development environment that enables us to develop applications today and going forward, at a lower cost than what would be typical in the industry. As a result of an increase in the number of customers and growth in our revenues, we will not be adding costs at the same rate that we will be adding revenues.
SALES AND THE SELLING PROCESS
What is the typical duration time for getting a sale?

In 2007, we modified a segment of our business strategy to incorporate a subscription based selling of our newest product, Supply Chain Profit Link ("SCPL"). While many of our customers turn to us for end-to-end business solutions, the SCPL product focuses on improving bottom line results through tactical management of out of stocks, shrink, promotion planning and assortment plans in both perishable and non-perishable departments. Subscription based sales of our Supply Chain Profit Link program is typically in the 3 to 6 month sales cycle range. Rapid acceptance and implementation coupled with quick analytics and actionable results are driving trial and sales of SCPL. The typical sales cycle for licensing of Park City Group technologies, whether it is for Fresh Market Manager or ActionManager the amount of time needed is between six (6) months to two years. The reason for this is because of the depth and breadth of our functionality, a prospect customer is looking at many different products and our software is an expensive transaction for the customer company in the range of several hundred thousand of dollars or more. This type of sale requires time and focus on the part of the purchasing company coupled with the fact that it is a senior level decision (usually including the CEO, COO, CFO, CIO, etc.). It takes time for meetings to be scheduled, for the prospective customer to complete their due diligence, for references to be checked, etc.
How do you get new customers?

Traditionally, the Company expands its customer base through a number of techniques: through referrals from existing customers and by directly selling though a high level sales process which can take anywhere from 6 months to 2 years for traditional license sales. Subscription based sales of our products are typically in the 3 to 6 month sales cycle range. The direct sales process for license sales for Fresh Market Manager and ActionManager is lengthy by the virtue of the fact that for any new prospect, there are a substantial number of the areas in the business that require education as it relates to the benefits of Park City Group's technology. We frequently require meetings with most "C" level executives, (i.e., Chief Executive Officer (CEO) or Chief Operating Officer (COO) in order to obtain guidance, direction and ultimately a decision. Because the technology is an enterprise software solution and one that can substantially change the strategic initiatives of the customer with a focus on bottom line results and profitability, it typically requires the highest level of the most senior management of the business to make the decision.
How does the company charge for its products?

The Company prices its proprietary software license sales computed based on the number of locations for its products and in some cases, specifically with Fresh Market Manager, has charged by the department within a location. Subscription based sales for Supply Chain Profit Link are charged on an annual basis calculated by the size of the category and number of stores represented. The Company prices its support services and maintenance typically at 18% of license sales. In addition, we offer custom consulting services which vary in hourly rate.
Park City Group has been increasing investor awareness of the company but how will it increase market awareness for the products?

As you have seen, the Company has been working hard to increase awareness in the investment community to Park City Group and its products and while the focus was directed to the investment community, a surprising result has been that the retail marketplace has also become more aware of Park City Group. Our plan is to increase our public relations and media activity around the company and its products. As press begins to publish articles and feature our customers and products we will make sure that both markets are aware of our activities.
PCYG STOCK AND ASSOCIATED QUESTIONS
When will PCYG be trading on an exchange instead of on the bulletin board?

At this point there are a number of qualification issues and over time these issues will become more easily surmounted. At that time, we will re-examine listing on other Exchanges.
Why does you company pay for investor relations and marketing promotions?

One of the difficulties of being a company on the Bulletin Board is that it is not possible for brokers to solicit orders for our stock and virtually no institutions can purchase securities listed on the OTCBB marketplace. As a result, companies on the Bulletin Board must be responsible for increasing investor awareness and it is necessary to use paid investor resources to perform this task. If investors will do their due diligence and as a result will understand the business problem we solve, appreciate our customers' success and our improving financials, they will determine that Park City Group merits an investment. The point is that it is in the best interest of the shareholders for the Company to increase its market recognition.
How many shares of stock are outstanding and what is the float?

Information about PCYG shares as of March 31, 2008 and according to our transfer agent:
Common Shares Outstanding = 9.218 million
Float = 4.74 million shares
PRODUCTS AND THE MARKETPLACE
What products does the company offer?

Our business focus is in the development, support and services associated with our computer software. We have three distinct, but fully compatible solution offerings. The first is Fresh Market Manager - focused on the perishable items of the grocery, supermarket and convenience store industries. The products composing this offering are: Item Level Cost Control and Category Management, Demand Forecasting, Production Planning, SKU base Inventory, Computer Assisted Ordering and Real-Time Alert Advisor. In addition, the Company has recently announced Center Store Manager that provides the same types of management for the dry goods area of the customers. The second is ActionManager - focused on improving business operations processes such as workflow, labor management and providing best practice advice. These applications have been marketed to retail, hospitality/entertainment, as well as to the grocery and convenience industry. The products composing this offering are: electronic forms and simplified mail systems, labor scheduling, labor requirements forecasting, time and attendance, drill down business analysis tool, an operations dashboard, computer based training, and hiring and testing tools. Third is Supply Chain Profit Link - part of a fully integrated collaborative solution for perishable, non-perishable, and convenience store operations. Supply Chain Profit Link addresses the critical item level category management that has previously eluded grocers and convenience store operators while providing timely information to the supplier for improved item management. Supply Chain Profit Link monitors product movement, while reducing shrink, waste and out-of-stocks. With its computer assisted ordering and SKU based inventory, Supply Chain Profit Link adds to the timeliness of supply chain management and improves category management capabilities. Supply Chain Profit Link delivers a unique collaborative solution that strengthens the Supplier/Retailer relationship.
How do you create this software? It says you have a lot of Patents but i don't really know what that means, can you explain?

We frequently tell prospective investors and customers that the crown jewel inside of Park City Group is not the applications but rather the people in the development organization. These individuals have enabled us to create amazing technologies that are easy to use, easy to deploy, easy to support and that solve real business problems. We typically start with some sort of business problem with which we have some familiarity from our own operational and retail experience, and we work backwards from the problem to develop a solution. We have formal processes in place as a proper development organization should, in order to make sure that our development efforts are focused on revenue producing opportunities whenever possible. The notion of patent protection is one that is based on the fact that once we have invested a substantial amount of money in the development of intellectual property that we think is proprietary and distinct; we want to secure a patent that will enable us to protect ourselves legally should someone encroach on that privileged intellectual property space.
Who is your competition and how do you position yourself against them?

Although we have many competitors - our products are distinct in the marketplace because they are end-to-end complete solutions for an entire business problem or process. We have competitors in the marketplace that simply address some aspect of an overall business problem. Since this technology came from the Mrs. Fields Cookies business, we recognize that a business needs to be approached as a whole, not in a piece-parts fashion and as a result, the technology is a modular, plug and play, fully integrated enterprise-wide solution for any problem we attempt to solve. Our competitors conversely are not able to offer that choice.
Why are you focusing on the grocery industry? Would your products work in other industries?

Because we are a small company and focus is essential, we have tried to concentrate on an industry that has the highest possible return for us. A characteristic of an industry that would produce high returns would be an industry that is under increasing pressure and dramatic demand for a product or service that the Company can offer. That is certainly the case in the supermarket industry. Over the last 15 years the supermarket industry has grown from doing a relatively small percentage of its total business in perishable products to now more than 50% of all business in the supermarket industry is in the perishable arena. As a matter of fact, for every dollar of supermarket revenue $.52 is from perishables and the next highest category is beverages with only $.10. The supermarket industry has become a perishable industry both literally and figuratively. Wal-Mart and other Value Retailers are creating a tremendous economic threat to the industry. We are seeing the rest of the supermarket business (the non-perishable portion) under extreme price pressure. We believe the supermarket industry is at one of those very important reflection points when, as the senior executives of the industry focus more on competitive advantage and perishables, they will find that they need control systems in perishables to drive profitability. Park City Group offers, we believe, the best fully integrated end-to-end solution for perishables management in the business. We also intend to extend our reach in the supermarket industry around over and through perishables to other inventory and labor management issues. Our technology is rules based and very flexible and certainly could operate in other industries not just other retail industries like food service, hospitality, restaurants, etc. but we also believe the technology has applicability as far a field as healthcare and others. We also have a tremendous opportunity to take this technology outside the US and sell this to retailers who are also looking for solutions of this sort. In summary, there is an enormous market opportunity for us and it is up to management and the Board to provide prudent supervision of our expansion into those markets.
Are you actively marketing your products in Europe and Asia?

We have customers in both Europe and Asia and we are actively working to acquire additional introductions into those markets.
How hard is it to install and operate your products?

One of the more interesting characteristics of the Fresh Market Manager, ActionManager, and Supply Chain Profit Link applications is that in relation to the number of people in the customer organization and the scope of the technology, the products are relatively easy to install. The word "easy" is often misused in the industry but we have several examples where we have been able to install our technology successfully in a matter of a few months, when often, projects of this sort can stretch to a year or two.

Can you tell us about the patents?

MISCELLANEOUS QUESTIONS
If I know of a company that might benefit from Park City Group software, how can I let you know?

Please send an email directly to our CEO, Randall Fields.
You have identified the strengths of the company, but aren't there some opportunities for improvement?

When we look at the Company as a whole, we would be remiss in saying that every aspect of the business can always be improved. It is certainly true that because of the financial constraints of the business we have to selectively determine where we spend our money. We have chosen to invest heavily in our product development, and as a result, other things received less resource than we either wanted or that they deserved. For example, the Company has taken the position that our Development team should get money first, and other priorities, specifically customer support and consulting services would be second. We scaled back on marketing activities and intentionally kept the sales team smaller than we would like but supplemented the sales activities with the use of industry specific strategic alliances. As we grow and are able to improve both the balance sheet and our financial position, the Company will be able to increase resource allocation to those activities that will further accelerate growth of the business.

Statements in this document that relate to Park City Group's future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Those factors could include changes in economic conditions that may change demand for the Company's products and services and other factors discussed in the "forward-looking information" section and the "risk factor" section of the management's discussion and analysis included in the Company's report on Form 10-K for the year ended June 30, 2008 and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K filed with the Securities and Exchange Commission. This release is comprised of interrelated information that must be interpreted in the context of all of the information provided and care should be exercised not to consider portions of this release out of context. Park City Group uses paid services of investor relations organizations to promote the Company to the investment community. Investments in any company should be considered speculative and prior to acquisition, should be thoroughly researched. Park City Group does not intend to update these forward-looking statements prior to announcement of quarterly or annual results.

Business Demand Projection System & Method	5,459,656
System & Method for Estimating Business Demand Based on Business Influences	5,712,985
System & Method for Making Staff Schedules as a function of available resources as well as Employee skill level, availability & priority Scheduler	5,111,391
Product Demand System & Method	5,299,115
Data Management Using Nested Records & Code Points	5,634,123
Agent-Based Multithreading Application Programming Interface ActionBase	5,421,013
System & Method for Creating, Processing & Storing Forms Electronically	5,410,646
Automated Post Office Based Rule Analysis of E-Mail Messages & Other data Objects For Controlled Distribution in Network Environment Gatekeeper	6,073,142
Quick Switch Language Support	7,113,904
Disambiguating Point-of-Sale Data Through Item Indexing	7,292,991
System & Method for Application Development of User Defined Business Event Driven Task Manager Using Action Boards	*Pending
Method of Operating Data Base Utility	*Pending

FAQ

Company Background

Financial

SALES AND THE SELLING PROCESS

PCYG STOCK AND ASSOCIATED QUESTIONS

PRODUCTS AND THE MARKETPLACE

MISCELLANEOUS QUESTIONS