Good day ladies and gentlemen and welcome to the Park City Group Fourth Quarter and Year End of the Conference Call. Today’s call is being recorded. And now, it’s my pleasure to turn the floor over to David Mossberg. Please go ahead, sir.

Thank you, Catherine. Before we begin, we will be referring to today’s earnings release, which can be downloaded from the Investor Relations section of the Company’s website at parkcitygroup.com. And also I'd like to remind that this conference call could contain forward-looking statements about Park City Group within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Park City Group’s management and are subject to risks and uncertainties which could cause actual results to differ from those forward-looking statements. Such risks are more fully discussed in the Company’s filings with the Securities and Exchange Commission. The information set forth herein should be considered in light of such risks. Park City Group does not assume any obligation to update the information contained in this conference call. Our speakers today will be Randy Fields, Park City Group’s Chairman and CEO; and Todd Mitchell, Park City Group’s CFO. I will now turn it over to Todd.

Thank you, Dave. Good afternoon everybody. It was a great quarter for us, capped off a real strong fiscal year. We exceeded our internal targets for fiscal 2016 for both revenue and profitability. And I would note both revenue growth and profitability got aggressively stronger over the course of the year, clearly demonstrating both accelerate in the business and operating leverage in our business model. I want to highlight that my comments on the financials today will be focused on out pro forma results, that is as if we had owned ReposiTrak in the comparable period a year ago. This is because we believe this gives a more accurate view of the underlying performance of our company. However I also want to remind you that as we are anniversaring the acquisition of ReposiTrak this will be the last quarter we will be giving this pro forma comparison. Revenue, fiscal fourth quarter revenues grew 29% on a pro forma basis to $3.8 million from $2.9 million a year ago. This was the highest quarterly growth rate in fiscal 2016. Fiscal fourth quarter results drove a 21% increase in full year revenue on a pro forma basis to over $14 million from $11.6 million in fiscal 2015. This was better than our internal expectations, with upside in the quarter and the year driven by real strong results at ReposiTrak. In short we believe we have reached an inflection point with ReposiTrak with regards to market adoption. As a result of the accelerate in fourth quarter, we ended the year with over 10,000 supplier connection, which was better than expected and drove 300% increase in supplier [ph] subscription revenue for ReposiTrak in fiscal 2016. Going forward, we expect overall revenue growth to accelerate in fiscal 2017 from fiscal 2016 pro forma level. Profitability,…

Thank you, Todd. I'm going to read my comments again, now this is only the second or third time that I've done that, and as you know there's somebody running for President who is now been constrained to a teleprompter. So, I understand his pain. So, I'm going to read my comments. It's worth staying around till the end because we're going to do something new that we haven't done before. We're going to give you some interesting goals and hopefully milestones for the current fiscal year that I suspect as investors hopefully you’ll find interesting to know, hang around even if my reading is a bit on the boring side. As Todd said fiscal '16 was a terrific year for us, ReposiTrak reached a tipping point in terms of market adoption and I think importantly the company did pass, and here comes that term, inflection point, in terms of accelerating our growth profile and transitioning the GAAP profitability. Perhaps the key phrase for last quarter and last year was inflection point. There is five issues I would like to raise for you to take in to consideration from this call. First, we did exceed our own internal forecast for 2016, both on the revenue side and more importantly on the bottom line profitability side. As you know we set an objective primarily to make sure that our customers feel comfortable with our financials of becoming GAAP profitable in fiscal '16, so we are very proud of that achievement. But as you saw in the fourth quarter and certainly as we announced well into the first quarter of our next fiscal year, we are clearly showing much faster revenue growth and the earnings leverage that we believe is apparent in our business. Secondly, we successfully scaled and accelerated the growth…

Thank you. [Operator Instruction] And we will take our first question from Walter Schenker.

I always feel obligated to ask the same question, which is could you give us a little more color on the non-food safety historic side of the business, the progress it’s making? And part three, when we start to see the synergy of all of this food safety contacts helping you sell more of the traditional inventory management?

Got it. Yes, we almost didn’t speak about it and it makes me feel like I have a red handed step child, I sat that every phone call, I feel terrible about it. But the growth rate of what we used to call the core business which isn’t fair to say anymore, but the supply chain business last year was I believe one of the faster years on record, this year will be a very significant growth rate faster yet. And there is lots of new products in it. And indeed there is some changes to how we are doing that that make it easier to adopt and easier to implement, Walter. So it enables us first to sell somebody ReposiTrak and then how do I say this, once somebody is in ReposiTrak they can more easily adopt the pieces that we have created for the supply chain. We have just broken it down and the easier to swallow discreet pieces. So far the response that we are getting from people that we have shown this to has been very high, so honestly this will be I’m guessing and please don’t hold me to this, but I believe that this will be the fastest growth rate we’ve ever seen in this old supply chain business. The year that we are in, fiscal '17. So we are hitting on all eight cylinders, it's pretty interesting.

Thank you. Our next question will come from Steve Bell, Private Investor.

I want to follow up on a couple of things here with you Randy, did you just say that the end of this fiscal year which we just completed here, we have 20,000 connections currently.

No, no, no the fiscal year that we are in, which will end next June of '17. June of '17.

Okay, you talked about we’re starting to see traction in first and second level suppliers, what categories broadly speaking are we seeing the greatest traction in?

Absolutely, everything. It's unbelievable, everything, no exception.

Okay, okay.

[Indiscernible] I was just joking [ph] you.

Not only are you reading from a script, but now you are coughing like Hilary.

I read like Trump and I cough like Hilary, terrific.

How would you describe the traffic that we are getting from the SQF data base, because obviously that’s going to drive a lot eyeballs here and hopefully expose people to not only ReposiTrak, but the Park City Legacy side? But can you give us some metrics on what type of traffic patterns are you seeing?

I can't give you any metrics yet because it's actually -- literally today the announcement went out to the SQF users of the cutover to ReposiTrak. So over the course of the next six to eight week eyeballs will be on the side.

Okay and you will be tracking that?

Yes, and I think the best way to describe where we are is to say, and we haven’t seen these press releases yet, but we are obviously most to the way through a quarter. We have a very deep pipeline, we have a lot of incoming business. And once again we are in the execution mode. So we can take what comes to us and I could not be more pleased with the efficacy of how we actually do what we do. The customers very much appreciate what we are doing, in fact I'll give you another little tit-bit. Two of the top five retailers in the U.S. will be customers of ReposiTrak in the current fiscal year. So even some of the big names guys have found that they need what we do. So it's -- this is a case where the initiative is to make sure that the execution is based right on the track that we are on, that the quality of the result is maintained, because it is hard for me to imagine if we go out in our time machine one year from today nobody looking back at '17 is going to say you should have grown faster. I think everybody that cares about growth rate, profitability and most importantly customer delivery will be thrilled with how this year goes.

Okay and when -- obviously we are focusing the [indiscernible] through the safety marketing act, but what do you think or when do you think we might begin to see some traction in the foreign supplier verification program?

How today sound?

[Multiple Speakers] Enquiries?

Yes, I literally was on a phone call with a prospect earlier today over the foreign supplier verification. I think people are -- look if you were to say three years to now, what's that mean, yes the foreign supplier verification rule is problematic for everyone. The one that’s hidden that people hadn’t thought about is the so called sanitary transportation rule, and the reason is the industry negotiated a deal with the FDA on that rule that they thought gave them cover, but I personally believe and I think it's likely to be the case, causes more problems than solves problems. Here is what it said, it says that if you put your food on a truck and move it, meaning dredge [ph], now that truck -- you have to have a contract with whoever provides you dredge to make sure that they wash the truck after food has been in it and under certain circumstances --.

And it's kept refrigerated for the whole --.

That's it’s kept refrigerated, and that all sounds great, doesn't it? And all you really have to have legally is a contract. Well now ask yourselves the question, do you think a lawyer when you say by the way, yes a few people got really sick and it's because the truck wasn't washed, do you think the lawyer will say well you’re off the hook because you had a contract, that the guy had to wash it? No, the lawyer is going to say did you supervise to see that the contract that you had in place was being effectuated. How do you know that they were washing trucks? And you go, I don't know, I just trusted them. Really? Take your wallet out. But the truth is virtually every truckload of product that’s moved is going to require some kind of a piece of electronic paper to show that it got washed properly. What we see which is pretty amazing, is that the food industry which has been regulated is about to become really regulated and it will look like the wild-wild west was evolving quickly to a highly regulated paper driven, compliance driven environment and people are waking up to it and frankly it's been enormously beneficial to our business. So, we have years ahead of helping people cope with all of this kinds of stuff. Here's another example, one of our customers said, I'm a ReposiTrak user, I love what you guys do, I have an interesting problem. What's the problem? I've this warehouse where I have, hang on to your hats folks, 5,000 rodent traps. 5,000. 5,000 rodent traps and what happens is every week a guy has to march around looking at each of the traps, scanning the number, which trap number, 1173, and then if there's a creature in it, he has to remove the creature and take a mug shot of the creature and record that, yuk. And it's all been done on paper. Not anymore. ReposiTrak now enables him to take a click of the creature, automatically logs it and enables him to maintain control over their 5,000 rodent traps. So, the deeper we get into this the more extensive our reach becomes and the more attractive we are to people for adoption. So, honestly our customers love what we're doing for them and we almost -- we have a [indiscernible] right now, things are very good.

Okay, I'll take another tangent. How many pilots do we have underway currently either on the legacy side of the business or perhaps on ReposiTrak side?

We call that the dreaded P word, and --.

Like in last September?

Well yes, and there's more than two little pilots that we're doing today, that have a very significant upside potential, but I won't say more than that and I'm not trying to be a tease, but that’s it. We never do a test with ReposiTrak, you either do it or you don’t.

Okay.

Steve, one more then we should go to somebody else.

I’ll hop out and if there is any other questions I’ll just ring up Todd or you directly.

No problem.

Thank you very much. And our next question comes from [indiscernible] with SWR.

I have been a shareholder from many, many, many years I never got on a call before and I haven't asked a question and I don’t intend to, I just want to say thank you, and I really mean that. This was a kind of a conference call every shareholder waits for and I say thank you for a couple of reasons, one, for your logical, precise and organized and conservative manner which you took this company along because you grew at a rate that assured success in the future and I for one appreciate that very much. So again I never get on these calls for any reason, but this time I just want to say thank you and I really do mean that.

Paul thank you, that’s very much appreciated. I’ll tell what we also appreciate, we appreciate the fact that shareholders have been patients that they want to know more about, we call at the story. What we have said to people is that it is critical that the customer gets the result that they are looking for, it’s the customer's result that matter. And we have delivered enough of that now on the supply chain side of the business, on the ReposiTrak side, that our market reputation is superb and I don’t mean stock market reputation. I mean the market that we serve. Today, literally today, we signed a contract with one of the most successful grocery retailers in the world who does everything internally, everything. And they came to us and said we are having the problem with ordering and we heard you guys are really good. We want to try something with you. So our reputation amongst the community this -- and I don't mean this is a slight, it’s most important our customer community continues to grow. And I think it's showing up in the numbers, their growth rate will continue to go up for us and again the constrain well is now, has been and always will be, let's not run faster than we can deliver a quality result to our customers. So thank you guys to your patients. Thank you Paul.

Thank you. We will continue on to Mark Stafford from Stafford Capital.

Hi Randy and team. I was just wondering is there any updates on the insurance and pharma part of this equation?

Yes, it's a good question Mark. Because of all that we have going as much as anything plus the slowness of pharma, we are just not putting any real resource against growing it. So it's chugging along, hasn’t gone away, hasn’t gone anywhere. But they are very slow, very laborious so we are just trying our other fish so to speak. And as you know when we first did that in spite of the fact that the big opportunity, I was never terribly optimistic as to whether or not we would be able to convert it into money. So we’ve converted a little into money, but I am -- there are just other things we should be doing first. We certainly from a first perspective should be doing more than we are today and hopefully we will be doing soon is food service that’s another enormous market potential for us. So food service is coming. The insurance thing is moving along in an interesting way, I can't talk about what we are doing but it's fair to say there is yet another interesting relationship that we are putting together, and again as a reward for our customers, not an incentive, as a reward for being a good citizen we think that the insurance program will be in the long run really beneficial to our customers set. In truth right now we don’t have a lot of time to go market it to our customers, but its available and it's about to get some profile with yet another partner being brought in. So there will be more about that over the next few months, might not be until midyear that we talk about a lot Mark.

Thank you. We will take our next question from John Evans with [indiscernible] Capital.

Yes, congratulations on the quarter. I was just curious that this last fiscal year, you grew your revenue sequentially every quarter. So is that kind of a new trend now that you have with the pipeline in the business, so as you go to '17 should you kind of grow sequentially or is there any kind of seasonality we should be aware?

There really is still seasonality. I'd love it to be sequential, it just won't be until and I have always thought this my numbers never changed. When we’re doing north of $5 million a quarter, I think it will be more sequential than it is today. So as excited as I think Todd and I are over last year being sequential, I wouldn’t hold out hope that there will always be that way. And the reason it honestly has to do with our customers, remember we are driven by retailers and wholesalers and they are seasonal, their fourth quarter and their summer sell, once we get to scale here, to more scale than we have and I think $5 million, $6 million quarters I think you will see the sequentialness increase.

May I just have a follow-up, so can you talk a little bit about G&A expenses as a percentage of revenue? You are kind of in that 22% give or take area and I’m just curious as you go into next year and you start to see this acceleration, where do we see the leverage in the P&L? Is it on the cost of services, is it the sales and marketing or is it the G&A? Can you help us with how you see the model evolving over time?

Yes, I think the best way to imagine what we are and a lot of fast businesses don’t perform this way, I don’t know why. We are really a high fixed low variable cost business, what you will see going forward is 80 plus percent of revenue increases in dollars become something called profitability.

Got it. So that’s kind of the incremental margin right?

Right and so as a result it's fair to say that all expenses other than sales expenses which are directly related to sales, even though if they go up somewhat in dollars, will not go up at nearly the rate that revenue growth would.

Thank you. And our next question will come from [indiscernible].

Quick question how's the CVS [ph] build out going?

Well we hate to talk about individual customers. So let me do it in different terms. I think it's fair to say that our two largest customers, I'll let you figure out who they are, are accelerating dramatically. Literally, I wish there was -- I don't like to give an unbalanced view of the world, I sound like Fox News. I'd rather say jeez there are some problem areas, our biggest accounts, the ones that, it's fair to say, boy you're fully deployed, what's left are both growing very rapidly. And it's a result of the team doing a tremendous job at helping them with additional projects. So, our two biggest accounts, I think I just answered your question. Our two biggest accounts are both growing very rapidly.

Well that’s good news, and my second question. Last year you talked about developing the app that would allow customers to just add services as needed. And I just wondered where that project was?

Yes, we call that The Portal and the idea of The Portal is that our customers for anything that we do, we’ll be able to go in and self-implement and buy if you will or try any of our other applications. And so the engineering work is proceeding rapidly, probably we're more than half way done with that as a view and over the course of the next couple of months our customers will experience the -- we call it the portalization of our product line and we're terribly excited about it. As I said, it’s taken some engineering work and some thought work in terms of how to breakdown very big things into much smaller bite sized pieces, but I think we're pretty nearly there. So, in fiscal '17 it won't make much of a contribution. We don't need it. '17 is -- I'm looking at Todd right now, I wouldn't say it's baked, but it's pretty baked. You're shaking your head Todd, yes. Todd ever as a skeptic says yes, '17 is baked. So, the contribution from all of this will moving into '18, but it ought to give us another wonderful up leg in what we’re doing.

Thank you. Let's take a follow-up from John Evans with [indiscernible] Capital.

Just real quick, can I just ask you a couple like housekeeping questions, do you expect to have any kind of tax rate in '17?

No.

And then can you just talk about the dividends on the preferred, they were up 28% in '16, do you expect that kind of increase or do they level out here?

Well what happens is that the company, not the holders, the company has the option of picking it. So, that it can conserve cash. And we've -- as you will see with some announcements here, this year as I mentioned earlier, some big -- some large retailers, we need cash on the balance sheet optically to get everybody, call the customer comfortable, that we're very strong financially. We are --.

So, you pick it again right, basically in ’17?

We haven't made the decision yet, but what we want to have is an optical balance sheet from a cash perspective, GAAP profitability. So, that our customers get -- they're making a lifelong decision about Park City Group and that's critically important to the sales effort.

Got you. And then just a last question, the share count was up about 10% year-over-year, do you expect that increase to with options and stuff or?

No, you will see that slowdown pretty dramatically on its own.

Okay. Thanks so much.

Thank you. And we have a question from Gary [indiscernible].

I wanted to ask about your Hub announcements, what is your policy for announcing new Hubs as the quarters proceed?

Yes, we think it is important to a Hub to do a press release, so his suppliers understand that they are making a commitment publically to the use of ReposiTrak to improve their compliant standing. We think it helps the Hub to do that, to get adoption in its supply chain. However, having said that there are people in the business that just don’t want to talk to the press or do anything that looks like a press release. So we believe it's helpful, not to us, I mean obviously it's nice for you to know, et cetera. But it's much more important for the suppliers of the Hub to know that, oh my god, the guy I am doing business with, this must be important, they’ve gone to the press. So we encourage it, but it’s not mandatory and therefore we add Hubs that are not announced.

I see you average about 350 connections per Hub with 28 totals, according to your announcement, are you finding your connections are getting larger with each Hub as you go forward, or are they staying about the same?

Our average per Hub is closer -- each new Hub brings us closer to 1,000 connections. What you are seeing is our penetration within the Hubs at varying levels depending on how long we had them online. And as I said, in the last quarter we just switched to what we are calling a central billing model which will get us to a 100% penetration in most cases within a quarter or two. But previously we were building it organically acquiring those connections organically. So that 300 is an average across the portfolio in terms of penetration of about 45%. Plus we have another problem Gary, which is that to think about, as we add suppliers as Hub they might only have 30 suppliers. So averages are going to mean zippo going forward. We wish they did but they won't, we’ve have got this clear of the mean [ph], head’s in the oven, feet in the refrigerator, on average the temperature is okay.

You have a goal for a number of Hubs for 2017?

The answer to that is we have a couple of different goals with regard to what we call suppliers Hubs and our retailer and wholesaler Hubs. We are not giving that out because we think the better metric now is not even a connection, it's -- we make that ambiguous for you. But you will see it all show up in revenue growth and profitability.

Thank you. With no additional questions in the queue, I would like to ahead and turn thing back over to our speaker for any additional or closing remarks. End of Q&A:

Thank you all for participating and your interest in Park City group. Our numbers are in the bottom of the press release, please feel free to contact any of us if you have any additional questions.

Thank you.

Thank you. You are welcome. Ladies and gentlemen that does conclude today's conference. Thank you all again for your participation.