UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from________ to________
Commission
File No.
(Exact name of Registrant as specified in its charter)
| (State or Other Jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of Principal Executive Offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate
by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 (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.
Indicate
by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the Registrant was required to submit and post such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:
August 14, 2025: shares of Common Stock
Forward-Looking Statements
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should carefully read this Quarterly Report completely, and it should be read and considered with all other reports filed by us with the United States Securities and Exchange Commission (the “SEC”) that are contained in the SEC Edgar Archives, including issues related to “Cybersecurity” enumerated in “Part I, Item 1C. Cybersecurity,” of our 10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025 (the “Annual Report”), which commence on page ten (10), a copy of which is attached hereto by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof, and is incorporated herein by reference. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
Documents Incorporated by Reference
See Part II, Other Information, Item 6, Exhibits.
PCS EDVENTURES!, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
INDEX
| 2 |
PART I –FINANCIAL INFORMATION
PART I – FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
The Condensed Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Condensed Financial Statements fairly present the financial condition of the Registrant.
(This space intentionally left blank.)
| 3 |
PCS EDVENTURES!, INC.
Condensed Balance Sheets
June 30, 2025 (Unaudited) | March 31, 2025 (Audited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net
of allowance for credit losses of $ | ||||||||
| Prepaid expenses | ||||||||
| Inventory, net | ||||||||
| Total Current Assets | ||||||||
| NONCURRENT ASSETS | ||||||||
| Lease Right-of-Use Asset | ||||||||
| Deposits | ||||||||
| Property and equipment, net | ||||||||
| Deferred tax asset | ||||||||
| Total Noncurrent Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Payroll liabilities and accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Lease Liability, current portion | ||||||||
| Total Current Liabilities | ||||||||
| Lease Liability, net of current portion | ||||||||
| Total Noncurrent Liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, | ||||||||
| Common stock, | ||||||||
| Additional Paid-in Capital before Treasury Shares | ||||||||
| Treasury Stock, shares | ( | ) | ||||||
| Total Additional Paid-in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
PCS EDVENTURES!, INC.
Condensed Statements of Operations (unaudited)
| For the three months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| REVENUE | $ | $ | ||||||
| COST OF SALES | ||||||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Salaries and wages | ||||||||
| General and administrative expenses | ||||||||
| Total Operating Expenses | ||||||||
| OPERATING INCOME | ||||||||
| OTHER INCOME | ||||||||
| Interest income | ||||||||
| Net Other Income | ||||||||
| NET INCOME BEFORE TAXES | ||||||||
| Provision for income taxes | ||||||||
| NET INCOME | $ | $ | ||||||
| Net Income per common share: | ||||||||
| Basic | $ | $ | ||||||
| Fully Diluted | $ | $ | ||||||
| Weighted Average number of shares outstanding | ||||||||
| Basic | ||||||||
| Fully diluted | ||||||||
The accompanying notes are an integral part of these condensed financial statements.
| 5 |
PCS EDVENTURES!, INC.
Condensed Statement of Stockholders’ Equity
(Unaudited)
# of Common Shares O/S | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Stockholders’ Equity | ||||||||||||||||
| Balance at 3/31/2024 | $ | ($ | ) | $ | ||||||||||||||||
| Net Income | - | $ | $ | |||||||||||||||||
| Balance at 6/30/2024 | $ | ($ | ) | $ | ||||||||||||||||
| Balance at 3/31/2025 | $ | ($ | ) | $ | ||||||||||||||||
| Net Income | - | |||||||||||||||||||
| Shares Redeemed | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Shares Issued for Board Comp | ||||||||||||||||||||
| Treasury Stock Purchase | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 6/30/2025 | $ | ( | ) | |||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
| 6 |
PCS EDVENTURES!, INC.
Condensed Statements of Cash Flows
(Unaudited)
| For the three months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | $ | ||||||
| Depreciation and amortization | ||||||||
| Amortization of right of use asset | ||||||||
| Provision for income tax | ||||||||
| Stock based compensation | ||||||||
| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in accounts receivable | ( | ) | ||||||
| (Increase) decrease in prepaid expenses | ( | ) | ||||||
| (Increase) in inventories | ( | ) | ( | ) | ||||
| Increase in accounts payable and accrued liabilities | ||||||||
| (Decrease) in lease liability | ( | ) | ( | ) | ||||
| Increase (decrease) in unearned revenue | ( | ) | ||||||
| Net Cash Provided by Operating Activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Cash paid for purchase of fixed assets | ( | ) | ( | ) | ||||
| Net Cash Used by Investing Activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Cash paid for private purchase of shares of common stock | ( | ) | ||||||
| Cash paid for purchase of shares of Treasury stock on open market | ( | ) | ||||||
| Net Cash Used by Financing Activities | ( | ) | ||||||
| Net Increase in Cash | ||||||||
| Cash at Beginning of Period | ||||||||
| Cash at End of Period | $ | $ | ||||||
| Cash paid for taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
| 7 |
PCS EDVENTURES!, INC.
Notes to the Condensed Financial Statements
June 30, 2025
(Unaudited)
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The condensed financial statements presented are those of PCS Edventures!, Inc., an Idaho corporation (the “Company,” “PCS,” “PCSV,” “we,” “our,” “us” or similar words), incorporated in 1994, in the State of Idaho. PCS specializes in experiential, hands-on, TK-12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and TK-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks.
Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer.
Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels.
PCS has developed and sells a variety of STEM education products into the K12 market which can be categorized as follows:
| 1. | Enrichment Programs |
These camps are for the informal learning market and are designed to be highly engaging for students while easily administered by the instructor. The Company offers approximately 36 different enrichment programs and typically develops at least two (2) new programs each year. Some of the more popular programs include Rockin’ Robots; Ready, Set, Drone!; Cubelets BOT Builder; Simple Machines; Drone Designers; Coding with Drones; Pirate Camp; Dirt Camp; and Claymation.
| 2. | Discover Series Products |
These products are designed for the makerspace environment and include engaging STEM activities that motivate students to pursue educational pathways toward STEM careers. The Discover Series includes Discover Podcasting; Discover STEM Dynamic Duo; and Discover Digital Video Lab.
| 3. | BrickLAB Products |
These products are designed for the grade school market and use the Company’s proprietary bricks (which are Lego compatible) and curriculum to engage students to explore, imagine and create within a STEM education framework. The Company offers a variety of grade-specific BrickLAB products.
| 4. | Discover Drones, Add-on Drone Packages and Ala Carte Drone Items |
These products are designed around using drones as a platform for STEM education and career exploration. These titles include the Discover Drones series of Products; Discover Drones Indoor Coding Bundle; Discover Drones Indoor Racing Add-On; Discover Drones Outdoor Practice Add-on; and all the spare parts and ala carte drone items offered in the Company’s comprehensive drone packages.
| 5. | STEAMventures BUILD Activity Book |
These series of activity books are designed for the TK-3 market. The series includes 12 different issues. Instructor guides and/or family engagement guides are included. The Company also provides the necessary bricks for the builds in the activity books as a separate, but related product.
| 8 |
| 6. | Professional Development Training |
The Company offers professional development trainings, for a fee, to educators who are implementing the Company’s products in their classroom.
The Company intends to continue developing STEM education products that address demand from large markets.
Interim Financial Information
The accompanying unaudited condensed financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the condensed financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three (3) months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending March 31, 2026, or any future periods. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on June, 30, 2025 (the “Annual Report”).
We manage our Company as one (1) reportable operating segment, STEM Supplies and Curriculum. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s President.
Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the STEM Supplies and Curriculum segment and decides how to better allocate resources based on net income reported on the Statements of Operations. The Company’s objective in making resource allocation decisions is to optimize the financial results. The accounting policies of our STEM Supplies and Curriculum segment are the same as those described in the summary of significant accounting policies herein.
For single reportable segment-level financial information, total assets, and significant non-cash transactions, see our Financial Statements.
Use of Estimates
The preparation of these condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include reserves related to accounts receivable and inventory, the valuation allowance related to deferred tax assets, the valuation of equity instruments, and debt discounts.
Revenue Recognition
The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, which we adopted on April 1, 2018. Revenue amounts presented in our condensed financial statements are recognized net of sales tax, value-added taxes, and other taxes. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped, or service performed.
The
Company had deferred revenue of $
| 9 |
Most of our contracts with customers contain transaction prices with fixed consideration; however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in FASB ASC 606. For certain fixed-fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.
The Company calculates net income (loss) per share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming exercise of all dilutive unexercised stock options and warrants. The dilutive effect of these instruments was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded as income tax expense when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock.
Common stock outstanding reflected in the Company’s balance sheets includes restricted stock awards outstanding. Securities that may participate in undistributed net income with common stock are considered participating securities. The computation of diluted earnings per share does not assume exercise or conversion of securities that would have an anti-dilutive effect. The following schedules present the calculation of basic and diluted net income per share:
| For the Three Months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net Loss per common Share: | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
| Weighted average number of common shares outstanding Basic | ||||||||
| Weighted average number of common shares outstanding Fully Diluted | ||||||||
Net
income for the three (3) months ended June 30, 2025, and 2024, was $
Recently Issued Accounting Pronouncements
The Company has reviewed recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position.
NOTE 2 – BUSINESS CONDITION
As
of June 30, 2025, the Company had $
| 10 |
NOTE 3 – ACCOUNTS RECEIVABLE
In
the Company’s normal course of business, the Company provides credit terms to its customers, which generally range from net fifteen
(15) to thirty (30) days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for
credit losses accounts of $
NOTE 4 - PREPAID EXPENSES
Prepaid expenses for the periods are as follows:
| June 30, 2025 | March 31, 2025 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid tradeshows | ||||||||
| Prepaid inventory | ||||||||
| Prepaid software | ||||||||
| Prepaid other | ||||||||
| Total Prepaid Expenses | $ | $ | ||||||
NOTE 5 - COMMON AND PREFERRED STOCK TRANSACTIONS
| a. | Common Stock |
The
Company has authorized shares of common stock,
During
the three (3) months ended June 30, 2025, the Company had
During the three (3) months ended June 30, 2025, the Company issued shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his Director services for the quarter ended June 30, 2025.
During
the three (3) months ended June 30, 2025, the Company repurchased an aggregate amount of shares common stock from one individual
who solicited the Company for an offer, at a price of $ per share for total consideration of $
During
the three months ended June 30, 2025, the Company repurchased shares of its common stock on the open market for total consideration
of $
| b. | Preferred Stock |
The Company has authorized shares of preferred stock. As of June 30, 2025, and March 31, 2025, there were preferred shares issued or outstanding.
NOTE 6 – PAYROLL LIABILITIES & ACCRUED EXPENSES
Accrued expenses for the periods are as follows:
| June 30, 2025 | March 31, 2025 | |||||||
| Payroll liabilities | $ | $ | ||||||
| Sales tax payable | ||||||||
| State income tax payable | ( | ) | ||||||
| Accrued expenses | ||||||||
| Total | $ | $ | ||||||
NOTE 7 - RELATED PARTY TRANSACTIONS
On
April 8, 2025, the Company issued shares of Rule 144 “restricted” common stock to Sean P. Iddings, an independent
member of our Board of Directors, as compensation for his services for the quarter ended March 31, 2025. The Company had
| 11 |
NOTE 8 - SUBSEQUENT EVENTS
On
July 1, 2025, we issued shares of Rule 144 “restricted”
On
July 7, 2025, we purchased shares of our
On
July 14, 2025, we purchased shares of our
On
July 16, 2025, we purchased shares of our
On
July 21, 2025, we purchased shares of our
On
July 22, 2025, we purchased shares of our
On
July 23, 2025, we purchased shares of our
On
July 24, 2025, we purchased shares of our
On
July 25, 2025, we purchased shares of our
On
July 28, 2025, we purchased shares of our
All
of the above open market repurchases of our stock are part of the share repurchase program announced by
| 12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statements for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995:
Except for historical facts, all matters discussed in this Quarterly Report, which are forward-looking, involve a high degree of risk and uncertainty. Certain statements in this Quarterly Report set forth management’s intentions, plans, beliefs, expectations, or predictions of the future based on current facts and analyses. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” or similar expressions, we intend to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated in such statements, due to a variety of factors, risks, and uncertainties. Potential risks and uncertainties include, but are not limited to, competitive pressures from other companies within the Educational Industries, economic conditions in the Company’s primary markets, exchange rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing, government action, weather conditions and other uncertainties, including those detailed in our SEC filings. We assume no duty to update forward-looking statements to reflect events or circumstances after the date of such statements.
The following discussion should be read in conjunction with Item 1, Condensed Financial Statements, in Part I of this Quarterly Report.
Overview of Current and Planned Operations
PCS Edventures!, Inc. sells STEM/STEAM products to educational and recreational entities serving youth. Because the majority of our customers work in out-of-school-time settings, we have not attempted to align our products to fit in the classroom setting, until recently. Classroom curriculum must promote academic achievement through rigorous alignment with specific state standards to be considered for use. Each state has its own unique set of standards, making classroom curriculum development a state by-state endeavor.
On the other hand, out of school programs focus more broadly on the goals of engagement, career exploration and development of 21st century skills. This difference makes it easier to penetrate out-of-school programs, as more freedoms exist for curriculum development. We focus our efforts on these out-of-school programs, which include summer school, summer camps, YMCA programs, Boys and Girls club programs, and various other programs offered outside of the classroom, at all times of the year, that are too numerous to list. Oftentimes, these programs are sponsored, administered, and/or supported by local school districts, and we employ considerable efforts to build relationships with these types of school districts to provide desired programing for their out-of-school programs. The majority of the time, the out-of-school programs offered are funded with grants; however, some programs are run on a for-profit basis. The Company sells to all of these types of entities.
However, given the new administration’s stated goals of removing federal influence and administration from education, and returning those functions to the states, we are now considering which of our products would be adaptable to the educational standards of certain larger states. We intend to continue to weigh state-level priorities much more heavily in the development of future products as well. We view a transition from federal dominance to state dominance of the application of educational standards to curriculum as likely, albeit over a long time frame, and we are adapting our product development to this change in our market.
Market feedback also indicates that products that have evidence of their effectiveness are increasingly being demanded, especially in state-funded programs and larger programs. While we maintain a library of the evidence we have accumulated about the outcomes one can expect when using our products, and while this library of evidence has helped us win larger orders, we believe that expanding this library and upgrading the tiers of evidence we have will produce meaningful benefits for future sales.
We have engaged various firms to help us generate more compelling evidence of our products’ effectiveness. We are early in this process, but we intend to substantially build out our library of evidence of our products’ effectiveness. The course we take to accomplish this endeavor will depend on our experiences with these early initiatives.
We offer professional development training for instructors using our products, and typically charge a fee for this service, with the fee primarily covering our expenses. Management does not view this service as a profit center, but rather as a customer service component of our product that adds to its uniqueness and value in the marketplace, and as a market development endeavor to build out the Company’s addressable market.
The nature of our target market produces considerable seasonality for the Company’s revenue. The quarters ending June 30 and September 30 tend to be the peak of this seasonality (with the quarter ending March 31 being close to these quarters), while the quarter ending December 31 tends to be the low point of our seasonality. The Table below reflects this seasonality.
| Quarterly Revenue | ||||||||||||||||
| Quarter Ended | 2022 | 2023 | 2024 | 2025 | ||||||||||||
| March 31 | 1,445,594 | 2,521,470 | 2,262,772 | 1,292,819 | ||||||||||||
| June 30 | 1,391,785 | 2,605,281 | 3,159,923 | 2,423,308 | ||||||||||||
| September 30 | 1,243,662 | 3,767,326 | 2,267,338 | |||||||||||||
| December 31 | 1,847,659 | 459,087 | 701,147 | |||||||||||||
During the quarter ended December 31, the Company focuses on product development, restocking inventory, and general planning for the next year. Sales and marketing activities remain fairly constant throughout the year.
| 13 |
Results of Operations
Revenue
For the quarter ended June 30, 2025, our revenue was $2,423,308, which was $736,615 less than our revenue for the quarter ended June 30, 2024, of $3,159,923. The difference in revenue was due to deteriorating market conditions from June 30, 2024, through June 30, 2025.
In the June 30, 2024, quarter, the Company’s market was quite robust, due in large part to the ESSER (“Elementary and Secondary School Emergency Relief”) funding being in effect and which expired on September 30, 2024, with a “use it or lose it” stipulation in place. The ESSER funds were created with the intent to raise the level of students’ education back up to where it should be after the school closures and loss of learning due to the Covid pandemic. These funds had few restrictions and were often used to fund out-of-school-time programs to help students catch up. This is our primary market and during the June 30, 2024, quarter, we benefited significantly from the ESSER funding and the rush to spend it prior to the September 30, 2024, deadline.
In the June 30, 2025, quarter, the Company’s market environment was mired with uncertainty which tends to freeze decision making until clarity returns. Not only had the ESSER funding expired, but also afterschool programs were targeted with federal budget cuts, some of which were implemented and some of which were proposed. Given these future funding uncertainties, education administrators tended to act cautiously, which curtailed what otherwise would have been normal spending patterns. The duration of this uncertainty has necessitated the closure of some afterschool programs either because the funding wasn’t there to support it, or because educational funding in general was cut enough to cause a reprioritization of funding allocations, with afterschool programs often being lower on the priority list.
The success of the Company initiative to solicit larger customers has waned since the onset of the uncertainty that grips our market. The table below shows customer transactions by size for the periods indicated.
Number of Customer Transactions by size
| > $1 million | >$500,000 | > $100,000 | > $50,000 | > $25,000 | > $10,000 | |||||||||||||||||||
| Three (3) months ended June 30, 2025 | 0 | 0 | 4 | 13 | 22 | 46 | ||||||||||||||||||
| Three (3) months ended June 30, 2024 | 0 | 0 | 8 | 13 | 26 | 50 | ||||||||||||||||||
| Three (3) months ended June 30, 2023 | 0 | 0 | 6 | 12 | 19 | 42 | ||||||||||||||||||
| Three (3) months ended June 30, 2022 | 0 | 0 | 3 | 7 | 12 | 24 | ||||||||||||||||||
We believe that once the uncertainty about funding streams is removed from our market, we can again show some success in soliciting larger customers; however, we cannot guarantee success, nor can we provide a numerical framework to describe the potential success. Risk factors include any developments that negatively impact education funding in the United States, challenges finding and retaining employees who meet our high standards, and disruptions to our supply chain of critical components.
Cost of Sales
We strive to have a cost of sales that is less than 40% of revenue. We price our products once per year, at the beginning of the calendar year, and maintain that pricing level throughout the year. During inflationary environments, when the price level of the Company’s raw materials is increasing, the Company must absorb that negative impact to gross margins until it can reprice its products at the beginning of the next calendar year. This repricing analysis considers the current pricing level of materials, as well as the likely increase in those levels in the year ahead. We attempt to incorporate shipping costs into the cost of raw materials, but oftentimes during the course of the year we are compelled to ship in a more expedient manner, which is more expensive than our baseline assumptions.
| 14 |
For the quarter ended June 30, 2025, our cost of sales was $886,771, or 36.6% of revenue. For the quarter ended June 30, 2024, our cost of sales was $1,198,435, or 37.9% of revenue. For any given quarter, and especially in low revenue quarters, the cost of sales can vary significantly from our desired 40% or less of revenue. However, for any given year, the calculation is relevant and desired to be 40% or less of revenue. Factors affecting cost of sales include:
| Helps sub 40% cost of sales | Impedes sub 40% cost of sales | |
| Higher revenue | Higher inflation | |
| Larger order size | Expedited shipping | |
| Ability to take advantage of volume discounts | Quality issues with raw materials | |
| Higher mix of sales from internal efforts | Higher mix of sales from resellers |
Operating Expenses
Operating expenses are divided into two categories – salary + wages, and general + administrative. Salary and wages tend to increase over time as the Company has been increasing its number of employees and we expect to continue to do so in the future. Also, the Company desires to retain employees over the long term, which requires periodic increases in compensation as their value to the Company increases.
The Company also has a discretionary quarterly bonus program based on qualified revenue. Qualified revenue is defined as revenue where there are no reseller fees or other price adjustments associated with that revenue. Thus, all reseller sales are disqualified from the discretionary quarterly bonus calculation, as are other miscellaneous transactions where the Company did not receive a full margin. During quarters with higher revenue, salaries and wages will increase all other things equal.
Salary and wages were $610,293 for the quarter ended June 30, 2025. For the quarter ended June 30, 2024, salaries and wages were $518,287. We had twenty-five (25) employees as of June 30, 2025, versus twenty-three (23) employees as of June 30, 2024. While the increase in employees is the main factor behind the increase in salaries and wages, we also want to retain our employees which necessitates annual raises to compensate for inflation and reflect an employee’s increased value to the Company.
General and administrative expenses include all operating expenses outside of salaries and wages. These include the following categories:
| 1. | Advertising and marketing expenses | |
| 2. | Trade show and travel expenses | |
| 3. | Product development expenses | |
| 4. | Finance charges | |
| 5. | Contract labor expenses | |
| 6. | Lease expenses | |
| 7. | Insurance premiums | |
| 8. | Workers’ compensation expenses | |
| 9. | Office supplies and repairs | |
| 10. | Professional expenses | |
| 11. | Licenses | |
| 12. | State sales tax expenses | |
| 13. | Office and warehouse infrastructure expenses |
Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $376,249 for the quarter ended June 30, 2025. For the quarter ended June 30, 2024, general and administrative expenses were $320,019. The increase in general and administrative expenses for the quarter ended June 30, 2025, was largely due to the Company’s new facilities leases, which began in the quarter ending December 31, 2024. Warehouse and office lease and maintenance expenses were $63,579 for the quarter ending June 30, 2025, compared to $35,669 for the quarter ending June 30, 2024.
Other Income and Expenses
Other income and expenses are those outside of the Company’s ordinary course of business. Interest income and interest expense are disclosed under other income and expenses. The Company has accumulated cash, which is invested in a Vanguard money market fund that invests exclusively in repurchase agreements and short-term U.S. government securities. The ticker symbol of this fund is VMFXX. The Company’s investments in this fund produce interest income.
| 15 |
For the quarter ended June 30, 2025, other income and expenses were $22,831, with net interest income accounting for the entire amount. For the quarter ended June 30, 2024, other income and expenses were $21,509, with net interest income accounting for the entire amount.
Net Income (Loss) Before Tax
For the quarter ended June 30, 2025, net income before tax was $572,826 versus $1,144,691 for the quarter ended June 30, 2024. Lower revenue accounted for the majority of the difference in net income between the June 30, 2025, quarter versus the June 30, 2024, quarter.
Taxes
The Company has significant net operating losses which arose due to past losses. At June 30, 2025, the Company had net operating losses of approximately $7.3 million that may be used to offset against future taxable income.
Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ended March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $1,011,466. The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal year 2024.
While we do not expect to pay federal income taxes for fiscal year 2026, the deferred tax asset will be adjusted on a quarterly basis to reflect the amount of taxes it is offsetting for the quarter. The provision for income tax is an unwinding of the tax benefit we recorded in prior periods when we recognized the value of the deferred tax asset on the income statement.
For the quarter ending June 30, 2025, the provision for income taxes was $127,673. We did not provide a provision for income taxes for the quarter ending June 30, 2024.
Liquidity and Capital Resources
Cash Flow from Operations
For the three (3) months ended June 30, 2025, cash provided by operations was $429,799 compared to cash provided by operations of $1,352,840 for the three (3) months ended June 30, 2024. Cash provided by operations decreased significantly, due to the difference in net income and the difference in changes to accounts receivable.
As of June 30, 2025, total current assets were $6,595,195 and total current liabilities were $571,059, resulting in working capital of $6,024,136. As of March 31, 2025, total current assets were $5,918,984 and total current liabilities were $326,439, resulting in working capital of $5,592,545. Working capital increased due to an increase in accounts receivable and cash from the profitability in the quarter.
The Company had a current ratio as of June 30, 2025, of 11.5 compared to a current ratio of 18.1 as of March 31, 2025.
As of June 30, 2025, we had $3,594,670 in cash and cash equivalents compared to $3,223,147 in cash and cash equivalents as of March 31, 2025. The improvements in cash on hand for the quarter ended June 30, 2025, is due to overall profitability during the quarter.
Cash Flow from Investing Activities
For the three (3) months ended June 30, 2025, cash used by investing activities was $7,255 compared to cash used by investing activities of $29,832 for the three (3) months ended June 30, 2024. Equipment purchases were less in the quarter ended June 30, 2025, versus that for the quarter ended June 30, 2024.
| 16 |
Cash Flow from Financing Activities
For the three (3) months ended June 30, 2025, cash used by financing activities was $51,021 compared to cash used by financing activities of $0 for the three (3) months ended June 30, 2024. For the quarter ended June 30, 2025, cash used by financing activities was due to three (3) factors:
During the three (3) months ended June 30, 2025, the Company issued 20,000 shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his Director services for the quarter ended June 30, 2025.
During the three (3) months ended June 30, 2025, the Company repurchased an aggregate amount of 284,959 shares common stock from one individual who solicited the Company for an offer, at a price of $0.14 per share for total consideration of $39,894. These shares were then immediately cancelled.
During the three months ended June 30, 2025, the Company repurchased 100,000 shares of its common stock on the open market at $0.13607 per share, including commission, for total consideration of $13,607 and held those shares as Treasury Stock as of June 30, 2025. The Company intends to cancel the shares that it repurchases on the open market when the amount of Treasury Stock accumulated exceeds one (1) million shares.
Off-Balance Sheet Arrangements
We had no Off-Balance Sheet arrangements during the three (3) month periods ended June 30, 2025, and 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item.
Item 4. Controls and Procedures.
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and our President who acts as our Principal Financial Officer have evaluated the effectiveness, as of December 31, 2024, of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025, due to the Company engaging the professional CPA firm of B.A. Harris to assist the Company in preparing our preliminary condensed financial statements and schedules for our auditor’s review.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 17 |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three (3) months ended June 30, 2025, the Company issued 20,000 shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his Director services for the quarter ended June 30, 2025.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None; not applicable.
Item 5. Other Information.
No
director or Section 16 officer
Item 6. Exhibits.
(a) Index of Exhibits
| 18 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PCS EDVENTURES!, INC. | ||
| Dated: August 14, 2025 | By: | /s/ Todd R. Hackett |
| Todd R. Hackett | ||
| Chief Executive Officer and | ||
| Chairman of the Board of Directors | ||
| Dated: August 14, 2025 | By: | /s/ Michael J. Bledsoe |
| Michael J. Bledsoe | ||
| President, Principal Financial Officer and Director | ||
| Dated: August 14, 2025 | By: | /s/ Sean P. Iddings |
| Sean P. Iddings | ||
| Director | ||
| 19 |