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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
| ☒ |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended June 30, 2026
| ☐ |
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. 000-49990
PCS
EDVENTURES!, INC.
(Exact
name of Registrant as specified in its charter)
| Idaho |
|
82-0475383 |
| (State or Other Jurisdiction
of |
|
(I.R.S. Employer |
| incorporation or organization) |
|
Identification No.) |
941
S. Industry Way
Meridian,
Idaho 83642
(Address
of Principal Executive Offices)
(208)
343-3110
(Registrant’s
telephone number, including area code)
941
S. Industry Way
Meridian,
ID 83642
(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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 ☐ |
Non-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, 2026: 9,677,687 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, 2026, filed
with the SEC on June 26, 2026 (the “Annual Report”), which commences on page 10 thereof, 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, hereof.
PCS
EDVENTURES!, INC.
FORM
10-Q
FOR
THE QUARTERLY PERIOD ENDED JUNE 30, 2026
INDEX
| |
|
|
Page |
| PART
I - |
FINANCIAL INFORMATION |
|
4 |
| |
|
|
|
| ITEM
1. |
Condensed Financial Statements (unaudited) |
|
4 |
| |
|
|
|
| |
Condensed Balance Sheets as of June 30, 2026 (unaudited), and March 31, 2026 |
|
5 |
| |
Condensed Statements of Operations for the Three months ended June 30, 2026, and 2025 (unaudited) |
|
6 |
| |
Condensed Statement of Stockholders’ Equity for the Three Months ended June 30, 2026, and 2025 (unaudited) |
|
7 |
| |
Condensed Statements of Cash Flows for the Three Months ended June 30, 2026, and 2025 (unaudited) |
|
8 |
| |
Notes to Condensed Financial Statements (unaudited) |
|
9 |
| |
|
|
|
| ITEM
2. |
Management’s Discussion and Analysis of Financial Conditions and Results of Operations |
|
16 |
| |
|
|
|
| ITEM
3. |
Quantitative and Qualitative Disclosures about Market Risk |
|
19 |
| |
|
|
|
| ITEM
4. |
Controls and Procedures |
|
19 |
| |
|
|
|
| PART
II - |
OTHER INFORMATION |
|
20 |
| |
|
|
|
| ITEM
1. |
Legal Proceedings |
|
20 |
| |
|
|
|
| ITEM
1A. |
Risk Factors |
|
20 |
| |
|
|
|
| ITEM
2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
|
20 |
| |
|
|
|
| ITEM
3. |
Defaults Upon Senior Securities |
|
20 |
| |
|
|
|
| ITEM
4. |
Mine Safety Disclosures |
|
20 |
| |
|
|
|
| ITEM
5. |
Other Information |
|
20 |
| |
|
|
|
| ITEM
6. |
EXHIBIT INDEX |
|
20 |
| |
|
|
|
| SIGNATURES |
|
21 |
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.)
PCS
EDVENTURES!, INC.
Condensed
Balance Sheets
| | |
June 30, 2026 | | |
March 31, 2026 | |
| | |
(Unaudited) | | |
(Audited) | |
| CURRENT ASSETS | |
| | | |
| | |
| Cash | |
$ | 2,647,668 | | |
$ | 2,674,538 | |
| Accounts receivable, net of allowance for credit losses of $41,889 | |
| 626,073 | | |
| 719,380 | |
| Accounts receivable, other receivables | |
| 3,213 | | |
| 3,227 | |
| Prepaid expenses | |
| 91,185 | | |
| 179,869 | |
| Inventory, net | |
| 2,290,713 | | |
| 2,054,008 | |
| Total Current Assets | |
| 5,658,852 | | |
| 5,631,022 | |
| | |
| | | |
| | |
| NONCURRENT ASSETS | |
| | | |
| | |
| Lease Right-of-Use Asset | |
| 879,263 | | |
| 934,064 | |
| Deposits | |
| 29,747 | | |
| 29,747 | |
| Property and equipment, net | |
| 78,834 | | |
| 84,873 | |
| Deferred tax asset | |
| 2,198,797 | | |
| 2,222,414 | |
| Total Noncurrent Assets | |
| 3,186,641 | | |
| 3,271,098 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 8,845,493 | | |
| 8,902,120 | |
| | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | |
| Accounts payable | |
$ | (4,134 | ) | |
| 84,316 | |
| Payroll liabilities and accrued expenses | |
| 135,352 | | |
| 115,582 | |
| Deferred revenue | |
| 60,166 | | |
| 21,240 | |
| Lease Liability, current portion | |
| 229,124 | | |
| 227,718 | |
| Total Current Liabilities | |
| 420,508 | | |
| 448,856 | |
| | |
| | | |
| | |
| Lease Liability, net of current portion | |
| 703,728 | | |
| 760,504 | |
| TOTAL LIABILITIES | |
$ | 1,124,236 | | |
| 1,209,360 | |
| | |
| | | |
| | |
| STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| Preferred stock, no par value, 20,000,000 authorized shares, no shares issued and outstanding | |
| - | | |
| - | |
| Common stock, no par value, 12,000,000 authorized shares, 9,784,898 issued and 9,678,474 outstanding, 9,781,828 issued, 9,707,960 outstanding, respectively | |
| - | | |
| - | |
| Additional Paid-in Capital | |
| 39,524,308 | | |
| 39,521,588 | |
| Treasury Stock, 106,424 shares and 73,868 shares, respectively | |
| (163,051 | ) | |
| (114,233 | ) |
| Accumulated deficit | |
| (31,640,000 | ) | |
| (31,714,595 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | |
| 7,721,257 | | |
| 7,692,760 | |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | |
$ | 8,845,493 | | |
| 8,902,120 | |
The
accompanying notes are an integral part of these unaudited condensed financial statements.
PCS
EDVENTURES!, INC.
Condensed
Statements of Operations (unaudited)
| | |
2026 | | |
2025 | |
| | |
For the three months ended June 30, | |
| | |
2026 | | |
2025 | |
| REVENUE | |
$ | 1,740,616 | | |
| 2,423,308 | |
| | |
| | | |
| | |
| COST OF SALES | |
| 647,320 | | |
| 886,771 | |
| | |
| | | |
| | |
| GROSS PROFIT | |
| 1,093,296 | | |
| 1,536,537 | |
| | |
| | | |
| | |
| OPERATING EXPENSES | |
| | | |
| | |
| Salaries and wages | |
| 601,346 | | |
| 610,293 | |
| General and administrative expenses | |
| 409,949 | | |
| 353,924 | |
| Total Operating Expenses | |
| 1,011,295 | | |
| 964,217 | |
| OPERATING INCOME | |
| 82,001 | | |
| 572,320 | |
| | |
| | | |
| | |
| OTHER INCOME | |
| | | |
| | |
| Interest income | |
| 20,846 | | |
| 22,831 | |
| Net Other Income | |
| 20,846 | | |
| 22,831 | |
| | |
| | | |
| | |
| Provision for income taxes | |
| 28,252 | | |
| 149,998 | |
| NET INCOME | |
$ | 74,595 | | |
| 445,153 | |
| | |
| | | |
| | |
| Net Income per common share: | |
| | | |
| | |
| Basic | |
$ | 0.01 | | |
| 0.04 | |
| Fully Diluted | |
$ | 0.01 | | |
| 0.04 | |
| | |
| | | |
| | |
| Weighted Average number of shares outstanding | |
| | | |
| | |
| Basic | |
| 9,682,113 | | |
| 10,170,103 | |
| Fully diluted | |
| 9,682,113 | | |
| 10,170,103 | |
The
accompanying notes are an integral part of these condensed financial statements.
PCS
EDVENTURES!, INC.
Condensed
Statement of Stockholders’ Equity
(Unaudited)
| | |
# of Common Shares O/S | | |
Common Stock | | |
Treasury Shares | | |
Treasury Paid-in Capital | | |
Additional Paid-in Capital | | |
Accumulated Deficit | | |
Stockholders’ Equity | |
| Balance at 3/31/2025 | |
| 10,182,853 | | |
| - | | |
| - | | |
| - | | |
$ | 40,022,746 | | |
$ | (31,967,777 | ) | |
| 8,054,969 | |
| Net Income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 445,153 | | |
| 445,153 | |
| Private Shares Repurchased | |
| (23,747 | ) | |
| - | | |
| - | | |
| - | | |
| (39,894 | ) | |
| - | | |
| (39,894 | ) |
| Treasury Shares Repurchased | |
| (8,333 | ) | |
| - | | |
| 8,333 | | |
| (13,607 | ) | |
| - | | |
| - | | |
| (13,607 | ) |
| Shares Issued for Board Comp | |
| 1,667 | | |
| - | | |
| - | | |
| - | | |
| 2,480 | | |
| - | | |
| 2,480 | |
| Balance at 6/30/2025 | |
| 10,152,440 | | |
| - | | |
| 8,333 | | |
| (13,607 | ) | |
| 39,985,332 | | |
| (31,522,624 | ) | |
| 8,449,101 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at 3/31/2026 | |
| 9,707,960 | | |
| - | | |
| 73,868 | | |
| (114,233 | ) | |
| 39,521,588 | | |
| (31,714,595 | ) | |
| 7,692,760 | |
| Adjustment for Transfer Agent Reporting Delay | |
| 1,403 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Net Income | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 74,595 | | |
| 74,595 | |
| Private Shares Repurchased | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Treasury Shares Repurchased | |
| (32,556 | ) | |
| - | | |
| 32,556 | | |
| (48,818 | ) | |
| - | | |
| - | | |
| (48,818 | ) |
| Shares Issued for Board Comp | |
| 1,667 | | |
| - | | |
| - | | |
| - | | |
| 2,720 | | |
| - | | |
| 2,720 | |
| Balance at 6/30/2026 | |
| 9,678,474 | | |
| - | | |
| 106,424 | | |
| (163,051 | ) | |
| 39,524,308 | | |
| (31,640,000 | ) | |
| 7,721,257 | |
The
accompanying notes are an integral part of these condensed financial statements.
PCS
EDVENTURES!, INC.
Condensed
Statements of Cash Flows
(Unaudited)
| | |
2026 | | |
2025 | |
| | |
For the three months ended June 30, | |
| | |
2026 | | |
2025 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
| Net Income | |
$ | 74,595 | | |
$ | 445,153 | |
| Depreciation and amortization | |
| 8,370 | | |
| 7,716 | |
| Amortization of right of use asset | |
| 54,801 | | |
| 49,678 | |
| Provision for income tax | |
| 28,252 | | |
| 127,673 | |
| Stock based compensation | |
| 5,351 | | |
| 2,480 | |
| Changes in operating assets and liabilities | |
| | | |
| | |
| (Increase) decrease in accounts receivable | |
| 93,320 | | |
| (456,491 | ) |
| (Increase) decrease in prepaid expenses | |
| 88,684 | | |
| 165,200 | |
| (Increase) in inventories | |
| (236,705 | ) | |
| (13,397 | ) |
| Increase in accounts payable and accrued liabilities | |
| (75,945 | ) | |
| 149,606 | |
| (Decrease) in lease liability | |
| (55,370 | ) | |
| (44,225 | ) |
| Increase (decrease) in unearned revenue | |
| 38,926 | | |
| (1,114 | ) |
| Net Cash Provided by Operating Activities | |
| 24,279 | | |
| 432,279 | |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
| Cash paid for purchase of fixed assets | |
| (2,331 | ) | |
| (7,255 | ) |
| Net Cash Used by Investing Activities | |
| (2,331 | ) | |
| (7,255 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| Cash paid for private purchase of common stock | |
| - | | |
| (39,894 | ) |
| Cash paid for purchase of Treasury stock on open market | |
| (48,818 | ) | |
| (13,607 | ) |
| Net Cash Used by Financing Activities | |
| (48,818 | ) | |
| (53,501 | ) |
| | |
| | | |
| | |
| Net Increase (Decrease) in Cash | |
| (26,870 | ) | |
| 371,523 | |
| Cash at Beginning of Period | |
| 2,674,538 | | |
| 3,223,147 | |
| Cash at End of Period | |
$ | 2,647,668 | | |
$ | 3,594,670 | |
| | |
| | | |
| | |
| Cash paid for taxes | |
$ | 85,637 | | |
$ | 11,604 | |
| Cash paid for interest | |
$ | - | | |
$ | 3,476 | |
The
accompanying notes are an integral part of these condensed financial statements.
PCS
EDVENTURES!, INC.
Notes
to the Condensed Financial Statements
June
30, 2026
(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 TK-12 market, which can be categorized as follows:
PCS
has developed and sells a variety of STEM education products into the K12 market, which can be categorized as follows:
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.
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.
| |
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 (the “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, 2026, are not necessarily
indicative of the results that may be expected for the fiscal year ending March 31, 2027, 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 fiscal year
ended March 31, 2026, filed with the SEC on June, 26, 2026 (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 financial statements in conformity with Generally Accepted Accounting Principles (“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 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,
and the valuation allowance related to deferred tax assets.
Income
Taxes
Income
taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective
tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.
In
November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17, “Income Taxes (“Topic
740”)-Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”), which requires reporting the net amount
of deferred tax assets and liabilities as a single noncurrent item on the classified balance sheet. Before this change, the net amounts
of current and noncurrent deferred tax assets and liabilities were reported separately.
We
account for income taxes in accordance with ASC 740. ASC 740 prescribes the use of the asset and liability method to compute the differences
between the tax bases of assets and liabilities and the related financial amounts, using currently enacted tax laws. If necessary, a
valuation allowance is established, based on the weight of available evidence, to reduce deferred tax assets to the amount that is more
likely than not to be realized. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon
achievement of sufficient future taxable income. We exercise significant judgment in determining our provisions for income taxes, our
deferred tax assets and liabilities and our future taxable income for purposes of assessing our ability to utilize any future tax benefit
from our deferred tax assets.
In
accordance with GAAP, the Company has analysed its filing positions in all jurisdictions where it is required to file income tax returns
for the open tax years in such jurisdictions. The Company currently believes that all significant filing positions are highly certain
and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has
no significant reserves for uncertain tax positions, and no adjustment to such reserves was required by GAAP. No interest or penalties
have been levied against the Company and none are anticipated; therefore, no interest or penalty has been included in the provision for
income taxes in the consolidated statements of operations. The Internal Revenue Code contains provisions which reduce or limit the availability
and utilization of net operating loss (“NOL”) carry forwards in the event of a more than a 50-percentage point change in
ownership. If such an ownership change occurs with the Company, the use of these net operating losses could be limited.
The
table below details the years that remain open to tax examinations:
SCHEDULE OF INCOME TAX EXAMINATION
| Tax Year | |
Fiscal Year End | |
Filed Date | |
Open Through |
| 2024 | |
3/31/2025 | |
11/24/2025 | |
11/24/2028 |
| 2023 | |
3/31/2024 | |
8/26/2024 | |
8/26/2027 |
| 2022 | |
3/31/2023 | |
8/23/2023 | |
8/23/2026 |
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 $60,166 as of June 30, 2026, related to contractual commitments with customers where the performance
obligation will be satisfied within the fiscal year ending March 31, 2027. The revenue associated with these performance obligations
is recognized as the obligation is satisfied. The Company had $21,240 of deferred revenue as of March 31, 2026.
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.
Reclassifications
Certain
reclassifications of tax expenses and tax provisions have been made to the financial statements for the quarter ended June 30, 2025,
to conform to the financial presentation for the quarter ended June 30, 2026. These reclassifications had no effect on the net income
or cash flows as previously reported.
Net
Earnings (Loss) Per Share of Common Stock
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:
SCHEDULE OF BASIC AND DILUTED NET INCOME
| | |
2026 | | |
2025 | |
| | |
For the Three Months ended June 30, | |
| | |
2026 | | |
2025 | |
| Net Income per common share: | |
| | |
| |
| Basic | |
$ | 0.01 | | |
$ | 0.04 | |
| Diluted | |
$ | 0.01 | | |
$ | 0.04 | |
| | |
| | | |
| | |
| Weighted average number of common shares outstanding Basic | |
| 9,682,113 | | |
| 10,170,103 | |
| | |
| | | |
| | |
| Weighted average number of common shares outstanding Fully Diluted | |
| 9,682,113 | | |
| 10,170,103 | |
Net
income for the three (3) months ended June 30, 2026, and 2025, was $74,595 and $445,153, respectively. As of June 30, 2026, and June
30, 2025, the Company had no outstanding dilutive instruments.
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, 2026, the Company had $2.65 million in cash, $2.29 million in net inventory, and $0.63 million in accounts receivable, with
no debt. Management strongly believes that the Company can sustain its operations over the course of the next 12 months with the cash
it has on hand, and with the revenue and associated profit generated from the sales expected over the course of the next 12 months, especially
given the Company’s large inventory balance.
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 15
to 30 days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for credit losses
accounts of $41,889 as of June 30, 2026, and March 31, 2026.
NOTE
4 - PREPAID EXPENSES
Prepaid
expenses for the periods are as follows:
SCHEDULE OF PREPAID EXPENSES
| | |
June 30, 2026 | | |
March 31, 2026 | |
| Prepaid insurance | |
$ | 6,746 | | |
$ | 13,922 | |
| Prepaid tradeshows | |
| 4,526 | | |
| 4,800 | |
| Prepaid inventory | |
| - | | |
| 79,808 | |
| Prepaid software | |
| 33,041 | | |
| 42,359 | |
| Prepaid other | |
| 46,872 | | |
| 38,980 | |
| Total Prepaid Expenses | |
$ | 91,185 | | |
$ | 179,869 | |
NOTE
5 - COMMON AND PREFERRED STOCK TRANSACTIONS
The
Company has 12,000,000 authorized shares of common stock, no par value. As of June 30, 2026, the total common shares issued were 9,784,898,
and the total common shares outstanding were 9,678,474, which includes the deduction of 106,424 shares of Company owned as Treasury stock.
During
the three (3) months ended June 30, 2026, the Company had no option expense.
During
the three (3) months ended June 30, 2026, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P.
Iddings as compensation for his services as a Board Director the quarter ended March 31, 2026.
During
the three months ended June 30, 2026, the Company repurchased 32,556 shares of its common stock on the open market for total consideration
of $48,818 including commissions and held those shares as Treasury Stock as of June 30, 2026. The Company intends to cancel theses shares.
The
Company has 20,000,000 authorized shares of preferred stock. As of June 30, 2026, and March 31, 2026, there were no preferred shares
issued or outstanding.
NOTE
6 – PAYROLL LIABILITIES & ACCRUED EXPENSES
Accrued
expenses for the periods are as follows:
SCHEDULE OF ACCRUED EXPENSES
| | |
June 30, 2026 | | |
March 31, 2026 | |
| Payroll liabilities | |
$ | 104,125 | | |
$ | 81,507 | |
| Sales tax payable | |
| 34,974 | | |
| 45,086 | |
| State income tax payable | |
| (21,362 | ) | |
| (25,996 | ) |
| Accrued expenses | |
| 17,615 | | |
| 14,985 | |
| Total | |
$ | 135,352 | | |
$ | 115,582 | |
NOTE
7 - RELATED PARTY TRANSACTIONS
On
April 8, 2025, the Company issued 1,667 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, 2026. During the quarter ended June 30, 2025,
the Company issued 1,667 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.
NOTE
8 –PROVISION FOR INCOME TAXES
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. Once the valuation allowance was fully removed, a provision for income taxes was disclosed. For the fiscal quarter ended June 30,
2026, the Company’s provision for income taxes was $28,252. For the fiscal quarter ended June 30, 2025, the Company’s provision
for income taxes was $149,998.
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than
not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of June 30, 2026 or March 31,
2026. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material
deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
The
Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential
examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance
with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits
will materially change over the next 12 months.
Although
we believe that our tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject
to examination by tax authorities in the ordinary course of business. We periodically assess the likelihood of adverse outcomes resulting
from these examinations to determine the impact on our deferred taxes and income tax liabilities and the adequacy of our provision for
income taxes. Changes in income tax legislation, statutory income tax rates or future taxable income levels, among other things, could
materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among
financial reporting periods.
The
Company files income tax returns in the United States, the State of Idaho and the State of California. The statute of limitations on
a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated
remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of
the Company due since inception have been filed. The Company does not have any unrecognized tax benefits to report in the current period.
Net
deferred tax assets and liabilities consist of the following components as of June 30, 2026, and March 31, 2026:
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES
| | |
June 30, 2026 | | |
March 31, 2026 | |
| Deferred tax assets | |
| | |
| |
| Right of use liabilities | |
| 261,199 | | |
| 276,702 | |
| Goodwill amortization | |
| 8,801 | | |
| 9,281 | |
| NOL carryover | |
| 2,176,582 | | |
| 2,200,040 | |
| Total deferred tax assets | |
| 2,446,582 | | |
| 2,486,023 | |
| | |
| | | |
| | |
| Deferred tax liabilities | |
| | | |
| | |
| Right of use assets | |
| (246,194 | ) | |
| (261,538 | ) |
| Depreciation | |
| (1,591 | ) | |
| (2,071 | ) |
| Total deferred tax liabilities | |
| (247,785 | ) | |
| (263,609 | ) |
| | |
| | | |
| | |
| Net deferred tax assets | |
| 2,198,797 | | |
| 2,222,414 | |
| | |
| | | |
| | |
| Less valuation allowance | |
| - | | |
| - | |
| Net deferred tax assets | |
| 2,198,797 | | |
| 2,222,414 | |
The
reconciliations of the Company’s net income taxes for the three (3) months ended June 30, 2026, and 2025, are as follows:
SCHEDULE OF RECONCILIATION NET INCOME TAXES
| | |
June 30, 2026 | | |
June 30, 2025 | |
| Current federal | |
| - | | |
| - | |
| Current state | |
| 4,634 | | |
| 22,325 | |
| Deferred federal | |
| 20,800 | | |
| 114,928 | |
| Deferred state | |
| 2,818 | | |
| 12,745 | |
| Total income tax provision | |
| 28,252 | | |
| 149,998 | |
| | |
| | | |
| | |
| | |
| | | |
| | |
| U.S. Federal income tax at statutory rate | |
| 22,571 | | |
| 124,963 | |
| Non-deductible expenses | |
| 759 | | |
| 1,082 | |
| Temporary differences | |
| (120 | ) | |
| 1,114 | |
| State income taxes, net of federal benefit | |
| 5,855 | | |
| 19,184 | |
| Return to provision adjustments / other | |
| (813 | ) | |
| 3,655 | |
| Total income tax provision | |
| 28,252 | | |
| 149,998 | |
The
summary of Federal Operating Loss Carryforwards for the three (3) months ended of June 30, 2026 is as follows:
SCHEDULE OF FEDERAL OPERATING LOSS CARRYFORWARDS
| | |
| | |
| Unused operating loss carryforwards at March 31, 2026 | |
$ | 7,675,873 | |
| Operating loss carryforwards realized | |
$ | 101,255 | |
| Unused operating loss carryforward at June 30, 2026 | |
$ | 7,574,618 | |
NOTE
9 – SUBSEQUENT EVENTS
On
July 1, 2026, we instructed our transfer agent to issue 1,667 shares of Rule 144 “restricted” no par value common stock to
Sean P. Iddings for his services as a Director of our Board for the quarter ended June 30, 2026. On August 3, 2026, those shares were
issued. This payment was accrued on our financial statements dated June 30, 2026.
On
July 6, 2026, we purchased 43 shares of our no par value common stock on the open market for $1.55 per share. Including transactions
costs, the total consideration for this purchase was $74.
On
July 7, 2026,we purchased 11 shares of our no par value common stock on the open market for $1.55 per share. Including transactions costs,
the total consideration for this purchase was $24.
On
July 10, 2026, we purchased 400 shares of our no par value common stock on the open market for $1.55 per share. Including transactions
costs, the total consideration for this purchase was $627.
On
July 17, 2026, we purchased 2,000 shares of our no par value common stock on the open market for $1.65 per share. Including transactions
costs, the total consideration for this purchase was $3,307.
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 programming 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 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 1) a customer service component
of our product that adds to its uniqueness and value in the marketplace and 2) 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.
| Quarter Ended | |
2023 | | |
2024 | | |
2025 | | |
2026 | |
| | |
| | |
| | |
| | |
| |
| March 31 | |
| 2,521,470 | | |
| 2,262,772 | | |
| 1,292,819 | | |
| 1,642,060 | |
| June 30 | |
| 2,605,281 | | |
| 3,159,923 | | |
| 2,423,308 | | |
| 1,740,616 | |
| September 30 | |
| 3,767,326 | | |
| 2,267,338 | | |
| 1,529,503 | | |
| | |
| December 31 | |
| 459,087 | | |
| 701,147 | | |
| 754,889 | | |
| | |
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.
Results
of Operations
Revenue
For
the quarter ended June 30, 2026, our revenue was $1,740,616, which was $682,692 less than our revenue for the quarter ended June 30,
2025, of $2,423,308. The difference in revenue was due to weak market conditions, characterized by fewer large orders and declining reseller
revenue.
The
success of the Company initiative to solicit larger customers has waned since the onset of this period of market weakness. 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, 2026 | |
| 0 | | |
| 0 | | |
| 2 | | |
| 8 | | |
| 15 | | |
| 43 | |
| 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.
Reseller
revenue for the quarter ended June 30, 2026, was $161,081 as compared to reseller revenue of $344,450 for the quarter ended June 30,
2025. This provides further evidence that the market weakness we are experiencing is widespread and not isolated to any individual factor.
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.
For
the quarter ended June 30, 2026, our cost of sales was $647,320, or 37.2% of revenue. For the quarter ended June 30, 2025, our cost of
sales was $886,771, or 36.6% 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 (2) 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.
Salary
and wages were $601,346 for the quarter ended June 30, 2026. For the quarter ended June 30, 2025, salaries and wages were $610,293. For
the quarter ended June 30, 2026, and going forward in time, the Company has a discretionary quarterly bonus program based on operating
income. During quarters with higher operating income, salaries and wages will increase all other things equal.
We
had 28 full time employees and two (2) part-time employees as of June 30, 2026, versus 25 full time employees as of June 30, 2025.
For
the quarter ended June 30, 2025, the Company had a discretionary quarterly bonus program based on revenue. This produced a higher quarterly
bonus pay out than the current program which is based on operating earnings. Despite a higher employee headcount, salary and wages were
slightly less for the quarter ended June 30, 2026, than for the quarter ended June 30, 2025. The change in the bonus program pay out
formula largely accounted for this decrease.
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 $409,949 for the quarter ended June 30, 2026. For the quarter ended June 30, 2025, general and administrative expenses were $353,924.
The increase in general and administrative expenses for the quarter ended June 30, 2026, was largely due to increased spending on sales
and marketing expenses, as well as for professional fees.
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.
For
the quarter ended June 30, 2026, other income and expenses were $20,846, with net interest income accounting for the entire amount. For
the quarter ended June 30, 2025, other income and expenses were $22,831, with net interest income accounting for the entire amount.
Net
Income (Loss) Before Tax
For
the quarter ended June 30, 2026, net income before tax was $102,847 versus $595,151 for the quarter ended June 30, 2025. Lower revenue
accounted for the majority of the difference in net income between the June 30, 2026, quarter versus the June 30, 2025, quarter.
Taxes
The
Company has significant net operating losses which arose due to past losses. At June 30, 2026, the Company had net operating losses of
approximately $7.57 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 2027, 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 ended June 30, 2026, the provision for income taxes was $28,252. For the quarter ended June 30, 2025, the provision for income
taxes was $149,998.
Liquidity
and Capital Resources
Cash
Flow from Operations
For
the three (3) months ended June 30, 2026, cash provided by operations was $24,279 compared to cash provided by operations of $432,279
for the three (3) months ended June 30, 2025. Cash provided by operations decreased significantly, due to the difference in net income
and the increases in inventory and accounts receivable.
As
of June 30, 2026, total current assets were $5,658,852 and total current liabilities were $420,508, resulting in working capital of $5,238,344.
As of March 31, 2026, total current assets were $5,631,022 and total current liabilities were $448,856, resulting in working capital
of $5,182,166. Working capital increased largely due to a decrease in accounts payable.
The
Company had a current ratio as of June 30, 2026, of 13.5 compared to a current ratio of 12.5 as of March 31, 2026.
As
of June 30, 2026, cash and cash equivalents were $2,647,668, compared to $2,674,538 in cash and cash equivalents as of March 31, 2026.The
slight decline in cash during the quarter was primarily driven by inventory purchases and share repurchases on the open market.
Cash
Flow from Investing Activities
For
the three (3) months ended June 30, 2026, cash used by investing activities was $2,331, compared to cash used by investing activities
of $7,255 for the three (3) months ended June 30, 2025. Equipment purchases were less in the quarter ended June 30, 2026, versus that
for the quarter ended June 30, 2025.
Cash
Flow from Financing Activities
For
the three (3) months ended June 30, 2026, cash used by financing activities was $48,818, compared to cash used by financing activities
of $53,501 for the three (3) months ended June 30, 2025. For the quarter ended June 30, 2026, cash used by financing activities was due
to the Company repurchasing 32,556 of its common stock on the open market for total consideration of $48,818.
Off-Balance
Sheet Arrangements
We
had no Off-Balance Sheet arrangements during the three (3) month periods ended June 30, 2026, and 2025.
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 June 30, 2026, 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, 2026, 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, 2026, that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
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, 2026, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P.
Iddings as compensation for his Director services for the quarter ended June 30, 2026.
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 adopted or terminated a trading arrangement intended to satisfy the affirmative defence conditions of
Rule 10b5-1(c) or a “non-Rule 10b5–1” trading arrangement during the periods reported in this Form 10-Q.
Item
6. Exhibits.
(a)
Index of Exhibits
| Exhibit
No. |
|
Identification
of Exhibit |
|
Location
if other than attached hereto |
| 3.1 |
|
Restated Articles of Incorporation |
|
Attached
hereto |
| 3.2 |
|
Third Amended Bylaws |
|
Attached
to our Form 10 filed October 3, 2023 |
| 31.1 |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Todd R. Hackett, Chief Executive Officer and Chairman |
|
Attached
hereto |
| 31.2 |
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Michael J. Bledsoe, President, Principal Financial Officer |
|
Attached
hereto |
| 32 |
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Todd R. Hackett, Chief Executive Officer and Chairman of the Board of Directors, and Michael J. Bledsoe, President and Principal Financial Officer |
|
Attached
hereto |
| 101.INS |
|
Inline
XBRL Instance Document |
|
|
| 101.PRE |
|
Inline
XBRL Taxonomy Extension Presentation Linkbase |
|
|
| 101.LAB |
|
Inline
XBRL Taxonomy Extension Label Linkbase |
|
|
| 101.DEF |
|
Inline
XBRL Taxonomy Extension Definition Linkbase |
|
|
| 101.CAL |
|
Inline
XBRL Taxonomy Extension Calculation Linkbase |
|
|
| 101.SCH |
|
Inline
XBRL Taxonomy Extension Schema |
|
|
| 104 |
|
Cover
Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL. |
|
|
10-K Annual Report for the fiscal year ended March 31, 2026, filed with the SEC on June 26, 2026 (the “Annual Report”)
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, 2026 |
By: |
/s/
Todd R. Hackett |
| |
|
Todd
R. Hackett |
| |
|
Chief
Executive Officer and |
| |
|
Chairman
of the Board of Directors |
| |
|
|
| Dated:
August 14, 2026 |
By: |
/s/
Michael J. Bledsoe |
| |
|
Michael
J. Bledsoe |
| |
|
President,
Principal Financial Officer and Director |
| |
|
|
| Dated:
August 14, 2026 |
By: |
/s/
Sean P. Iddings |
| |
|
Sean
P. Iddings |
| |
|
Director |
