UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
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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)
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| (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)
N/A
(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 smaller 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 ☐ |
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Smaller reporting
company
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Emerging growth company
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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:
November 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,” which commence on page nine (9) of our 10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025 (the “10-K Annual Report”), a copy of which is attached hereto by Hyperlink in Part II, Other Information, 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.
| 2 |
PCS EDVENTURES!, Inc.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025
INDEX
| 3 |
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.)
| 4 |
PCS EDVENTURES!, INC.
Condensed Balance Sheets
| September 30, 2025 | ||||||||
| Unaudited | March 31, 2025 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ |
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$ |
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Accounts receivable, net of allowance for credit losses of $
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| Accounts receivable, other receivables |
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| Prepaid expenses |
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| Inventory, net |
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| Total Current Assets |
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NONCURRENT ASSETS |
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| Lease Right-of-Use Asset |
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| Deposits |
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| Property and equipment, net |
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| Deferred tax asset |
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| Total Noncurrent Assets |
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| TOTAL ASSETS | $ |
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$ |
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| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ |
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$ |
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| Payroll liabilities and accrued expenses |
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| Deferred revenue |
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| Lease Liability, current portion |
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| Total Current Liabilities |
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| NONCURRENT LIABILITIES | ||||||||
| Lease liabilities, net of current portion |
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| Total Noncurrent Liabilities |
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| TOTAL LIABILITIES | $ |
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$ |
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| STOCKHOLDERS’ EQUITY | ||||||||
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Preferred stock,
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Common stock,
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| Additional paid-in capital before Treasury shares |
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| Treasury stock, shares and shares, respectively |
(
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| Total additional paid-in capital |
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| Accumulated deficit |
(
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) |
(
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) | ||||
| TOTAL STOCKHOLDERS’ EQUITY |
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| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
| 5 |
PCS EDVENTURES!, INC.
Condensed Statements of Operations
(Unaudited)
| For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUE | $ |
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$ |
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$ |
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$ |
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| COST OF SALES |
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| GROSS PROFIT |
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| OPERATING EXPENSES | ||||||||||||||||
| Salaries and wages |
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| General and administrative expenses |
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| Total Operating Expenses |
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| INCOME (LOSS) FROM OPERATIONS |
(
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) |
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| OTHER INCOME | ||||||||||||||||
| Net interest income |
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| Total Other Income |
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| INCOME BEFORE TAXES | $ |
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$ |
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$ |
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$ |
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| Income tax provision |
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| NET INCOME | $ |
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$ |
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$ |
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$ |
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| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ |
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$ |
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$ |
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$ |
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| Diluted | $ |
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$ |
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$ |
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$ |
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| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic |
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| Diluted |
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The accompanying notes are an integral part of these unaudited condensed financial statements.
| 6 |
PCS EDVENTURES!, INC.
Condensed Statements of Stockholders’ Equity
(Unaudited)
| Treasury | ||||||||||||||||||||||||||||
| Stock | ||||||||||||||||||||||||||||
| # of | Additional | Additional | ||||||||||||||||||||||||||
| Common | Common | Treasury | Paid-in | Paid-in | Accumulated | Stockholders’ | ||||||||||||||||||||||
| Shares O/S | Stock | Shares | Capital | Capital | Deficit | Equity | ||||||||||||||||||||||
| For the three months ended 9/30/2024 | ||||||||||||||||||||||||||||
| Balance at 6/30/2024 |
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$ | $ |
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$ |
(
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) | $ |
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|||||||||||||||||||
| Net Income | - | - |
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||||||||||||||||||||||||
| Shares repurchased and cancelled |
(
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) | - |
(
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) |
(
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) | |||||||||||||||||||||
| Balance at 9/30/2024 |
|
$ | $ |
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$ |
(
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) | $ |
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|||||||||||||||||||
| For the six months ended 9/30/2024 | ||||||||||||||||||||||||||||
| Balance at 3/31/2024 |
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$ | $ |
|
$ |
(
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) | $ |
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|||||||||||||||||||
| Net Income | - | - |
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||||||||||||||||||||||||
| Private shares purchased and cancelled |
(
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) | - |
(
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) |
(
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) | |||||||||||||||||||||
| Balance at 9/30/2024 |
|
$ | $ |
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$ |
(
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) | $ |
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|||||||||||||||||||
| For the three months ended 9/30/2025 | ||||||||||||||||||||||||||||
| Balance at 6/30/2025 |
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$ |
(
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) | $ |
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$ |
(
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) | $ |
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||||||||||||||||
| Net Income | - | - |
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||||||||||||||||||||||||
| Treasury shares purchased |
(
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) |
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(
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) |
(
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) | |||||||||||||||||||||
| Treasury shares cancelled | - |
(
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) |
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(
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) | ||||||||||||||||||||||
| Private shares purchased and cancelled |
(
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) | - |
(
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) |
(
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) | |||||||||||||||||||||
| Shares issued for Board comp |
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- |
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| Balance at 9/30/2025 |
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$ |
(
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) | $ |
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$ |
(
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) | $ |
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||||||||||||||||
| For the six months ended 9/30/2025 | ||||||||||||||||||||||||||||
| Balance at 3/31/2025 |
|
$ | $ |
|
$ |
(
|
) | $ |
|
|||||||||||||||||||
| Net Income | - | - |
|
|
||||||||||||||||||||||||
| Treasury shares purchased |
(
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) |
|
(
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) |
(
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) | |||||||||||||||||||||
| Treasury shares cancelled | - |
(
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) |
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(
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) | ||||||||||||||||||||||
| Private shares purchased and cancelled |
(
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) | - |
(
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) |
(
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) | |||||||||||||||||||||
| Shares issued for Board comp |
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- |
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| Balance at 9/30/2025 |
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|
$ |
(
|
) | $ |
|
$ |
(
|
) | $ |
|
||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 7 |
PCS EDVENTURES!, INC.
Condensed Statements of Cash Flows
(Unaudited)
| For the Six Months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| NET INCOME | $ |
|
$ |
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||||
| Provision for income tax |
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||||||
| Depreciation and amortization |
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||||||
| Stock based compensation for Board member |
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|||||||
| Right of use asset amortization |
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| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in accounts receivable |
(
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) |
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|||||
| (Increase) decrease in prepaid expenses |
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||||||
| (Increase) decrease in inventories |
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| (Decrease) increase in accounts payable and accrued liabilities |
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||||||
| (Increase) decrease in lease liability |
(
|
) |
(
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) | ||||
| (Decrease) increase in unearned revenue |
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|
||||||
| (Increase) decrease in deposits |
(
|
) | ||||||
| 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 private purchase of shares of common stock |
(
|
) | ||||||
| Cash paid for private purchase of shares of common stock |
(
|
) | ||||||
| Cash paid for purchase of Treasury Shares in 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 unaudited condensed financial statements.
| 8 |
PCS EDVENTURES!, INC.
Notes to the Condensed Financial Statements (unaudited)
September 30, 2025 and 2024
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:
| 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.
| 9 |
| 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 (“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) and six (6) months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the year ended 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. The Company’s objective in making resource allocation decisions is to optimize the financial results over the longer term. 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.
| 10 |
The
Company had deferred revenue of $
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 September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net Income 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 September 30, 2025, and 2024, was $
| 11 |
| For the Six Months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Net Income 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 six (6) months ended September 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 September 30, 2025, the Company had $
NOTE 3 – ACCOUNTS RECEIVABLE
In
the Company’s normal course of business, the Company provides credit terms for 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 of $
NOTE 4 - PREPAID EXPENSES
Prepaid expenses for the periods are as follows:
| September 30, 2025 | March 31, 2025 | |||||||
| Prepaid insurance | $ |
|
$ |
|
||||
| Prepaid tradeshows |
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| Prepaid inventory |
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| Prepaid software |
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| Prepaid other |
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| 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 September 30, 2025, the Company had
During the three (3) months ended September 30, 2025, the Company issued shares of Rule 144 “restricted” stock to Sean P. Iddings, an Independent Board Member, for his services in that capacity during the quarter.
| 12 |
During
the three (3) months ended September 30, 2025, the Company completed two (2) private transactions to purchase and cancel shares of its
common stock. These transactions were for
shares of common stock at $
per share for total consideration of $
Dring the three (3) months ended September 30, 2025, the Company completed the following transactions on the open market:
| Date | Shares Purchased | Price/Share | Total Consideration | |||||||||
| 7/7/2025 |
|
$ |
|
$ |
|
|||||||
| 7/16/2025 |
|
$ |
|
$ |
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| 7/21/2025 |
|
$ |
|
$ |
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| 7/23/2025 |
|
$ |
|
$ |
|
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| 7/24/2025 |
|
$ |
|
$ |
|
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| 7/25/2025 |
|
$ |
|
$ |
|
|||||||
| 7/28/2025 |
|
$ |
|
$ |
|
|||||||
| 7/29/2025 |
|
$ |
|
$ |
|
|||||||
| 8/25/2025 |
|
$ |
|
$ |
|
|||||||
| 9/19/2025 |
|
$ |
|
$ |
|
|||||||
| Total |
|
$ |
|
|||||||||
The
Company also completed an open-market transaction on May 22, 2025, for
shares at $
/ share, for total consideration of $
During
the six (6) months ended September 30, 2025, the Company had
During the six (6) months ended September 30, 2025, the Company issued shares of Rule 144 “restricted” stock to Sean Iddings, an Independent Board Member, for his services in that capacity during the period.
In
addition to the two (2) private transactions totaling $
disclosed above, the Company had one (1) additional transaction during
the six (6) months ended September 30, 2025. In May, 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 $
| b. | Preferred Stock |
The Company has authorized shares of preferred stock. As of September 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:
| September 30, 2025 | March 31, 2025 | |||||||
| Payroll liabilities | $ |
|
$ |
|
||||
| Sales tax payable |
|
|
||||||
| State income tax payable |
(
|
) |
(
|
) | ||||
| Production printer accrued expenses |
|
|
||||||
| Total | $ |
|
$ |
|
||||
NOTE 7 - RELATED PARTY TRANSACTIONS
The
Company had
NOTE 8 - SUBSEQUENT EVENTS
On
October 28, 2025, the Company purchased
shares on the open market for $
/share, for total consideration of $
On October 3, 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 September 30, 2025.
| 13 |
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 Annual Report, which are forward-looking, involve a high degree of risk and uncertainty. Certain statements in this Annual 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 21 st century skills. This difference makes it easier to penetrate out-of-school programs, as more freedom exists 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. Most 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 longer time frame, and we are adapting our product development to this change in our market.
| 14 |
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 ended June 30 and September 30 tend to be the peak of this seasonality (with the quarter ended March 31 being close to these quarters), while the quarter ended December 31 tends to be the low point of our seasonality. The Table below illustrates 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 | 2,423,309 | ||||||||||||
| September 30 | 1,243,662 | 3,767,326 | 2,267,338 | 1,529,503 | ||||||||||||
| 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.
Results of Operations
Revenue
For the three (3) months ended September 30, 2025, our revenue was $1,529,503, which was $737,835 less than our revenue for the quarter ended September 30, 2024 of $2,267,338. The factors below account for this difference:
| 1. | The market environment for the quarter ended September 30, 2024 was significantly more robust than that for the quarter ended September 30, 2025. The Elementary and Secondary School Emergency Relief (“ESSER”) funds were expiring on September 30, 2024, incentivizing the spending of those funds prior to their expiration. Not only were those funds absent in the quarter ended September 30, 2025, but also the market was faced with the uncertainty of future funding which held back some purchasing decisions until further clarity was reached. | |
| 2. | For the quarter ended September 30, 2024, we had $445,113 in revenue from the Air Force JROTC program. For the quarter ended September 30, 2025, we had $8,144 in revenue from this customer. It is reasonable to assume that our sales experience with the Air Force JROTC program will decline as the contract ages, as they have a limited number of sites (approximately 870 sites), and we have already sold our Discover Drones program into the vast majority of these sites. | |
| 3. | For the quarter ended September 30, 2024, we had $613,330 in reseller sales, as compared to $223,492 in reseller sales for the quarter ended September 30, 2025. | |
| 4. | On the positive side, we recorded revenue of $424,790 from our Iowa Scale-Up customer for the quarter ended September 30, 2025. We did not win a contract from this customer in the prior year and, thus, had $0 in revenue from them for the quarter ended September 30, 2024, from this customer. |
| 15 |
For the six (6) months ended September 30, 2025, our revenue was $3,952,812, which was $1,474,450 less than our revenue for the six (6) months ended September 30, 2024, of $5,427,262. The same factors that affected the difference in quarterly revenue described above also explain the revenue difference for the six (6) month periods ended September 30, 2025, and 2024. Reseller revenue was $1,095,651 for the six (6) months ended September 30, 2024, versus $571,934 for the six (6) months ended September 30, 2025. Revenue from the Air Force JROTC was negligible during the three-month periods ended June 30, 2025, and 2024. Thus, revenue from the Air Force JRTOC for the six (6) month periods ended September 30, 2025, and 2024, mirror that for the three (3) month periods ended September 30, 2025, and 2024.
The market environment was also more robust for the six (6) months ended September 30, 2024, versus conditions for the six (6) months ended September 30, 2025. The approaching deadline to spend ESSER funds stimulated sales activity for the six (6) months ended September 30, 2024. Funding uncertainty hindered sales activity for the six (6) months ended September 30, 2025.
The table below, which shows sales by customer size, illustrates the restrained market environment for the three (3) and six (6) month periods ended September 30, 2025.
Number of Customer Transactions by size
| >$1 million | >$500,000 | > $100,000 | > $50,000 | > $25,000 | > $10,000 | |||||||||||||||||||
| Three months ended 9/30/2022 | 0 | 0 | 2 | 10 | 15 | 22 | ||||||||||||||||||
| Three months ended 9/30/2023 | 1 | 1 | 11 | 13 | 17 | 34 | ||||||||||||||||||
| Three months ended 9/30/2024 | 0 | 0 | 6 | 10 | 18 | 33 | ||||||||||||||||||
| Three months ended 9/30/2025 | 0 | 0 | 2 | 10 | 16 | 29 | ||||||||||||||||||
Number of Customer Transactions by size
| >$1 million | >$500,000 | > $100,000 | > $50,000 | > $25,000 | > $10,000 | |||||||||||||||||||
| Six months ended 9/30/2022 | 0 | 0 | 7 | 15 | 26 | 43 | ||||||||||||||||||
| Six months ended 9/30/2023 | 1 | 1 | 16 | 23 | 33 | 72 | ||||||||||||||||||
| Six months ended 9/30/2024 | 0 | 0 | 14 | 20 | 41 | 78 | ||||||||||||||||||
| Six months ended 9/30/2025 | 0 | 0 | 6 | 22 | 37 | 71 | ||||||||||||||||||
We believe that we can resume the success we experienced in soliciting larger customers, but we can offer no assurances that success will be certain; nor can we offer any numerical framework in describing the success that may occur. Risk factors include anything that would negatively affect educational funding in the United States; finding and retaining employees that meet our high standards; and anything that would negatively affect 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.
| 16 |
For the quarter ended September 30, 2025, our cost of sales was $641,650, or 42.0% of revenue. For the quarter ended September 30, 2024, our cost of sales was $912,651, or 40.3% 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. The difference in the cost of sales for the two (2) quarters was due to cost inflation arising primarily from tariff expenses being incorporated into the final costs of items in our inventory.
Reseller revenue was down from 27.1% of revenue in the quarter ended September 30, 2024, compared to 14.6% of revenue in the quarter ended September 30, 2025. Because reseller revenue has a higher cost of goods due to the reseller’s margin being deducted from revenue, a lower reseller percentage of revenue, like that experienced in the quarter ended September 30, 2025, would have the effect of reducing our cost of sales as a percentage of revenue. Thus, our reseller mix of sales for the quarter ended September 30, 2025, was a favorable factor in reducing our cost of sales. Because our cost of sales increased for the quarter ended September 30, 2025, versus that for the quarter ended September 30, 2024, the inflationary impact of tariffs had a greater negative impact on our cost of sales than the actual change in cost of sales.
For the six (6) months ended September 30, 2025, our cost of sales was $1,528,421, or 38.7% of revenue. For the six (6) months ended September 30, 2024, our cost of sales was $2,111,087, or 38.9% 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 | |
| Lower reseller mix | Higher reseller mix |
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.
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 $524,247 for the quarter ended September 30, 2025. For the quarter ended September 30, 2024, salaries and wages were $485,734. For the six (6) months ended September 30, 2025, salary and wages were $1,134,539 versus $1,004,031 for the six (6) months ended September 30, 2024. Salaries and wages increased during the three (3) and six (6) month periods ended September 30, 2025, compared to the three (3) and six (6) month periods ended September 30, 2024, as increases in salaries and employee additions outweighed a lower bonus amount.
As of September 30, 2025, we had 26 full-time employees and one (1) part-time employee. As of September 30, 2024, we had 24 full-time employees.
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. | Software | |
| 12. | State sales tax expenses | |
| 13. | Office and warehouse infrastructure expenses |
| 17 |
Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $387,920 for the quarter ended September 30, 2025. For the quarter ended September 30, 2024, general and administrative expenses were $356,154. For the six (6) months ended September 30, 2025, general and administrative expenses were $764,171, compared to $715,924 for the six (6) months ended September 30, 2024.
This increase in general and administrative expenses during the three (3) and six (6) month periods ended September 30, 2025, compared to the three (3) and six (6) month period ended September 30, 2024, was largely due to the increased costs of our new warehouse and office facilities for the periods ended September 30, 2025, compared to those costs for our prior facilities for the period ended September 30, 2024.
Other Income
Net interest income was the sole source of other income for the quarters ended September 30, 2025, and 2024. For the quarter ended September 30, 2025, other income was $31,126, while other income was $37,613 for the quarter ended September 30, 2024.
For the six (6) months ended September 30, 2025, and 2024, net interest income was the sole source of other income. For the six (6) months ended September 30, 2025, other income was $53,957, while other income was $59,123 for the quarter ended September 30, 2024.
The Company’s surplus cash 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.” For comparisons for both periods, net interest income declined as our cash invested in our money market savings declined, and because the yield of the fund has declined in tandem with short-term interest rates.
Net Income Before Tax
For the three (3) months ended September 30, 2025, net income before tax was $6,812 versus $550,412 for the three (3) months ended September 30, 2024. For the six (6) months ended September 30, 2025, net income before tax was $579,638 versus $1,655,343 for the six (6) months ended September 30, 2024. Lower revenue and lower gross margin during the three (3) and six (6) month periods ended September 30, 2025, versus those for the period ended September 30, 2024, were responsible for the variance in net income before taxes.
Taxes
The Company has a significant tax-loss carry-forward asset, which arose due to past losses. At March 31, 2025, the Company had net operating losses of approximately $8.0 million that may be offset against future taxable income. At September 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.
| 18 |
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 income statement.
Liquidity and Capital Resources
Cash Flow from Operations
For the six (6) months ended September 30, 2025, cash provided by operations was $488,877, compared to cash provided by operations of $2,852,232 for the six (6) months ended September 30, 2024. Major factors in this difference are a lower net income and, with that, a lower tax provision; and the changes in accounts receivable for the two (2) periods.
As of September 30, 2025, total current assets were $6,087,877 and total current liabilities were $453,862, resulting in working capital of $5,634,015. 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. The Company had a current ratio as of September 30, 2025, of 13.4, compared to a current ratio of 18.1 as of March 31, 2025.
As of September 30, 2025, we had $3,247,793 in cash and cash equivalents, compared to $3,223,147 in cash as of March 31, 2025.
Cash Flow from Investing Activities
For the six (6) months ended September 30, 2025, cash used by investing activities was $12,041, compared to cash used by investing activities of $32,982 for the six (6) months ended September 30, 2024.
We purchased a forklift for the warehouse for $26,829 during the six (6) months ended September 30, 2024, which accounts for the majority of the difference between the two (2) periods.
Cash Flow from Financing Activities
For the six (6) months ended September 30, 2025, cash used by financing activities was $452,190, compared to cash used by financing activities of $143,813 for the six (6) months ended September 30, 2024. For both periods, the Company was active in buying back its stock and cancelling it. Until May of 2025, our purchase activity was in the form of private transactions where the owner of the stock approached us soliciting an offer to buy. Starting in May of 2025, we also began buying our stock on the open market. During the six (6) months ended September 30, 2025, we purchased 3,951,370 shares of our common stock in the open market, with an aggregate cost basis of $399,061. All of these shares, except for 115,500 shares, were cancelled during the quarter.
Off-Balance Sheet Arrangements
We had no Off-Balance Sheet Arrangements during the three (3) month periods ended September 30, 2025, and 2024, nor did we have any such Arrangements during the six (6) month periods ended September 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.
| 19 |
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 September 30, 2025, 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 September 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 September 30, 2025, 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. For additional information, please see our10-K Annual Report, filed with the SEC on June 30, 2025, which is incorporated herein by reference in Part II, Item 6. Exhibits, below.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None; not applicable.
Item 5. Other Information.
Effective September 29, 2025, the Company decreased its authorized common stock from 150,000,000 shares to 125,000,000 shares. This decrease in our authorized shares of common stock was approved by our shareholders at our 2025 annual meeting held on September 26, 2025. For additional information, please see Section 5 – Corporate Governance and Management, Item 503, of our 8-K Current Report dated September 26, 2025, filed with the SEC on September 30, 2025, which is incorporated herein by reference in Part II, Other Information, Item 6. Exhibits, below.
No
director or Section 16 officer
| 20 |
Item 6. Exhibits.
(a) Index of Exhibits
8-K Current Report dated September 26, 2025, filed with the SEC on September 30, 2025.
10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025.
| 21 |
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: November 14, 2025 | By: | /s/ Todd R. Hackett |
| Todd R. Hackett | ||
| Chief Executive Officer and | ||
| Chairman of the Board of Directors | ||
| Dated: November 14, 2025 | By: | /s/ Michael J. Bledsoe |
| Michael J. Bledsoe | ||
| President, Principal Financial Officer and Director |
| 22 |