PCS Edventures!, Inc 10-Q for FY2025 Q2
PCS Edventures!, Inc. (PCSV)
About this 10-Q
PCS Edventures!, Inc filed this 10-Q on November 15, 2024, covering the quarter ended September 30, 2024 (FY2025 Q2).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.27M
- down 39.8% from $3.77M a year earlier
- Net income
- $431.23K
- down 76.2% from net income of $1.81M a year earlier
- Diluted EPS
- $0.00
- compared with $0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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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
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to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
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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 ☐ | Smaller
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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. ☐
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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, 2024: 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, 2024, filed with the SEC on June 28, 2024 (the “Annual Report”), a copy of which is attached hereto by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof, and is incorporated herein by reference. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
Documents Incorporated by Reference
See Part II, Other Information, Item 6, Exhibits.
PCS EDVENTURES!, Inc.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024
INDEX
| 2 |
PART I –FINANCIAL INFORMATION
PART I – FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
The Condensed Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Condensed Financial Statements fairly present the financial condition of the Registrant.
(This space intentionally left blank.)
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PCS EDVENTURES!, INC.
Condensed Balance Sheets
| Unaudited | Audited | |||||||
| September 30, 2024 | March 31, 2024 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||
| Prepaid expenses | ||||||||
| Inventory, net | ||||||||
| Total Current Assets | ||||||||
NONCURRENT ASSETS | ||||||||
| Lease Right-of-Use Asset | ||||||||
| Deposits | ||||||||
| Property and equipment, net | ||||||||
| Deferred tax asset | ||||||||
| Total Noncurrent Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Payroll liabilities and accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Lease Liability, current portion | ||||||||
| Total Current Liabilities | ||||||||
| NONCURRENT LIABILITIES | ||||||||
| Lease liabilities, net of current portion | ||||||||
| Total Noncurrent Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, | ||||||||
| Common stock, | ||||||||
| Additional Paid-in Capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
| 4 |
PCS EDVENTURES!, INC.
Condensed Statements of Operations
(Unaudited)
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
For the Three Months Ended September 30, | For the Six Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COST OF SALES | ||||||||||||||||
| GROSS PROFIT | ||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| INCOME FROM OPERATIONS | ||||||||||||||||
| OTHER INCOME | ||||||||||||||||
| Net interest income | ||||||||||||||||
| Other Income | ||||||||||||||||
| Total Other Income | ||||||||||||||||
| NET INCOME BEFORE TAXES | $ | $ | ||||||||||||||
| Income tax provision | ||||||||||||||||
| NET INCOME | $ | $ | $ | $ | ||||||||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
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PCS EDVENTURES!, INC.
Condensed Statement of Stockholders’ Equity
(Unaudited)
| # of Common | Common | Additional Paid-in | Accumulated | Stockholders’ | ||||||||||||||||
| Shares O/S | Stock | Capital | Deficit | Equity | ||||||||||||||||
| Balance at 6/30/2023 | $ | $ | ( | ) | $ | | ||||||||||||||
| Net Income | - | |||||||||||||||||||
| Shares repurchased and cancelled | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 9/30/2023 | $ | $ | ( | ) | $ | |||||||||||||||
| Balance at 3/31/2023 | $ | $ | ( | ) | $ | |||||||||||||||
| Net Income | - | |||||||||||||||||||
| Shares repurchased and cancelled | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 9/30/2023 | $ | $ | ( | ) | $ | |||||||||||||||
| Balance at 6/30/2024 | $ | $ | ( | ) | $ | |||||||||||||||
| Net Income | - | |||||||||||||||||||
| Shares repurchased and cancelled | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 9/30/2024 | $ | $ | ( | ) | $ | |||||||||||||||
| Balance at 3/31/2024 | $ | $ | ( | ) | $ | |||||||||||||||
| Net Income | - | |||||||||||||||||||
| Shares repurchased and cancelled | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Balance at 9/30/2024 | $ | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
| 6 |
PCS EDVENTURES!, INC.
Condensed Statements of Cash Flows
(Unaudited)
| 2024 | 2023 | |||||||
For the Six Months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| NET INCOME | $ | $ | ||||||
| Provision for income tax | ||||||||
| Depreciation and amortization | ||||||||
| Right of use asset amortization | ||||||||
| Changes in operating assets and liabilities | ||||||||
| (Increase) decrease in accounts receivable | ( | ) | ||||||
| (Increase) decrease in prepaid expenses | ||||||||
| (Increase) decrease in inventories | ||||||||
| (Decrease) increase in accounts payable and accrued liabilities | ||||||||
| (Increase) decrease in lease liability | ( | ) | ( | ) | ||||
| (Decrease) increase in unearned revenue | ( | ) | ||||||
| (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 | ||||||||
| Common stock repurchased (Treasury shares) and cancelled | ( | ) | ( | ) | ||||
| Net Cash Used by Financing Activities | ( | ) | ( | ) | ||||
| Net Increase in Cash | ||||||||
| Cash at Beginning of Fiscal Year | ||||||||
| Cash at End of Quarter | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
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PCS EDVENTURES!, INC.
Notes to the Condensed Financial Statements (unaudited)
September 30, 2024 and 2023
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, K12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and K-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks.
Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer.
Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels.
PCS has developed and sells a variety of STEM education products into the K12 market, which can be categorized as follows:
| 1. | Enrichment Programs |
These camps are for the informal learning market and are designed to be highly engaging for students while easily administered by the instructor. The Company offers approximately thirty (30) different enrichment programs and typically develops at least two (2) new programs each year. Some of the more popular programs include Rockin’ Robots; Build a Better World; Summer Camp Classics; Pirate Camp; Flight and Aerodynamics; Science of the Human Body; 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 Engineering; Discover Robotics & Physics; Discover Robotics & Programming; and Discover STEM.
| 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.
| 8 |
| 5. | STEAMventures BUILD Activity Book |
These series of activity books are designed for the K-3 market and ideal for a distance-learning environment. The series includes twelve (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 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 months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending March 31, 2025, 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, 2024, filed with the SEC on June, 28, 2024 (the “Annual Report”).
Use of Estimates
The preparation of these condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include reserves related to accounts receivable and inventory, the valuation allowance related to deferred tax assets, the valuation of equity instruments, and debt discounts.
Revenue Recognition
The Company accounts for revenue in accordance with FASB ASC 606, “Revenue from Contracts with Customers,” which we adopted on April 1, 2018. Revenue amounts presented in our condensed financial statements are recognized net of sales tax, value-added taxes, and other taxes. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped, or service performed.
The
Company had deferred revenue of $
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.
| 9 |
The Company calculates net income per share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Under ASC 260, basic net income per common share is calculated by dividing net income 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 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:
| 2024 | 2023 | |||||||
For the Three Months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| 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, 2024, and 2023, was $
| 2024 | 2023 | |||||||
For the Six Months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| 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, 2024, and 2023, 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.
| 10 |
NOTE 2 – BUSINESS CONDITION
As
of September 30, 2024, the Company had $
NOTE 3 – ACCOUNTS RECEIVABLE
In
the Company’s normal course of business, the Company provides credit terms to its customers, which generally range from net fifteen
(15) to thirty (30) days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for
doubtful accounts of $
NOTE 4 - PREPAID EXPENSES
Prepaid expenses for the periods are as follows:
SCHEDULE OF PREPAID EXPENSES
| September 30, 2024 | March 31, 2024 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid tradeshows | ||||||||
| Prepaid inventory | ||||||||
| Prepaid software | ||||||||
| Prepaid other | ||||||||
| Total Prepaid Expenses | $ | $ | ||||||
NOTE 5 - COMMON AND PREFERRED STOCK TRANSACTIONS
| a. | Common Stock |
The
Company has authorized shares of common stock,
During
the three (3) months ended September 30, 2024, the Company had
During the three (3) months ended September 30, 2024, the Company did t issue any shares of common stock.
During
the three (3) months ended September 30, 2024, the Company completed two (2) private transactions to purchase and retire shares of its
common stock. One transaction was for shares of common stock at $ per share for total consideration of $
During
the six (6) months ended September 30, 2024, the Company had
During the six (6) months ended September 30, 2024, the Company did t issue any shares of common stock.
During
the six (6) months ended September 30, 2024, the Company completed two (2) private transactions to purchase and retire shares of its
common stock. One transaction was for shares of common stock at $ per share for total consideration of $
| b. | Preferred Stock |
The Company has authorized shares of preferred stock. As of September 30, 2024, and March 31, 2024, there were preferred shares issued or outstanding.
| 11 |
NOTE 6 – PAYROLL LIABILITIES & ACCRUED EXPENSES
Accrued expenses for the periods are as follows:
SCHEDULE OF ACCRUED EXPENSES
| September 30, 2024 | March 31, 2024 | |||||||
| 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
The
Company entered into two (2) leases, one for a
941 South Industry Way
Meridian, ID 83642
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. Currently, we do not attempt to align our products to fit in the classroom setting although we are aware that some of our customers use our products to fill enrichment time blocks in the classroom during formal school time. Classroom curriculum must align with specific state standards to be considered for use. Each state has their own unique set of standards, making classroom curriculum development a state by-state endeavor.
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On the other hand, out of school programs are not subject to state governmental standards alignment, although these programs often require that educational programs align with various sets of state or national educational standards. 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. 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.
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 products 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 quarter ended June 30 tends to be the peak of this seasonality, while the quarter ended December 31 tends to be the low point of our seasonality. The Table below reflects this seasonality.
| Quarterly Revenue $ | ||||||||||||||||
| Quarter Ended | 2021 | 2022 | 2023 | 2024 | ||||||||||||
| March 31 | 648,743 | 1,445,594 | 2,521,470 | 2,262,772 | ||||||||||||
| June 30 | 1,062,127 | 1,391,785 | 2,605,281 | 3,159,923 | ||||||||||||
| September 30 | 993,458 | 1,243,662 | 3,767,326 | 2,267,338 | ||||||||||||
| December 31 | 566,473 | 1,847,659 | 459,087 | |||||||||||||
The Company, through winning a competitive “Request For Proposal,” added the Air Force Junior Reserve Officers’ Training Corp (“AFJROTC”) as a customer in the second half of calendar year 2022. The Company experienced elevated sales due to the fulfillment of the AFJROTC orders for the quarters ended December 31, 2022, March 31, 2023, and September 30, 2023. One of the AFJROTC revenue quarters was December 31, 2022, which corresponds with the lowest seasonal revenue quarter, so the effects of seasonality in 2022 were not as readily apparent as in other calendar years. The table below removes the AFJROTC revenue to highlight the seasonality that the Company experiences.
| Quarterly Revenue Less Air Force JROTC Revenue | ||||||||||||||||
| Quarter Ended | 2021 | 2022 | 2023 | 2024 | ||||||||||||
| March 31 | 648,743 | 1,445,594 | 1,247,835 | 2,262,772 | ||||||||||||
| June 30 | 1,062,127 | 1,391,785 | 2,605,281 | 3,159,923 | ||||||||||||
| September 30 | 993,458 | 1,243,662 | 2,501,410 | 1,822,225 | ||||||||||||
| December 31 | 566,473 | 458,239 | 459,087 | |||||||||||||
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 September 30, 2024, our revenue was $2,267,338, which was $1,499,988 less than our revenue for the quarter ended September 30, 2023 of $3,767,326. The decrease in revenue was largely due to the difference between two (2) large customer orders that we fulfilled in the September 30, 2023, quarter, amounting to $1,246,236 (Air Force JROTC) and $801,301 (Iowa Scale-UP). During the September 30, 2024, quarter, these two (2) customers accounted for $445,113 and $0 of revenue, respectively. The difference in revenue received by these two (2) customers was $1,602,424 between the two (2) quarters, whereas the difference in total revenue for the two (2) quarters was $1,499,988.
| 13 |
For the six (6) months ended September 30, 2024, our revenue was $5,427,262, which was $946,345 less than our revenue for the six (6) months ended September 30, 2023, of $6,372,607. As with the case above, the decrease in revenue was largely due to the difference in the Company’s revenue from the Air Force JROTC and Iowa Scale-Up, amounting to $1,246,236 and $801,301, respectively during the six (6) month period ending September 30, 2023. During the six (6) months ended September 30, 2024, these two (2) customers accounted for $445,113 and $0 of revenue, respectively. The difference in revenue received by these two (2) customers was $1,602,424 between the two (2) periods, whereas the difference in total revenue for the two (2) periods was $946,345.
Excluding the revenue from the Air Force JROTC and Iowa Scale-Up would produce the following revenue:
Revenue excluding Air Force JROTC and Iowa Scale-Up
| Quarter ended September 30, 2024 | $ | 1,822,225 | ||
| Quarter ended September 30, 2023 | $ | 1,719,789 | ||
| Six months ended September 30, 2024 | $ | 4,982,149 | ||
| Six months ended September 30, 2023 | $ | 4,325,070 |
The increase in revenue after excluding Air Force JROTC and Iowa Scale-Up was largely due to our strategy of soliciting larger customers. 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 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 | ||||||||||||||||||
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 | ||||||||||||||||||
We believe that we can continue to experience success 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.
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For the quarter ended September 30, 2024, our cost of sales was $912,651, or 40.3% of revenue. For the quarter ended September 30, 2023, our cost of sales was $1,188,826, or 31.6% 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. The difference in the cost of sale for the two (2) quarters was due to the product mix of sales. Some of our products carry higher margins than others, and we had a more favorable mix in the quarter ended September 30, 2023, versus that for the quarter ended September 30, 2024.
For the six (6) months ended September 30, 2024, our cost of sales was $2,111,087, or 38.9% of revenue. For the six (6) months ended September 30, 2023, our cost of sales was $2,192,896, or 34.4% 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 |
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 $485,734 for the quarter ended September 30, 2024. For the quarter ended September 30, 2023, salaries and wages were $513,676. Salaries and wages decreased during the quarter ended September 30, 2024, as compared to the quarter ended September 30, 2023, due to the lower revenue in the September 30, 2024, quarter, producing lower bonus amounts than those for the quarter ended September 30, 2023. This effect offset a higher employee count for the quarter ended September 30, 2024, versus that for the quarter ended September 30, 2023.
For the six (6) months ended September 30, 2024, salary and wages were $1,004,031 versus $959,952 for the six (6) months ended September 30, 2023. Salaries and wages increased slightly during the six (6) months ended September 30, 2024, compared to the six (6) months ended September 30, 2023, as increases in salaries and employee additions outweighed a lower bonus amount.
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 |
| 15 |
Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $356,154 for the quarter ended September 30, 2024. For the quarter ended September 30, 2023, general and administrative expenses were $294,807. This increase in general and administrative expenses this quarter versus last year’s quarter was due to significant increases in annual state income tax estimates that the Company uses to make quarterly estimated state tax payments. For the quarter ended September 30, 2023, state income taxes paid was $38,192. For the quarter ended September 30, 2024, state income taxes paid was $85,141. Annual state tax estimates for the next year are based on the current year’s earnings experience. Last year, the Company’s estimated tax payments understated the actual taxes owed. Because revenue was down this year versus last year, it is likely that the Company is paying more taxes, based on the estimates, than the taxes that the Company will ultimately owe for calendar year 2024.
For the six (6) months ended September 30, 2024, general and administrative expenses were $715,924 compared to $589,641 for the six (6) months ended September 30, 2023. As above, state income tax estimates increasing significantly is the largest contributor to the increase in general and administrative expenses for the six (6) months ended September 30, 2024.
Additional expenses associated with being an SEC “reporting company” under the Exchange Act also contributed to the rise in general and administrative expenses for both the three (3) and six (6) months ending September 30, 2024, versus the year-ago periods.
Other Income
Interest income was the sole source of other income for the quarter ended September 30, 2024, and was $37,613. For the quarter ended September 30, 2023, interest income was $10,315, while income associated with the Employee Retention Tax Credit (“ERTC”) was $31,258, producing total other income of $41,573 for the period.
For the six (6) months ended September 30, 2024, interest income was the sole source of other income and was $59,123. For the six (6) months ended September 30, 2023, other income was $41,850 and consisted of interest income of $11,240 and income associated with the ERTC of $30,610.
For comparisons for both periods, interest income rose substantially as our cash invested in our money market savings account increased significantly. 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.”
Net Income Before Tax
For the three (3) months ended September 30, 2024, net income before tax was $550,412 versus $1,811,590 for the three (3) months ended September 30, 2023. Lower revenue and lower gross margin during the quarter ended September 30, 2024, versus those for the quarter ended September 30, 2023, were responsible for the variance in net income before taxes.
For the six (6) months ended September 30, 2024, net income before tax was $1,655,343 versus $2,671,968 for the six (6) months ended September 30, 2023. Lower revenue and lower gross margin during the six (6) months ended September 30, 2024, versus those for the six (6) months ended September 30, 2023, were responsible for the variance in net income before taxes.
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Taxes
The Company has a significant tax-loss carry-forward asset, which arose due to past losses. At March 31, 2024, the Company had net operating losses of approximately $9.2 million that may be 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 2025, 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, 2024, cash provided by operations was $2,852,232 compared to cash provided by operations of $1,749,146 for the six (6) months ended September 30, 2023. Cash provided by operations increased significantly, despite a difference in net income of ($1,383,464), largely due to the difference in the change in accounts receivable. For the six (6) months ended September 30, 2024, accounts receivable decreased by $940,170, compared to an increasing accounts receivable balance of 1,219,554 for the six (6) months ended September 30, 2023, which had the effect of reducing cash provided by operations by the same amount for the period.
As of September 30, 2024, total current assets were $6,992,836 and total current liabilities were $486,760, resulting in working capital of $6,506,076. As of March 31, 2024, total current assets were $5,425,141 and total current liabilities were $416,154, resulting in working capital of $5,008,987. The Company had a current ratio as of September 30, 2024, of 14.4 compared to a current ratio of 13.0 as of March 31, 2024.
As of September 30, 2024, we had $4,005,145 in cash and cash equivalents compared to $1,329,708 in cash as of March 31, 2024. The improvements in working capital and cash on hand are due to a reduction in accounts receivable and a positive net income during the period.
Cash Flow from Investing Activities
For the six (6) months ended September 30, 2024, cash used by investing activities was $32,982 compared to cash used by investing activities of $8,656 for the six (6) months ended September 30, 2023. 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 three (6) months ended September 30, 2024, cash used by financing activities was $143,813 compared to cash used by financing activities of $64,933 for the six (6) months ended September 30, 2023. In both periods, cash used by financing activities was solely due to the purchase of the Company’s common stock, by the Company, in private transactions with shareholders who solicited the Company for an offer. In all cases, the common stock purchased by the Company was retired.
Off-Balance Sheet Arrangements
We had no Off-Balance Sheet Arrangements during the three (3) month periods ended September 30, 2024, and 2023, nor did we have any such Arrangements during the six (6) month periods ended September 30, 2024, and 2023.
| 17 |
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 September 30, 2024, of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2024, because of inadequate control and expertise over preparation of the preliminary financial statements and schedules for our auditor’s review, resulting in some minor errors in applying “Accounting Standards Codifications” used in the United States to organize and present accounting standards and principles. Management has concluded that we will take appropriate action to add additional expertise to assist us in the preparation of our future interim financial statements for our auditor’s review to ameliorate this weakness. Management acknowledges that as a smaller reporting entity, it is difficult to have adequate accounting staff to perform appropriate additional reviews of the financial statements.
Changes in Internal Control over Financial Reporting
Management has contracted with additional expertise to assist us in the preparation of our future interim financial statements to ameliorate any internal control weakness and to assist us in designing and implementing a system of adequate controls over the preparation of our financial statements and schedules. There have been no other actions or changes in our internal control over financial reporting during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, improving our internal controls over financial reporting is an ongoing process.
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.
None.
Item 3. Defaults Upon Senior Securities.
None.
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Item 4. Mine Safety Disclosures.
None; not applicable.
Item 5. Other Information.
No
director or Section 16 officer
Item 6. Exhibits.
(a) Index of Exhibits
| Exhibit No. | Identification of Exhibit | Location if other than attached hereto | ||
| 3.1 | Second Amended and Restated Articles of Incorporation dated October 2, 2006 | Attached to our Form 10 filed October 3, 2023 | ||
| 3.2 | Articles of Amendment dated April 12, 2012 | Attached to our Form 10 filed October 3, 2023 | ||
| 3.3 | Articles of Amendment dated September 25, 2014 | Attached to our Form 10 filed October 3, 2023 | ||
| 3.4 | Articles of Amendment dated September 25, 2015 | Attached to our Form 10 filed October 3, 2023 | ||
| 3.5 | Articles of Amendment dated September 23, 2016 | Attached to our Form 10 filed October 3, 2023 | ||
| 3.6 | 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 Mike 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. | |||
Form 10A-1 Registration Statement filed with the SEC on November 15, 2023.
10-K Annual Report for the fiscal year ended March 31, 2024, filed with the SEC on June 28, 2024.
| 19 |
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 15, 2024 | By: | /s/ Todd R. Hackett |
| Todd R. Hackett | ||
| Chief Executive Officer and | ||
| Chairman of the Board of Directors | ||
| Dated: November 15, 2024 | By: | /s/ Michael J. Bledsoe |
| Michael J. Bledsoe | ||
| President, Principal Financial Officer and Director | ||
| 20 |
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Todd R. Hackett, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of PCS Edventures!, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: | November 15, 2024 | By: | /s/ Todd R. Hackett | |
| Todd R. Hackett, Chief Executive Officer and Chairman |
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Bledsoe, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of PCS Edventures!, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4. The Registrant other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Registrant and have:
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c) | evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d) | disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions);
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and | |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
| Date: | November 15, 2024 | By: | /s/ Michael J. Bledsoe | |
| Michael J. Bledsoe, President and Principal Financial Officer |
Exhibit 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of PCS Edventures!, Inc. (the “Registrant”) on Form 10-Q for the period ending December 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), we, Todd R. Hackett, Chief Executive Officer, and Michael J. Bledsoe, President and Principal Financial Officer of the Registrant, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.
| Date: | November 15, 2024 | By: | /s/ Todd R. Hackett | |
| Todd R. Hackett, Chief Executive Officer and Chairman |
| Date: | November 15, 2024 | By: | /s/ Michael J. Bledsoe | |
| Michael J. Bledsoe, President and Principal Financial Officer |