PCSV 10-Q
PCS Edventures!, Inc. (PCSV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from________ to________
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File No.
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| incorporation or organization) | Identification No.) |
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if changed since last report)
Indicate
by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the Registrant was required to submit and post such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
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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:
February 13, 2026: shares of Common Stock
Forward-Looking Statements
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should carefully read this Quarterly Report completely, and it should be read and considered with all other reports filed by us with the United States Securities and Exchange Commission (the “SEC”) that are contained in the SEC Edgar Archives, including issues related to “Cybersecurity” enumerated in “Part I, Item 1C. Cybersecurity,” of our 10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025 (the “Annual Report”), which commence on page nine (9) thereof, a copy of which is attached hereto by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof, and is incorporated herein by reference. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.
Documents Incorporated by Reference
See Part II, Other Information, Item 6, Exhibits, hereof.
| 2 |
PCS EDVENTURES!, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 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
| December 31, 2025 | March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowance for credit losses of $ | ||||||||
| Accounts receivable, other receivables | ||||||||
| 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 liability, net of current portion | ||||||||
| Total Noncurrent Liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, | ||||||||
| Common stock, | ||||||||
| Additional paid-in capital before Treasury shares | ||||||||
| Treasury stock, shares and shares, respectively | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
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 December 31, |
For the Nine Months Ended December 31, |
|||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COST OF SALES | ||||||||||||||||
| GROSS PROFIT | ||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Salaries and wages | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | ( |
) | ( |
) | ||||||||||||
| OTHER INCOME | ||||||||||||||||
| Net interest income | ||||||||||||||||
| Total Other Income | ||||||||||||||||
| NET INCOME (LOSS) BEFORE TAXES | ( |
) | ( |
) | ||||||||||||
| Income tax provision | ( |
) | ( |
) | ||||||||||||
| NET INCOME (LOSS) | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||
| Diluted | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
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 12/31/2024 | ||||||||||||||||||||||||||||
| Balance at 9/30/2024 | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
| Net Income | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Shares repurchased and cancelled | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance at 12/31/2024 | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
| For the nine months ended 12/31/2024 | ||||||||||||||||||||||||||||
| Balance at 3/31/2024 | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
| Net Income | - | - | ||||||||||||||||||||||||||
| Shares repurchased and cancelled | ( |
) | - | ( |
) | ( |
) | |||||||||||||||||||||
| Balance at 12/31/2024 | $ | $ | ) | $ | ( |
) | $ | |||||||||||||||||||||
| For the three months ended 12/31/2025 | ||||||||||||||||||||||||||||
| Balance at 9/30/2025 | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||
| Net Income | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Treasury shares purchased | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Private shares purchased and cancelled | ( |
) | - | ( |
) | ( |
) | |||||||||||||||||||||
| Shares issued for Board comp | - | |||||||||||||||||||||||||||
| Balance at 12/31/2025 | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||
| For the nine months ended 12/31/2025 | ||||||||||||||||||||||||||||
| Balance at 3/31/2025 | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||
| Net Income | - | - | ||||||||||||||||||||||||||
| Treasury shares purchased | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Treasury shares cancelled | - | ( |
) | ( |
) | |||||||||||||||||||||||
| Private shares purchased and cancelled | ( |
) | - | ( |
) | ( |
) | |||||||||||||||||||||
| Shares issued for Board comp | - | |||||||||||||||||||||||||||
| Balance at 12/31/2025 | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 7 |
PCS EDVENTURES!, INC.
Condensed Statements of Cash Flows
(Unaudited)
| Nine Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | $ | ||||||
| Provision for income tax | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation for board member | ||||||||
| Amortization of right of use asset | ||||||||
| 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 | ( | ) | ( | ) | ||||
| Increase (decrease) 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 | ||||||||
| Cash paid for private purchase of shares of common stock | ( | ) | ||||||
| Cash paid for purchase of Treasury shares in open market | ( | ) | ||||||
| Common stock repurchased and cancelled | ( | ) | ||||||
| Net Cash Used by Financing Activities | ( | ) | ( | ) | ||||
| Net Increase (Decrease) in Cash | ( | ) | ||||||
| Cash at Beginning of Period | ||||||||
| Cash at End of Period | $ | $ | ||||||
| Cash Paid for Interest | $ | $ | ||||||
| Cash Paid for taxes | $ | $ | ||||||
| Right of use assets obtained in exchange for new operating lease liabilities | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 8 |
PCS EDVENTURES!, INC.
Notes to the Condensed Financial Statements
December 31, 2025 and 2024
(Unaudited)
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The condensed financial statements presented are those of PCS Edventures!, Inc., an Idaho corporation (the “Company,” “PCS,” “PCSV,” “we,” “our,” “us” or similar words), incorporated in 1994, in the State of Idaho. PCS specializes in experiential, hands-on, TK-12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and TK-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks.
Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer.
Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels.
PCS has developed and sells a variety of STEM education products into the TK-12 market which can be categorized as follows:
| 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 30 different enrichment programs and typically develops at least two (2) new programs each year. Some of the more popular programs include Podcasting; Drone Designers; Ready, Set, Drong!; Rockin’ Robots; Build a Better World; Summer Camp Classics; Influencer Camp; World of Wonders; 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.
| 9 |
| 5. | STEAMventures BUILD Activity Book |
These series of activity books are designed for the TK-3 market and ideal for a distance-learning environment. 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 United States Securities and Exchange Commission (the “SEC”). Accordingly, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the condensed financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three (3) and nine (9) months ended December 31, 2025, are not necessarily indicative of the results that may be expected for the year ending March 31, 2026, or any future periods. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on June, 30, 2025 (the “Annual Report”).
We manage our Company as one (1) reportable operating segment, STEM Supplies and Curriculum. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s President.
Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the STEM Supplies and Curriculum segment and decides how to better allocate resources. 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, and the valuation allowance related to deferred tax assets.
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. As of December 31, 2025, and March 31, 2025, the Company had no options or restricted stock awards outstanding. The following schedules present the calculation of basic and diluted net income per share:
For the Three Months ended December 31, |
||||||||
| 2025 | 2024 | |||||||
| Net Loss per common Share: | ||||||||
| Basic | $ | ( |
) | $ | ( |
) | ||
| Diluted | $ | ( |
) | $ | ( |
) | ||
| Weighted average number of common shares outstanding Basic | ||||||||
| Weighted average number of common shares outstanding Fully Diluted | ||||||||
Net
loss for the three (3) months ended December 31, 2025, and 2024, was ($
| 11 |
| For the Nine Months ended December 31, | ||||||||
| 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 nine (9) months ended December 31, 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 December 31, 2025, 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 30
to 45 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:
| December 31, 2025 | March 31, 2025 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid tradeshows | ||||||||
| Prepaid inventory | ||||||||
| Prepaid software | ||||||||
| Prepaid other | ||||||||
| Total Prepaid Expenses | $ | $ | ||||||
NOTE 5 - COMMON AND PREFERRED STOCK TRANSACTIONS
| a. | Common Stock |
The
Company has authorized shares of common stock,
During
the three (3) months ended December 31, 2025, the Company had
| 12 |
During the three (3) months ended December 31, 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.
During
the three (3) months ended December 31, 2025, the Company completed four (4) private transactions to purchase and cancel shares of its
common stock, amounting to an aggregate total of shares. These transactions were for shares of common stock at $ per
share for total consideration of $
During the three (3) months ended December 31, 2025, the Company completed the following transactions on the open market:
| Date | Shares Purchased | Price/Share | Total Consideration | |||||||||
| 10/28/2025 | $ | $ | ||||||||||
| 12/1/2025 | $ | $ | ||||||||||
| 12/12/2025 | $ | $ | ||||||||||
| 12/19/2025 | $ | $ | ||||||||||
| 12/23/2025 | $ | $ | ||||||||||
| 12/29/2025 | $ | $ | ||||||||||
| Total | $ | |||||||||||
During
the nine (9) months ended December 31, 2025, the Company had
During the nine (9) months ended December 31, 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 period.
During
the nine (9) months ended December 31, 2025, the Company completed six (6) private transactions for an aggregate amount of shares
common stock, at a weighted average price of $ per share for total consideration of $
During
the nine (9) months ended December 31, 2025, the Company executed 17 purchases of its common stock on the open market for an aggregate
amount of shares, at a weighted average price of $ per share for total consideration of $
| b. | Preferred Stock |
The Company has authorized shares of preferred stock. As of December 31, 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:
| December 31, 2025 | March 31, 2025 | |||||||
| Payroll liabilities | $ | $ | ||||||
| Sales tax payable | ||||||||
| State income tax payable | ( | ) | ( | ) | ||||
| Accrued expenses | ||||||||
| Total | $ | $ | ||||||
| 13 |
NOTE 7 - RELATED PARTY TRANSACTIONS
The
Company had
NOTE 8 – PROVISION FOR INCOME TAXES
Prior
to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in
the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation
allowance was partially removed for the fiscal year ending March 31, 2023, such that the tax benefit recognized by us in fiscal year
2023 was $
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than
not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense.
The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next 12 months.
Although we believe that our tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to examination by tax authorities in the ordinary course of business. We periodically assess the likelihood of adverse outcomes resulting from these examinations to determine the impact on our deferred taxes and income tax liabilities and the adequacy of our provision for income taxes. Changes in income tax legislation, statutory income tax rates or future taxable income levels, among other things, could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods.
The Company files income tax returns in the United States, the State of Idaho and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed. The Company does not have any unrecognized tax benefits to report in the current period.
| 14 |
Net deferred tax assets and liabilities consist of the following components as of December 31, 2025, and March 31, 2025:
| December 31, 2025 | March 31, 2025 | |||||||
| Deferred tax assets | ||||||||
| Right of use liabilities | ||||||||
| Goodwill amortization | ||||||||
| Charitable Contribution carryover | ||||||||
| NOL carryover | ||||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities | ||||||||
| Right of use assets | ( | ) | ( | ) | ||||
| Depreciation | ( | ) | ( | ) | ||||
| Total deferred tax liabilities | ( | ) | ( | ) | ||||
| Net deferred tax assets | ||||||||
| Less valuation allowance | ||||||||
| Net deferred tax assets | ||||||||
The reconciliations of the Company’s net income taxes for the nine (9) months ended December 31, 2025, and fiscal year 2025 ended on March 31, 2025, are as follows:
| December 31, 2025 | March 31, 2025 | |||||||
| U.S. Federal income tax at statutory rate | $ | ( | ) | $ | ||||
| State taxes, net of Federal benefit | ( | ) | ||||||
| Change in valuation allowance | ||||||||
| (Income Tax Benefit) Provision | $ | ( | ) | $ | ||||
The Company files income tax returns in the United States, the State of Idaho, and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed.
The summary of Federal Operating Loss Carryforwards for the nine (9) months ended of December 31, 2025, is as follows:
| Unused operating loss carryforward March 31, 2025 | $ | |||
| Operating loss carryforwards realized | $ | |||
| Unused operating loss carryforward December 31, 2025 | $ |
NOTE 9 - SUBSEQUENT EVENTS
On
January 9, 2026, we purchased shares of our common stock in the open market at $ per share. The total amount of the transaction
was $
On
January 23, 2026, we purchased shares of our common stock from the estate of a former investor. The Personal Representative of
the estate solicited us for an offer to purchase these shares. The price paid per share was $, for an aggregate purchase price of
$
On
January 30, 2026, we purchased shares of our common stock in a private transaction with an individual who solicited us for an
offer to purchase these shares. The price paid per share was $, for an aggregate purchase price of $
| 15 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statements for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995:
Except for historical facts, all matters discussed in this Quarterly Report, which are forward-looking, involve a high degree of risk and uncertainty. Certain statements in this Quarterly Report set forth management’s intentions, plans, beliefs, expectations or predictions of the future based on current facts and analyses. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “intend” or similar expressions, we intend to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated in such statements, due to a variety of factors, risks and uncertainties. Potential risks and uncertainties include, but are not limited to, competitive pressures from other companies within the Educational Industries, economic conditions in the Company’s primary markets, exchange rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing, government action, weather conditions and other uncertainties, including those detailed in our SEC filings. We assume no duty to update forward-looking statements to reflect events or circumstances after the date of such statements.
The following discussion should be read in conjunction with Item 1, Condensed Financial Statements, in Part I of this Quarterly Report.
Overview of Current and Planned Operations
PCS Edventures!, Inc. sells STEM / STEAM products to educational and recreational entities serving youth. At this time, 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.
On the other hand, out of school programs are not subject to any state governmental standard alignments, 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 freedoms exist for curriculum development. We focus our efforts on these out-of-school programs, which include summer school, summer camps, YMCA programs, Boys and Girls club programs and various other programs offered outside of the classroom, at all times of the year, that are too numerous to list. Oftentimes, these programs are sponsored, administered and/or supported by local school districts, and we employ considerable efforts to build relationships with these types of school districts to provide desired programming for their out-of-school programs. The majority of the time, the out-of-school programs offered are funded with grants; however, some programs are run on a for- profit basis. The Company sells to all of these types of entities.
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 reflects this seasonality.
| Quarterly Revenue $ | ||||||||||||||||
| Quarter Ended | 2022 | 2023 | 2024 | 2025 | ||||||||||||
| March 31 | 1,445,594 | 2,521,470 | 2,262,772 | 1,292,819 | ||||||||||||
| June 30 | 1,391,785 | 2,605,281 | 3,159,923 | 2,423,309 | ||||||||||||
| September 30 | 1,243,662 | 3,767,326 | 2,267,338 | 1,529,503 | ||||||||||||
| December 31 | 1,847,659 | 459,087 | 701,147 | 754,889 | ||||||||||||
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 was not as readily apparent as in other calendar years.
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.
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Results of Operations
Revenue
For the quarter ended December 31, 2025, our revenue was $754,889, which was $53,742 greater than our revenue for the quarter ended December 31, 2024, of $701,147. Business conditions during the quarter ended December 31, 2025, were much better than those during the quarter ended December 31, 2024. The revenue differential of $53,742 includes deferred revenue from the prior quarter for both periods.
Deferred revenue for the quarter ended September 30, 2025, of $30,160, was recognized in the quarter ended December 31, 2025. Deferred revenue for the quarter ended September 30, 2024, of $107,336, was recognized in the quarter ended December 31, 2024. Thus, the revenue differential between the quarter ended December 31, 2025, versus the quarter ended December 31, 2024, was much larger when considering sales activities that occurred during the quarter that produced the revenue for the quarter, indicating the much-improved business conditions for the quarter ended December 31, 2025, over those during the quarter ended December 31, 2024.
For the nine (9) months ended December 31, 2025, our revenue was $4,707,702, which was $1,420,707 less than our revenue for the nine (9) months ended December 31, 2024, of $6,128,409. Business conditions were impaired during the first three (3) calendar quarters of 2025 compared to the same period in 2024 and did not improve until the fourth calendar quarter on a year-over-year basis, which is our seasonally slowest quarter of the year.
Thus, the business environment for the nine (9) months ended December 31, 2025, can be characterized as impaired when compared to that of the nine (9) months ended December 31, 2024. Our reseller revenue for the nine (9) months ended December 31, 2025, was $845,637, versus $1,430,491 for the nine (9) months ended December 31, 2024, which provides another indication of the challenges faced during the nine (9) months ended December 31, 2025, compared to the nine (9) months ended December 31, 2024.
These challenges started with the expiration of the Elementary and Secondary School Emergency Relief funds on September 30, 2024, which were part of the extra funding available to schools after the Covid pandemic. This expiration was followed by a change in presidential administrations, which significantly changed the landscape of school funding. This change created hesitation in the minds of decision makers to commit to spending as they struggled to understand the nature of the changes. They wanted to wait for clarity before committing to purchasing activities.
The table below, which shows customer transactions by size for the periods indicated, illustrates the impairment our market faced for the nine (9) months ended December 31, 2025.
| Number of Customer Transactions by size | ||||||||||||||||||||||||
| > $1 million | >$500,000 | > $100,000 | > $50,000 | > $25,000 | > $10,000 | |||||||||||||||||||
| Nine (9) months ended December 31, 2025 | 0 | 0 | 8 | 25 | 42 | 80 | ||||||||||||||||||
| Nine (9) months ended December 31, 2024 | 0 | 1 | 14 | 21 | 44 | 90 | ||||||||||||||||||
| Nine (9) months ended December 31, 2023 | 1 | 2 | 16 | 23 | 34 | 80 | ||||||||||||||||||
| Nine (9) months ended December 31, 2022 | 1 | 1 | 8 | 18 | 30 | 49 | ||||||||||||||||||
| Nine (9) months ended December 31, 2021 | 0 | 0 | 5 | 10 | 15 | 38 | ||||||||||||||||||
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Despite our setback in 2025, we will continue to solicit larger customers; however, we cannot guarantee success, nor can we provide a numerical framework to describe the potential success. Risk factors include any developments that negatively impact education funding in the United States, challenges finding and retaining employees who meet our high standards and disruptions to our supply chain of critical components.
Cost of Sales
We strive to have a cost of sales that is less than 40% of revenue. We price our products once per year, at the beginning of the calendar year, and maintain that pricing level throughout the year. During inflationary environments, when the price level of the Company’s raw materials is increasing, the Company must absorb that negative impact to gross margins until it can reprice its products at the beginning of the next calendar year. This repricing analysis considers the current pricing level of materials, as well as the likely increase in those levels in the year ahead. We attempt to incorporate shipping costs into the cost of raw materials, but oftentimes during the course of the year, we are compelled to ship in a more expedient manner, which is more expensive than our baseline assumptions. More recently, tariff management has become a significant factor in pricing considerations.
For the quarter ended December 31, 2025, our cost of sales was $270,138, or 35.8% of revenue. For the quarter ended December 31, 2024, our cost of sales was $348,660, or 49.7% 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. For the nine (9) months ended December 31, 2025, our cost of sales was $1,798,560, or 38.2% of revenue, as compared to $2,459,747, or 40.1% of revenue for the nine (9) months ended December 31, 2024. 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 $539,034 for the quarter ended December 31, 2025. For the quarter ended December 31, 2024, salaries and wages were $436,150. We had 27 employees as of December 31, 2025, versus 24 employees as of December 31, 2024.
Salary and wages were $1,673,573 for the nine (9) months ended December 31, 2025. For the nine (9) months ended December 31, 2024, salaries and wages were $1,440,181. As with the case above, we had more employees during the nine (9) months ended December 31, 2025, than the nine (9) months ended December 31, 2024. We also want to retain our employees, which necessitates annual raises to compensate for inflation and reflect an employee’s increased value to the Company.
| 18 |
General and administrative expenses include all operating expenses outside of salaries and wages. These include the following categories:
| 1. | Advertising and marketing expenses | |
| 2. | Trade show and travel expenses | |
| 3. | Product development expenses | |
| 4. | Finance charges | |
| 5. | Contract labor expenses | |
| 6. | Lease expenses | |
| 7. | Insurance premiums | |
| 8. | Workers’ compensation expenses | |
| 9. | Office supplies and repairs | |
| 10. | Professional expenses | |
| 11. | Licenses | |
| 12. | State sales tax expenses | |
| 13. | Office and warehouse infrastructure expenses |
Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $262,358 for the quarter ended December 31, 2025. For the quarter ended December 31, 2024, general and administrative expenses were $375,081. The decrease in general and administrative expenses for the quarter ended December 31, 2025, versus the quarter ended December 31, 2024, was largely due to the Company’s new facilities leases, which began in the quarter ended December 31, 2024, and required upgrading expenses. These upgrading expenses were absent in the quarter ended December 31, 2025. Warehouse and Office lease and maintenance expenses were $64,149 for the quarter ended December 31, 2025, compared to $141,847 for the quarter ended December 31, 2024. The expenses included the costs of upgrading the new facilities, especially the warehouse.
General and administrative expenses were $1,026,529 for the nine (9) months ended December 31, 2025. For the nine (9) months ended December 31, 2024, general and administrative expenses were $1,091,005. An increase of warehouse and office lease expenses is largely responsible for the increase in general and administrative expenses for the nine (9) months ended December 31, 2025, over the nine (9) months ended December 31, 2024. The lease rates for our new facilities are higher than for our old facilities.
We moved into our new facilities during the quarter ended December 31, 2024, and thus, incurred lower lease rates for the nine (9) months ended December 31, 2024, than we did for the nine (9) months ended December 31, 2025.
Other Income and Expenses
Other income and expenses are those outside of the Company’s ordinary course of business. Interest income and interest expense are disclosed under other income and expenses. The Company has accumulated cash which is invested in a Vanguard money market fund that invests exclusively in repurchase agreements and short-term U.S. government securities. The ticker symbol of this fund is VMFXX. The Company’s investments in this fund produce interest income.
For the quarter ended December 31, 2025, other income and expenses were $28,837, with net interest income accounting for the entire amount. For the quarter ended December 31, 2024, other income and expenses were $24,920, with net interest income accounting for the entire amount.
For the nine (9) months ended December 31, 2025, other income and expenses were $82,794, with net interest income accounting for the entire amount. For the nine (9) months ended December 31, 2024, other income and expenses were $84,043, with net interest income accounting for the entire amount.
Net Income (Loss) Before Tax
For the quarter ended December 31, 2025, net income (loss) before tax was ($287,804) versus ($433,824) for the quarter ended December 31, 2024. Higher revenue and lower costs characterized the net income (loss) before tax for the quarter ended December 31, 2025, compared to the quarter ended December 31, 2024.
| 19 |
For the nine (9) months ended December 31, 2025, net income before tax was $291,834 versus $1,221,519 for the nine (9) months ended December 31, 2024. The nine (9) months ended December 31, 2025, can be characterized as having less revenue and higher costs when compared to the nine (9) months ended December 31, 2024.
Taxes
The Company has significant net operating losses which arose due to past losses. At March 31, 2025, the Company had net operating losses of approximately $7.9 million that may be used to offset against future taxable income.
Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ended March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $1,011,466. The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal year 2024.
While we do not expect to pay federal income taxes for fiscal year 2026, the deferred tax asset will be adjusted on a quarterly basis to reflect the amount of taxes it is offsetting for the quarter. The provision for income tax is an unwinding of the tax benefit we recorded in prior periods when we recognized the value of the deferred tax asset on the income statement.
For the three (3) months ended December 31, 2025, the provision for income tax was $77,313 compared to $210,935 for the three (3) months ended December 31, 2024. A positive income tax provision indicates a net loss before income tax for the period.
For the nine (9) months ended December 31, 2025, the provision for income tax was ($56,233) compared to ($155,904) for the nine (9) months ended December 31, 2024. A negative income tax provision indicates a positive net income before tax for the period.
Liquidity and Capital Resources
Cash Flow from Operations
For the nine (9) months ended December 31, 2025, cash provided by operations was $262,875 compared to cash provided by operations of $2,727,089 for the nine (9) months ended December 31, 2024. Cash provided by operations decreased significantly for the nine (9) months ended December 31, 2025, as compared to the nine (9) months ended December 31, 2024, largely due to 1) the difference between the change in accounts receivable and 2) the difference in the net income between the two (2) periods.
For the nine (9) months ended December 31, 2025, accounts receivable decreased by $158,217 compared to a decrease of $1,512,101 for the nine (9) months ended December 31, 2024.
For the nine (9) months ended December 31, 2025, net income was $235,601 compared to net income of $1,065,615 for the nine (9) months ended December 31, 2024.
As of December 31, 2025, total current assets were $5,693,823 and total current liabilities were $399,382, resulting in working capital of $5,294,441. 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 December 31, 2025, of 14.3 compared to a current ratio of 18.1 as of March 31, 2025.
As of December 31, 2025, we had $2,973,457 in cash and cash equivalents compared to $3,223,147 in cash and cash equivalents as of March 31, 2025.
| 20 |
Cash Flow from Investing Activities
For the nine (9) months ended December 31, 2025, cash used by investing activities was $14,734 compared to cash used by investing activities of $76,725 for the nine (9) months ended December 31, 2024. During the nine (9) months ended December 31, 2024, we purchased warehouse equipment related to our recent relocation of the warehouse, expenses we did not incur during the nine (9) months ended December 31, 2025, which accounts for the decrease in cash used by investing activities.
Cash Flow from Financing Activities
For the nine (9) months ended December 31, 2025, cash used by financing activities was $497,831 compared to cash used by financing activities of $390,021 for the nine (9) months ended December 31, 2024. In both periods, cash used by financing activities was due to the Company’s purchase of its common stock. For the nine (9) months ended December 31, 2025, the Company purchased 4,751,512 shares of its common stock, and for the nine (9) months ended December 31, 2024, the Company purchased 1,174,501 shares of its common stock. All common stock purchased was cancelled except for the 314,327 Treasury shares the Company held as of December 31, 2025.
Off-Balance Sheet Arrangements
We had no Off-Balance Sheet arrangements during the three (3) and nine (9) month periods ended December 31, 2025, and 2024.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item.
Item 4. Controls and Procedures.
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and our President, who acts as our Principal Financial Officer, have evaluated the effectiveness, as of December 31, 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 December 31, 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 December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 21 |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three (3) months ended December 31, 2025, the Company issued 20,000 shares of Rule 144 “restricted” stock to Sean P. Iddings, an Independent Board Member, for his services in that capacity during the quarter.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None; not applicable.
Item 5. Other Information.
No
director or Section 16 officer
| 22 |
Item 6. Exhibits.
(a) Index of Exhibits
Documents Incorporated by Reference:
8-K Current Report dated September 26, 2025, regarding our 2025 Annual Meeting, 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.
| 23 |
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: February 13, 2026 | By: | /s/ Todd R. Hackett |
| Todd R. Hackett | ||
| Chief Executive Officer and | ||
| Chairman of the Board of Directors | ||
| Dated: February 13, 2026 | By: | /s/ Michael J. Bledsoe |
| Michael J. Bledsoe | ||
| President, Principal Financial Officer and Director | ||
| 24 |