-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KvuxfWEJkqsezvdOIdYG+hi+0U7F0sdBjGzam1LECUwQiVhsP2zYl712eCJIM6S9 SMhmVp2z3imp8gunS9jxeA== 0001010412-05-000315.txt : 20050822 0001010412-05-000315.hdr.sgml : 20050822 20050822165041 ACCESSION NUMBER: 0001010412-05-000315 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050822 DATE AS OF CHANGE: 20050822 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PCS EDVENTURES COM INC CENTRAL INDEX KEY: 0001122020 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 820475383 FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-49990 FILM NUMBER: 051041538 BUSINESS ADDRESS: STREET 1: 345 BOBWHITE COURT STREET 2: #200 CITY: BOISE STATE: ID ZIP: 83706 BUSINESS PHONE: 208-343-3110 MAIL ADDRESS: STREET 1: 345 BOBWHITE COURT STREET 2: #200 CITY: BOISE STATE: ID ZIP: 83706 10QSB 1 q605.txt QUARTERLY REPORT ON FORM 10QSB FOR THE QUARTER ENDED JUNE 30, 2005 United States Securities and Exchange Commission Washington, D. C. 20549 FORM 10-QSB [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from to -------------- --------------- Commission File No. 000-49990 PCS EDVENTURES!.COM, INC. ------------------------- (Exact Name of Small Business Issuer as Specified in its Charter) IDAHO 82-0475383 ----- ---------- (State or Other Jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 345 Bobwhite Court, Suite #200 Boise, Idaho 83706 ------------------ (Address of Principal Executive Offices) Issuer's Telephone Number: (208) 343-3110 Check whether the Registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Not applicable. Check whether the Registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes No --- --- 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: 28,488,485 July 27, 2004 Transitional Small Business Disclosure Format (Check One): Yes X No --- --- PART I - FINANCIAL INFORMATION Item 1. Financial Statements. The Financial Statements of the Registrant required to be filed with this 10-QSB Quarterly Report were prepared by management, and commence on the following page, together with Related Notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant. PCS EDVENTURES!.COM, INC. AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS June 30, 2005 and March 31, 2005 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Balance Sheets ASSETS June 30, March 31, 2005 2005 ----------- ---------- (Unaudited) CURRENT ASSETS Cash $ 66,013 $ 16,752 Accounts receivable 238,493 130,569 Inventory 54,596 8,304 Deferred costs - 110,367 Prepaid expenses 18,019 14,826 Other assets 1,000 - ----------- ---------- Total Current Assets 378,121 280,818 ----------- ---------- FIXED ASSETS (NET) 13,242 11,917 ----------- ---------- OTHER ASSETS Deposits 6,225 6,225 ----------- ---------- Total Other Assets 6,225 6,225 ----------- ---------- TOTAL ASSETS $ 397,588 $ 298,960 =========== ========== The accompanying notes are an integral part of these consolidated financial statements. F-2 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Balance Sheets (Continued) LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) June 30, March 31, 2005 2005 --------- ---------- (Unaudited) CURRENT LIABILITIES Accounts payable $ 141,255 $ 183,068 Accrued compensation 58,506 40,537 Payroll taxes payable 66,673 87,669 Accrued interest 70,805 75,044 Accrued expenses 59,284 59,079 Unearned revenue 159,256 269,571 Notes payable - related parties 117,054 117,054 Notes payable 122,116 205,465 ---------- --------- Total Current Liabilities 794,949 1,037,487 ---------- --------- Total Liabilities 794,949 1,037,487 ---------- --------- STOCKHOLDERS' EQUITY (DEFICIT) Preferred stock, no par value, authorized 10,000,000 shares, 15,246 shares issued and outstanding 56,372 56,372 Common stock, no par value, authorized 50,000,000 shares; 28,402,585 shares issued and outstanding 24,065,117 23,868,669 Variable deferred consulting fees - (1,000) Accumulated deficit (24,518,850)(24,662,568) ----------- ----------- Total Stockholders' Equity (Deficit) (397,361) (738,527) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 397,588 $ 298,960 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. F-3 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Operations (Unaudited) For the Three Months Ended June 30, -------------------------- 2005 2004 ------------- ---------- REVENUES Lab Revenue $ 889,522 $ 395,729 License Revenue 44,132 45,961 Subscription Revenue 1,318 3,008 ---------- --------- Total Revenues 934,972 444,698 ---------- --------- COST OF GOODS SOLD 382,211 147,472 ---------- --------- GROSS PROFIT 552,761 297,226 ---------- --------- OPERATING EXPENSES Salaries and wages 106,768 116,859 Depreciation expense 1,190 - Stock options issued for consulting services - 322,442 General and administrative 293,767 242,722 ---------- --------- Total Operating Expenses 401,725 682,023 ---------- --------- OPERATING INCOME (LOSS) 151,036 (384,797) ---------- --------- OTHER INCOME AND (EXPENSES) Gain on settlement of debt (Note 4) - 43,990 Interest income 5 949 Interest expense (23,778) (30,438) Other income 16,455 7,293 Other expense - (1,467) ---------- --------- Total Other Income and (Expenses) (7,318) 20,327 ---------- --------- INCOME BEFORE INCOME TAXES 143,718 (364,470) INCOME TAX EXPENSE (BENEFIT) - - ---------- --------- NET INCOME $ 143,718 $(364,470) ========== ========= BASIC INCOME (LOSS) PER SHARE $ 0.01 $ (0.01) ========== ========= DILUTED INCOME (LOSS) PER SHARE $ 0.00 $ (0.01) ========== ========= WEIGHTED AVERAGE NUMBER OF BASIC SHARES OUTSTANDING 26,515,013 24,692,361 =========== =========== WEIGHTED AVERAGE NUMBER OF DILUTED SHARES OUTSTANDING 30,659,009 24,692,361 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. F-4 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) Common Shares Preferred Shares ----------------------- -------------------- Shares Amount Shares Amount ---------- ----------- --------- ---------- Balance, March 31, 2004 24,230,874 $ 23,023,323 82,850 $120,473 Common stock issued for services at $0.17 per share 30,000 5,100 - - Stock offering costs - (5,100) - - Common stock issued for services at $0.17 per share 240,000 40,800 - - Stock offering costs - (40,800) - - Options issued to employees below market value - 3,000 - - Options issued to consultants below market value - 507,877 - - Common stock issued for conversion of debt and interest at $0.20 per share 376,165 75,232 - - Common stock issued for cash at $0.10 per share for option exercise 750,000 75,000 - - Intrinsic value of employee options issued below market value - 5,000 - - Common stock issued for related party note payable reduction at $0.07 per share 250,000 17,500 - - Fair value of options issued to consultant - 696 - - Common stock issued for conversion of preferred stock at $0.20 per share 338,020 67,603 (67,604) (67,603) Options issued to directors for accrued director fees - 9,241 - - ---------- ----------- --------- ------------ Balance forward 26,215,059 $23,784,472 15,246 $ 52,870 ---------- ----------- --------- ------------ F-5 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) (Continued) Common Shares Preferred Shares ------------------------- ---------------------- Shares Amount Shares Amount ---------- ------------ --------- ----------- Balance forward 26,215,059 $23,784,472 15,246 $ 52,870 Contributed capital for accrued director fee - 50,759 - - Pro-rata cumulative non-cash preferred stock dividend - - - 3,502 Amortization of prepaid expense - - - - Amortization and revaluation of consulting expense - (92,102) - - Stock issued for marketing services at $0.09 per share 250,000 22,500 - - Stock issued for legal services at $0.09 per share 500,000 45,000 - - Stock issued for accounts payable at $0.15 per share 45,833 6,875 - - Stock issued for note payable to related party at $0.06 per share 344,559 20,674 - - Amortization of prepaid expense - - - - Fair value of options issued to consultant - 491 - - Options issued to directors for accrued director fees - 28,416 - - Contributed capital for accrued director fees - 1,584 - - Net loss, March 31, 2005 - - - - ---------- ----------- --------- ---------- Balance, March 31, 2005 27,355,451 $ 23,868,669 15,246 $ 56,372 ---------- ----------- --------- ---------- F-6 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) (Continued) Common Shares Preferred Shares ----------------------- -------------------- Shares Amount Shares Amount ---------- ----------- --------- ---------- Balance Forward 27,355,451 $ 23,868,669 15,246 $ 56,372 Options issued to directors for accrued director fees (unaudited) - 15,000 - - Treasury stock issued for legal services (unaudited) - 21,250 - - Stock issued for the exercise of options for $0.16 per share (unaudited) 15,000 2,400 - - Stock issued for cash for $0.20 per share (unaudited) 35,000 7,000 - - Stock issued for public relations services for $0.095/share (unaudited) 90,972 8,649 - - Stock issued for the exercise of options for $0.13 per share (unaudited) 205,211 26,645 - - Stock issued for conversion of debt and interest at $0.17 per share (unaudited) 654,706 112,485 - - Stock issued for conversion of debt and interest at $0.17 per share (unaudited) 12,815 2,178 - - Stock issued for cash for $0.17 per share (unaudited) 33,430 5,683 - - Amortization and revaluation of consulting expense (unaudited) - (7,667) - - Options issued to employees below market value (unaudited) - 2,825 - - Net income, June 30, 2005 (unaudited) - - - - ---------- ----------- --------- ------------ Balance, June 30, 2005 (unaudited) 28,402,585 $24,065,117 15,246 $ 56,372 =========== ============ ========= ============ F-7 [CONTINUED] PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) (Continued) Variable Expenses Prepaid Deferred Accumulated with Common Stock Consulting Deficit ----------------- ---------- ----------- Balance, March 31, 2004 $(67,292) $ - $(23,720,434) Common stock issued for services at $0.17 per share - - - Stock offering costs - - - Common stock issued for services at $0.17 per share - - - Stock offering costs - - - Options issued to employees below market value - - - Options issued to consultants below market value - (507,877) - Common stock issued for conversion of debt and interest at $0.20 per share - - - Common stock issued for cash at $0.10 per share for option exercise - - - Intrinsic value of employee options issued below market value - - - Common stock issued for related party note payable reduction at $0.07 per share - - - Fair value of options issued to consultant - - - Common stock issued for conversion of preferred stock at $0.20 per share - - - Options issued to directors for accrued director fees - - - Contributed capital for accrued director fees - - - ----------- --------- ------------ Balance forward $ (67,292) $(507,877) $(23,720,434) ----------- --------- ------------ F-5 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) (Continued) Variable Expenses Prepaid Deferred Accumulated with Common Stock Consulting Deficit ----------------- ---------- ----------- Balance forward $ (67,292) $(507,877) $(23,720,434) Pro-rata cumulative non-cash preferred stock dividend - - (3,502) Amortization of prepaid expense 67,292 - - Amortization and revaluation of consulting expense - 506,877 - Stock issued for marketing services at $0.09 per share (22,500) - - Stock issued for legal services at $0.09 per share (45,000) - - Stock issued for accounts payable at $0.15 per share - - - Stock issued for note payable to related party at $0.06 per share - - - Amortization of prepaid expense 67,500 - - Fair value of options issued to consultant - - - Options issued to directors for accrued director fees - - - Contributed capital for accrued director fees - - - Net loss, March 31, 2005 - - (938,632) ----------------- ---------- ----------- Balance, March 31, 2005 $ - $ (1,000) $(24,662,568) ----------------- ---------- ----------- F-6 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Stockholders' Equity (Deficit) (Continued) Variable Expenses Prepaid Deferred Accumulated with Common Stock Consulting Deficit ----------------- ---------- ----------- Balance Forward $ - $ (1,000) $(24,662,568) Options issued to directors for accrued director fees (unaudited) - - - Treasury stock issued for legal services (unaudited) - - - Stock issued for the exercise of options for $0.16 per share (unaudited) - - - Stock issued for cash for $0.20 per share (unaudited) - - - Stock issued for public relations services for $0.095/share (unaudited) - - - Stock issued for the exercise of options for $0.13 per share (unaudited) - - - Stock issued for conversion of debt and interest at $0.17 per share (unaudited) - - - Stock issued for conversion of debt and interest at $0.17 per share (unaudited) - - - Stock issued for cash for $0.17 per share (unaudited) - - - Amortization and revaluation of consulting expense (unaudited) - 1,000 - Options issued to employees below market value (unaudited) - - - Net income, June 30, 2005 (unaudited) - - 143,718 ---------- --------- ------------ Balance, June 30, 2005 (unaudited) - $ - $(24,518,850) ========== ========= ============ The accompanying notes are an integral part of these consolidated financial statements. F-7 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended June 30, ---------------------- 2005 2004 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 143,718 $(364,470) Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: Depreciation 1,190 - Gain on extinguishment - (43,990) Stock options issued for consulting services 8,649 322,442 Stock options issued for board compensation 15,000 3,000 Stock options issued for employee compensation 2,825 - Amortization of expenses prepaid with common stock (7,667) 21,250 Stock issued for legal expenses 35,000 - Gain on return of common stock (13,750) - Changes in operating assets and liabilities: (Increase) Decrease in accounts receivable (107,924) 90,395 Decrease in prepaid expenses (4,193) 6,084 (Increase) in inventory (46,291) (12,507) Decrease in deferred costs 110,367 - Increase (decrease) in accounts payable and accrued liabilities (44,976) (6,587) Increase (decrease) in interest payable (4,240) 12,511 (Decrease) in unearned revenue (110,315) (33,692) --------- -------- Net Cash Provided (Used) by Operating Activities (22,607) (5,564) --------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Cash receipt on notes receivable - 50,000 Purchase of fixed assets (2,515) - --------- -------- Net Cash Provided (Used) by Investing Activities (2,515) 50,000 --------- -------- CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) in cash overdraft - - Payments to related parties - (10,654) Payments on notes payable (27,726) (73,086) Proceeds from notes payable 60,380 - Proceeds from common stock 41,728 75,000 -------- --------- Net Cash Provided (Used) by Financing Activities 74,382 (8,740) -------- --------- NET INCREASE IN CASH 49,260 35,696 CASH AT BEGINNING OF PERIOD 16,753 113,820 -------- --------- CASH AT END OF PERIOD $ 66,013 $ 149,516 ======== ========= The accompanying notes are an integral part of these consolidated financial statements. F-8 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Consolidated Statements of Cash Flows (Continued) (Unaudited) For the Three Months Ended June 30, --------------------- 2005 2004 ----------- --------- NON-CASH INVESTING AND FINANCING ACTIVITIES: Issuance of stock for payment on notes payable and interest $ 114,664 $ 75,232 Common stock issued for stock offering costs $ - $ 45,900 Common stock issued for payment on accounts payable $ - $ - Stock options issued for consulting services $ 8,649 $ 332,442 Stock options issued for board compensation $ 15,000 $ 3,000 Stock options issued for employee compensation $ 2,825 $ - Cash Paid For: Interest $ 13,199 $ - Income taxes $ - $ - The accompanying notes are an integral part of these consolidated financial statements. F-9 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Notes to the Consolidated Financial Statements June 30, 2005 and March 31, 2005 NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements include normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its March 31, 2005 Annual Report on Form 10-KSB. Operating results for the three months ended June 30, 2005 are not necessarily indicative of the results that may be expected for the year ending March 31, 2006. NOTE 2 - GOING CONCERN The Company's consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operating costs. Additionally, the Company has accumulated significant losses, has negative working capital, and a deficit in stockholders' equity. All of these items raise substantial doubt about its ability to continue as a going concern. Management's plans with respect to alleviating the adverse financial conditions that caused you to express substantial doubt about the Company's ability to continue as a going concern are as follows: During the fiscal year ending March 2005, the Company opened discussions with several target companies for possible merger and acquisition activities. In addition, the Company also continued to investigate the feasibility of utilizing parts of our Learning Labs to create a line of specialty retail learning toys. The Company has also entered into several strategic alliances with K'NEX, Science Demo, and GibsonTechEd for further product development and enhancement. The Company has also strengthened its international position by naming agents and installing Learning Labs in Egypt, Dubai, and Saudi Arabia. Over the next fiscal year, the Company will continue to develop marketplace strategy for the US market as well as the international market. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. NOTE 3 - DILUTIVE INSTRUMENTS a. Stock Options SFAS No. 148, requires the Company to provide pro forma information regarding net loss and net loss per share as if compensation costs for the Company's stock option plans and other stock awards had been determined in accordance with the fair value based method prescribed in SFAS No. 148. The current year pro forma net income(loss) includes $17,675 of prior year option expense amortization. The Company estimates the fair value of each stock award at the grant date by using the Black-Scholes option pricing model with the following weighted average assumptions used for grants, respectively; dividend yield of zero percent for all years; expected volatility of 100% to 538% percent for all years; risk-free interest rates of 1% to 6%, and expected lives of 1 to 10 years. For the Three Months Ended June 30, 2005 2004 Net income(loss): As reported $ 143,718 $ (364,470) Pro Forma 173,396 (390,401) Net income(loss) per share: As reported $ 0.01 $ (0.01) Pro Forma 0.00 (0.02) F-10 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Notes to the Consolidated Financial Statements June 30, 2005 and March 31, 2005 NOTE 3 - DILUTIVE INSTRUMENTS (Continued) a. Stock Options (Continued) The Company has granted the following options as of June 30, 2005: Amount Date of Issue Issue Amount Expired/ Amount Description Grant Number Price Exercised Cancelled Outstanding - ---------------- -------- --------- -------- --------- --------- ---------- 1) Board Members 12-10-01 1,000,000 $ 0.30 0 (250,000) 750,000 2) Board Members 06-03-02 1,000,000 $ 0.16 0 (250,000) 750,000 3) Employees 07-01-02 335,000 $ 0.16 0 (10,000) 325,000 4) Employee 08-15-02 5,000 $ 0.16 0 0 5,000 5) Board Members 10-21-02 499,998 $ 0.09 0 (166,666) 333,332 6) Board Members 05-15-03 892,855 $ 0.07 (250,000) (214,285) 428,570 7) Employee 05-20-03 100,000 $ 0.07 0 0 100,000 8) Employee 07-25-03 25,000 $ 0.10 0 0 25,000 9) Employee 09-05-03 150,000 $ 0.07 0 0 150,000 10) Employee 09-25-03 25,000 $ 0.15 0 0 25,000 11) Board Member 04-28-04 150,000 $ 0.15 0 0 150,000 12) Consultant 04-28-04 2,000,000 $ 0.10 (750,000)(1,250,000) 0 13) Consultant 04-28-04 4,000,000 $ 0.25 0 (4,000,000) 0 14) Consultant 04-28-04 200,000 $ 0.10 0 0 200,000 15) Consultant 04-28-04 200,000 $ 0.20 0 0 200,000 16) Consultant 04-28-04 200,000 $ 0.30 0 0 200,000 17) Consultant 04-28-04 200,000 $ 0.35 0 0 200,000 18) Board Members 09-14-04 80,358 $ 0.14 0 0 80,358 19) Board Members 09-14-04 93,750 $ 0.12 0 0 93,750 20) Board Members 09-14-04 112,500 $ 0.10 0 0 112,500 21) Board Members 09-14-04 48,912 $ 0.23 0 0 48,912 22) Board Members 09-14-04 57,692 $ 0.26 0 0 57,692 23) Employee 07-29-04 153,533 $ 0.15 0 0 153,533 24) Employee 08-10-04 50,000 $ 0.13 0 0 50,000 25) Employee 07-10-04 50,000 $ 0.13 0 0 50,000 26) Employee 07-01-04 25,000 $ 0.31 0 0 25,000 27) Consultant 07-29-04 5,000 $ 0.15 0 0 5,000 28) Employee 11-15-04 100,000 $ 0.10 0 0 100,000 29) Board Members 01-04-05 315,792 $ 0.10 0 0 315,792 30) Consultant 01-06-05 4,500 $ 0.10 0 0 4,500 31) Employee 06-01-04 75,000 $ 0.31 0 0 75,000 32) Employee 06-14-04 250,000 $ 0.31 0 0 250,000 33) Employee 06-01-04 50,000 $ 0.31 0 0 50,000 34) Employee 06-01-04 75,000 $ 0.31 0 0 75,000 35) Employee 06-16-04 150,000 $ 0.31 0 0 150,000 36) Board Members 04-01-05 81,080 $ 0.185 0 0 81,080 37) Employees 05-26-05 175,000 $ 0.50 0 0 175,000 38) Officer 05-26-05 107,467 $ 0.50 0 0 107,467 ---------- --------- ---------- ---------- 13,043,437 (1,000,000) 6,140,951 5,620,019 ========== ========= ========== ========== Amount Exercisable 4,621,486 ========== Risk-Free Fair Interest Expected Expected Description Value Rate Life Volatility ---------------- --------- --------- -------- ---------- 1) Board Members $ 0.20 5.69% 10.00 99.80% 2) Board Members $ 0.15 5.48% 10.00 128.91% 3) Employee $ 0.14 2.84% 3.50 157.77% 4) Employee $ 0.14 2.84% 3.30 163.77% 5) Board Members $ 0.09 3.94% 10.00 158.83% 6) Board Members $ 0.09 3.94% 10.00 151.61% 7) Employee $ 0.06 2.54% 4.00 151.61% 8) Employee $ 0.12 2.81% 4.00 156.24% 9) Employee $ 0.11 2.81% 4.00 152.03% 10) Employee $ 0.12 3.07% 5.85 152.03% 11) Board Member $ 0.17 4.43% 10.00 344.55% 12) Consultant $ 0.17 0.98% 0.17 187.13% 13) Consultant $ 0.17 0.98% 0.33 187.13% 14) Consultant $ 0.17 1.55% 1.00 537.80% 15) Consultant $ 0.17 1.55% 1.00 537.80% 16) Consultant $ 0.17 1.55% 1.00 537.80% 17) Consultant $ 0.17 1.55% 1.00 537.80% 18) Board Members $ 0.15 4.14% 10.00 247.04% 19) Board Members $ 0.15 4.14% 10.00 247.04% 20) Board Members $ 0.15 4.14% 10.00 247.04% 21) Board Members $ 0.15 4.14% 10.00 247.04% 22) Board Members $ 0.15 4.14% 10.00 247.04% 23) Employee $ 0.14 3.78% 5.00 250.60% 24) Employee $ 0.13 3.47% 5.00 247.04% 25) Employee $ 0.23 3.64% 5.00 250.60% 26) Employee $ 0.27 3.81% 5.00 240.27% 27) Consultant $ 0.14 3.78% 5.00 250.60% 28) Employee $ 0.10 3.53% 5.00 236.98% 29) Board Members $ 0.09 4.29% 10.00 234.54% 30) Consultant $ 0.11 3.65% 5.00 236.98% 31) Employee $ 0.31 3.91% 5.00 235.04% 32) Employee $ 0.26 3.98% 5.00 235.04% 33) Employee $ 0.31 3.91% 5.00 235.04% 34) Employee $ 0.31 3.91% 5.00 235.04% 35) Employee $ 0.31 3.91% 5.00 235.04% 36) Board Members $ 0.185 4.24% 10.00 237.88% 37) Employees $ 0.50 3.91% 5.00 257.85% 38) Officer $ 0.50 3.91% 5.00 257.85% F-11 PCS EDVENTURES!.COM, INC. AND SUBSIDIARY Notes to the Consolidated Financial Statements June 30, 2005 and March 31, 2005 NOTE 4 - SUBSEQUENT EVENTS During the month of July 2005, the Company issued 20,000 shares to certain individuals who helped with converting the last of the indentured trustholders' notes to common stock. The shares were issued valued at $0.705 per share for a total commission expense of $14,100. During the month of July 2005, the Company issued 60,900 shares to an indentured trust holder who converted debt to common stock. This transaction is reflected in the above financial statements. During the month of July 2005, the Company issued 5,000 shares to a consultant who was exercising options. These options were exercisable at a price of $0.15 per share. During July 2005, the Company signed a letter of intent (LOI) to acquire LabMentors, a Canadian based developer of hands-on virtual computer, networking, and server labs. PCS will acquire all LabMentor's stock in exchange for PCS' restricted stock; the final structure of the exchange has not been determined. The purchase price is $450,000, payable in PCS restricted common stock. In addition to the purchase price, LabMentor's shareholders can earn additional PCS shares based on LabMentor's EBITDA (earnings before income taxes, depreciation/amortization) for three years after the initial purchase of LabMentors. The LOI will terminate on October 31, 2005, unless a definitive agreement is reached following PCS' due diligence. F-12 Item 2. Management's Discussion and Analysis or Plan of Operation. - -------------------------------------------------------------------- Results of Operations. - ---------------------- Three months ended June 30, 2005, compared to three months ended June 30, 2004. - -------------- Revenues for the three-month period ended June 30, 2005, increased by $490,274, or 110% to $934,972 as compared to $444,698 for the three-month period ended June 30, 2004. This increase is due to increased sales and marketing efforts throughout the country as well as increased international sales. In addition, we received several large orders at the end of the previous fiscal year (ended March 31, 2005); these orders were delivered, and the revenue recognized, during this first quarter. Cost of goods sold for the three-month period ended June 30, 2005, increased by $234,739, or 159% to $382,211 as compared to $147,472 for the three-month period ended June 30, 2004. This increase is due to an increase in sales as well as an increase in shipping costs and slightly higher supplier pricing. Operating expenses for the three-month period ended June 30, 2005, decreased by $280,298, or 41% to $401,725 as compared to $682,023 for the three-month period ended June 30, 2004. This decrease is primarily due the non-recurring expense we booked during last year's period for non-cash consulting expense of $322,442. Interest expenses for the three-month period ended June 30, 2005, decreased 22%, or $6,659 to $23,778 as compared to $30,438 for the three-month, period ended June 30, 2004. This decrease is due to our efforts to convert debt to equity. During this first quarter ended June 30, 2005, we converted approximately $103,500 of indentured trust debt to equity. Liquidity and Capital Resources. - -------------------------------- We had a cash balance of $66,013 at June 30, 2005. Management believes that the cash received from delivered sales orders, as well as continued limited offerings of our common stock, will be sufficient to meet our operating expenses for the foreseeable future. Item 3. Controls and Procedures. - ---------------------------------- As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our President and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures are effectively designed to ensure that information required to be disclosed or filed by us is recorded, processed or summarized, within the time periods specified in the rules and regulations of the Securities and Exchange Commission. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. In addition, we reviewed our internal controls over financial reporting, and there have been no changes in our internal controls or in other factors in the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings. - ---------------------------- None; not applicable. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. - ---------------------------------------------------------------------- Sales of Unregistered Securities During the Last Quarter. --------------------------------------------------------- Common Preferred Description Shares Amount Shares Amount - ----------- ------ ------ ------ ------ Laura & Bill Baran 15,000 (1) Hazen & Josephine Sandwick 35,000 (2) Scott Peyron & Associates 90,972 (3) Anthony A. Maher 205,211 (4) Paul & Lynn Kalcic 12,815 (5) Matamo Corp. LLC 16,715 (6) Douglas Miller 16,715 (6) Trace G. Barnes 33,382 (5) Trevor Brown Living Trust 71,030 (5) William & Linda Hamm 81,000 (5) Mary Kalcic 75,000 (5) Armand LaSorsa 66,911 (5) Baker-Louderback Living Trust 39,539 (5) Rodney C. Luker 100,494 (5) Clifford W. Nichols 71,030 (5) Nelson Wooster 40,235 (5) John R. Coghlan 76,085 (5) (1) These shares were issued to an employee who exercised some options. These options were exercisable at $0.16 per share. (2) These shares were issued for cash at $0.20 per share. (3) These shares were issued for public relations services at $0.095 per share. (4) These shares were issued to an Officer/Board Member who exercised some options. These options were exercisable at $0.13 per share. (5) These shares were issued for the conversion of indentured trust debt and interest at $0.17 per share. (6) These shares were issued for cash at $0.17 per share. Item 3. Defaults Upon Senior Securities. - ------------------------------------------ None; not applicable. Item 4. Submission of Matters to a Vote of Security Holders. - -------------------------------------------------------------- None; not applicable. Item 5. Other Information. - ---------------------------- None; not applicable. Item 6. Exhibits. - ------------------- Exhibits. 31.1 302 Certification of Anthony A. Maher 31.2 302 Certification of Christina M. Vaughn 32 906 Certifications SB-2 Registration Statement Filed with an Effective Date of May 11, 2001* * Incorporated by Reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized. PCS EDVENTURES.COM, INC. Date: 8/22/2005 By:/s/Anthony A. Maher ---------- ------------------------------------- Anthony A. Maher Chief Executive Officer, President and Chairman of the Board of Directors Date: 8/22/2005 By:/s/Christina M. Vaughn ---------- ------------------------------------- Christina M. Vaughn Chief Financial Officer Date: 8/17/2005 By:/s/Donald J. Farley ---------- ------------------------------------- Donald J. Farley Secretary and Director Date: 8/15/2005 By:/s/Cecil D. Andrus ---------- ------------------------------------- Cecil D. Andrus Director EX-31 2 ex31-1.txt 302 CERTIFICATION OF ANTHONY MAHER Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Anthony A. Maher, CEO, President and Chairman of the Board of Directors of PCS Edventures.com, Inc. (the "small business issuer"), certify that: 1. I have reviewed this Quarterly Report ("Quarterly Report") on Form 10-QSB of the small business issuer; 2. Based on my knowledge, this Quarterly 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 Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this Quarterly Report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer is made known to me by others within those entities, particularly during the period in which this Quarterly Report is being prepared; b) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this Quarterly Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and c) disclosed in this Quarterly Report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting. Date: 8/22/2005 By/s/Anthony A. Maher --------- ------------------------------------- Anthony A. Maher CEO, President and Chairman of the Board of Directors EX-31 3 ex31-2.txt 302 CERTIFICATION OF CHRISTINA M. VAUGHN Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Christina M. Vaughn, Vice President and CFO of PCS Edventures.com, Inc., (the "small business issuer"), certify that: 1. I have reviewed this Quarterly Report ("Quarterly Report") on Form 10-QSB of the small business issuer; 2. Based on my knowledge, this Quarterly 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 Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this Quarterly Report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer is made known to me by others within those entities, particularly during the period in which this Quarterly Report is being prepared; b) evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this Quarterly Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Quarterly Report based on such evaluation; and c) disclosed in this Quarterly Report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting. Date: 8/22/2005 By/s/Christina M. Vaughn --------- ------------------------------------- Christina M. Vaughn Vice President and CFO EX-32 4 ex32.txt 906 CERTIFICATION 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!.com, Inc. (the "Company") on Form 10-QSB for the period ending June 30, 2005, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), We, Anthony A. Maher, President and Christina M. Vaughn, Chief Financial Officer of the Company, 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 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 Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: 8/22/2005 /s/Anthony A. Maher ---------- --------------------- Anthony A. Maher President and director Date: 8/22/2005 /s/Christina M. Vaughn ---------- --------------------- Christina M. Vaughn Chief Financial Officer and director -----END PRIVACY-ENHANCED MESSAGE-----