0001213900-22-026115.txt : 20220513 0001213900-22-026115.hdr.sgml : 20220513 20220513061952 ACCESSION NUMBER: 0001213900-22-026115 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 45 CONFORMED PERIOD OF REPORT: 20220331 FILED AS OF DATE: 20220513 DATE AS OF CHANGE: 20220513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Amesite Inc. CENTRAL INDEX KEY: 0001807166 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 823431717 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-39553 FILM NUMBER: 22920141 BUSINESS ADDRESS: STREET 1: 205 EAST WASHINGTON STREET STREET 2: SUITE B CITY: ANN ARBOR STATE: MI ZIP: 48104 BUSINESS PHONE: (650) 516-7633 MAIL ADDRESS: STREET 1: 205 EAST WASHINGTON STREET STREET 2: SUITE B CITY: ANN ARBOR STATE: MI ZIP: 48104 FORMER COMPANY: FORMER CONFORMED NAME: Amesite Operating Co DATE OF NAME CHANGE: 20200318 10-Q 1 f10q0322_amesiteinc.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2022

 

or

 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number: 001-39553

 

 

AMESITE INC.

(Exact name of registrant as specified in its charter)

 

Delaware   82-3431718
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
     

607 Shelby Street

Suite 700 PMB 214

Detroit, MI

  48226
(Address of principal executive offices)   (Zip Code)

 

(734) 876-8130

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.0001   AMST   The Nasdaq Stock Market LLC

  

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer ☒  Smaller reporting company  
    Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No 

  

There were 25,743,484 shares of the registrant’s common stock issued and outstanding as of May 13, 2022.

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
PART I - FINANCIAL INFORMATION   1
     
ITEM 1. FINANCIAL STATEMENTS   1
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   14
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   18
ITEM 4. CONTROLS AND PROCEDURES   18
     
PART II – OTHER INFORMATION   19
     
ITEM 1. LEGAL PROCEEDINGS   19
ITEM 1A. RISK FACTORS   19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   19
ITEM 3. DEFAULTS UPON SENIOR SECURITIES   19
ITEM 4. MINE SAFETY DISCLOSURES   19
ITEM 5. OTHER INFORMATION   19
ITEM 6. EXHIBITS   20
     
SIGNATURES   21

 

-i-

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements. These statements may be identified by such forward-looking terminology as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in these forward-looking statements. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

 

our artificial intelligence (AI)-driven learning platform’s ability to enable businesses, universities and K-12 schools to offer timely, improved popular courses and certification programs, without becoming software tech companies;

 

our planned online machine learning platform’s ability to result in opportunistic incremental revenue for colleges and universities, and improved ability to garner state funds due to increased retention and graduation rates through use of machine learning and natural language processing;

 

our ability to continue as a going concern;

 

our ability to obtain and maintain intellectual property protection for our technologies and our ability to operate our business without infringing the intellectual property rights of others;

 

our reliance on third parties to conduct our business and studies;

 

our reliance on third party designers, suppliers, and partners to provide and maintain our learning platform;

 

our ability to attract and retain qualified key management and technical personnel;

 

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act, or JOBS Act;

 

our financial performance; and

 

the impact of government regulation and developments relating to our competitors or our industry.

 

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

 

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

 

-ii-

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Amesite Inc.

 

Condensed Financial Statements

March 31, 2022

 

 

 

-1-

 

 

Amesite Inc.

Contents

 

Condensed Financial Statements   Page
Condensed Balance Sheets (unaudited)   3
     
Condensed Statements of Operations (unaudited)   4
     
Condensed Statements of Stockholders’ Equity (unaudited)   5
     
Condensed Statements of Cash Flows (unaudited)   6
     
Notes to Condensed Financial Statements   7-13

 

-2-

 

 

Amesite Inc.
Condensed Balance Sheets (unaudited)

 

   March 31,
2022
   June 30,
2021
 
Assets    
Current Assets        
Cash and cash equivalents  $8,905,431   $10,713,091 
Accounts receivable   10,795    51,120 
Prepaid expenses and other current assets   564,684    299,389 
Total current assets   9,480,910    11,063,600 
           
Noncurrent assets          
Property and Equipment - net   91,146    100,590 
Capitalized software - net   1,203,945    1,312,643 
Total noncurrent assets   1,295,091    1,413,233 
Total assets  $10,776,001   $12,476,833 
Liabilities and Stockholders’ Equity          
Current Liabilities          
Accounts payable  $412,911   $139,754 
Accrued and other current liabilities:          
Accrued compensation   180,296    199,908 
Deferred revenue   219,190    333,200 
Other accrued liabilities   26,416    68,881 
Total current liabilities   838,813    741,743 
           
Stockholders’ Equity          
Common stock, $.0001 par value; 100,000,000 shares authorized; 25,739,679 and 21,063,954 shares issued and outstanding and March 31, 2022 and June 30, 2021, respectively   2,533    2,066 
Preferred stock, $.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2021 or June 30, 2021   
-
    
-
 
Additional paid-in capital   37,068,255    31,950,117 
Accumulated deficit   (27,133,600)   (20,217,093)
Total stockholders’ equity   9,937,188    11,735,090 
Total liabilities and stockholders’ equity  $10,776,001   $12,476,833 

 

See accompanying Notes to Condensed Financial Statements. 

 

-3-

 

 

Amesite Inc.

Condensed Statements of Operations (unaudited)

 

   Three Months Ended
March 31,
   Nine Months Ended
March 31,
 
   2022   2021   2022   2021 
Net Revenue  $209,518   $201,394   $539,383   $418,315 
Operating Expenses                    
General and administrative expenses   1,239,153    1,049,128    3,926,901    3,523,259 
Technology and content development   899,951    615,157    2,377,077    1,593,934 
Sales and marketing   282,684    860,562    1,153,943    1,385,202 
Total operating expenses   2,421,787    2,524,847    7,457,921    6,502,395 
Other Income (Expense)                    
Interest Income   1,207    703    8,742    1,323 
Interest Expense   (5,049)   
-
    (6,711)   (3,613,831)
Total other income (expense)   (3,842)   703    2,031    (3,612,508)
Net Loss  $(2,216,111)  $(2,322,750)  $(6,916,507)  $(9,696,588)
Earnings per Share                    
Basic loss per share  $(0.09)  $(0.11)  $(0.32)  $(0.51)
Weighted average shares outstanding   23,802,866    20,538,461    21,824,688    19,150,778 

 

See accompanying Notes to Condensed Financial Statements. 

 

-4-

 

 

Amesite Inc.

Condensed Statements of Stockholders’ Equity (unaudited)

 

   Common Stock   Additional
Paid-In
   Accumulated     
   Shares   Amount   Capital   Deficit   Total 
Balance - July 1, 2020   16,231,820   $1,583   $11,629,114   $(8,630,801)  $2,999,896 
Net loss   -    
-
    
-
    (5,086,264)   (5,086,264)
Issuance of common stock - net   3,000,000    300    12,795,930    
-
    12,796,230 
Stock-based compensation expense   -    
-
    212,413    
-
    212,413 
Conversion of notes payable   1,127,872    113    5,639,248    
-
    5,639,361 
Balance - September 30, 2020   20,359,692   $1,996   $30,276,705   $(13,717,065)  $16,561,636 
Net loss   -    
-
    
-
    (2,287,574)   (2,287,574)
Issuance of common stock for consulting services   176,092    18    789,582    
-
    789,600 
Stock-based compensation expense   -    
-
    217,075    
-
    217,075 
Balance - December 31, 2020   20,535,784   $2,014   $31,283,362   $(16,004,639)  $15,280,737 
Net loss   -    
-
    
-
    (2,322,750)   (2,322,750)
Cashless exercise of warrants   29,782    3    (3)   
-
    
-
 
Stock-based compensation expense   -    
-
    221,168    
-
    221,168 
Balance - March 31, 2021   20,565,566   $2,017   $31,504,527   $(18,327,389)  $13,179,155 
                          
Balance - July 1, 2021   21,063,954   $2,066   $31,950,117   $(20,217,093)  $11,735,090 
Net loss   -    
-
    
-
    (2,378,157)   (2,378,157)
Issuance of common stock – net of offering costs of $140,000   911,824    91    1,359,909    
-
    1,360,000 
Stock-based compensation expense   -    
-
    389,085    
-
    389,085 
Balance - September 30, 2021   21,975,778   $2,157   $33,699,111   $(22,595,250)  $11,106,018 
Net loss   -    
-
    
-
    (2,322,239)   (2,322,239)
Issuance of common stock for consulting services   13,901    1    22,697    
-
    22,698 
Stock-based compensation expense   -    
-
    422,526    
-
    422,526 
Balance - December 31, 2021   21,989,679   $2,158   $34,144,334   $(24,917,489)  $9,229,003 
Net loss   -    
-
         (2,216,111)   (2,216,111)
Issuance of common stock – net of offering costs of $250,450   3,750,000    375    2,509,175    
-
    2,509,550 
Stock-based compensation expense   -    
-
    414,746    
-
    414,746 
Balance - March 31, 2022   25,739,679   $2,533   $37,068,255   $(27,133,600)  $9,937,188 

 

See accompanying Notes to Condensed Financial Statements. 

 

-5-

 

 

Amesite Inc.

Condensed Statements of Cash Flows (unaudited)

 

   Nine Months Ended
March 31,
 
   2022   2021 
Cash Flows from Operating Activities        
Net loss  $(6,916,507)  $(9,696,588)
Adjustments to reconcile net loss to net cash and cash equivalents from operating activities:          
Depreciation and amortization   682,068    537,112 
Stock compensation expense   1,226,357    650,656 
Amortization of debt costs   
-
    182,900 
Interest expense on notes payable converted to common stock   
-
    3,430,931 
Value of common stock issued in exchange for consulting services   22,698    789,600 
Changes in operating assets and liabilities which used cash:          
Accounts receivable   40,325    54,220 
Prepaid expenses and other assets   (265,295)   (398,412)
Accounts payable   297,621    103,797 
Accrued compensation   (19,612)   33,871 
Deferred revenue   (114,010)   164,615 
Accrued and other liabilities   (42,465)   53,388 
Net cash and cash equivalents used in operating activities   (5,088,820)   (4,093,910)
           
Cash Flows from Investing Activities          
Purchase of property and equipment   (14,267)   (67,266)
Investment in capitalized software   (574,123)   (607,236)
Net cash and cash equivalents used in investing activities   (588,390)   (674,502)
           
Cash Flows from Financing Activities – Issuance of common stock – net of issuance costs   3,869,550    12,796,230 
Net (Decrease) Increase in Cash and Cash Equivalents   (1,807,660)   8,027,818 
Cash and Cash Equivalents - Beginning of period   10,713,091    4,093,874 
Cash and Cash Equivalents - End of period  $8,905,431   $12,121,692 
Significant Noncash Transactions:          
Acquisition of capitalized software included in accounts payable and accrued liabilities  $70,924   $94,481 
Conversion of convertible notes payable, including accrued interest of $73,315, into 1,127,872 of common stock  $
-
   $2,255,745 
Issuance of common stock in exchange for consulting services  $22,698   $789,600 

 

See accompanying Notes to Condensed Financial Statements. 

 

-6-

 

 

Amesite Inc.

Notes to Condensed Financial Statements

 

March 31, 2022 and 2021

 

Note 1 - Nature of Business and Liquidity

 

Amesite Inc. (the “Company”) was incorporated in November 2017. The Company is an artificial intelligence driven platform and course designer, that provides customized, high performance and scalable online products for schools and businesses. The Company uses machine learning to provide a novel, mass customized experience to learners. The Company’s customers are businesses, universities and colleges, and K-12 schools. The Company’s activities are subject to significant risks and uncertainties. The Company’s operations are considered to be in one segment.

 

On September 18, 2020, we consummated a reorganizational merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated July 14, 2020 (“Effective Date”), whereby we merged with and into Amesite Inc. (“Amesite Parent”) our former parent corporation, with our Company resulting as the surviving entity. In connection with the same, we filed a Certificate of Ownership and Merger with the Secretary of State of the State of Delaware, and changed our name from “Amesite Operating Company” to “Amesite Inc.” The stockholders of Amesite Parent approved the Merger Agreement on August 4, 2020. The directors and officers of Amesite Parent became our directors and officers.

 

Pursuant to the Merger Agreement, on the Effective Date, each share of the Amesite parent’s common stock, $0.0001 par value per share, issued and outstanding immediately before the Effective Date, was converted, on a one-for-one basis, into shares of our common stock.

 

Additionally, each option or warrant to acquire shares of Amesite Parent outstanding immediately before the Effective Date was converted into and became an equivalent option to acquire shares of our common stock, upon the same terms and conditions.

 

Going Concern

 

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company is in the early stages of developing its customer base and has not completed its efforts to establish a stabilized source of revenue sufficient to cover its costs over an extended period of time.

 

The Company does not have sufficient cash on hand or available liquidity to maintain operations for at least twelve months from the date of issuance of the condensed financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

In response to the conditions, management plans include raising capital through equity financing, or by selling additional shares to Lincoln Park Capital per the Purchase Agreement (Note 5) or by completing other offerings of common stock. However, these plans are subject to market conditions, and are not within the Company’s control, and therefore, cannot be deemed probable. There is no assurance that the Company will be successful in implementing its business plan, generate sufficient cash from operations or sell stock on favorable terms or at all. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

 

The condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

 

-7-

 

 

Note 2 - Significant Accounting Policies

 

Basis of Presentation

 

The condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). The Company has a fiscal year with a June 30 year end.

 

In the opinion of management, the condensed financial statements of the Company as of March 31, 2022 and 2021 and for the three and nine months ended March 31, 2022 and 2021 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

 

Capitalized Software Costs

 

The Company capitalizes costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing internal use computer software. Planning costs incurred prior to the development of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $658,357 and $525,000 for the nine months ended March 31, 2022 and 2021, respectively. The Company recognized amortization expense of approximately $234,000 and $192,000 for the three months ended March 31, 2022 and 2021, respectively. Accumulated amortization on March 31, 2022 and 2021 was $1,996,137 and $1,129,186, respectively.

 

Revenue Recognition

 

We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities, and non-profit organizations to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings.

 

Performance Obligations and Timing of Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

 

We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.

 

Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.

 

-8-

 

 

We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance). For the three and nine months ended March 31, 2022 and 2021, all of the revenue recognized has been recognized over the related contract periods. Additionally, for the three and nine months ended March 31, 2022, five customers comprised approximately 86% of total revenue. During the three and nine months ended March 31, 2021, one customer comprised approximately 76% and 54% of total revenue, respectively.

 

We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).

 

The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:

 

The majority of our customers are private and public learning institutions across various domestic regions

 

The majority of our customers have annual payment terms

 

Accounts Receivable, Contract Assets and Liabilities

 

Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 or June 30, 2021.

 

We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.

 

Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.

 

Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.

 

-9-

 

 

The following table provides information on the changes in the balance of contract liabilities for the nine months ended March 31:

 

   2022   2021 
Opening balance  $333,200   $380,000 
Billings   425,445    582,930 
Less revenue recognized from continuing operations (net of cancellations):   (539,455)   (418,315)
Closing balance  $219,190   $544,615 

 

Revenue recognized during the nine months ended March 31, 2022 and 2021 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $539,455 and $417,415, respectively.

 

The deferred revenue balance as of March 31, 2022 is expected to be recognized over the next 12 months.

  

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. There were 3,208,024 and 2,910,125 potentially dilutive securities for the three and nine months ended March 31, 2022 and 2021, respectively.

 

Risks and Uncertainties

 

The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including the potential risk of business failure.

 

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.

 

-10-

 

 

Note 3 - Stock-Based Compensation

 

The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over two years from the grant date and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan).

 

The Company has reserved 4,600,000 shares of common stock to be available for granting under the Plan.

 

The Company estimates the fair value of each option award using a Black Scholes Model (“BSM”) that uses the weighted average assumptions included in the table below. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise within the valuation model or estimates the expected option exercise when historical data is unavailable. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur.

 

The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the nine months ended:

 

   March 31,
2022
   March 31,
2021
 
Expected term (years)   10.00    6.00 
Risk-free interest rate   1.75 - 2.2%   0.12%
Expected volatility   78% - 93%   45% - 46.3%
Dividend yield   0%   0%

 

A summary of option activity for the nine months ended March 31, 2022 is presented below:

 

Options  Number of
Shares
   Weighted Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
 
Outstanding at July 1, 2021   3,222,125   $1.96    8.34 
Granted   125,024    1.76    9.51 
Cancelled   (139,125)   3.09    8.91 
Outstanding and expected to vest at March 31, 2022   3,208,024    1.91    7.61 

 

The weighted-average grant-date fair value of options granted during the nine months ended March 31, 2022 as $1.76. The options contained time-based vesting conditions satisfied over four years from the grant date.

 

For the three months ended March 31, 2022 and 2021, the Company recognized $414,746 and $221,168, in expense related to the Plan, respectively. For the nine months ended March 31, 2022 and 2021, the Company recognized $1,226,357 and $650,656 in expense related to the Plan, respectively.  

 

-11-

 

 

On September 28, 2021, the Board approved certain stock awards to its board members in the form of stock options and restricted stock. The stock option awards are expected to vest ratably over twelve-month period from beginning September 28, 2021 through September 28, 2022. The restricted stock awards are expected to vest over a twelve-month period beginning July 1, 2021 through June 30, 2022. The total approved compensation was $172,702 in stock options and $600,000 in restricted stock. The number of options was determined based on the fair value of the Company’s share price as of the date of grant. The Company determined that there will be 337,078 of restricted shares issued upon vesting, based on the fair value of the Company’s share price on the grant date.

 

Accordingly, $43,176 and $87,310 related to the stock option grants made to the board members, was recognized as stock-based compensation expense for the three and nine months ended March 31, 2022. The Company also recognized $150,000 and $450,000 as stock-based compensation expense related to the restricted stock unit grants made to the board members for the three and nine months ended March 31, 2022, respectively. The cost related to the grants made to board members is expected to be recognized through September of 2022.

 

As of March 31, 2022, there was approximately $610,011 of total unrecognized compensation cost for employees and non-employees related to nonvested options. These costs are expected to be recognized through March 2026.

 

Note 4 - Income Taxes

 

For the three and nine months ended March 31, 2022 and prior periods since inception, the Company’s activities have not generated taxable income or tax liabilities. Accordingly, the Company has not recognized an income tax benefit on the Condensed Statements of Operations for the nine months ended March 31, 2022 and 2021.

 

The Company has approximately $20,881,000 of net operating loss carryforwards available to reduce future income taxes, of which approximately $17,000 of net operating loss carryforwards expire in 2037. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets.

 

Note 5 - Common Stock

 

On September 25, 2020, the Company completed an initial public offering (“Offering”) of 3,000,000 shares of its common stock, $0.0001 par value per share, at an offering price of $5.00 per share (total net proceeds of approximately $12.8 million after underwriting discounts, commissions, and other offering costs). In connection with the Offering, the Company agreed to issue five (5) year warrants to the underwriter to purchase five percent (5%) of the number of common shares sold in the Offering for an exercise price equal to $6.00. Total warrants of 150,000 were issued to the underwriter on September 29, 2020.

 

The Company measures the warrants using the BSM to estimate their fair value. The fair value of the warrants issued in connection with the Offering was approximately $249,000 based on the following inputs and assumptions using the BSM: (i) expected stock price volatility of 45.00%; (ii) risk free interest rate of .14%; and (iii) expected life of the warrants of 5 years. The warrants were fully vested on the date of grant and are included in offering costs in the Statement of Stockholders’ Equity.

 

In connection with the Offering, the Company converted its outstanding convertible notes payable into 1,127,872 shares of its common stock.

 

During fiscal year 2021, warrant holders exercised 834,544 warrants on a cashless basis and received 488,728 shares of common stock.

 

On August 2, 2021, the Company entered into a purchase agreement (the “Purchase Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, the Company may sell to Lincoln Park up to $16.5 million worth of common stock, par value $0.0001 per share, from time to time during the term of the Purchase Agreement, which ends August 2, 2023.

 

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In connection with the Purchase Agreement, the Company entered into an introducing broker agreement with Laidlaw & Company (UK) Ltd. (“Laidlaw”), pursuant to which the Company agreed to pay a cash fee to Laidlaw (the “Introductory Fee”) equal to (i) 8% of the amount of the Initial Purchase, (ii) 8% of the amount of a one-time share request up to $1,000,000 (“Tranche Purchase”), if any, and (iii) 4% of up to the next $13,500,000 (or up to $14,500,000 if the Tranche Purchase is not exercised).

  

Upon entering into the Purchase Agreement, the Company sold 759,109 shares of common stock to Lincoln Park as an initial purchase for a total purchase price of $1,500,000 (the “Initial Purchase”). The Company received net proceeds from the Initial Purchase of $1,360,000 after the payment of the Introductory Fee and offering costs. As consideration for Lincoln Park’s commitment to purchase up to $16.5 million of shares of common stock under the Purchase Agreement, the Company issued 152,715 shares of common stock to Lincoln Park. If Lincoln Park is requested to purchase additional shares during the term of the Purchase Agreement, the requested shares, (“Regular Purchase”), are limited based on the current share price of the Company’s common stock. If the average price is below $3.00 per share, the Company is limited to issuing 50,000 shares per request; if the share price is between $3.00 and $4.00 per share, the limit is 75,000 shares per request, if the share price is between $4.00 and $5.00, the limit is 100,000 shares per request, and if the share price is above $5.00, the limit is 150,000 shares per request. Requests for purchases are permitted daily as long as the Company’s stock price is above $0.50 per share. The price for such regular purchases will be the lower of: (i) the lowest closing price of the Company’s common stock on the purchase date for such Regular Purchase and (ii) the arithmetic average of the three (3) lowest closing prices of the Company’s common stock during the ten (10) consecutive business days immediately preceding. Additionally, the Company may instruct Lincoln Park to purchase additional shares of common stock that exceed the Regular Purchase limits (“Accelerated Purchase”). If the Company requests Lincoln Park to make an Accelerated Purchase, the price per share is discounted from average historical closing prices.

 

The Company evaluated the contract that includes the right to require Lincoln Park to purchase additional shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the put right and has concluded that it has no value as of March 31, 2022.

 

On February 11, 2022, the Company entered into an underwriting agreement with Laidlaw, as representative of the several underwriters, to issue and sell up to 3,437,500 shares of the Company’s common stock, at a public offering price of $0.80 per share. On February 14, 2022, the Company entered into an amended and restated underwriting agreement in order to increase the number of shares sold in the offering to 3,750,000. On February 16, 2022, the Company closed the offering, and sold 3,750,000 shares of common stock to Laidlaw for total gross proceeds of $3,000,000. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $2,509,550.

 

Note 6 - Convertible Notes Payable

 

In April and May 2020, the Company issued unsecured, convertible notes payable (the “Notes”) to certain accredited investors, with an aggregate principal amount of $2,182,500, in an offering intended to be exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.

 

The Notes were unsecured, bore interest at 8% per annum, and matured one year from their dates of issuance. The Notes were subject to automatic conversion into the Company’s common stock upon a qualified equity financing or change of control, based on a specified formula for the conversion price; using the lesser of $2.00 or 75% of the price paid per share in either of the conversion events.

 

The Company incurred issuance costs of $261,900. The issuance costs were amortized over six months, which was the estimated length of time that the Company believed the Notes would be outstanding until a conversion event occurred.

 

In connection with the Offering (Note 5), the Notes (totaling $2,255,815, including accrued interest) were converted into 1,127,872 shares of common stock at $2.00 per share. As the Offering price was $5.00 per share, the Company recognized an expense totaling $3,383,546 which represents the discount provided to the Note holders. This expense is recorded within interest expense in the condensed statement of operations. Additionally, upon completion of the Offering, the remaining unamortized debt issuance costs of $182,900 were fully amortized and included within interest expense.

 

Note 7 - Subsequent Events

 

The Company has evaluated subsequent events through the date of filing this Quarterly Report on Form 10-Q and determined that no material events occurred.

 

-13-

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes for the year ended June 30, 2021 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on September 10, 2021. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q, including those factors set forth in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” and in the section entitled “Risk Factors” in Part II, Item 1A.

 

Overview

 

We were incorporated in the State of Delaware on November 14, 2017. Amesite is an artificial intelligence driven platform and course designer that rapidly provides customized, high performance and scalable online learning community environmentTM systems for businesses and nonprofits, including museums and universities. We use machine learning to provide a novel, mass customized experience to learners. We enable organizations to deliver learning experiences for students or employees, and launch programs using their own materials, materials created by Amesite, or materials licensed from third parties. We provide whole-enterprise solutions and also provide solutions alongside other eLearning platforms currently in place with our customers. We are passionate about improving the learner experience and learner outcomes in online learning products, and improving our customers’ ability to create and deliver both. We are focused on creating the best possible technology solutions and have been awarded an innovation award for our product. We are committed to our team, and have been recognized with ten workplace excellence awards, including four national awards. We aim to partner with the best firms in the industry, and deliver our platform on Azure as a Microsoft Partner and Education Specialist. 

 

Our activities are subject to significant risks and uncertainties, including failure to secure additional funding to execute the current business plan.

 

The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the three and nine months ended March 31, 2022 and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on our unaudited condensed financial statements contained in this Quarterly Report on Form 10-Q, which we have prepared in accordance with United States generally accepted accounting principles, or GAAP. You should read the discussion and analysis together with such financial statements and the related notes thereto.

 

We are not currently profitable, and we cannot provide any assurance that we will ever be profitable. We incurred a net loss of $2,216,111 for the three months ended March 31, 2022, and we incurred a net loss of $27,133,600 for the period from November 14, 2017 (date of incorporation) to March 31, 2022.

 

Based upon our current forecast and our currently available cash balance, the Company does not expect to have sufficient cash on hand or available liquidity to maintain operations for at least twelve months from the date of issuance of the condensed financial statements.

 

This condition raises substantial doubt about the Company’s ability to continue as a going concern and the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

 

-14-

 

 

Basis of Presentation

 

The financial statements contained herein have been prepared in accordance with GAAP and the requirements of the SEC.

 

Critical Accounting Policies and Significant Judgments and Estimates

 

This management’s discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with U.S. GAAP, we base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies are more fully described in Note 2 in the “Notes to Condensed Financial Statements,” we believe the following accounting policies are critical to the process of making significant judgments and estimates in preparation of our financial statements.

 

Internally-Developed Capitalized Software

 

We capitalize certain costs related to internal-use software, primarily consisting of direct labor and third-party vendor costs associated with creating the software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Costs capitalized in the application development stage include costs related to the design and implementation of the selected software components, software build and configuration infrastructure, and software interfaces. Capitalization of costs requires judgment in determining when a project has reached the application development stage, the proportion of time spent in the application development stage, and the period over which we expect to benefit from the use of that software. Once the software is placed in service, these costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three years.

 

Revenue Recognition

 

We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities and K-12 schools to provide a comprehensive platform of tightly integrated technology and technology enabled services related to product offerings.

 

Performance Obligations and Timing of Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

 

We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two-year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.

 

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Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.

 

We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance).

 

We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).

 

The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:

 

  The majority of our customers are private and public learning institutions across various domestic regions

 

  The majority of our customers have annual payment terms

 

Accounts Receivable, Contract Assets and Liabilities

 

Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 and June 30, 2021.

 

We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.

 

Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.

 

Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.

 

Results of Operations

 

Revenue

 

We generated revenues of $209,518 for the three months ended March 31, 2022 as compared to $201,394 for the three months ended March 31, 2021. We generated revenues of $539,383 for the nine months ended March 31, 2022 as compared to $418,315 for the nine months ended March 31, 2021. Revenue growth compared to prior year for the nine months ended March 31, 2022 was primarily driven by growth in the sale of annual license fees and associated implementation and customization services.

 

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General and Administrative

 

General and administrative expenses consist primarily of personnel and personnel-related expenses, including executive management, legal, finance, human resources and other departments that do not provide direct operational services. General and administrative expense also includes professional fees and other corporate expense.

 

General and administrative expenses for the three months ended March 31, 2022 were $1,239,153 as compared to $1,049,128 for the three months ended March 31, 2021. General and administrative expenses for the nine months ended March 31, 2022 were $3,926,901 as compared to $3,523,259 for the nine months ended March 31, 2021. The increase between the three and nine month periods is primarily due to stock-based compensation related to stock awards and options issued to its employees and board members in the fiscal year 2022.

 

Technology and Content Development

 

Technology and content development expenses consist primarily of personnel and personnel-related expense and contracted services associated with the ongoing improvement and maintenance of our platform as well as hosting and licensing costs. Technology and content expense also include the amortization of capitalized software costs.

 

Technology and content development expenses for the three months ended March 31, 2022 were $899,951 as compared to $615,157 for the three months ended March 31, 2021. Technology and content development expenses for the nine months ended March 31, 2022 were $2,377,077 as compared to $1,593,934 for the nine months ended March 31, 2021. The increase between the three and nine month periods is primarily due to the recognition of a settlement obligation to a vendor for early termination of its agreement amounting to $335,756, increase in payments to contract services that support the development of our technology platforms and overall increase in payroll in fiscal year 2022. 

 

Sales and Marketing

 

Sales and marketing expense consist primarily of activities to attract customers to our offerings. This includes personnel and personnel-related expenses, various search engine and social media costs as well as the cost of advertising.

 

Sales and marketing expenses for the three months ended March 31, 2022 were $282,684 as compared to $860,562 for the three months ended March 31, 2021. Sales and marketing expenses for the nine months ended March 31, 2022 were $1,153,943 as compared to $1,385,202 for the nine months ended March 31, 2021. The decrease between the three month and nine month periods is primarily due to significantly increased expenditures in the fiscal year 2021 as the Company increased focus on digital presence to drive lead generation and pipeline growth in support of the sales and marketing division. In 2021, the Company focused on creation of value-added content, social posts and case studies which did not occur in 2022.

 

Interest Income

 

For the three months ended March 31, 2022, interest income totaled $1,207 as compared to interest income of $703 for the three months ended March 31, 2021. For the nine months ended March 31, 2022, interest income totaled $8,742 as compared to interest income of $1,323 for the nine months ended March 31, 2021.

 

Net Loss

 

Our net loss for the three months ended March 31, 2022 was $2,216,111 as compared to a net loss for the three months ended March 31, 2021 of $2,322,750. Our net loss for the nine months ended March 31, 2022 was $6,916,507 as compared to a net loss for the nine months ended March 31, 2021 of $9,696,588. The loss was substantially lower during the nine months ended March 31, 2022 compared to 2021 as a result of interest expense incurred in connection with our Offering in the prior fiscal year. Our net loss from operations increased as a result of changes noted above.   

 

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Financial Position, Liquidity, and Capital Resources

 

Overview

 

We are not currently profitable, and we cannot provide any assurance that we will ever be profitable, as indicated by our losses noted above.

 

During the period from November 14, 2017 (date of incorporation) to September 30, 2020, we raised net proceeds of approximately $11,760,000 from private placement financing transactions (stock and debt). On September 25, 2020, we completed the Offering of 3,000,000 shares of its common stock, $0.0001 par value per share, at an offering price of $5.00 per share (total net proceeds of approximately $12,800,000 after underwriting discounts, commissions, and other offering costs).

 

On August 2, 2021, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, we may sell up to $16.5 million of shares of common stock. Our net proceeds under the Purchase Agreement will depend on the frequency of sales and the number of shares sold to Lincoln Park and the prices at which we sell shares to Lincoln Park. On August 2, 2021, we sold 759,109 shares of our common stock to Lincoln Park in an initial purchase under the Purchase Agreement for a total purchase price of $1,500,000. We also issued 152,715 shares of our common stock to Lincoln Park as consideration for its irrevocable commitment to purchase our common stock under the Purchase Agreement.

 

On February 16, 2022, we closed on an offering of common stock and received approximately $2.51 million of cash proceeds, net of underwriting discounts, commissions, and other offering costs (Note 7 to the Condensed Financial Statements).

 

As of March 31, 2022, our cash balance totaled $8,905,431.

 

The Company is in the early stages of developing its customer base and has not completed its efforts to establish a stabilized source of revenue sufficient to cover its costs over an extended period of time. The Company does not have sufficient cash on hand or available liquidity to maintain operations for at least twelve months from the date of issuance of the condensed financial statements.

 

This condition raises substantial doubt about the Company’s ability to continue as a going concern and the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None. 

 

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

 

The Company is not required to provide the information required by this Item as it is a “smaller reporting company.”

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision, and with the participation of, our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based on that evaluation, our management concluded that our disclosure controls and procedures were effective.

 

Changes in Internal Controls Over Financial Reporting

 

During the period covered by this Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting (as defined in Rule 13(a)-15(f) or 15(d)-15(f)) that occurred during the period covered by this quarterly report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

-18-

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

None.

 

Item 1A. Risk Factors.

 

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our Annual Report on Form 10-K, the occurrence of any one of which could have a material adverse effect on our actual results. There have been no material changes in our risk factors from those previously disclosed in our Annual Report on Form 10-K, other than as described below:

 

There is substantial doubt about our ability to continue as a going concern.

 

Our financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP, applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are in the early stages of developing our customer base and have not completed our efforts to establish a stabilized source of revenue sufficient to cover our costs over an extended period of time. For the years ended June 30, 2021 and 2020, we had net losses of $11,586,292 and $4,170,303, respectively. For the three and nine months ended March 31, 2022, we had net losses of $2,216,111 and $6,916,507, respectively. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement our business plan. On February 16, 2022, we completed a public offering of our common stock which resulted in net proceeds to the Company of $2.51 million. In addition, on August 2, 2021, we entered into a purchase agreement (the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, we may sell up to $16.5 million of shares of common stock. We may raise capital by selling additional shares to Lincoln Park, however, the net proceeds under the Lincoln Park Purchase Agreement will depend on the frequency of sales and the number of shares sold to Lincoln Park and the prices at which we sell shares to Lincoln Park. Based upon our current operations with our currently available cash balance, management concluded that the current conditions raise substantial doubt about our ability to continue as a going concern, management concluded it has substantial doubt in its ability to continue as a going concern.

 

We received a written notice from Nasdaq that we have failed to comply with certain listing requirements of the Nasdaq Stock Market, which could result in our Common Stock being delisted from the Nasdaq Stock Market.

 

On March 8, 2022, we received a notification from Nasdaq related to our failure to maintain a minimum bid price of $1 per share. Based on the closing bid price of the Company’s common stock between January 24, 2022 and March 7, 2022, the Company no longer meets the minimum bid price requirement. However, the Nasdaq Listing Rules also provide us a compliance period of 180 calendar days in which to regain compliance. Accordingly, if at any time from the date of this notice until September 5, 2022, the closing bid price our common stock is at least $1 for a minimum of ten consecutive business days, Nasdaq will provide us with written confirmation of compliance and the matter will be closed. If we do not regain compliance with the minimum bid price requirement by September 5, 2022, we may be afforded a second 180 calendar day period to regain compliance. To qualify, we would be required to meet all other initial listing standards, except for the minimum bid price requirement. In addition, we would be required to notify Nasdaq of our intent to cure the deficiency during the second compliance period. If we do not regain compliance with the minimum bid price requirement by the end of the compliance period (or the second compliance period, if applicable), our common stock will become subject to delisting. If we are delisted from Nasdaq, our common stock may be eligible for trading on an over-the-counter market. If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their shares. We intend to monitor the closing bid price of our common stock and may be required to seek approval from our stockholders to affect a reverse stock split of the issued and outstanding shares of our common stock. However, there can be no assurance that the reverse stock split would be approved by our stockholders. Further, there can be no assurance that the market price per new share of our common stock after the reverse stock split will remain unchanged or increase in proportion to the reduction in the number of old shares of our common stock outstanding before the reverse stock split. Even if the reverse stock split is approved by our stockholders, there can be no assurance that we will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing rules.

 

If we are delisted from Nasdaq, but obtain a substitute listing for our common stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our common stock is delisted from Nasdaq, the value and liquidity of our common stock, warrants and pre-funded warrants would likely be significantly adversely affected. A delisting of our common stock from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

-19-

 

 

Item 6. Exhibits

 

Exhibit       Incorporated by Reference   Filed
Number   Exhibit Description   Form   File No.   Exhibit   Filing Date   Herewith
                         
3.1   Certificate of Incorporation of the Registrant   10-Q   001-39553   3.1   November 16, 2020    
                         
3.2   Bylaws of the Registrant   10-Q   001-39553   3.2   November 16, 2020    
                         
4.1   Form of Underwriter’s Warrant   8-K   001-39553   4.1   February 16, 2022    
                         
31.1*   Certification of Chief Executive Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                   X
                         
31.2*   Certification of Chief Financial Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                   X
                         
32.1*   Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                   X
                         
32.2*   Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                   X
                         
101.INS   Inline XBRL Instance Document                   X
                         
101.SCH   Inline XBRL Taxonomy Extension Schema Document                   X
                         
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document                   X
                         
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document                   X
                         
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document                   X
                         
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document                   X
                         
104   Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 is formatted in Inline XBRL                   X

 

*This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

-20-

 

 

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

 

  AMESITE INC.
     
 Date: May 13, 2022 By: /s/ Ann Marie Sastry, Ph.D.
    Ann Marie Sastry, Ph.D.
    Chief Executive Officer
    (Principal Executive Officer)

 

 Date: May 13, 2022 By: /s/ Mark Corrao
    Mark Corrao
    Chief Financial Officer
    (Principal Financial Officer)
    (Principal Accounting Officer)

 

 

-21-

 

 

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EX-31.1 2 f10q0322ex31-1_amesiteinc.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Ann Marie Sastry, Ph.D., certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Amesite Inc.;
   
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 13, 2022 By: /s/ Ann Marie Sastry, Ph.D.
    Ann Marie Sastry, Ph.D.
   

Chief Executive Officer

(Principal Executive Officer)

 

 

 

EX-31.2 3 f10q0322ex31-2_amesiteinc.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Mark Corrao, certify that:

 

(1) I have reviewed this Quarterly Report on Form 10-Q of Amesite Inc.;
   
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

May 13, 2022 By: /s/ Mark Corrao
    Mark Corrao
   

Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

EX-32.1 4 f10q0322ex32-1_amesiteinc.htm CERTIFICATION

Exhibit 32.1

 

CERTIFICATION PURSUANT

TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the accompanying Quarterly Report on Form 10-Q of Amesite Inc. for the period ended March 31, 2022 (the “Report”), the undersigned hereby certifies in her capacity as Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge and belief, 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 results of operations of Amesite Inc.

 

May 13, 2022 By: /s/ Ann Marie Sastry, Ph.D.
    Ann Marie Sastry, Ph.D.
    Chief Executive Officer
    (Principal Executive Officer)

 

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Amesite Inc. or the certifying officers.

 

 

 

 

EX-32.2 5 f10q0322ex32-2_amesiteinc.htm CERTIFICATION

Exhibit 32.2

 

CERTIFICATION PURSUANT

TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the accompanying Quarterly Report on Form 10-Q of Amesite Inc. for the period ended March 31, 2022 (the “Report”), the undersigned hereby certifies in his capacity as Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge and belief, 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 results of operations of Amesite Inc.

 

May 13, 2022 By: /s/ Mark Corrao
    Mark Corrao
    Chief Financial Officer
    (Principal Financial and Accounting Officer)

 

The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Amesite Inc. or the certifying officers.

 

 

 

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Document And Entity Information - shares
9 Months Ended
Mar. 31, 2022
May 13, 2022
Document Information Line Items    
Entity Registrant Name AMESITE INC.  
Trading Symbol AMST  
Document Type 10-Q  
Current Fiscal Year End Date --06-30  
Entity Common Stock, Shares Outstanding   25,743,484
Amendment Flag false  
Entity Central Index Key 0001807166  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Mar. 31, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company false  
Entity Ex Transition Period false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 001-39553  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 82-3431718  
Entity Address, Address Line One 607 Shelby Street  
Entity Address, Address Line Two Suite 700 PMB 214  
Entity Address, City or Town Detroit  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48226  
City Area Code (734)  
Local Phone Number 876-8130  
Title of 12(b) Security Common Stock, par value $0.0001  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
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Condensed Balance Sheets (Unaudited) - USD ($)
Mar. 31, 2022
Jun. 30, 2021
Current Assets    
Cash and cash equivalents $ 8,905,431 $ 10,713,091
Accounts receivable 10,795 51,120
Prepaid expenses and other current assets 564,684 299,389
Total current assets 9,480,910 11,063,600
Noncurrent assets    
Property and Equipment - net 91,146 100,590
Capitalized software - net 1,203,945 1,312,643
Total noncurrent assets 1,295,091 1,413,233
Total assets 10,776,001 12,476,833
Current Liabilities    
Accounts payable 412,911 139,754
Accrued and other current liabilities:    
Accrued compensation 180,296 199,908
Deferred revenue 219,190 333,200
Other accrued liabilities 26,416 68,881
Total current liabilities 838,813 741,743
Stockholders’ Equity    
Common stock, $.0001 par value; 100,000,000 shares authorized; 25,739,679 and 21,063,954 shares issued and outstanding and March 31, 2022 and June 30, 2021, respectively 2,533 2,066
Preferred stock, $.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding at December 31, 2021 or June 30, 2021
Additional paid-in capital 37,068,255 31,950,117
Accumulated deficit (27,133,600) (20,217,093)
Total stockholders’ equity 9,937,188 11,735,090
Total liabilities and stockholders’ equity $ 10,776,001 $ 12,476,833
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Condensed Balance Sheets (Unaudited) (Parentheticals) - $ / shares
Mar. 31, 2022
Jun. 30, 2021
Statement of Financial Position [Abstract]    
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 25,739,679 21,063,954
Common stock, shares outstanding 25,739,679 21,063,954
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
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Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Mar. 31, 2022
Mar. 31, 2021
Income Statement [Abstract]        
Net Revenue $ 209,518 $ 201,394 $ 539,383 $ 418,315
Operating Expenses        
General and administrative expenses 1,239,153 1,049,128 3,926,901 3,523,259
Technology and content development 899,951 615,157 2,377,077 1,593,934
Sales and marketing 282,684 860,562 1,153,943 1,385,202
Total operating expenses 2,421,787 2,524,847 7,457,921 6,502,395
Other Income (Expense)        
Interest Income 1,207 703 8,742 1,323
Interest Expense (5,049) (6,711) (3,613,831)
Total other income (expense) (3,842) 703 2,031 (3,612,508)
Net Loss $ (2,216,111) $ (2,322,750) $ (6,916,507) $ (9,696,588)
Earnings per Share        
Basic loss per share (in Dollars per share) $ (0.09) $ (0.11) $ (0.32) $ (0.51)
Weighted average shares outstanding (in Shares) 23,802,866 20,538,461 21,824,688 19,150,778
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.22.1
Condensed Statements of Stockholders’ Equity (Unaudited) - USD ($)
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Total
Balance at Jun. 30, 2020 $ 1,583 $ 11,629,114 $ (8,630,801) $ 2,999,896
Balance (in Shares) at Jun. 30, 2020 16,231,820      
Net loss (5,086,264) (5,086,264)
Issuance of common stock - net $ 300 12,795,930 12,796,230
Issuance of common stock - net (in Shares) 3,000,000      
Stock-based compensation expense 212,413 212,413
Conversion of notes payable $ 113 5,639,248 5,639,361
Conversion of notes payable (in Shares) 1,127,872      
Balance at Sep. 30, 2020 $ 1,996 30,276,705 (13,717,065) 16,561,636
Balance (in Shares) at Sep. 30, 2020 20,359,692      
Net loss (2,287,574) (2,287,574)
Issuance of common stock for consulting services $ 18 789,582 789,600
Issuance of common stock for consulting services (in Shares) 176,092      
Stock-based compensation expense 217,075 217,075
Balance at Dec. 31, 2020 $ 2,014 31,283,362 (16,004,639) 15,280,737
Balance (in Shares) at Dec. 31, 2020 20,535,784      
Net loss (2,322,750) (2,322,750)
Cashless exercise of warrants $ 3 (3)
Cashless exercise of warrants (in Shares) 29,782      
Stock-based compensation expense 221,168 221,168
Balance at Mar. 31, 2021 $ 2,017 31,504,527 (18,327,389) 13,179,155
Balance (in Shares) at Mar. 31, 2021 20,565,566      
Balance at Jun. 30, 2021 $ 2,066 31,950,117 (20,217,093) 11,735,090
Balance (in Shares) at Jun. 30, 2021 21,063,954      
Net loss (2,378,157) (2,378,157)
Issuance of common stock - net $ 91 1,359,909 1,360,000
Issuance of common stock - net (in Shares) 911,824      
Stock-based compensation expense 389,085 389,085
Balance at Sep. 30, 2021 $ 2,157 33,699,111 (22,595,250) 11,106,018
Balance (in Shares) at Sep. 30, 2021 21,975,778      
Net loss (2,322,239) (2,322,239)
Issuance of common stock for consulting services $ 1 22,697 22,698
Issuance of common stock for consulting services (in Shares) 13,901      
Stock-based compensation expense 422,526 422,526
Balance at Dec. 31, 2021 $ 2,158 34,144,334 (24,917,489) 9,229,003
Balance (in Shares) at Dec. 31, 2021 21,989,679      
Net loss   (2,216,111) (2,216,111)
Issuance of common stock - net $ 375 2,509,175 2,509,550
Issuance of common stock - net (in Shares) 3,750,000      
Stock-based compensation expense 414,746 414,746
Balance at Mar. 31, 2022 $ 2,533 $ 37,068,255 $ (27,133,600) $ 9,937,188
Balance (in Shares) at Mar. 31, 2022 25,739,679      
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Condensed Statements of Stockholders’ Equity (Unaudited) (Parentheticals) - USD ($)
3 Months Ended
Mar. 31, 2022
Sep. 30, 2021
Statement of Stockholders' Equity [Abstract]    
Net of offering costs $ 250,450 $ 140,000
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.22.1
Condensed Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash Flows from Operating Activities    
Net loss $ (6,916,507) $ (9,696,588)
Adjustments to reconcile net loss to net cash and cash equivalents from operating activities:    
Depreciation and amortization 682,068 537,112
Stock compensation expense 1,226,357 650,656
Amortization of debt costs 182,900
Interest expense on notes payable converted to common stock 3,430,931
Value of common stock issued in exchange for consulting services 22,698 789,600
Changes in operating assets and liabilities which used cash:    
Accounts receivable 40,325 54,220
Prepaid expenses and other assets (265,295) (398,412)
Accounts payable 297,621 103,797
Accrued compensation (19,612) 33,871
Deferred revenue (114,010) 164,615
Accrued and other liabilities (42,465) 53,388
Net cash and cash equivalents used in operating activities (5,088,820) (4,093,910)
Cash Flows from Investing Activities    
Purchase of property and equipment (14,267) (67,266)
Investment in capitalized software (574,123) (607,236)
Net cash and cash equivalents used in investing activities (588,390) (674,502)
Cash Flows from Financing Activities – Issuance of common stock – net of issuance costs 3,869,550 12,796,230
Net (Decrease) Increase in Cash and Cash Equivalents (1,807,660) 8,027,818
Cash and Cash Equivalents - Beginning of period 10,713,091 4,093,874
Cash and Cash Equivalents - End of period 8,905,431 12,121,692
Significant Noncash Transactions:    
Acquisition of capitalized software included in accounts payable and accrued liabilities 70,924 94,481
Conversion of convertible notes payable, including accrued interest of $73,315, into 1,127,872 of common stock 2,255,745
Issuance of common stock in exchange for consulting services $ 22,698 $ 789,600
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Condensed Statements of Cash Flows (Unaudited) (Parentheticals)
9 Months Ended
Mar. 31, 2022
USD ($)
shares
Statement of Cash Flows [Abstract]  
Accrued interest | $ $ 73,315
Shares of common stock | shares 1,127,872
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Nature of Business and Liquidity
9 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Nature of Business and Liquidity

Note 1 - Nature of Business and Liquidity

 

Amesite Inc. (the “Company”) was incorporated in November 2017. The Company is an artificial intelligence driven platform and course designer, that provides customized, high performance and scalable online products for schools and businesses. The Company uses machine learning to provide a novel, mass customized experience to learners. The Company’s customers are businesses, universities and colleges, and K-12 schools. The Company’s activities are subject to significant risks and uncertainties. The Company’s operations are considered to be in one segment.

 

On September 18, 2020, we consummated a reorganizational merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated July 14, 2020 (“Effective Date”), whereby we merged with and into Amesite Inc. (“Amesite Parent”) our former parent corporation, with our Company resulting as the surviving entity. In connection with the same, we filed a Certificate of Ownership and Merger with the Secretary of State of the State of Delaware, and changed our name from “Amesite Operating Company” to “Amesite Inc.” The stockholders of Amesite Parent approved the Merger Agreement on August 4, 2020. The directors and officers of Amesite Parent became our directors and officers.

 

Pursuant to the Merger Agreement, on the Effective Date, each share of the Amesite parent’s common stock, $0.0001 par value per share, issued and outstanding immediately before the Effective Date, was converted, on a one-for-one basis, into shares of our common stock.

 

Additionally, each option or warrant to acquire shares of Amesite Parent outstanding immediately before the Effective Date was converted into and became an equivalent option to acquire shares of our common stock, upon the same terms and conditions.

 

Going Concern

 

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company is in the early stages of developing its customer base and has not completed its efforts to establish a stabilized source of revenue sufficient to cover its costs over an extended period of time.

 

The Company does not have sufficient cash on hand or available liquidity to maintain operations for at least twelve months from the date of issuance of the condensed financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

In response to the conditions, management plans include raising capital through equity financing, or by selling additional shares to Lincoln Park Capital per the Purchase Agreement (Note 5) or by completing other offerings of common stock. However, these plans are subject to market conditions, and are not within the Company’s control, and therefore, cannot be deemed probable. There is no assurance that the Company will be successful in implementing its business plan, generate sufficient cash from operations or sell stock on favorable terms or at all. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

 

The condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.22.1
Significant Accounting Policies
9 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Significant Accounting Policies

Note 2 - Significant Accounting Policies

 

Basis of Presentation

 

The condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). The Company has a fiscal year with a June 30 year end.

 

In the opinion of management, the condensed financial statements of the Company as of March 31, 2022 and 2021 and for the three and nine months ended March 31, 2022 and 2021 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

 

Capitalized Software Costs

 

The Company capitalizes costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing internal use computer software. Planning costs incurred prior to the development of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $658,357 and $525,000 for the nine months ended March 31, 2022 and 2021, respectively. The Company recognized amortization expense of approximately $234,000 and $192,000 for the three months ended March 31, 2022 and 2021, respectively. Accumulated amortization on March 31, 2022 and 2021 was $1,996,137 and $1,129,186, respectively.

 

Revenue Recognition

 

We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities, and non-profit organizations to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings.

 

Performance Obligations and Timing of Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

 

We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.

 

Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.

 

We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance). For the three and nine months ended March 31, 2022 and 2021, all of the revenue recognized has been recognized over the related contract periods. Additionally, for the three and nine months ended March 31, 2022, five customers comprised approximately 86% of total revenue. During the three and nine months ended March 31, 2021, one customer comprised approximately 76% and 54% of total revenue, respectively.

 

We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).

 

The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:

 

The majority of our customers are private and public learning institutions across various domestic regions

 

The majority of our customers have annual payment terms

 

Accounts Receivable, Contract Assets and Liabilities

 

Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 or June 30, 2021.

 

We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.

 

Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.

 

Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.

 

The following table provides information on the changes in the balance of contract liabilities for the nine months ended March 31:

 

   2022   2021 
Opening balance  $333,200   $380,000 
Billings   425,445    582,930 
Less revenue recognized from continuing operations (net of cancellations):   (539,455)   (418,315)
Closing balance  $219,190   $544,615 

 

Revenue recognized during the nine months ended March 31, 2022 and 2021 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $539,455 and $417,415, respectively.

 

The deferred revenue balance as of March 31, 2022 is expected to be recognized over the next 12 months.

  

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. There were 3,208,024 and 2,910,125 potentially dilutive securities for the three and nine months ended March 31, 2022 and 2021, respectively.

 

Risks and Uncertainties

 

The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including the potential risk of business failure.

 

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.22.1
Stock-Based Compensation
9 Months Ended
Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

Note 3 - Stock-Based Compensation

 

The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over two years from the grant date and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan).

 

The Company has reserved 4,600,000 shares of common stock to be available for granting under the Plan.

 

The Company estimates the fair value of each option award using a Black Scholes Model (“BSM”) that uses the weighted average assumptions included in the table below. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise within the valuation model or estimates the expected option exercise when historical data is unavailable. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur.

 

The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the nine months ended:

 

   March 31,
2022
   March 31,
2021
 
Expected term (years)   10.00    6.00 
Risk-free interest rate   1.75 - 2.2%   0.12%
Expected volatility   78% - 93%   45% - 46.3%
Dividend yield   0%   0%

 

A summary of option activity for the nine months ended March 31, 2022 is presented below:

 

Options  Number of
Shares
   Weighted Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
 
Outstanding at July 1, 2021   3,222,125   $1.96    8.34 
Granted   125,024    1.76    9.51 
Cancelled   (139,125)   3.09    8.91 
Outstanding and expected to vest at March 31, 2022   3,208,024    1.91    7.61 

 

The weighted-average grant-date fair value of options granted during the nine months ended March 31, 2022 as $1.76. The options contained time-based vesting conditions satisfied over four years from the grant date.

 

For the three months ended March 31, 2022 and 2021, the Company recognized $414,746 and $221,168, in expense related to the Plan, respectively. For the nine months ended March 31, 2022 and 2021, the Company recognized $1,226,357 and $650,656 in expense related to the Plan, respectively.  

 

On September 28, 2021, the Board approved certain stock awards to its board members in the form of stock options and restricted stock. The stock option awards are expected to vest ratably over twelve-month period from beginning September 28, 2021 through September 28, 2022. The restricted stock awards are expected to vest over a twelve-month period beginning July 1, 2021 through June 30, 2022. The total approved compensation was $172,702 in stock options and $600,000 in restricted stock. The number of options was determined based on the fair value of the Company’s share price as of the date of grant. The Company determined that there will be 337,078 of restricted shares issued upon vesting, based on the fair value of the Company’s share price on the grant date.

 

Accordingly, $43,176 and $87,310 related to the stock option grants made to the board members, was recognized as stock-based compensation expense for the three and nine months ended March 31, 2022. The Company also recognized $150,000 and $450,000 as stock-based compensation expense related to the restricted stock unit grants made to the board members for the three and nine months ended March 31, 2022, respectively. The cost related to the grants made to board members is expected to be recognized through September of 2022.

 

As of March 31, 2022, there was approximately $610,011 of total unrecognized compensation cost for employees and non-employees related to nonvested options. These costs are expected to be recognized through March 2026.

XML 23 R12.htm IDEA: XBRL DOCUMENT v3.22.1
Income Taxes
9 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes

Note 4 - Income Taxes

 

For the three and nine months ended March 31, 2022 and prior periods since inception, the Company’s activities have not generated taxable income or tax liabilities. Accordingly, the Company has not recognized an income tax benefit on the Condensed Statements of Operations for the nine months ended March 31, 2022 and 2021.

 

The Company has approximately $20,881,000 of net operating loss carryforwards available to reduce future income taxes, of which approximately $17,000 of net operating loss carryforwards expire in 2037. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets.

XML 24 R13.htm IDEA: XBRL DOCUMENT v3.22.1
Common Stock
9 Months Ended
Mar. 31, 2022
Common Stock [Abstract]  
Common Stock

Note 5 - Common Stock

 

On September 25, 2020, the Company completed an initial public offering (“Offering”) of 3,000,000 shares of its common stock, $0.0001 par value per share, at an offering price of $5.00 per share (total net proceeds of approximately $12.8 million after underwriting discounts, commissions, and other offering costs). In connection with the Offering, the Company agreed to issue five (5) year warrants to the underwriter to purchase five percent (5%) of the number of common shares sold in the Offering for an exercise price equal to $6.00. Total warrants of 150,000 were issued to the underwriter on September 29, 2020.

 

The Company measures the warrants using the BSM to estimate their fair value. The fair value of the warrants issued in connection with the Offering was approximately $249,000 based on the following inputs and assumptions using the BSM: (i) expected stock price volatility of 45.00%; (ii) risk free interest rate of .14%; and (iii) expected life of the warrants of 5 years. The warrants were fully vested on the date of grant and are included in offering costs in the Statement of Stockholders’ Equity.

 

In connection with the Offering, the Company converted its outstanding convertible notes payable into 1,127,872 shares of its common stock.

 

During fiscal year 2021, warrant holders exercised 834,544 warrants on a cashless basis and received 488,728 shares of common stock.

 

On August 2, 2021, the Company entered into a purchase agreement (the “Purchase Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, the Company may sell to Lincoln Park up to $16.5 million worth of common stock, par value $0.0001 per share, from time to time during the term of the Purchase Agreement, which ends August 2, 2023.

 

In connection with the Purchase Agreement, the Company entered into an introducing broker agreement with Laidlaw & Company (UK) Ltd. (“Laidlaw”), pursuant to which the Company agreed to pay a cash fee to Laidlaw (the “Introductory Fee”) equal to (i) 8% of the amount of the Initial Purchase, (ii) 8% of the amount of a one-time share request up to $1,000,000 (“Tranche Purchase”), if any, and (iii) 4% of up to the next $13,500,000 (or up to $14,500,000 if the Tranche Purchase is not exercised).

  

Upon entering into the Purchase Agreement, the Company sold 759,109 shares of common stock to Lincoln Park as an initial purchase for a total purchase price of $1,500,000 (the “Initial Purchase”). The Company received net proceeds from the Initial Purchase of $1,360,000 after the payment of the Introductory Fee and offering costs. As consideration for Lincoln Park’s commitment to purchase up to $16.5 million of shares of common stock under the Purchase Agreement, the Company issued 152,715 shares of common stock to Lincoln Park. If Lincoln Park is requested to purchase additional shares during the term of the Purchase Agreement, the requested shares, (“Regular Purchase”), are limited based on the current share price of the Company’s common stock. If the average price is below $3.00 per share, the Company is limited to issuing 50,000 shares per request; if the share price is between $3.00 and $4.00 per share, the limit is 75,000 shares per request, if the share price is between $4.00 and $5.00, the limit is 100,000 shares per request, and if the share price is above $5.00, the limit is 150,000 shares per request. Requests for purchases are permitted daily as long as the Company’s stock price is above $0.50 per share. The price for such regular purchases will be the lower of: (i) the lowest closing price of the Company’s common stock on the purchase date for such Regular Purchase and (ii) the arithmetic average of the three (3) lowest closing prices of the Company’s common stock during the ten (10) consecutive business days immediately preceding. Additionally, the Company may instruct Lincoln Park to purchase additional shares of common stock that exceed the Regular Purchase limits (“Accelerated Purchase”). If the Company requests Lincoln Park to make an Accelerated Purchase, the price per share is discounted from average historical closing prices.

 

The Company evaluated the contract that includes the right to require Lincoln Park to purchase additional shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the put right and has concluded that it has no value as of March 31, 2022.

 

On February 11, 2022, the Company entered into an underwriting agreement with Laidlaw, as representative of the several underwriters, to issue and sell up to 3,437,500 shares of the Company’s common stock, at a public offering price of $0.80 per share. On February 14, 2022, the Company entered into an amended and restated underwriting agreement in order to increase the number of shares sold in the offering to 3,750,000. On February 16, 2022, the Company closed the offering, and sold 3,750,000 shares of common stock to Laidlaw for total gross proceeds of $3,000,000. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $2,509,550.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.22.1
Convertible Notes Payable
9 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Convertible Notes Payable

Note 6 - Convertible Notes Payable

 

In April and May 2020, the Company issued unsecured, convertible notes payable (the “Notes”) to certain accredited investors, with an aggregate principal amount of $2,182,500, in an offering intended to be exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.

 

The Notes were unsecured, bore interest at 8% per annum, and matured one year from their dates of issuance. The Notes were subject to automatic conversion into the Company’s common stock upon a qualified equity financing or change of control, based on a specified formula for the conversion price; using the lesser of $2.00 or 75% of the price paid per share in either of the conversion events.

 

The Company incurred issuance costs of $261,900. The issuance costs were amortized over six months, which was the estimated length of time that the Company believed the Notes would be outstanding until a conversion event occurred.

 

In connection with the Offering (Note 5), the Notes (totaling $2,255,815, including accrued interest) were converted into 1,127,872 shares of common stock at $2.00 per share. As the Offering price was $5.00 per share, the Company recognized an expense totaling $3,383,546 which represents the discount provided to the Note holders. This expense is recorded within interest expense in the condensed statement of operations. Additionally, upon completion of the Offering, the remaining unamortized debt issuance costs of $182,900 were fully amortized and included within interest expense.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.22.1
Subsequent Events
9 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]  
Subsequent Events

Note 7 - Subsequent Events

 

The Company has evaluated subsequent events through the date of filing this Quarterly Report on Form 10-Q and determined that no material events occurred.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.22.1
Accounting Policies, by Policy (Policies)
9 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

 

The condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). The Company has a fiscal year with a June 30 year end.

 

In the opinion of management, the condensed financial statements of the Company as of March 31, 2022 and 2021 and for the three and nine months ended March 31, 2022 and 2021 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

 

Capitalized Software Costs

Capitalized Software Costs

 

The Company capitalizes costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing internal use computer software. Planning costs incurred prior to the development of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $658,357 and $525,000 for the nine months ended March 31, 2022 and 2021, respectively. The Company recognized amortization expense of approximately $234,000 and $192,000 for the three months ended March 31, 2022 and 2021, respectively. Accumulated amortization on March 31, 2022 and 2021 was $1,996,137 and $1,129,186, respectively.

 

Revenue Recognition

Revenue Recognition

 

We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities, and non-profit organizations to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings.

 

Performance Obligations and Timing of Recognition

 

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.

 

We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.

 

Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.

 

We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance). For the three and nine months ended March 31, 2022 and 2021, all of the revenue recognized has been recognized over the related contract periods. Additionally, for the three and nine months ended March 31, 2022, five customers comprised approximately 86% of total revenue. During the three and nine months ended March 31, 2021, one customer comprised approximately 76% and 54% of total revenue, respectively.

 

We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).

 

The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:

 

The majority of our customers are private and public learning institutions across various domestic regions

 

The majority of our customers have annual payment terms

 

Accounts Receivable, Contract Assets and Liabilities

 

Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 or June 30, 2021.

 

We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.

 

Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.

 

Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.

 

The following table provides information on the changes in the balance of contract liabilities for the nine months ended March 31:

 

   2022   2021 
Opening balance  $333,200   $380,000 
Billings   425,445    582,930 
Less revenue recognized from continuing operations (net of cancellations):   (539,455)   (418,315)
Closing balance  $219,190   $544,615 

 

Revenue recognized during the nine months ended March 31, 2022 and 2021 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $539,455 and $417,415, respectively.

 

The deferred revenue balance as of March 31, 2022 is expected to be recognized over the next 12 months.

  

Net Loss per Share

Net Loss per Share

 

Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. There were 3,208,024 and 2,910,125 potentially dilutive securities for the three and nine months ended March 31, 2022 and 2021, respectively.

 

Risks and Uncertainties

Risks and Uncertainties

 

The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including the potential risk of business failure.

 

On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.22.1
Significant Accounting Policies (Tables)
9 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Schedule of contract liabilities
   2022   2021 
Opening balance  $333,200   $380,000 
Billings   425,445    582,930 
Less revenue recognized from continuing operations (net of cancellations):   (539,455)   (418,315)
Closing balance  $219,190   $544,615 

 

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.22.1
Stock-Based Compensation (Tables)
9 Months Ended
Mar. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Schedule of fair value of the stock options granted
   March 31,
2022
   March 31,
2021
 
Expected term (years)   10.00    6.00 
Risk-free interest rate   1.75 - 2.2%   0.12%
Expected volatility   78% - 93%   45% - 46.3%
Dividend yield   0%   0%

 

Schedule of option activity
Options  Number of
Shares
   Weighted Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
 
Outstanding at July 1, 2021   3,222,125   $1.96    8.34 
Granted   125,024    1.76    9.51 
Cancelled   (139,125)   3.09    8.91 
Outstanding and expected to vest at March 31, 2022   3,208,024    1.91    7.61 

 

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.22.1
Nature of Business and Liquidity (Details)
Mar. 31, 2022
$ / shares
Merger Agreement [Member]  
Nature of Business and Liquidity (Details) [Line Items]  
Common stock, par value $ 0.0001
XML 31 R20.htm IDEA: XBRL DOCUMENT v3.22.1
Significant Accounting Policies (Details) - USD ($)
3 Months Ended 9 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Mar. 31, 2022
Mar. 31, 2021
Significant Accounting Policies (Details) [Line Items]        
Amortization expense $ 234,000 $ 192,000 $ 658,357 $ 525,000
Accumulated amortization     1,996,137 1,129,186
Deferred revenue     $ 539,455 $ 417,415
Potentially dilutive securities 3,208,024 2,910,125 3,208,024 2,910,125
Five Customer [Member] | Total Revenue [Member]        
Significant Accounting Policies (Details) [Line Items]        
Concentration risk, percentage 86.00%   86.00%  
One Customer [Member] | Total Revenue [Member]        
Significant Accounting Policies (Details) [Line Items]        
Concentration risk, percentage   76.00%   54.00%
XML 32 R21.htm IDEA: XBRL DOCUMENT v3.22.1
Significant Accounting Policies (Details) - Schedule of contract liabilities - USD ($)
9 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Schedule of contract liabilities [Abstract]    
Opening balance $ 333,200 $ 380,000
Billings 425,445 582,930
Less revenue recognized from continuing operations (net of cancellations): (539,455) (418,315)
Closing balance $ 219,190 $ 544,615
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.22.1
Stock-Based Compensation (Details) - USD ($)
1 Months Ended 3 Months Ended 9 Months Ended
Sep. 28, 2021
Mar. 31, 2022
Mar. 31, 2021
Mar. 31, 2022
Mar. 31, 2021
Share-Based Payment Arrangement [Abstract]          
Common stock granted (in Shares)   4,600,000   4,600,000  
Weighted-average grant-date fair value of options granted (in Dollars per share)       $ 1.76  
Recognized expense related to plan   $ 414,746 $ 221,168 $ 1,226,357 $ 650,656
Stock options compensation $ 172,702        
Restricted stock compensation $ 600,000        
Number of restricted shares (in Shares) 337,078        
Stock option grant   43,176   87,310  
Stock based compensation expense   $ 150,000   450,000  
Total unrecognized compensation cost for employees       $ 610,011  
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.22.1
Stock-Based Compensation (Details) - Schedule of fair value of the stock options granted
9 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Stock-Based Compensation (Details) - Schedule of fair value of the stock options granted [Line Items]    
Expected term (years) 10 years 6 years
Risk-free interest rate   0.12%
Dividend yield 0.00% 0.00%
Minimum [Member]    
Stock-Based Compensation (Details) - Schedule of fair value of the stock options granted [Line Items]    
Risk-free interest rate 1.75%  
Expected volatility 78.00% 45.00%
Maximum [Member]    
Stock-Based Compensation (Details) - Schedule of fair value of the stock options granted [Line Items]    
Risk-free interest rate 2.20%  
Expected volatility 93.00% 46.30%
XML 35 R24.htm IDEA: XBRL DOCUMENT v3.22.1
Stock-Based Compensation (Details) - Schedule of option activity
9 Months Ended
Mar. 31, 2022
$ / shares
shares
Schedule of option activity [Abstract]  
Number of Shares, Outstanding beginning balance | shares 3,222,125
Weighted Average Exercise Price, Outstanding beginning balance | $ / shares $ 1.96
Weighted Average Remaining Contractual Term (in years), Outstanding beginning balance 8 years 4 months 2 days
Number of Shares, Granted | shares 125,024
Weighted Average Exercise Price, Granted | $ / shares $ 1.76
Weighted Average Remaining Contractual Term (in years), Granted 9 years 6 months 3 days
Number of Shares, Cancelled | shares (139,125)
Weighted Average Exercise Price, Cancelled | $ / shares $ 3.09
Weighted Average Remaining Contractual Term (in years), Cancelled 8 years 10 months 28 days
Number of Shares, Outstanding ending balance | shares 3,208,024
Weighted Average Exercise Price, Outstanding ending balance | $ / shares $ 1.91
Weighted Average Remaining Contractual Term (in years), Outstanding ending balance 7 years 7 months 9 days
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Income Taxes (Details)
9 Months Ended
Mar. 31, 2022
USD ($)
Income Tax Disclosure [Abstract]  
Net operating loss carryforwards $ 20,881,000
Operating loss carryforwards $ 17,000
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.22.1
Common Stock (Details) - USD ($)
1 Months Ended 6 Months Ended 9 Months Ended
Aug. 02, 2021
Feb. 16, 2022
Feb. 14, 2022
Sep. 25, 2020
Dec. 31, 2021
Mar. 31, 2022
Feb. 11, 2022
Common Stock (Details) [Line Items]              
Common stock, par value (in Dollars per share)       $ 0.0001      
Offering per share price (in Dollars per share)       $ 5      
Total net proceeds (in Dollars)       $ 12,800,000      
Private placement offering, description       the Company agreed to issue five (5) year warrants to the underwriter to purchase five percent (5%) of the number of common shares sold in the Offering for an exercise price equal to $6.00. Total warrants of 150,000 were issued to the underwriter on September 29, 2020.      
Description of fair value of the warrants           The fair value of the warrants issued in connection with the Offering was approximately $249,000 based on the following inputs and assumptions using the BSM: (i) expected stock price volatility of 45.00%; (ii) risk free interest rate of .14%; and (iii) expected life of the warrants of 5 years. The warrants were fully vested on the date of grant and are included in offering costs in the Statement of Stockholders’ Equity  
Convertible shares           1,127,872  
Shares of common stock           759,109  
Purchase price (in Dollars)           $ 1,500,000  
Received net proceeds from initial purchase (in Dollars)           $ 1,360,000  
Average price, description           If the average price is below $3.00 per share, the Company is limited to issuing 50,000 shares per request; if the share price is between $3.00 and $4.00 per share, the limit is 75,000 shares per request, if the share price is between $4.00 and $5.00, the limit is 100,000 shares per request, and if the share price is above $5.00, the limit is 150,000 shares per request. Requests for purchases are permitted daily as long as the Company’s stock price is above $0.50 per share.  
Shares of common stock             3,437,500
Public offering price per share (in Dollars per share)             $ 0.8
Underwriting agreement shares     3,750,000        
Offering shares   3,750,000          
Gross proceeds (in Dollars)   $ 3,000,000          
Net proceeds (in Dollars)   $ 2,509,550          
Warrant [Member]              
Common Stock (Details) [Line Items]              
Exercised warrants         834,544    
Shares of common stock         488,728    
Initial Public Offering [Member]              
Common Stock (Details) [Line Items]              
Shares of common stock       3,000,000      
Lincoln Park Capital Fund [Member]              
Common Stock (Details) [Line Items]              
Shares of common stock           152,715  
Common stock, par value (in Dollars per share) $ 0.0001            
Shares of common stock (in Dollars) $ 16,500,000         $ 16,500,000  
Purchase agreement description           (“Laidlaw”), pursuant to which the Company agreed to pay a cash fee to Laidlaw (the “Introductory Fee”) equal to (i) 8% of the amount of the Initial Purchase, (ii) 8% of the amount of a one-time share request up to $1,000,000 (“Tranche Purchase”), if any, and (iii) 4% of up to the next $13,500,000 (or up to $14,500,000 if the Tranche Purchase is not exercised).  
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.22.1
Convertible Notes Payable (Details) - USD ($)
9 Months Ended
Mar. 31, 2022
May 31, 2020
Apr. 30, 2020
Debt Disclosure [Abstract]      
Aggregate principal amount   $ 2,182,500 $ 2,182,500
Unsecured bear interest 8.00%    
Convertible debt price, per share (in Dollars per share) $ 2    
Convertible debt, percentage 75.00%    
Incurred issuance costs $ 261,900    
Accrued interest $ 2,255,815    
Shares of common stock converted (in Shares) 1,127,872    
Common stock per share (in Dollars per share) $ 2    
Offering price per share (in Dollars per share) $ 5    
Recognized expense $ 3,383,546    
Unamortization of debt issuance costs $ 182,900    
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DE 82-3431718 607 Shelby Street Suite 700 PMB 214 Detroit MI 48226 (734) 876-8130 Common Stock, par value $0.0001 AMST NASDAQ Yes Yes Non-accelerated Filer true true false false 25743484 8905431 10713091 10795 51120 564684 299389 9480910 11063600 91146 100590 1203945 1312643 1295091 1413233 10776001 12476833 412911 139754 180296 199908 219190 333200 26416 68881 838813 741743 0.0001 0.0001 100000000 100000000 25739679 25739679 21063954 21063954 2533 2066 0.0001 0.0001 5000000 5000000 37068255 31950117 -27133600 -20217093 9937188 11735090 10776001 12476833 209518 201394 539383 418315 1239153 1049128 3926901 3523259 899951 615157 2377077 1593934 282684 860562 1153943 1385202 2421787 2524847 7457921 6502395 1207 703 8742 1323 5049 6711 3613831 -3842 703 2031 -3612508 -2216111 -2322750 -6916507 -9696588 -0.09 -0.11 -0.32 -0.51 23802866 20538461 21824688 19150778 16231820 1583 11629114 -8630801 2999896 -5086264 -5086264 3000000 300 12795930 12796230 212413 212413 1127872 113 5639248 5639361 20359692 1996 30276705 -13717065 16561636 -2287574 -2287574 176092 18 789582 789600 217075 217075 20535784 2014 31283362 -16004639 15280737 -2322750 -2322750 29782 3 -3 221168 221168 20565566 2017 31504527 -18327389 13179155 21063954 2066 31950117 -20217093 11735090 -2378157 -2378157 140000 911824 91 1359909 1360000 389085 389085 21975778 2157 33699111 -22595250 11106018 -2322239 -2322239 13901 1 22697 22698 422526 422526 21989679 2158 34144334 -24917489 9229003 -2216111 -2216111 250450 3750000 375 2509175 2509550 414746 414746 25739679 2533 37068255 -27133600 9937188 -6916507 -9696588 682068 537112 1226357 650656 182900 3430931 22698 789600 -40325 -54220 265295 398412 297621 103797 -19612 33871 -114010 164615 -42465 53388 -5088820 -4093910 14267 67266 574123 607236 -588390 -674502 3869550 12796230 -1807660 8027818 10713091 4093874 8905431 12121692 70924 94481 73315 1127872 2255745 22698 789600 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 1 - Nature of Business and Liquidity</b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Amesite Inc. (the “Company”) was incorporated in November 2017. The Company is an artificial intelligence driven platform and course designer, that provides customized, high performance and scalable online products for schools and businesses. The Company uses machine learning to provide a novel, mass customized experience to learners. The Company’s customers are businesses, universities and colleges, and K-12 schools. The Company’s activities are subject to significant risks and uncertainties. The Company’s operations are considered to be in one segment.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 18, 2020, we consummated a reorganizational merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated July 14, 2020 (“Effective Date”), whereby we merged with and into Amesite Inc. (“Amesite Parent”) our former parent corporation, with our Company resulting as the surviving entity. In connection with the same, we filed a Certificate of Ownership and Merger with the Secretary of State of the State of Delaware, and changed our name from “Amesite Operating Company” to “Amesite Inc.” The stockholders of Amesite Parent approved the Merger Agreement on August 4, 2020. The directors and officers of Amesite Parent became our directors and officers.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Pursuant to the Merger Agreement, on the Effective Date, each share of the Amesite parent’s common stock, $0.0001 par value per share, issued and outstanding immediately before the Effective Date, was converted, on a one-for-one basis, into shares of our common stock.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Additionally, each option or warrant to acquire shares of Amesite Parent outstanding immediately before the Effective Date was converted into and became an equivalent option to acquire shares of our common stock, upon the same terms and conditions.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><i>Going Concern</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0; text-align: justify"><b> </b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is in the early stages of developing its customer base and has not completed its efforts to establish a stabilized source of revenue sufficient to cover its costs over an extended period of time.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company does not have sufficient cash on hand or available liquidity to maintain operations for at least twelve months from the date of issuance of the condensed financial statements. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In response to the conditions, management plans include raising capital through equity financing, or by selling additional shares to Lincoln Park Capital per the Purchase Agreement (Note 5) or by completing other offerings of common stock. However, these plans are subject to market conditions, and are not within the Company’s control, and therefore, cannot be deemed probable. There is no assurance that the Company will be successful in implementing its business plan, generate sufficient cash from operations or sell stock on favorable terms or at all. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.5in; text-align: justify">The condensed financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.</p> 0.0001 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 2 - Significant Accounting Policies</b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Basis of Presentation</i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). The Company has a fiscal year with a June 30 year end.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In the opinion of management, the condensed financial statements of the Company as of March 31, 2022 and 2021 and for the three and nine months ended March 31, 2022 and 2021 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Capitalized Software Costs </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company capitalizes costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing internal use computer software. Planning costs incurred prior to the development of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $658,357 and $525,000 for the nine months ended March 31, 2022 and 2021, respectively. The Company recognized amortization expense of approximately $234,000 and $192,000 for the three months ended March 31, 2022 and 2021, respectively. Accumulated amortization on March 31, 2022 and 2021 was $1,996,137 and $1,129,186, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Revenue Recognition </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities, and non-profit organizations to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="text-decoration:underline">Performance Obligations and Timing of Recognition</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance). For the three and nine months ended March 31, 2022 and 2021, all of the revenue recognized has been recognized over the related contract periods. Additionally, for the three and nine months ended March 31, 2022, five customers comprised approximately 86% of total revenue. During the three and nine months ended March 31, 2021, one customer comprised approximately 76% and 54% of total revenue, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The majority of our customers are private and public learning institutions across various domestic regions</span></td> </tr></table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The majority of our customers have annual payment terms</span></td> </tr></table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="text-decoration:underline">Accounts Receivable, Contract Assets and Liabilities</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 or June 30, 2021.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following table provides information on the changes in the balance of contract liabilities for the nine months ended March 31:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Opening balance</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">333,200</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">380,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Billings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">425,445</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">582,930</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Less revenue recognized from continuing operations (net of cancellations):</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(539,455</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(418,315</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Closing balance</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">219,190</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">544,615</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Revenue recognized during the nine months ended March 31, 2022 and 2021 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $539,455 and $417,415, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The deferred revenue balance as of March 31, 2022 is expected to be recognized over the next 12 months.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> <b><i> </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Net Loss per Share</i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. There were 3,208,024 and 2,910,125 potentially dilutive securities for the three and nine months ended March 31, 2022 and 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0"><b><i>Risks and Uncertainties </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including the potential risk of business failure.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.</p> <p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Basis of Presentation</i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and considering the requirements of the United States Securities and Exchange Commission (“SEC”). The Company has a fiscal year with a June 30 year end.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In the opinion of management, the condensed financial statements of the Company as of March 31, 2022 and 2021 and for the three and nine months ended March 31, 2022 and 2021 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Capitalized Software Costs </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company capitalizes costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing internal use computer software. Planning costs incurred prior to the development of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $658,357 and $525,000 for the nine months ended March 31, 2022 and 2021, respectively. The Company recognized amortization expense of approximately $234,000 and $192,000 for the three months ended March 31, 2022 and 2021, respectively. Accumulated amortization on March 31, 2022 and 2021 was $1,996,137 and $1,129,186, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p> 658357 525000 234000 192000 1996137 1129186 <p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Revenue Recognition </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We generate substantially all of our revenue from contractual arrangements with businesses, colleges and universities, and non-profit organizations to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="text-decoration:underline">Performance Obligations and Timing of Recognition</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We derive revenue from annual licensing arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs ratably over the contract term.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Occasionally, we will provide professional services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not observable, we utilize a cost plus margin approach to allocate the transaction price.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We do not disclose the value of unsatisfied performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is unknown in advance). For the three and nine months ended March 31, 2022 and 2021, all of the revenue recognized has been recognized over the related contract periods. Additionally, for the three and nine months ended March 31, 2022, five customers comprised approximately 86% of total revenue. During the three and nine months ended March 31, 2021, one customer comprised approximately 76% and 54% of total revenue, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We also receive fees that are fixed in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives and consumes the benefit of the software over the contract service period).</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The majority of our customers are private and public learning institutions across various domestic regions</span></td> </tr></table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.75in"/><td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">●</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The majority of our customers have annual payment terms</span></td> </tr></table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span style="text-decoration:underline">Accounts Receivable, Contract Assets and Liabilities</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Balance sheet items related to contracts consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of March 31, 2022 or June 30, 2021.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">We may recognize revenue prior to billing a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until after the service period has commenced. As of March 31, 2022 and June 30, 2021, we do not have any contract assets.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Contract liabilities as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Some contracts also involve annual license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following table provides information on the changes in the balance of contract liabilities for the nine months ended March 31:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Opening balance</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">333,200</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">380,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Billings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">425,445</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">582,930</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Less revenue recognized from continuing operations (net of cancellations):</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(539,455</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(418,315</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Closing balance</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">219,190</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">544,615</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Revenue recognized during the nine months ended March 31, 2022 and 2021 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $539,455 and $417,415, respectively.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The deferred revenue balance as of March 31, 2022 is expected to be recognized over the next 12 months.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> <b><i> </i></b></p> 0.86 0.86 0.76 0.54 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Opening balance</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">333,200</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">380,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Billings</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">425,445</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">582,930</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Less revenue recognized from continuing operations (net of cancellations):</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(539,455</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(418,315</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Closing balance</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">219,190</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">544,615</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0"> </p> 333200 380000 425445 582930 -539455 -418315 219190 544615 539455 417415 <p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i>Net Loss per Share</i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Basic net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period, increased by potentially dilutive common shares (“dilutive securities”) that were outstanding during the period. Dilutive securities include stock options and warrants granted, convertible debt, and convertible preferred stock. There were 3,208,024 and 2,910,125 potentially dilutive securities for the three and nine months ended March 31, 2022 and 2021, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.5in; text-align: justify"><b><i> </i></b></p> 3,208,024 3,208,024 2,910,125 2,910,125 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0"><b><i>Risks and Uncertainties </i></b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including the potential risk of business failure.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On March 11, 2020, the World Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot be reasonably estimated at this time.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 3 - Stock-Based Compensation</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0"><b> </b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over two years from the grant date and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan).</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has reserved 4,600,000 shares of common stock to be available for granting under the Plan.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company estimates the fair value of each option award using a Black Scholes Model (“BSM”) that uses the weighted average assumptions included in the table below. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise within the valuation model or estimates the expected option exercise when historical data is unavailable. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the nine months ended:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2021</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Expected term (years)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">10.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">6.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.75 - 2.2</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.12</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">78% - 93</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">45% - 46.3</span></td><td style="text-align: left">% </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">A summary of option activity for the nine months ended March 31, 2022 is presented below:</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Options</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Shares</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term<br/> (in years)</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Outstanding at July 1, 2021</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3,222,125</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1.96</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">8.34</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">125,024</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.76</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9.51</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(139,125</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right">3.09</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right">8.91</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Outstanding and expected to vest at March 31, 2022</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">3,208,024</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: right">1.91</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: right">7.61</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The weighted-average grant-date fair value of options granted during the nine months ended March 31, 2022 as $1.76. The options contained time-based vesting conditions satisfied over four years from the grant date.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">For the three months ended March 31, 2022 and 2021, the Company recognized $414,746 and $221,168, in expense related to the Plan, respectively. For the nine months ended March 31, 2022 and 2021, the Company recognized $1,226,357 and $650,656 in expense related to the Plan, respectively.  </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 28, 2021, the Board approved certain stock awards to its board members in the form of stock options and restricted stock. The stock option awards are expected to vest ratably over twelve-month period from beginning September 28, 2021 through September 28, 2022. The restricted stock awards are expected to vest over a twelve-month period beginning July 1, 2021 through June 30, 2022. The total approved compensation was $172,702 in stock options and $600,000 in restricted stock. The number of options was determined based on the fair value of the Company’s share price as of the date of grant. The Company determined that there will be 337,078 of restricted shares issued upon vesting, based on the fair value of the Company’s share price on the grant date.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Accordingly, $43,176 and $87,310 related to the stock option grants made to the board members, was recognized as stock-based compensation expense for the three and nine months ended March 31, 2022. The Company also recognized $150,000 and $450,000 as stock-based compensation expense related to the restricted stock unit grants made to the board members for the three and nine months ended March 31, 2022, respectively. The cost related to the grants made to board members is expected to be recognized through September of 2022.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As of March 31, 2022, there was approximately $610,011 of total unrecognized compensation cost for employees and non-employees related to nonvested options. These costs are expected to be recognized through March 2026.</p> 4600000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2022</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">March 31,<br/> 2021</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Expected term (years)</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">10.00</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">6.00</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Risk-free interest rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.75 - 2.2</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0.12</td><td style="text-align: left">%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Expected volatility</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">78% - 93</span></td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">45% - 46.3</span></td><td style="text-align: left">% </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Dividend yield</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">0</td><td style="text-align: left">%</td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0; text-align: justify"> </p> P10Y P6Y 0.0175 0.022 0.0012 0.78 0.93 0.45 0.463 0 0 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid">Options</td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Shares</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Weighted Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt"> </td><td style="padding-bottom: 1.5pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term<br/> (in years)</td><td style="padding-bottom: 1.5pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Outstanding at July 1, 2021</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">3,222,125</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1.96</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 9%; text-align: right">8.34</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">125,024</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1.76</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9.51</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Cancelled</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">(139,125</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right">3.09</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt; text-align: right">8.91</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Outstanding and expected to vest at March 31, 2022</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left"> </td><td style="border-bottom: Black 4pt double; text-align: right">3,208,024</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: right">1.91</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt; text-align: right">7.61</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> 3222125 1.96 P8Y4M2D 125024 1.76 P9Y6M3D 139125 3.09 P8Y10M28D 3208024 1.91 P7Y7M9D 1.76 414746 221168 1226357 650656 172702 600000 337078 43176 87310 150000 450000 610011 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 4 - Income Taxes</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">For the three and nine months ended March 31, 2022 and prior periods since inception, the Company’s activities have not generated taxable income or tax liabilities. Accordingly, the Company has not recognized an income tax benefit on the Condensed Statements of Operations for the nine months ended March 31, 2022 and 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company has approximately $20,881,000 of net operating loss carryforwards available to reduce future income taxes, of which approximately $17,000 of net operating loss carryforwards expire in 2037. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets.</p> 20881000 17000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 5 - Common Stock</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0"><b> </b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 25, 2020, the Company completed an initial public offering (“Offering”) of 3,000,000 shares of its common stock, $0.0001 par value per share, at an offering price of $5.00 per share (total net proceeds of approximately $12.8 million after underwriting discounts, commissions, and other offering costs). In connection with the Offering, the Company agreed to issue five (5) year warrants to the underwriter to purchase five percent (5%) of the number of common shares sold in the Offering for an exercise price equal to $6.00. Total warrants of 150,000 were issued to the underwriter on September 29, 2020.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company measures the warrants using the BSM to estimate their fair value. The fair value of the warrants issued in connection with the Offering was approximately $249,000 based on the following inputs and assumptions using the BSM: (i) expected stock price volatility of 45.00%; (ii) risk free interest rate of .14%; and (iii) expected life of the warrants of 5 years. The warrants were fully vested on the date of grant and are included in offering costs in the Statement of Stockholders’ Equity.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In connection with the Offering, the Company converted its outstanding convertible notes payable into 1,127,872 shares of its common stock.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During fiscal year 2021, warrant holders exercised 834,544 warrants on a cashless basis and received 488,728 shares of common stock.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On August 2, 2021, the Company entered into a purchase agreement (the “Purchase Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, the Company may sell to Lincoln Park up to $16.5 million worth of common stock, par value $0.0001 per share, from time to time during the term of the Purchase Agreement, which ends August 2, 2023.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In connection with the Purchase Agreement, the Company entered into an introducing broker agreement with Laidlaw &amp; Company (UK) Ltd. (“Laidlaw”), pursuant to which the Company agreed to pay a cash fee to Laidlaw (the “Introductory Fee”) equal to (i) 8% of the amount of the Initial Purchase, (ii) 8% of the amount of a one-time share request up to $1,000,000 (“Tranche Purchase”), if any, and (iii) 4% of up to the next $13,500,000 (or up to $14,500,000 if the Tranche Purchase is not exercised).</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">  </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Upon entering into the Purchase Agreement, the Company sold 759,109 shares of common stock to Lincoln Park as an initial purchase for a total purchase price of $1,500,000 (the “Initial Purchase”). The Company received net proceeds from the Initial Purchase of $1,360,000 after the payment of the Introductory Fee and offering costs. As consideration for Lincoln Park’s commitment to purchase up to $16.5 million of shares of common stock under the Purchase Agreement, the Company issued 152,715 shares of common stock to Lincoln Park. If Lincoln Park is requested to purchase additional shares during the term of the Purchase Agreement, the requested shares, (“Regular Purchase”), are limited based on the current share price of the Company’s common stock. If the average price is below $3.00 per share, the Company is limited to issuing 50,000 shares per request; if the share price is between $3.00 and $4.00 per share, the limit is 75,000 shares per request, if the share price is between $4.00 and $5.00, the limit is 100,000 shares per request, and if the share price is above $5.00, the limit is 150,000 shares per request. Requests for purchases are permitted daily as long as the Company’s stock price is above $0.50 per share. The price for such regular purchases will be the lower of: (i) the lowest closing price of the Company’s common stock on the purchase date for such Regular Purchase and (ii) the arithmetic average of the three (3) lowest closing prices of the Company’s common stock during the ten (10) consecutive business days immediately preceding. Additionally, the Company may instruct Lincoln Park to purchase additional shares of common stock that exceed the Regular Purchase limits (“Accelerated Purchase”). If the Company requests Lincoln Park to make an Accelerated Purchase, the price per share is discounted from average historical closing prices.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company evaluated the contract that includes the right to require Lincoln Park to purchase additional shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the put right and has concluded that it has no value as of March 31, 2022.</p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On February 11, 2022, the Company entered into an underwriting agreement with Laidlaw, as representative of the several underwriters, to issue and sell up to 3,437,500 shares of the Company’s common stock, at a public offering price of $0.80 per share. On February 14, 2022, the Company entered into an amended and restated underwriting agreement in order to increase the number of shares sold in the offering to 3,750,000. On February 16, 2022, the Company closed the offering, and sold 3,750,000 shares of common stock to Laidlaw for total gross proceeds of $3,000,000. After deducting the underwriting commission and expenses, the Company received net proceeds of approximately $2,509,550.</p> 3000000 0.0001 5 12800000 the Company agreed to issue five (5) year warrants to the underwriter to purchase five percent (5%) of the number of common shares sold in the Offering for an exercise price equal to $6.00. Total warrants of 150,000 were issued to the underwriter on September 29, 2020. The fair value of the warrants issued in connection with the Offering was approximately $249,000 based on the following inputs and assumptions using the BSM: (i) expected stock price volatility of 45.00%; (ii) risk free interest rate of .14%; and (iii) expected life of the warrants of 5 years. The warrants were fully vested on the date of grant and are included in offering costs in the Statement of Stockholders’ Equity 1127872 834544 488728 16500000 0.0001 (“Laidlaw”), pursuant to which the Company agreed to pay a cash fee to Laidlaw (the “Introductory Fee”) equal to (i) 8% of the amount of the Initial Purchase, (ii) 8% of the amount of a one-time share request up to $1,000,000 (“Tranche Purchase”), if any, and (iii) 4% of up to the next $13,500,000 (or up to $14,500,000 if the Tranche Purchase is not exercised). 759109 1500000 1360000 16500000 152715 If the average price is below $3.00 per share, the Company is limited to issuing 50,000 shares per request; if the share price is between $3.00 and $4.00 per share, the limit is 75,000 shares per request, if the share price is between $4.00 and $5.00, the limit is 100,000 shares per request, and if the share price is above $5.00, the limit is 150,000 shares per request. Requests for purchases are permitted daily as long as the Company’s stock price is above $0.50 per share. 3437500 0.8 3750000 3750000 3000000 2509550 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><span><b>Note 6 - Convertible Notes Payable</b></span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.8in; text-indent: 0"><b> </b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span>In April and May 2020, the Company issued unsecured, convertible notes payable (the “Notes”) to certain accredited investors, with an aggregate principal amount of $2,182,500, in an offering intended to be exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span>The Notes were unsecured, bore interest at 8% per annum, and matured one year from their dates of issuance. The Notes were subject to automatic conversion into the Company’s common stock upon a qualified equity financing or change of control, based on a specified formula for the conversion price; using the lesser of $2.00 or 75% of the price paid per share in either of the conversion events.</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span>The Company incurred issuance costs of $261,900. The issuance costs were amortized over six months, which was the estimated length of time that the Company believed the Notes would be outstanding until a conversion event occurred.</span></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span>In connection with the Offering (Note 5), the Notes (totaling $2,255,815, including accrued interest) were converted into 1,127,872 shares of common stock at $2.00 per share. As the Offering price was $5.00 per share, the Company recognized an expense totaling $3,383,546 which represents the discount provided to the Note holders. This expense is recorded within interest expense in the condensed statement of operations. Additionally, upon completion of the Offering, the remaining unamortized debt issuance costs of $182,900 were fully amortized and included within interest expense.</span></p> 2182500 2182500 0.08 2 0.75 261900 2255815 1127872 2 5 3383546 182900 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0"><b>Note 7 - Subsequent Events</b></p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"> </p><p style="text-indent: 0; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><span>The Company has evaluated subsequent events through the date of filing this Quarterly Report on Form 10-Q and determined that no material events occurred.</span></p> false --06-30 Q3 0001807166 EXCEL 40 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx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