UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~December 3031, 2025

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

For the transition period from________ to________

Commission File No. 000-49990

PCS EDVENTURES!, INC.

(Exact name of Registrant as specified in its charter)

Idaho		82-0475383
(State or Other Jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

941 ~~South~~S. Industry Way

Meridian, Idaho 83642

(Address of Principal Executive Offices)

(208) 343-3110

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report)

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

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☒ No ☐

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

Large accelerated filer ☐	Accelerated filer ☐	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 ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

~~November~~February 1413, ~~2025~~2026: 117,~~779~~058,~~021~~148 shares of Common Stock

Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should carefully read this Quarterly Report completely, and it should be read and considered with all other reports filed by us with the United States Securities and Exchange Commission (the “SEC”) that are contained in the SEC Edgar Archives, including issues related to “Cybersecurity” enumerated in “Part I, Item 1C. Cybersecurity,” ~~which commence on page nine (9)~~ of our 10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025 (the “~~10-K~~ Annual Report”), which commence on page nine (9) thereof, a copy of which is attached ~~hereto~~ hereto by Hyperlink in Part II, -Other Information, in Item 6., Exhibits, hereof, and is incorporated herein by reference. Other than as ~~required~~ required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

Documents Incorporated by Reference

See Part II, Other Information, Item 6., Exhibits, hereof.

PCS EDVENTURES!, ~~Inc~~INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~DECEMBER 3031, 2025

INDEX

		~~Page~~	Page
PART I –	FINANCIAL INFORMATION	4
PART I -	FINANCIAL INFORMATION		4
ITEM 1.	Condensed Financial Statements (unaudited)	4	4
	Condensed Balance Sheets as of September 30, 2025 (unaudited), and March 31, 2025	5
	Condensed Balance Sheets as of December 31, 2025 (unaudited), and March 31, 2025		5
	Condensed Statements of Operations for the Three and Six Months ended September 30, 2025, and 2024 (unaudited)	6
	Condensed Statements of Operations for the Three and Nine Months ended December 31, 2025, and 2024 (unaudited)		6
	Condensed Statements of Stockholders’ Equity for the Three and Six Months ended September 30, 2025, and 2024 (unaudited)	7
	Condensed Statement of Stockholders’ Equity for the Three and Nine Months ended December 31, 2025, and 2024 (unaudited)		7
	Condensed Statements of Cash Flows for the Six Months ended September 30, 2025, and 2024 (unaudited)	8
	Condensed Statements of Cash Flows for the Nine Months ended December 31, 2025, and 2024 (unaudited)		8
	Notes to the Condensed Financial Statements (unaudited)	9
	Notes to Condensed Financial Statements (unaudited)		9
ITEM 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	14	16
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	19	21
ITEM 4.	Controls and Procedures	19	21
PART II -	OTHER INFORMATION	20	22
ITEM 1.	Legal Proceedings	20	22
ITEM 1A.	Risk Factors	20	22
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20	22
ITEM 3.	Defaults Upon Senior Securities	20	22
ITEM 4.	Mine Safety Disclosures	20	22
ITEM 5.	Other Information	20	22
ITEM 6.	EXHIBIT INDEX	21	23
SIGNATURES		22	24

PART I –FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

The Condensed Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Condensed Financial Statements fairly present the financial condition of the Registrant.

(This space intentionally left blank.)

PCS EDVENTURES!, INC.

Condensed Balance Sheets

	September 30, 2025
	December 31, 2025			March 31, 2025
	Unaudited			March 31, 2025
	December 31, 2025			March 31, 2025
	(Unaudited)
CURRENT ASSETS
Cash	$	32,~~247~~973,~~793~~457		$	3,223,147
Accounts receivable, net of allowance for credit losses of $38,027		~~741~~222,~~110~~828			383,826
Accounts receivable, other receivables		812,~~736~~837			55
Prepaid expenses		~~185~~432,~~146~~091			247,422
Inventory, net		12,~~832~~062,~~092~~610			2,064,534
Total Current Assets		65,~~087~~693,~~877~~823			5,918,984
NONCURRENT ASSETS
Lease Right-of-Use Asset		1,039,646			1,140,217
Lease right-of-use asset		987,509			1,140,217
Deposits		29,747			29,747
Property and equipment, net		9388,~~974~~805			97,213
Deferred tax asset		2,~~143~~220,~~315~~628			2,276,861
Total Noncurrent Assets		3,~~306~~326,~~682~~689			3,544,038
TOTAL ASSETS	$	9,~~394~~020,~~559~~512		$	9,463,022
CURRENT LIABILITIES
Accounts payable	$	98115,~~643~~103		$	24,991
Payroll liabilities and accrued expenses		~~108~~58,~~485~~088			171,398
Deferred revenue		304,~~160~~138			20,026
Lease Liability, current portion		216,574			110,024
Lease liability, current portion		222,053			110,024
Total Current Liabilities		~~453~~399,~~862~~382			326,439
NONCURRENT LIABILITIES
Lease liabilities, net of current portion		886,483			1,081,614
Lease liability, net of current portion		820,183			1,081,614
Total Noncurrent Liabilities		~~886~~820,~~483~~183			1,081,614
TOTAL LIABILITIES	$	1,~~340~~219,~~345~~565		$	1,408,053
STOCKHOLDERS’ EQUITY
Preferred stock, no par value, 20,000,000 authorized shares, No shares issued and outstanding		-			-
Preferred stock, no par value, 20,000,000 authorized shares, no shares issued and outstanding		-			-
Common stock, no par value, 125,000,000 authorized shares, 117,877,521 shares issued, 117,762,021 shares outstanding 122,189,763 shares issued and outstanding		-			-
Common stock, no par value, 125,000,000 authorized shares, 117,498,251 issued and 117,183,924 outstanding 122,189,763 issued and outstanding, respectively		-			-
Additional paid-in capital before Treasury shares		39,~~590~~571,~~922~~321			40,022,746
Treasury stock, 115,500 shares and 0 shares, respectively		(15,023	)		-
Treasury stock, 314,327 shares and 0 shares, respectively		(38,198	)		-
Total additional paid-in capital		39,575,899			40,022,746
Accumulated deficit		(31,732,176	)		(31,967,777	)
Accumulated deficit		(31,521,685	)		(31,967,777	)
TOTAL STOCKHOLDERS’ EQUITY		7,800,947			8,054,969
TOTAL STOCKHOLDERS’ EQUITY		8,054,214			8,054,969
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,020,512		$	9,463,022
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	9,394,559		$	9,463,022

The accompanying notes are an integral part of these unaudited condensed financial statements.

PCS EDVENTURES!, INC.

Condensed Statements of Operations

(Unaudited)

	2025			2024			2025			2024
	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2025			2024			2025			2024
REVENUE	$	1754,~~529,503~~889		$	2701,~~267,338~~147		$	34,~~952~~707,~~812~~702		$	56,~~427~~128,~~262~~409
COST OF SALES		~~641~~270,~~650~~138			~~912~~348,~~651~~660			1,~~528~~798,~~421~~560			2,~~111~~459,~~087~~747
GROSS PROFIT		~~887~~484,~~853~~751			1352,~~354,687~~487			2,~~424~~909,~~391~~142			3,~~316~~668,~~175~~662
OPERATING EXPENSES
Salaries and wages		~~524~~539,~~247~~034			~~485~~436,~~734~~150			1,~~134~~673,~~539~~573			1,~~004~~440,~~031~~181
General and administrative expenses		~~387~~262,~~920~~358			~~356~~375,~~154~~081			~~764~~1,~~171~~026,529			~~715~~1,~~924~~091,005
Total Operating Expenses		~~912~~801,~~167~~392			~~841~~811,~~888~~231			12,~~898~~700,~~710~~102			12,~~719~~531,~~955~~186
INCOME (LOSS) FROM OPERATIONS		(24316,~~314~~641	)		~~512~~(458,~~799~~744	)		~~525~~209,~~681~~040			1,~~596~~137,~~220~~476
OTHER INCOME
Net interest income		3128,~~126~~837			3724,~~613~~920			5382,~~957~~794			5984,~~123~~043
Total Other Income		3128,~~126~~837			3724,~~613~~920			5382,~~957~~794			5984,~~123~~043
INCOME BEFORE TAXES	$	6,812		$	550,412		$	579,638		$	1,655,343
NET INCOME (LOSS) BEFORE TAXES		(287,804	)		(433,824	)		291,834			1,221,519
Income tax provision		577,~~873~~313			~~119~~210,~~183~~935			~~133~~(56,~~546~~233	)		~~366~~(155,~~839~~904	)
NET INCOME	$	939		$	431,229		$	446,092		$	1,288,504
NET INCOME (LOSS)	$	(210,491	)	$	(222,889	)	$	235,601		$	1,065,615
Net income (loss) per common share:
Basic	$	(0.00	)	$	(0.00	)	$	0.00		$	0.01
Diluted	$	(0.00	)	$	(0.00	)	$	0.00		$	0.01
Weighted Average Common Shares Outstanding
Basic		~~118~~117,~~973~~798,~~050~~993			~~124~~123,~~493~~596,~~141~~176			~~120~~119,~~496~~541,~~424~~482			124,~~612~~275,~~661~~328
Diluted		~~118~~117,~~973~~798,~~050~~993			~~124~~123,~~493~~596,~~141~~176			~~120~~119,~~496~~541,~~424~~482			124,~~612~~275,~~661~~328

The accompanying notes are an integral part of these unaudited condensed financial statements.

PCS EDVENTURES!, INC.

Condensed Statements of Stockholders’ Equity

(Unaudited)

									~~Treasury~~	Treasury
									~~Stock~~	Stock
	# of								~~Additional~~	Additional		~~Additional~~	Additional
	Common			Common		Treasury			~~Paid-in~~	Paid-in		~~Paid-in~~	Paid-in		~~Accumulated~~	Accumulated		~~Stockholders’~~	Stockholders’
	Shares O/S			Stock		Shares			~~Capital~~	Capital		~~Capital~~	Capital		~~Deficit~~	Deficit		~~Equity~~	Equity
For the three months ended 9/30/2024
For the three months ended 12/31/2024
Balance at 6/30/2024		124,733,494			-		-		$	-		$	40,570,459		$	(32,057,367	)	$	8,513,092
Net Income		-			-		-			-			-			431,229			431,229
Shares repurchased and cancelled		(602,084	)		-		-			-			(143,813	)		-			(143,813	)
Balance at 9/30/2024		124,131,410			-		-		$	-		$	40,426,646		$	(31,626,138	)	$	8,800,508
For the six months ended 9/30/2024
Net Income		-			-								-			(222,889	)		(222,889	)
Shares repurchased and cancelled		(1,172,417	)		-					-			(246,208	)		-			(246,208	)
Balance at 12/31/2024		122,958,993			-		-		$	-		$	40,180,438		$	(31,849,027	)	$	8,331,411
For the nine months ended 12/31/2024
Balance at 3/31/2024		124,733,494			-		-		$	-		$	40,570,459		$	(32,914,642	)	$	7,655,817
Net Income		-			-		-			-			-			1,~~288~~065,~~504~~615			1,~~288~~065,~~504~~615
Private shares purchased and cancelled		(602,084	)		-		-			-			(143,813	)		-			(143,813	)
Shares repurchased and cancelled		(1,774,501	)		-		-			-			(390,021	)		-			(390,021	)
Balance at 9/30/2024		124,131,410			-		-		$	-		$	40,426,646		$	(31,626,138	)	$	8,800,508
Balance at 12/31/2024		122,958,993			-		-		$	-		$	40,180,438	)	$	(31,849,027	)	$	8,331,411
For the three months ended 9/30/2025
For the three months ended 12/31/2025
Balance at 6/30/2025		121,824,804			-		100,000		$	(13,607	)	$	39,985,332		$	(31,522,624	)	$	8,449,101
Net Income		-			-		-			-			-			939			939
Treasury shares purchased		(3,851,670	)		-		3,851,670			(385,454	)		-			-			(385,454	)
Treasury shares cancelled		-			-		(3,836,170	)		384,038			(384,038	)		-			-
Private shares purchased and cancelled		(115,613	)		-		-			-			(13,236	)		-			(13,236	)
Shares issued for Board comp		20,000			-		-			-			2,864			-			2,864
Balance at 9/30/2025		117,877,521			-		115,500		$	(15,023	)	$	39,590,922		$	(31,521,685	)	$	8,054,214
For the six months ended 9/30/2025
Net Income		-			-								-			(210,491	)		(210,491	)
Treasury shares purchased		(198,827	)		-		198,827			(23,175	)		-			-			(23,175	)
Private shares purchased and cancelled		(200,443	)		-		-			-			(22,465	)		-			(22,465	)
Shares issued for Board comp		20,000			-		-			-			2,864			-			2,864
Balance at 12/31/2025		117,498,251			-		314,327		$	(38,198	)	$	39,571,321		$	(31,732,176	)	$	7,800,947
For the nine months ended 12/31/2025
Balance at 3/31/2025		122,189,763			-		-		$	-		$	40,022,746		$	(31,967,777	)	$	8,054,969
Balance		122,189,763			-		-		$	-		$	40,022,746		$	(31,967,777	)	$	8,054,969
Net Income		-			-		-			-			-			235,601			235,601
Net Income		-			-		-			-			-			446,092			446,092
Treasury shares purchased		(4,150,497	)		-		4,150,497			(422,236	)		-			-			(422,236	)
Treasury shares purchased		(3,951,670	)		-		3,951,670			(399,061	)		-			-			(399,061	)
Treasury shares cancelled		-			-		(3,836,170	)		384,038			(384,038	)		-				-
Treasury shares cancelled		-			-		(3,836,170	)		384,038			(384,038	)		-			-
Private shares purchased and cancelled		(601,015	)		-		-			-			(75,595	)		-			(75,595	)
Private shares purchased and cancelled		(400,572	)		-		-			-			(53,130	)		-			(53,130	)
Shares issued for Board comp		60,000			-		-			-			8,208			-			8,208
Shares issued for Board comp		40,000			-		-			-			5,344			-			5,344
Balance at 12/31/2025		117,498,251			-		314,327		$	(38,198	)	$	39,571,321		$	(31,732,176	)	$	7,800,947
Balance at 9/30/2025		117,877,521			-		115,500		$	(15,023	)	$	39,590,922		$	(31,521,685	)	$	8,054,214
Balance		117,877,521			-		115,500		$	(15,023	)	$	39,590,922		$	(31,521,685	)	$	8,054,214

The accompanying notes are an integral part of these unaudited condensed financial statements.

PCS EDVENTURES!, INC.

Condensed Statements of Cash Flows

(Unaudited)

	2025			2024
For the Six Months ended September 30,
	Nine Months Ended December 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME	$	446,092		$	1,288,504
Net Income	$	235,601		$	1,065,615
Provision for income tax		~~133~~56,~~546~~233			~~366~~155,~~839~~904
Depreciation and amortization		1523,~~281~~142			919,~~801~~001
Stock based compensation for Board member		5,344			-
Stock based compensation for board member		8,208			-
Right of use asset amortization		100,571			57,441
Amortization of right of use asset		152,708			108,898
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable		~~(438~~158,~~965~~217	)		~~940~~1,~~170~~512,101
(Increase) decrease in prepaid expenses		62(184,~~276~~669	)		~~133~~110,~~040~~480
(Increase) decrease in inventories		~~232~~1,~~441~~924			34(11,~~532~~486	)
(Decrease) increase in accounts payable and accrued liabilities		10(23,~~740~~198	)		4(143,~~781~~407	)
(Increase) decrease in lease liability		(88,582	)		(60,003	)
Increase (decrease) in lease liability		(149,403	)		(74,038	)
(Decrease) increase in unearned revenue		10,134			92,787
Increase (decrease) in unearned revenue		(15,888	)		7,467
(Increase) decrease in deposits		-			(1523,~~660~~446	)
Net Cash Provided by Operating Activities	$	~~488~~262,~~878~~875		$	2,~~852~~727,~~232~~089
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for purchase of fixed assets		(1214,~~041~~734	)		(3276,~~982~~725	)
Net Cash Used by Investing Activities	$	(1214,~~041~~734	)	$	(3276,~~982~~725	)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash paid for private purchase of 400,572 shares of common stock		(53,130	)		-
Cash paid for private purchase of 601,015 shares of common stock		(75,595	)		-
Cash paid for private purchase of 352,084 shares of common stock		-			(95,063	)
Cash paid for purchase of Treasury shares in open market		(422,236	)		-
Cash paid for private purchase of 250,000 shares of common stock		-			(48,750	)
Common stock repurchased and cancelled		-			(390,021	)
Cash paid for purchase of Treasury Shares in open market		(399,061	)		-
Net Cash Used by Financing Activities		(497,831	)		(390,021	)
Net Cash Used by Financing Activities	$	(452,191	)	$	(143,813	)
Net Increase (Decrease) in Cash		(249,690	)		2,260,343
Net Increase in Cash	$	24,646		$	2,675,437
Cash at Beginning of Period		3,223,147			1,329,708
Cash at Beginning of Period	$	3,223,147		$	1,329,708
Cash at End of Period	$	2,973,457		$	3,590,051
Cash at End of Period	$	3,247,793		$	4,005,145
Cash Paid for Interest	$	-		$	-
Cash paid for taxes	$	62,440		$	53,290
Cash Paid for taxes	$	42,307		$	131,432
Cash paid for interest	$	3,476		$	-
Non Cash Investing and Financing Transactions:
Right of use assets obtained in exchange for new operating lease liabilities	$	-		$	1,023,703

The accompanying notes are an integral part of these unaudited condensed financial statements.

PCS EDVENTURES!, INC.

Notes to the Condensed Financial Statements ~~(unaudited)~~

~~September~~December 3031, 2025 and 2024

(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

The condensed financial statements presented are those of PCS Edventures!, Inc., an Idaho corporation (the “Company,” “PCS,” “PCSV,” “we,” “our,” “us” or similar words), incorporated in 1994, in the State of Idaho. PCS specializes in experiential, hands-on, TK-12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and TK-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks.

Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer.

Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels.

PCS has developed and sells a variety of STEM education products into the TK-12 market which can be categorized as follows:

Enrichment Programs

These camps are for the informal learning market and are designed to be highly engaging for students while easily administered by the instructor. The Company offers approximately 3630 different enrichment programs and typically develops at least two (2) new programs each year. Some of the more popular programs include ~~Rockin’~~Podcasting; ~~Robots~~Drone Designers; Ready, Set, ~~Drone~~Drong!; ~~Cubelets~~Rockin’ ~~BOT Builder~~Robots; ~~Simple~~Build ~~Machines;~~a ~~Drone~~Better ~~Designers~~World; ~~Coding~~Summer ~~with~~Camp ~~Drones~~Classics; ~~Pirate~~Influencer Camp; ~~Dirt~~World ~~Camp~~of Wonders; and Claymation.

Discover Series Products

These products are designed for the makerspace environment and include engaging STEM activities that motivate students to pursue educational pathways toward STEM careers. The Discover Series includes Discover ~~Podcasting~~Engineering; Discover ~~STEM~~Robotics ~~Dynamic~~& ~~Duo~~Physics; Discover Robotics & Programming; and Discover ~~Digital Video Lab~~STEM.

BrickLAB Products

These products are designed for the grade school market and use the Company’s proprietary bricks (which are Lego compatible) and curriculum to engage students to explore, imagine and create within a STEM education framework. The Company offers a variety of grade-specific BrickLAB products.

Discover Drones, Add-on Drone Packages and Ala Carte Drone Items

These products are designed around using drones as a platform for STEM education and career exploration. These titles include the Discover Drones series of Products; Discover Drones Indoor Coding Bundle; Discover Drones Indoor Racing Add-On; Discover Drones Outdoor Practice Add-on; and all the spare parts and ala carte drone items offered in the Company’s comprehensive drone packages.

STEAMventures BUILD Activity Book

These series of activity books are designed for the TK-3 market and ideal for a distance-learning environment. The series includes 12 different issues. Instructor guides and/or family engagement guides are included. The Company also provides the necessary bricks for the builds in the activity books as a separate, but related product.

Professional Development Training

The Company offers professional development trainings, for a fee, to educators who are implementing the Company’s products in their classroom.

The Company intends to continue developing STEM education products that address demand from large markets.

Interim Financial Information

The accompanying unaudited condensed financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the ~~U.S.~~United States Securities and ~~Exchange~~ Exchange Commission (the “SEC”). Accordingly, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications ~~considered~~ considered necessary in order to make the condensed financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three (3) and ~~six~~nine (69) months ended ~~September~~December 3031, 2025, are not necessarily indicative of the results that may be expected for the year ~~ended~~ending March 31, 2026, or any future periods. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on June, 30, 2025 (the “Annual Report”).

We manage our Company as one (1) reportable operating segment, STEM Supplies and Curriculum. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s President.

Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the STEM Supplies and Curriculum segment and decides how to better allocate resources. The Company’s objective in making resource allocation decisions is to optimize the financial results over the longer term. The accounting policies of our STEM Supplies and Curriculum segment are the same as those described in the summary of significant accounting policies herein.

For single reportable segment-level financial information, total assets, and significant non-cash transactions, see our Financial Statements.

Use of Estimates

The preparation of these condensed financial statements in conformity with GAAP requires management to make estimates and assumptions ~~that~~ that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed ~~financial~~ financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include reserves related to accounts receivable and inventory, ~~the~~and the valuation allowance related to deferred tax assets~~, the valuation of equity instruments, and debt discounts~~.

Revenue Recognition

The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers, which we adopted on April 1, 2018. Revenue amounts presented in our condensed financial statements are recognized net of sales tax, value-added taxes, and other taxes. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped, or service performed.

The Company had deferred revenue of $304,~~160~~138 as of ~~September~~December 3031, 2025, related to contractual commitments with customers where the performance obligation will be satisfied within the fiscal year ~~ended~~ending March 31, 2026. The revenue associated with these performance obligations is is recognized as the obligation is satisfied. The Company had $20,026 of deferred revenue as of March 31, 2025.

Most of our contracts with customers contain transaction prices with fixed consideration; however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in FASB ASC 606. For certain fixed -fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts.

Net Earnings (Loss) Per Share of Common Stock

The Company calculates net income (loss) per share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming exercise of all dilutive unexercised stock options and warrants. The dilutive effect of these instruments was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded as income tax expense when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock.

Common stock outstanding reflected in the Company’s balance sheets includes restricted stock awards outstanding. Securities that may participate in undistributed net income with common stock are considered participating securities. The computation of diluted earnings per share does not assume exercise or conversion of securities that would have an anti-dilutive effect. As of December 31, 2025, and March 31, 2025, the Company had no options or restricted stock awards outstanding. The following schedules present the calculation of basic and diluted net income per share:

	2025			2024
	For the Three Months ended September 30,
	For the Three Months ended December 31,
	2025			2024
Net Income per common Share:
Net Loss per common Share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding Basic		~~118~~117,~~973~~798,~~050~~993			~~124~~123,~~493~~596,~~141~~176
Weighted average number of common shares outstanding Fully Diluted		~~118~~117,~~973~~798,~~050~~993			~~124~~123,~~493~~596,~~141~~176

Net ~~income~~loss for the three (3) months ended ~~September~~December 3031, 2025, and 2024, was ($~~939~~210,491) and ($~~431~~222,~~229~~889), respectively.

	2025		2024
	For the Six Months ended September 30,
	For the Nine Months ended December 31,
	2025		2024
Net Income per common Share:
Basic	$	0.00	$	0.01
Diluted	$	0.00	$	0.01
Weighted average number of common shares outstanding Basic		~~120~~119,~~496~~541,~~424~~482		124,~~612~~275,~~661~~328
Weighted average number of common shares outstanding Fully Diluted		~~120~~119,~~496~~541,~~424~~482		124,~~612~~275,~~661~~328

Net ~~income~~Income for the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, and 2024, was $~~446~~235,~~092~~601 and $1,~~288~~065,~~504~~615, respectively.

Recently Issued Accounting Pronouncements

The Company has reviewed recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position.

NOTE 2 – BUSINESS CONDITION

As of ~~September~~December 3031, 2025, the Company had $3.20 million in cash;, $12.~~8 million in inventory; $0.~~1 million in ~~prepaid~~ inventory;, and $0.83 million in ~~accounts~~prepaid ~~receivable~~inventory, with no debt. Management strongly believes that the Company can sustain its operations over the course of the next ~~twelve (~~12) months with the cash it has on hand, and with the revenue and associated profit generated from the sales expected over the course of the next ~~twelve (~~12) months, especially given the Company’s ~~relatively~~ large ~~cash~~inventory and prepaid inventory balances.

NOTE 3 – ACCOUNTS RECEIVABLE

In the Company’s normal course of business, the Company provides credit terms ~~for~~to its customers, which generally range from net ~~fifteen~~30 ~~(15)~~ to ~~thirty~~45 ~~(30)~~ days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for credit losses of $38,027 as of ~~September~~December 3031, 2025, and March 31, 2025.

NOTE 4 - PREPAID EXPENSES

Prepaid expenses for the periods are as follows:

SCHEDULE OF PREPAID EXPENSES

	September 30, 2025		March 31, 2025
	December 31, 2025		March 31, 2025
Prepaid insurance	$	3022,~~628~~275	$	11,960
Prepaid tradeshows		2217,~~670~~350		13,362
Prepaid inventory		~~100~~298,~~000~~820		178,660
Prepaid software		1050,~~763~~453		31,612
Prepaid other		2143,~~085~~193		11,828
Total Prepaid Expenses	$	~~185~~432,~~146~~091	$	247,422

NOTE 5 - COMMON AND PREFERRED STOCK TRANSACTIONS

Common Stock

The Company has 125,000,000 authorized shares of common stock, no par value. AtAs ~~September~~of 30December 31, 2025, the total common shares issued were 117,~~877~~498,~~521,~~ 251 and total shares outstanding were 117,~~762~~183,~~021~~924. AtAs of March 31, 2025, the total common shares issued and outstanding ~~were~~was 122,189,763.

During the three (3) months ended ~~September~~December 3031, 2025, the Company had no option expense.

During the three (3) months ended September 30, 2025, the Company issued 20,000 shares of Rule 144 “restricted” stock to Sean P. Iddings, an Independent Board Member, for his services in that capacity during the quarter.

During the three (3) months ended ~~September~~December 3031, 2025, the Company ~~completed~~issued ~~two~~20,000 ~~(2) private transactions to purchase and cancel~~ shares of ~~its common~~Rule ~~stock.~~144 ~~These~~“restricted” ~~transactions were for 11,850 shares of common~~ stock atto ~~$0.11~~Sean ~~per share for total consideration of $1,303, and for~~P. ~~103~~Iddings,~~763~~ ~~shares~~an ofIndependent ~~common~~Board ~~stock~~Member, ~~at $0.115 per share~~ for ~~total~~his ~~consideration~~services ~~of $11,933. These shares were subsequently cancelled. The sellers~~ in ~~these~~that ~~transactions~~capacity ~~solicited~~during the ~~Company for an offer~~quarter.

~~Dring~~During the three (3) months ended ~~September~~December 3031, 2025, the Company completed ~~the~~four ~~following~~(4) private transactions onto purchase and cancel shares of its common stock, amounting to an aggregate total of 200,443 shares. These transactions were for 5,000 shares of common stock at $0.12 per share for total consideration of $600; 24,367 shares of common stock at $0.125 per share for total consideration of $3,046; 169,476 shares of common stock at $0.11 per share for total consideration of $18,643; and 1,600 shares of common stock at $0.11 per share for total consideration of $176. The sellers of these shares solicited the ~~open~~Company ~~market:~~for an offer.

During the three (3) months ended December 31, 2025, the Company completed the following transactions on the open market:

Date	Shares Purchased		Price/Share		Total Consideration
7/7/2025		1,000,000	$	0.1200	$	120,007
10/28/2025		3,000	$	0.1255	$	383
7/16/2025		200,000	$	0.1100	$	22,007
12/1/2025		130,477	$	0.1120	$	14,620
7/21/2025		19,000	$	0.0945	$	1,802
12/12/2025		5,500	$	0.1216	$	676
7/23/2025		23,000	$	0.0990	$	2,284
12/19/2025		30,000	$	0.1200	$	3,607
7/24/2025		24,000	$	0.0940	$	2,263
12/23/2025		11,000	$	0.1295	$	1,431
7/25/2025		26,000	$	0.0900	$	2,347
12/29/2025		18,850	$	0.1300	$	2,458
7/28/2025		26,000	$	0.0890	$	2,321
Total		198,827			$	23,175
7/29/2025		2,418,170	$	0.0899	$	217,400
8/25/2025		65,500	$	0.1299	$	8,516
9/19/2025		50,000	$	0.1300	$	6,507
Total		3,851,670			$	385,454

~~The~~During ~~Company~~the ~~also~~nine ~~completed~~(9) anmonths ~~open-market~~ended ~~transaction~~December ~~on May 22~~31, 2025, ~~for 100,000 shares at $0.136 / share, for total consideration of $13,607. In early August of 2025,~~ the Company ~~requested the aggregate amount of stock that it~~ had ~~purchased~~no tooption ~~date in certificate form~~expense. ~~This certificate was for 3,836,170 shares. The Company sent this certificate to its transfer agent to cancel these shares outstanding, which was completed in August of 2025.~~

During the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, the Company ~~had~~issued no60,000 ~~option~~shares ~~expense~~of Rule 144 “restricted” stock to Sean P. Iddings, an Independent Board Member, for his services in that capacity during the period.

During the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, the Company ~~issued~~completed 40six (6) private transactions for an aggregate amount of 601,~~000~~015 shares common stock, at a weighted average price of ~~Rule~~$0.1258 ~~144~~per ~~“restricted”~~share ~~stock~~for tototal ~~Sean~~consideration ~~Iddings~~of $75, an595. ~~Independent~~These ~~Board~~shares ~~Member,~~were ~~for~~then ~~his~~immediately cancelled. ~~services~~The insellers ~~that~~of ~~capacity~~these ~~during~~shares solicited the ~~period~~Company for an offer to purchase their shares.

InDuring ~~addition to~~ the ~~two~~nine (29) ~~private~~months ~~transactions~~ended ~~totaling~~December ~~$13~~31,~~236~~ ~~disclosed above~~2025, the Company ~~had~~executed ~~one~~17 ~~(1)~~purchases ~~additional~~of ~~transaction~~its ~~during the~~common ~~six~~stock ~~(6)~~on ~~months ended September 30, 2025. In May,~~ the ~~Company~~open ~~repurchased~~market for an aggregate amount of ~~284~~4,~~959~~150,497 shares ~~common stock from one individual who solicited the Company for an offer~~, at a weighted average price of $0.141017 per share for total consideration of $39422,~~894~~236. ~~These~~Of ~~shares~~those 4,150,497 ~~were~~shares ~~then~~that ~~cancelled.~~were ~~Total~~purchased ~~consideration paid for share purchases in private transactions~~ during the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, ~~was~~3,836,170 ~~$53~~shares were cancelled,~~130~~ and 314,327 were held as Treasury shares as of December 31, 2025.

Preferred Stock

The Company has 20,000,000 authorized shares of preferred stock. As of ~~September~~December 3031, 2025, and March 31, 2025, there were no preferred shares issued or outstanding.

NOTE 6 – PAYROLL LIABILITIES & ACCRUED EXPENSES

Accrued expenses for the periods are as follows:

SCHEDULE OF ACCRUED EXPENSES

	September 30, 2025			March 31, 2025
	December 31, 2025			March 31, 2025
Payroll liabilities	$	~~121~~88,~~046~~994		$	128,655
Sales tax payable		815,~~229~~822			32,502
State income tax payable		(3561,~~775~~713	)		(4,744	)
Production printer accrued expenses		14,985			14,985
Accrued expenses		14,985			14,985
Total	$	~~108~~58,~~485~~088		$	171,398

NOTE 7 - RELATED PARTY TRANSACTIONS

The Company had no related party transactions during the fiscal year ended March 31, 2025, nor during the six (6) months ended September 30, 2025.

NOTE 8 - SUBSEQUENT EVENTS

On October 28, 2025, the Company purchased 3,000 shares on the open market for $0.1255/share, for total consideration of $383.

On October 3, 2025, the Company issued 20,000 shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his Director services for the quarter ended September 30, 2025.

NOTE 7 - RELATED PARTY TRANSACTIONS

The Company had no related party transactions during the fiscal year ended March 31, 2025, nor during the nine (9) months ended December 31, 2025.

NOTE 8 – PROVISION FOR INCOME TAXES

Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ending March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $1,011,466. The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal year 2024. Once the valuation allowance was fully removed, a provision for income taxes was disclosed.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of December 31, 2025, or March 31, 2025. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next 12 months.

Although we believe that our tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to examination by tax authorities in the ordinary course of business. We periodically assess the likelihood of adverse outcomes resulting from these examinations to determine the impact on our deferred taxes and income tax liabilities and the adequacy of our provision for income taxes. Changes in income tax legislation, statutory income tax rates or future taxable income levels, among other things, could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods.

The Company files income tax returns in the United States, the State of Idaho and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed. The Company does not have any unrecognized tax benefits to report in the current period.

Net deferred tax assets and liabilities consist of the following components as of December 31, 2025, and March 31, 2025:

	December 31, 2025			March 31, 2025
Deferred tax assets
Right of use liabilities		291,826			333,659
Goodwill amortization		9,761			11,201
Charitable Contribution carryover		-			700
NOL carryover		2,197,113			2,253,412
Total deferred tax assets		2,498,700			2,598,972

Deferred tax liabilities
Right of use assets		(276,503	)		(319,261	)
Depreciation		(1,570	)		(2,850	)
Total deferred tax liabilities		(278,073	)		(322,111	)

Net deferred tax assets		2,220,627			2,276,861

Less valuation allowance		-			-
Net deferred tax assets		2,220,627			2,276,861

The reconciliations of the Company’s net income taxes for the nine (9) months ended December 31, 2025, and fiscal year 2025 ended on March 31, 2025, are as follows:

	December 31, 2025			March 31, 2025
U.S. Federal income tax at statutory rate	$	(52,972	)	$	243,564
State taxes, net of Federal benefit		(3,261	)		20,834
Change in valuation allowance		-			-
(Income Tax Benefit) Provision	$	(56,233	)	$	264,398

The Company files income tax returns in the United States, the State of Idaho, and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed.

The summary of Federal Operating Loss Carryforwards for the nine (9) months ended of December 31, 2025, is as follows:


Unused operating loss carryforward March 31, 2025	$	7,911,114
Operating loss carryforwards realized	$	255,761
Unused operating loss carryforward December 31, 2025	$	7,655,353

NOTE 9 - SUBSEQUENT EVENTS

On January 9, 2026, we purchased 20,000 shares of our common stock in the open market at $0.132 per share. The total amount of the transaction was $2,647, which included a $7.00 commission.

On January 23, 2026, we purchased 426,788 shares of our common stock from the estate of a former investor. The Personal Representative of the estate solicited us for an offer to purchase these shares. The price paid per share was $0.115, for an aggregate purchase price of $49,081. These shares were subsequently cancelled.

On January 30, 2026, we purchased 13,315 shares of our common stock in a private transaction with an individual who solicited us for an offer to purchase these shares. The price paid per share was $0.135, for an aggregate purchase price of $1,797.53. These shares were subsequently cancelled.

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

Cautionary Statements for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995:

Except for historical facts, all matters discussed in this ~~Annual~~Quarterly Report, which are forward-looking, involve a high degree of risk and uncertainty. Certain statements in this ~~Annual~~Quarterly Report set forth management’s intentions, plans, beliefs, expectations, or predictions of the future based on current facts and analyses. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” or similar expressions, we intend to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated in such statements, due to a variety of factors, risks, and uncertainties. Potential risks and uncertainties include, but are not limited to, competitive pressures from other companies within the Educational Industries, economic conditions in the Company’s primary markets, exchange rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing, government action, weather conditions and other uncertainties, including those detailed in our SEC filings. We assume no duty to update forward-looking statements to reflect events or circumstances after the date of such statements.

The following discussion should be read in conjunction with Item 1, Condensed Financial Statements, in Part I of this Quarterly Report.

Overview of Current and Planned Operations

PCS Edventures!, Inc. sells STEM / STEAM products to educational and recreational entities serving youth. ~~Because~~At ~~the~~this ~~majority of our customers work in out-of-school-~~time ~~settings~~, we ~~have~~do not ~~attempted~~ attempt to align our products to fit in the classroom setting, ~~until~~although ~~recently.~~we ~~Classroom~~are aware that some of our customers use our products to fill enrichment ~~curriculum~~time ~~must~~blocks ~~promote~~in ~~academic~~the ~~achievement~~classroom ~~through~~during ~~rigorous~~formal ~~alignment~~school time. Classroom curriculum must align with specific state standards to be considered for use. Each state has ~~its~~their own unique set of standards, making classroom curriculum development a state by-state endeavor.

On the other hand, out of school programs ~~focus~~are ~~more~~not ~~broadly~~subject onto ~~the~~any ~~goals~~state ofgovernmental ~~engagement~~standard alignments, ~~career~~although ~~exploration~~these ~~and~~programs ~~development~~often require that educational programs align with various sets of ~~21st century~~state ~~skills~~or national educational standards. This difference makes it easier to penetrate out-of-school programs, as more ~~freedom~~freedoms ~~exists~~exist for curriculum development. We focus our efforts on these out-of-school programs, which include summer school, summer camps, YMCA programs, Boys and Girls club programs, and various other programs offered outside of the classroom, at all times of the year, that are too numerous to list. Oftentimes, these programs are sponsored, administered, and/or supported by local school districts, and we employ considerable efforts to build relationships with these types of school districts to provide desired ~~programing~~ programming for their out-of-school programs. ~~Most~~The majority of the time, the out-of-school programs offered are funded with grants; however, some programs are run on a for- profit basis. The Company sells to all of these types of entities.

~~However,~~We ~~given~~offer ~~the~~professional ~~new~~development ~~administration’s~~training ~~stated~~for ~~goals~~instructors ofusing ~~removing~~our ~~federal~~products; ~~influence~~ and ~~administration~~typically ~~from~~charge ~~education,~~a ~~and~~fee ~~returning~~for ~~those functions~~this ~~to the states~~service, wewith ~~are~~the ~~now~~fee primarily ~~considering~~covering ~~which of~~ our ~~products would be adaptable to the educational standards of certain larger states~~expenses. WeManagement ~~intend~~does tonot ~~continue~~view tothis ~~weigh~~service ~~state-level~~as ~~priorities~~a ~~much~~profit ~~more~~center, ~~heavily~~but inrather ~~the development of future products~~ as ~~well. We view~~ a ~~transition~~customer ~~from~~service ~~federal dominance to state dominance~~ component of ~~the~~our ~~application~~product ofthat ~~educational~~adds ~~standards~~ to ~~curriculum~~its asuniqueness ~~likely,~~and ~~albeit~~value ~~over a~~in ~~longer~~the ~~time frame~~marketplace, and weas ~~are~~a ~~adapting~~market ~~our product~~ development endeavor to ~~this~~build ~~change~~out inthe ~~our~~Company’s addressable market.

14The nature of our target market produces considerable seasonality for the Company’s revenue. The quarters ended June 30 and September 30 tend to be the peak of this seasonality (with the quarter ended March 31 being close to these quarters), while the quarter ended December 31 tends to be the low point of our seasonality. The Table below reflects this seasonality.

Market feedback also indicates that products that have evidence of their effectiveness are increasingly being demanded, especially in state-funded programs and larger programs. While we maintain a library of the evidence we have accumulated about the outcomes one can expect when using our products, and while this library of evidence has helped us win larger orders, we believe that expanding this library and upgrading the tiers of evidence we have will produce meaningful benefits for future sales.

	Quarterly Revenue $
Quarter Ended	2022		2023		2024		2025

March 31		1,445,594		2,521,470		2,262,772		1,292,819
June 30		1,391,785		2,605,281		3,159,923		2,423,309
September 30		1,243,662		3,767,326		2,267,338		1,529,503
December 31		1,847,659		459,087		701,147		754,889

WeThe ~~have~~Company, ~~engaged~~through ~~various~~winning ~~firms~~a tocompetitive ~~help~~Request usfor ~~generate~~Proposal, ~~more~~added ~~compelling~~the ~~evidence~~Air ofForce ~~our~~Junior ~~products~~Reserve Officers’ ~~effectiveness.~~Training WeCorp ~~are~~(“AFJROTC”) as ~~early~~a customer in ~~this~~the ~~process, but~~second wehalf ~~intend~~of tocalendar ~~substantially~~year ~~build~~2022. ~~out~~The ~~our~~Company ~~library~~experienced ofelevated ~~evidence~~sales due to the fulfillment of ~~our~~the ~~products’~~AFJROTC orders ~~effectiveness~~for the quarters ended December 31, 2022, March 31, 2023, and September 30, 2023. ~~The~~One ~~course~~of wethe ~~take~~AFJROTC torevenue ~~accomplish~~quarters was December ~~this~~31, ~~endeavor~~2022, ~~will~~which ~~depend~~corresponds onwith ~~our~~the ~~experiences~~lowest ~~with~~seasonal ~~these~~revenue ~~early~~quarter, ~~initiatives~~so the effects of seasonality in 2022 was not as readily apparent as in other calendar years.

WeDuring ~~offer~~the ~~professional~~quarter ~~development~~ended ~~training~~December ~~for instructors using our products~~31, ~~and~~the ~~typically~~Company ~~charge~~focuses aon ~~fee~~product ~~for this service~~development, ~~with~~restocking ~~the~~inventory ~~fee primarily~~and ~~covering~~general ~~our~~planning ~~expenses.~~for ~~Management~~the ~~does~~next ~~not view this service as a profit center, but rather as a customer service component~~year. ofSales ~~our product that adds to its uniqueness~~ and ~~value~~marketing inactivities ~~the~~remain ~~marketplace,~~fairly ~~and~~constant asthroughout ~~a market development endeavor to build out~~ the ~~Company’s addressable market~~year.

The nature of our target market produces considerable seasonality for the Company’s revenue. The quarters ended June 30 and September 30 tend to be the peak of this seasonality (with the quarter ended March 31 being close to these quarters), while the quarter ended December 31 tends to be the low point of our seasonality. The Table below illustrates this seasonality.16

	Quarterly Revenue
Quarter Ended	2022		2023		2024		2025
March 31		1,445,594		2,521,470		2,262,772		1,292,819
June 30		1,391,785		2,605,281		3,159,923		2,423,309
September 30		1,243,662		3,767,326		2,267,338		1,529,503
December 31		1,847,659		459,087		701,147

During the quarter ended December 31, the Company focuses on product development, restocking inventory, and general planning for the next year. Sales and marketing activities remain fairly constant throughout the year.

Results of Operations

Revenue

For the ~~three~~quarter ~~(3) months~~ ended ~~September~~December 3031, 2025, our revenue was $1754,~~529~~889,~~503,~~ which was $~~737~~53,~~835~~742 ~~less~~greater than our revenue for the quarter ended ~~September~~ 30December 31, 2024, of $2701,~~267~~147. Business conditions during the quarter ended December 31,~~338~~ 2025, were much better than those during the quarter ended December 31, 2024. The ~~factors~~revenue ~~below~~differential ~~account~~of $53,742 includes deferred revenue from the prior quarter for ~~this~~both ~~difference:~~periods.

1.Deferred revenue ~~The market environment~~ for the quarter ended September 30, ~~2024 was significantly more robust than that for the quarter ended September 30~~2025, ~~2025.~~of ~~The Elementary and Secondary School Emergency Relief (“ESSER”) funds were expiring on September~~ $30, ~~2024~~160, ~~incentivizing~~was ~~the~~recognized ~~spending of those funds prior to their expiration. Not only were those funds absent~~ in the quarter ended ~~September~~December 3031, 2025~~, but also the market was faced with the uncertainty of future funding which held back some purchasing decisions until further clarity was reached~~. 2.Deferred ~~For~~revenue for the quarter ended September 30, 2024, weof ~~had~~ $~~445~~107,~~113~~336, inwas ~~revenue~~recognized ~~from~~in the ~~Air Force JROTC program. For the~~ quarter ended ~~September~~December 3031, ~~2025,~~2024. ~~we had $8~~Thus,~~144~~ inthe revenue ~~from~~differential between ~~this customer. It is reasonable to assume that our sales experience with~~ the ~~Air~~quarter ~~Force~~ended ~~JROTC~~December ~~program will decline as the contract ages~~31, ~~as they have a limited number of sites (approximately 870 sites)~~2025, ~~and~~versus ~~we have already sold our Discover Drones program into~~ the ~~vast majority of these sites. 3. For the~~ quarter ended ~~September~~December 3031, 2024, wewas ~~had~~much ~~$613,330~~larger inwhen ~~reseller~~considering sales, asactivities that ~~compared~~occurred toduring ~~$223,492 in reseller sales for~~ the quarter ~~ended~~that ~~September~~produced ~~30,~~the ~~2025.~~revenue 4.for On the ~~positive side~~quarter, weindicating ~~recorded~~the ~~revenue of $424,790 from our Iowa Scale~~much-Upimproved ~~customer~~business conditions for the quarter ended ~~September~~December 3031, 2025~~. We did not win a contract from this customer in the prior year and~~, ~~thus,~~over ~~had~~those $0during ~~in revenue from them for~~ the quarter ended ~~September~~December 3031, 2024~~, from this customer~~.

15For the nine (9) months ended December 31, 2025, our revenue was $4,707,702, which was $1,420,707 less than our revenue for the nine (9) months ended December 31, 2024, of $6,128,409. Business conditions were impaired during the first three (3) calendar quarters of 2025 compared to the same period in 2024 and did not improve until the fourth calendar quarter on a year-over-year basis, which is our seasonally slowest quarter of the year.

~~For~~Thus, the ~~six~~business environment for the nine (69) months ended ~~September~~December 3031, 2025, ~~our~~can ~~revenue~~be ~~was~~characterized ~~$3,952,812,~~as ~~which~~impaired ~~was~~when ~~$1,474,450~~compared ~~less~~to ~~than~~that ~~our revenue for~~ of the ~~six~~nine (69) months ended ~~September~~December 3031, 2024~~, of $5,427,262~~. ~~The~~Our ~~same~~reseller ~~factors that affected the difference in quarterly~~ revenue ~~described above also explain the revenue difference~~ for the ~~six~~nine (69) ~~month~~months ~~periods~~ ended ~~September~~December 3031, 2025, ~~and 2024. Reseller revenue~~ was $1845,~~095~~637,~~651 for the six~~ ~~(6) months ended September 30, 2024,~~ versus $~~571~~1,~~934~~430,491 for the ~~six~~nine (69) months ended ~~September~~December 3031, ~~2025. Revenue from the Air Force JROTC was negligible during the three-month periods ended June 30~~2024, ~~2025,~~which ~~and~~provides ~~2024.~~another ~~Thus,~~indication ~~revenue~~of ~~from~~ the ~~Air~~challenges ~~Force~~faced ~~JRTOC for~~ during the ~~six~~nine (69) ~~month periods~~months ended ~~September~~December 3031, 2025, ~~and~~compared ~~2024,~~to ~~mirror that for~~ the ~~three~~nine (39) ~~month~~months ~~periods~~ ended ~~September~~December 3031, ~~2025, and~~ 2024.

~~The~~These ~~market~~challenges ~~environment~~started ~~was~~with ~~also~~the ~~more~~expiration ~~robust~~of ~~for~~ the ~~six~~Elementary ~~(6)~~and ~~months~~Secondary ~~ended~~School Emergency Relief funds on September 30, 2024, ~~versus~~which ~~conditions~~were part ~~for~~of the ~~six~~extra ~~(6)~~funding ~~months~~available ~~ended September~~to ~~30,~~schools ~~2025~~after the Covid pandemic. ~~The~~This ~~approaching~~expiration ~~deadline~~was tofollowed ~~spend~~by ~~ESSER~~a ~~funds~~change ~~stimulated~~in ~~sales~~presidential ~~activity~~administrations, which ~~for~~significantly changed the ~~six~~landscape ~~(6)~~of ~~months~~school ~~ended~~funding. ~~September~~This ~~30,~~change created hesitation in the minds of decision makers to commit ~~2024.~~to ~~Funding~~spending ~~uncertainty~~as ~~hindered~~they ~~sales~~struggled ~~activity~~to ~~for~~understand the ~~six~~nature ~~(6)~~of ~~months~~the ~~ended~~changes. ~~September~~They ~~30,~~wanted ~~2025~~to wait for clarity before committing to purchasing activities.

The table below, which shows ~~sales~~customer transactions by ~~customer~~ size for the periods indicated, illustrates the ~~restrained~~impairment our market ~~environment~~faced for the nine ~~three~~ (39) ~~and~~months ~~six (6) month periods~~ ended ~~September~~December 3031, 2025.

Number of Customer Transactions by size

	Number of Customer Transactions by size
		> $1 million		>$500,000		> $100,000		> $50,000		> $25,000		> $10,000
Nine (9) months ended December 31, 2025			0		0		8		25		42		80
Nine (9) months ended December 31, 2024			0		1		14		21		44		90
Nine (9) months ended December 31, 2023			1		2		16		23		34		80
Nine (9) months ended December 31, 2022			1		1		8		18		30		49
Nine (9) months ended December 31, 2021			0		0		5		10		15		38

	>$1 million		>$500,000		> $100,000		> $50,000		> $25,000		> $10,000
Three months ended 9/30/2022		0		0		2		10		15		22
Three months ended 9/30/2023		1		1		11		13		17		34
Three months ended 9/30/2024		0		0		6		10		18		33
Three months ended 9/30/2025		0		0		2		10		16		29

~~Number~~Despite ofour ~~Customer~~setback ~~Transactions~~in by2025, ~~size~~we will continue to solicit larger customers; however, we cannot guarantee success, nor can we provide a numerical framework to describe the potential success. Risk factors include any developments that negatively impact education funding in the United States, challenges finding and retaining employees who meet our high standards and disruptions to our supply chain of critical components.

	>$1 million		>$500,000		> $100,000		> $50,000		> $25,000		> $10,000
Six months ended 9/30/2022		0		0		7		15		26		43
Six months ended 9/30/2023		1		1		16		23		33		72
Six months ended 9/30/2024		0		0		14		20		41		78
Six months ended 9/30/2025		0		0		6		22		37		71

We believe that we can resume the success we experienced in soliciting larger customers, but we can offer no assurances that success will be certain; nor can we offer any numerical framework in describing the success that may occur. Risk factors include anything that would negatively affect educational funding in the United States; finding and retaining employees that meet our high standards; and anything that would negatively affect our supply chain of critical components.

Cost of Sales

We strive to have a cost of sales that is less than 40% of revenue. We price our products once per year, at the beginning of the calendar year, and maintain that pricing level throughout the year. During inflationary environments, when the price level of the Company’s raw materials is increasing, the Company must absorb that negative impact to gross margins until it can reprice its products at the beginning of the next calendar year. This repricing analysis considers the current pricing level of materials, as well as the likely increase in those levels in the year ahead. We attempt to incorporate shipping costs into the cost of raw materials, but oftentimes during the course of the year, we are compelled to ship in a more expedient manner, which is more expensive than our baseline assumptions. More recently, tariff management has become a significant factor in pricing considerations.

16For the quarter ended December 31, 2025, our cost of sales was $270,138, or 35.8% of revenue. For the quarter ended December 31, 2024, our cost of sales was $348,660, or 49.7% of revenue. For any given quarter, and especially in low revenue quarters, the cost of sales can vary significantly from our desired 40% or less of revenue. However, for any given year, the calculation is relevant and desired to be 40% or less of revenue. For the nine (9) months ended December 31, 2025, our cost of sales was $1,798,560, or 38.2% of revenue, as compared to $2,459,747, or 40.1% of revenue for the nine (9) months ended December 31, 2024. Factors affecting cost of sales include:

For the quarter ended September 30, 2025, our cost of sales was $641,650, or 42.0% of revenue. For the quarter ended September 30, 2024, our cost of sales was $912,651, or 40.3% of revenue. For any given quarter, and especially in low revenue quarters, the cost of sales can vary significantly from our desired 40% or less of revenue. However, for any given year, the calculation is relevant and desired to be 40% or less of revenue. The difference in the cost of sales for the two (2) quarters was due to cost inflation arising primarily from tariff expenses being incorporated into the final costs of items in our inventory.

Reseller revenue was down from 27.1% of revenue in the quarter ended September 30, 2024, compared to 14.6% of revenue in the quarter ended September 30, 2025. Because reseller revenue has a higher cost of goods due to the reseller’s margin being deducted from revenue, a lower reseller percentage of revenue, like that experienced in the quarter ended September 30, 2025, would have the effect of reducing our cost of sales as a percentage of revenue. Thus, our reseller mix of sales for the quarter ended September 30, 2025, was a favorable factor in reducing our cost of sales. Because our cost of sales increased for the quarter ended September 30, 2025, versus that for the quarter ended September 30, 2024, the inflationary impact of tariffs had a greater negative impact on our cost of sales than the actual change in cost of sales.

For the six (6) months ended September 30, 2025, our cost of sales was $1,528,421, or 38.7% of revenue. For the six (6) months ended September 30, 2024, our cost of sales was $2,111,087, or 38.9% of revenue.

Factors affecting cost of sales include:

Helps sub 40% cost of sales		Impedes sub 40% cost of sales
Higher revenue		Higher inflation
Larger order size		Expedited shipping
Ability to take advantage of volume discounts		Quality issues with raw materials
Lower reseller mix		Higher reseller mix

Operating Expenses

Operating expenses are divided into two (2) categories – salary + wages, and general + administrative. Salary and wages tend to increase over time as the Company has been increasing its number of employees, and we expect to continue to do so in the future. Also, the Company desires to retain employees over the long term, which requires periodic increases in compensation as their value to the Company increases.

The Company also has a discretionary quarterly bonus program based on qualified revenue. Qualified revenue is defined as revenue where there are no reseller fees or other price adjustments associated with that revenue. Thus, all reseller sales are disqualified from the discretionary quarterly bonus calculation, as are other miscellaneous transactions where the Company did not receive a full margin. During quarters with higher revenue, salaries and wages will increase, all other things equal.

Salary and wages were $~~524~~539,~~247~~034 for the quarter ended ~~September~~December 3031, 2025. For the quarter ended ~~September~~December 3031, 2024, salaries and wages were $~~485~~436,~~734~~150. ~~For~~We ~~the~~had ~~six~~27 ~~(6)~~employees ~~months~~as ~~ended~~of ~~September~~December 3031, 2025, ~~salary and wages were $1,134,539~~ versus ~~$1,004,031~~24 ~~for~~employees ~~the~~as ~~six~~of ~~(6)~~December ~~months ended September 30~~31, 2024. Salaries and wages increased during the three (3) and six (6) month periods ended September 30, 2025, compared to the three (3) and six (6) month periods ended September 30, 2024, as increases in salaries and employee additions outweighed a lower bonus amount.

AsSalary ofand ~~September~~wages 30were $1,673,573 for the nine (9) months ended December 31, 2025. For the nine (9) months ended December 31, 2024, salaries and wages were $1,440,181. As with the case above, we had 26more ~~full-time~~ employees ~~and~~during ~~one~~the nine (19) ~~part-time~~months ~~employee.~~ended AsDecember of31, ~~September~~2025, 30than the nine (9) months ended December 31, 2024,. weWe ~~had~~also 24want ~~full-time~~to retain our employees, which necessitates annual raises to compensate for inflation and reflect an employee’s increased value to the Company.

General and administrative expenses include all operating expenses outside of salaries and wages. These include the following categories:

1. Advertising and marketing expenses 2. Trade show and travel expenses 3. Product development expenses 4. Finance charges 5. Contract labor expenses 6. Lease expenses 7. Insurance premiums 8. Workers’ compensation expenses 9. Office supplies and repairs 10. Professional expenses 11. ~~Software~~Licenses 12. State sales tax expenses 13. Office and warehouse infrastructure expenses

17Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $262,358 for the quarter ended December 31, 2025. For the quarter ended December 31, 2024, general and administrative expenses were $375,081. The decrease in general and administrative expenses for the quarter ended December 31, 2025, versus the quarter ended December 31, 2024, was largely due to the Company’s new facilities leases, which began in the quarter ended December 31, 2024, and required upgrading expenses. These upgrading expenses were absent in the quarter ended December 31, 2025. Warehouse and Office lease and maintenance expenses were $64,149 for the quarter ended December 31, 2025, compared to $141,847 for the quarter ended December 31, 2024. The expenses included the costs of upgrading the new facilities, especially the warehouse.

~~Most~~General ofand ~~these~~administrative expenses ~~are~~were ~~not~~$1,026,529 ~~correlated~~for ~~with~~the ~~changes~~nine in(9) ~~revenue~~months ended December 31, ~~but~~2025. ~~they~~For ~~tend~~the tonine ~~increase~~(9) ~~over~~months ~~time.~~ended ~~General~~December 31, 2024, general and administrative expenses were $~~387~~1,~~920~~091,005. ~~for~~An ~~the~~increase ~~quarter~~of ~~ended~~warehouse ~~September~~and ~~30,~~office ~~2025.~~lease ~~For~~expenses ~~the~~is ~~quarter~~largely ~~ended~~responsible for ~~September~~the ~~30,~~increase ~~2024,~~in general and administrative expenses ~~were~~ ~~$356,154.~~for ~~For~~ the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, ~~general~~over ~~and~~the ~~administrative~~nine ~~expenses~~(9) ~~were~~months ~~$764~~ended December 31,~~171,~~ ~~compared~~2024. toThe ~~$715,924~~ lease rates for ~~the~~our ~~six~~new ~~(6)~~facilities ~~months~~are ~~ended~~higher ~~September~~than ~~30,~~for ~~2024~~our old facilities.

~~This~~We ~~increase~~moved ininto ~~general~~our ~~and~~new ~~administrative~~facilities ~~expenses~~ during the ~~three~~quarter ~~(3) and six (6) month periods~~ ended ~~September~~December 3031, ~~2025~~2024, ~~compared to the three (3)~~ and ~~six (6) month period ended September 30~~thus, ~~2024,~~incurred ~~was~~lower ~~largely~~lease ~~due~~rates tofor the ~~increased~~nine ~~costs~~(9) ~~of our new warehouse and office~~months ~~facilities for the periods~~ ended ~~September~~December 3031, ~~2025~~2024, ~~compared~~than towe ~~those~~did ~~costs~~ for ~~our~~the ~~prior~~nine ~~facilities~~(9) ~~for~~months ~~the period~~ ended ~~September 30~~December 31, ~~2024~~2025.

Other Income and Expenses

~~Net~~Other ~~interest~~ income ~~was~~and expenses are those outside of the ~~sole~~Company’s ~~source~~ordinary course of ~~other~~business. Interest income ~~for~~and ~~the~~interest ~~quarters~~expense ~~ended~~are ~~September~~disclosed under ~~30,~~other ~~2025,~~income and ~~2024~~expenses. ~~For~~The ~~the~~Company ~~quarter~~has ~~ended~~accumulated ~~September~~cash which is invested in a Vanguard money market fund that invests exclusively ~~30,~~in ~~2025,~~repurchase ~~other~~agreements ~~income~~and ~~was~~short-term ~~$31,126,~~U.S. ~~while~~government ~~other~~securities. ~~income~~The ~~was~~ticker ~~$37,613~~symbol ~~for~~of ~~the~~this ~~quarter~~fund ~~ended~~is ~~September~~VMFXX. ~~30,~~The ~~2024~~Company’s investments in this fund produce interest income.

For the ~~six~~quarter ~~(6) months~~ ended ~~September~~December 3031, 2025, other income and ~~2024~~expenses were $28,837, with net interest income ~~was~~accounting for the ~~sole~~entire ~~source of other income~~amount. For the ~~six~~quarter ~~(6) months~~ ended ~~September~~December 3031, ~~2025~~2024, other income ~~was~~and expenses were $5324,~~957~~920, ~~while~~with ~~other~~net interest income ~~was~~accounting ~~$59,123~~ for the ~~quarter~~entire ~~ended September 30, 2024~~amount.

~~The~~For ~~Company’s~~the ~~surplus~~nine ~~cash~~(9) ismonths ~~invested~~ended inDecember a31, ~~“Vanguard”~~2025, ~~money~~other ~~market~~income ~~fund that invests exclusively in repurchase agreements~~ and ~~short-term~~expenses ~~U.S.~~were ~~government~~$82,794, ~~securities.~~with ~~The~~net ~~ticker~~interest ~~symbol~~income ofaccounting ~~this~~for ~~fund~~the ~~is “VMFXX~~entire amount.” For ~~comparisons~~the ~~for~~nine ~~both~~(9) ~~periods,~~months ~~net interest~~ended ~~income~~December ~~declined~~31, as2024, ~~our~~other ~~cash~~income ~~invested~~and inexpenses ~~our~~were ~~money market savings declined~~$84,043, ~~and~~with ~~because~~net ~~the~~interest ~~yield~~income ofaccounting for the ~~fund~~entire ~~has declined in tandem with short-term interest rates~~amount.

Net Income (Loss) Before Tax

For the ~~three~~quarter ~~(3) months~~ ended ~~September~~December 3031, 2025, net income ~~before tax was $6,812 versus $550,412 for the three~~ (3loss) ~~months ended September 30, 2024. For the six (6) months ended September 30, 2025, net income~~ before tax was ($~~579~~287,~~638~~804) versus ($1433,~~655,343~~824) for the ~~six~~quarter ~~(6) months~~ ended ~~September~~December 3031, 2024. ~~Lower~~Higher revenue and lower ~~gross~~costs ~~margin~~characterized ~~during~~ the ~~three~~net income (3loss) ~~and~~before ~~six~~tax ~~(6)~~for ~~month~~the ~~periods~~quarter ended ~~September~~December 3031, 2025, compared ~~versus~~to ~~those for~~ the ~~period~~quarter ended ~~September~~December 3031, 2024~~, were responsible for the variance in net income before taxes~~.

For the nine (9) months ended December 31, 2025, net income before tax was $291,834 versus $1,221,519 for the nine (9) months ended December 31, 2024. The nine (9) months ended December 31, 2025, can be characterized as having less revenue and higher costs when compared to the nine (9) months ended December 31, 2024.

Taxes

The Company has a significant ~~tax-loss~~net ~~carry-forward~~operating ~~asset,~~losses which arose due to past losses. At March 31, 2025, the Company had net operating ~~losses~~ ~~of approximately $8.0 million that may be offset against future taxable income. At September 30, 2025, the Company had net operating~~ losses of approximately $7.39 million that may be used to offset against future taxable income.

Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ended March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $1,011,466. The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal year 2024.

18While we do not expect to pay federal income taxes for fiscal year 2026, the deferred tax asset will be adjusted on a quarterly basis to reflect the amount of taxes it is offsetting for the quarter. The provision for income tax is an unwinding of the tax benefit we recorded in prior periods when we recognized the value of the deferred tax asset on the income statement.

~~While~~For wethe dothree ~~not~~(3) ~~expect~~months toended ~~pay~~December ~~federal~~31, ~~income taxes for fiscal year 2026~~2025, the ~~deferred~~provision ~~tax~~for ~~asset~~income ~~will~~tax bewas ~~adjusted~~$77,313 oncompared ato ~~quarterly~~$210,935 ~~basis~~for ~~to reflect~~ the ~~amount~~three of(3) ~~taxes~~months ended itDecember is31, ~~offsetting for the quarter~~2024. ~~The~~A ~~provision~~positive ~~for~~ income tax isprovision anindicates ~~unwinding~~a ofnet ~~the~~loss ~~tax~~before ~~benefit~~income wetax ~~recorded~~for ~~in prior periods when we recognized~~ the ~~value of the deferred tax asset on income statement~~period.

For the nine (9) months ended December 31, 2025, the provision for income tax was ($56,233) compared to ($155,904) for the nine (9) months ended December 31, 2024. A negative income tax provision indicates a positive net income before tax for the period.

Liquidity and Capital Resources

Cash Flow from Operations

For the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, cash provided by operations was $~~488~~262,~~877,~~875 compared to cash provided by operations of $2,~~852~~727,~~232~~089 for the ~~six~~nine (69) months ended ~~September~~December 3031, 2024. ~~Major~~Cash ~~factors~~provided inby ~~this~~operations ~~difference~~decreased ~~are~~significantly afor ~~lower~~the ~~net~~nine ~~income~~(9) ~~and~~months ended December 31, ~~with~~2025, ~~that~~as compared to the nine (9) months ended December 31, a2024, ~~lower~~largely ~~tax~~due to 1) the difference between the change in accounts ~~provision;~~receivable and 2) the ~~changes~~difference in ~~accounts~~the ~~receivable~~net ~~for~~income between the two (2) periods.

AsFor ofthe ~~September~~nine ~~30,~~(9) ~~2025,~~months ~~total~~ended ~~current~~December ~~assets were $6,087,877 and total current liabilities were $453,862, resulting in working capital of $5,634,015. As of March~~ 31, 2025, ~~total~~accounts ~~current~~receivable ~~assets~~decreased ~~were~~by $5158,~~918,984~~217 ~~and~~compared ~~total~~to ~~current~~a ~~liabilities~~decrease ~~were~~of $~~326~~1,~~439~~512,101 ~~resulting~~for inthe ~~working~~nine ~~capital~~(9) ofmonths ~~$5,592,545.~~ended ~~The~~December ~~Company had a current ratio as of September 30, 2025, of 13.4, compared to a current ratio of 18.1 as of March~~ 31, ~~2025~~2024.

AsFor ofthe ~~September~~nine ~~30,~~(9) ~~2025,~~months weended ~~had~~December $331,~~247~~ 2025,~~793~~ innet ~~cash~~income ~~and~~was ~~cash equivalents~~$235,601 compared to net income of $31,~~223~~065,~~147~~615 infor ~~cash~~the asnine of(9) ~~March~~months ended December 31, ~~2025~~2024.

As of December 31, 2025, total current assets were $5,693,823 and total current liabilities were $399,382, resulting in working capital of $5,294,441. As of March 31, 2025, total current assets were $5,918,984 and total current liabilities were $326,439, resulting in working capital of $5,592,545. The Company had a current ratio as of December 31, 2025, of 14.3 compared to a current ratio of 18.1 as of March 31, 2025.

As of December 31, 2025, we had $2,973,457 in cash and cash equivalents compared to $3,223,147 in cash and cash equivalents as of March 31, 2025.

Cash Flow from Investing Activities

For the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, cash used by investing activities was $1214,~~041,~~734 compared to cash used by investing activities of $3276,~~982~~725 for the ~~six~~nine (69) months ended ~~September~~December 3031, 2024. During the nine (9) months ended December 31, 2024, we purchased warehouse equipment related to our recent relocation of the warehouse, expenses we did not incur during the nine (9) months ended December 31, 2025, which accounts for the decrease in cash used by investing activities.

We purchased a forklift for the warehouse for $26,829 during the six (6) months ended September 30, 2024, which accounts for the majority of the difference between the two (2) periods.

Cash Flow from Financing Activities

For the ~~six~~nine (69) months ended ~~September~~December 3031, 2025, cash used by financing activities was $~~452~~497,~~190,~~831 compared to cash used by financing activities of $~~143~~390,~~813~~021 for the ~~six~~nine (69) months ended ~~September~~December 3031, 2024. ~~For~~In both periods, ~~the~~cash ~~Company~~used ~~was~~by ~~active~~financing inactivities ~~buying~~was ~~back~~due ~~its~~to ~~stock~~the ~~and cancelling~~Company’s ~~it.~~purchase ~~Until May~~ of ~~2025,~~its ~~our~~common ~~purchase~~stock. ~~activity~~For ~~was in~~ the ~~form~~nine of(9) ~~private~~months ~~transactions~~ended ~~where~~December ~~the~~31, ~~owner~~2025, of the ~~stock~~Company ~~approached~~purchased us4,751,512 ~~soliciting an~~shares ~~offer to buy. Starting in May~~ of ~~2025,~~its wecommon ~~also began buying our~~ stock, and onfor the ~~open~~nine ~~market. During the six~~ (69) months ended ~~September 30~~December 31, ~~2025~~2024, wethe Company purchased 31,~~951~~174,~~370~~501 shares of ~~our~~its common stock. inAll ~~the~~common ~~open~~stock ~~market,~~purchased was ~~with~~cancelled anexcept ~~aggregate~~for ~~cost~~the ~~basis of $399~~314,~~061.~~327 ~~All~~Treasury ~~of these~~ shares, ~~except~~the ~~for~~Company ~~115,500~~held ~~shares,~~as ~~were~~of ~~cancelled~~December ~~during~~31, ~~the quarter~~2025.

Off-Balance Sheet Arrangements

We had no Off-Balance Sheet ~~Arrangements~~arrangements during the three (3) ~~month periods ended September 30, 2025,~~ and ~~2024,~~nine ~~nor did we have any such Arrangements during the six~~ (69) month periods ended ~~September~~December 3031, 2025, and 2024.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and our President, who acts as our Principal Financial Officer, have evaluated the effectiveness, as of December 31, 2025, of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025, due to the Company engaging the professional CPA firm of B.A. Harris to assist the Company in preparing our preliminary condensed financial statements and schedules for our auditor’s review.

Management, with the participation of our Chief Executive Officer, and our President, who acts as our Principal Financial Officer, have evaluated the effectiveness, as of September 30, 2025, of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2025, due to the Company engaging the professional CPA firm of B.A. Harris to assist the Company in preparing our preliminary condensed financial statements and schedules for our auditor’s review.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended ~~September~~December 3031, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this ~~Item~~item. ~~For additional information, please see our10-K Annual Report, filed with the SEC on June 30, 2025, which is incorporated herein by reference in Part II, Item 6. Exhibits, below.~~

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

~~None~~During the three (3) months ended December 31, 2025, the Company issued 20,000 shares of Rule 144 “restricted” stock to Sean P. Iddings, an Independent Board Member, for his services in that capacity during the quarter.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None; not applicable.

Item 5. Other Information.

~~Effective~~No ~~September~~director ~~29,~~or ~~2025,~~Section ~~the~~16 ~~Company~~officer ~~decreased~~adopted ~~its~~or ~~authorized~~terminated ~~common~~a ~~stock~~trading ~~from~~arrangement ~~150,000,000~~intended ~~shares~~ to ~~125,000,000~~satisfy ~~shares.~~the ~~This~~affirmative ~~decrease~~defense ~~in our~~conditions ~~authorized shares~~ of ~~common stock was approved by our shareholders at our 2025 annual meeting held on September 26, 2025. For additional~~ ~~information,~~Rule ~~please~~10b5-1(c) ~~see~~or ~~Section~~a 5“non-Rule 10b5–1” ~~Corporate~~trading ~~Governance~~arrangement ~~and~~during ~~Management, Item 503, of our 8-K Current Report dated September 26, 2025, filed with~~ the ~~SEC~~periods onreported ~~September 30, 2025, which is incorporated herein by reference~~ in ~~Part~~this ~~II,~~Form ~~Other Information, Item 6~~10-Q. ~~Exhibits, below.~~

No director or Section 16 officer adopted or terminated a trading arrangement intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a “non-Rule 10b5–1” trading arrangement during the periods reported in this Quarterly Report.22

Item 6. Exhibits.

(a) Index of Exhibits

Exhibit No.	Identification of Exhibit	Location if other than attached hereto
3.1	Second Amended and Restated Articles of Incorporation dated October 2, 2006	Attached to our Form 10 filed October 3, 2023
3.2	Articles of Amendment dated April 12, 2012	Attached to our Form 10 filed October 3, 2023
3.3	Articles of Amendment dated September 25, 2014	Attached to our Form 10 filed October 3, 2023
3.4	Articles of Amendment dated September 25, 2015	Attached to our Form 10 filed October 3, 2023
3.5	Articles of Amendment dated September 23, 2016	Attached to our Form 10 filed October 3, 2023
3.6	~~Third~~Articles ~~Amended~~of ~~Bylaws~~Amendment dated September 29, 2025	Attached ~~to our Form 10 filed October 3, 2023~~hereto
3.7	Third Amended Bylaws	Attached to our Form 10 filed October 3, 2023
31.1	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Todd R. Hackett, Chief Executive Officer and Chairman	Attached hereto
31.2	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Michael J. Bledsoe, President, Principal Financial Officer	Attached hereto
32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Todd R. Hackett, Chief Executive Officer and Chairman of the Board of Directors, and Mike J. Bledsoe, President and Principal Financial Officer	Attached hereto
101.INS	XBRL Instance Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.SCH	XBRL Taxonomy Extension Schema

~~8-K~~Documents ~~Current~~Incorporated ~~Report~~by ~~dated September 26, 2025, filed with the SEC on September 30, 2025.~~Reference:

8-K Current Report dated September 26, 2025, regarding our 2025 Annual Meeting, filed with the SEC on September 30, 2025.

10-K Annual Report for the fiscal year ended March 31, 2025, filed with the SEC on June 30, 2025.

2123

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PCS EDVENTURES!, INC.

	PCS EDVENTURES!, INC.

Dated: February 13, 2026	By:	/s/ Todd R. Hackett
		Todd R. Hackett
		Chief Executive Officer and
		Chairman of the Board of Directors

Dated: February 13, 2026	By:	/s/ Michael J. Bledsoe
		Michael J. Bledsoe
		President, Principal Financial Officer and Director

Dated: November 14, 2025	By:	/s/ Todd R. Hackett
		Todd R. Hackett
		Chief Executive Officer and
		Chairman of the Board of Directors
Dated: November 14, 2025	By:	/s/ Michael J. Bledsoe
		Michael J. Bledsoe
		President, Principal Financial Officer and Director

Filing Compare · PCS Edventures!, Inc.