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Item 1. Financial Statements

2016-02-11 compared with 2015-11-12 · 570 added, 641 removed, 161 unchanged (88% of the section changed)

Financial Statements.

The 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 Financial Statements fairly present the financial condition of the Registrant.

PART I - FINANCIAL INFORMATION

Balance sheets (Unaudited)

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 Financial Statements fairly present the financial condition

of the Registrant.

I - FINANCIAL INFORMATION

Balance Sheets

Statements of Operations (Unaudited)

Statement of Stockholders’

Deficit (Unaudited)

Equity (Deficit) (Unaudited)

Statements of Cash Flows (Unaudited)

Notes to Financial Statements (Unaudited)

Management’s Discussion and Analysis of Financial Conditions and Results of

Controls and Procedures

PART II - OTHER INFORMATION

EXHIBIT INDEX

PCS EDVENTURES!.COM, INC.

Balance Sheets

September 30, 2015

March 31, 2015 (audited)

to Consolidated Financial Statements (Unaudited)

Management’s

Discussion and Analysis of Financial Condition and Results of Operations

and Procedures

II - OTHER INFORMATION

EDVENTURES!.COM, INC.

December 31, 2015

March 31, 2015

CURRENT ASSETS

Accounts receivable, net of allowance for doubtful accounts of $3,184 and $3,184, respectively

Accounts receivable, net of allowance for doubtful accounts of $3,184 and

$3,184, respectively

Prepaid expenses

3 unchanged sentences

FIXED ASSETS, net of accumulated depreciation of $152,616 and $144,821, respectively

Note Receivable net of allowance of $49,513 and $47,998, respectively

Note Receivable, net of allowance of $49,513

Total Other Assets

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Balance Sheets

September 30, 2015

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC.

Sheets (continued)

December 31, 2015

March 31, 2015

4 unchanged sentences

Deferred revenue

Note payable convertible, related party net of $3,723 and $24,063 discount for September 30 and March 31, 2015, respectively

Note payable, related party

Note payable, convertible, related party, net of $0 and $24,063 discount

as of December 31, 2015 and March 31, 2015, respectively

Note payable, related party, net discount of $0 and $38,184

Current portion of long term liabilities

Total Short term and current portion long term notes payable

Total Short term and current portion

long term notes payable

Total Current Liabilities

Long term debt

Total Long Term Liabilities

Total Liabilities

STOCKHOLDERS’

Preferred stock, no par value, 20,000,000 authorized shares, no shares issued and outstanding

Common stock, no par value, 100,000,000 authorized shares, 75,194,368 and 74,235,284 shares issued and outstanding, respectively

EQUITY (DEFICIT)

Preferred stock, no par value, 20,000,000 authorized shares, no shares issued

and outstanding

Common stock, no par value, 100,000,000 authorized shares, 76,530,590 and

74,235,284 shares issued and outstanding, respectively

Stock payable

5 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDERS’

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Statements of Operations

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC.

For the Three Months Ended

For the Six Months Ended

September 30,

For the Nine Months Ended

International service revenue

5 unchanged sentences

Salaries and wages

Depreciation and amortization expense

Depreciation and amortization

General and administrative expenses

2 unchanged sentences

OTHER INCOME AND EXPENSES

Interest income

Interest expense

Total Other Income/(Expense)

INCOME (LOSS) FROM OPERATIONS

Gain on Bad Debt Collection

Total Other Income and (Expenses)

LOSS FROM CONTINUING OPERATIONS

LOSS FROM DISCONTINUED OPERATIONS

NET INCOME/(LOSS)

NET COMPREHENSIVE INCOME (LOSS)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

$ (1,088,143 )

Net income per common share:

COMPREHENSIVE INCOME/(LOSS)

LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

Basic and diluted net income (loss) per common share:

Basic and diluted net loss per share

Weighted Average Number of Shares Outstanding, Basic and Diluted

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Statement of Stockholders’

Stockholders’

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC.

of Stockholders’

Equity (Deficit)

Stockholders’

Balance at 3/31/2015

1 unchanged sentence

$ (1,673,404 )

Stock for exercise of options and warrants

Stock for Services

Stock for RSU’s

Stock for exercise of options & warrants

Stock for cash

Stock for RSU’s

Conversion of Notes Payable

4 unchanged sentences

$ (1,977,290 )

The accompanying notes are an integral part

of these financial statements.

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC.

Statements of Cash Flows

For the Six Months Ended

September 30,

For the Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

$ (1,088,143 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided (used) by operating activities:

Debt discount amortization

Depreciation and amortization

Stock on settlement

Impairment of Brain Mold

Common stock issued for services

Stock payable for service

Common stock for settlement

Amortization of fair value of stock options

Amortization of brain molds

Impairment of Brain Molds

(Gain) on Bad Debt Collection

Changes in operating assets and liabilities:

5 unchanged sentences

(Decrease) increase in accounts payable and accrued liabilities

Increase (decrease) in unearned revenue

Increase (decrease) in deferred revenue

Net Cash Provided (Used) by Operating Activities

3 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment on LOC

Proceeds from sale of stock

Borrowings on note payable

Proceeds from note payable –

Principal payments on debt –

Proceeds from notes payable

Proceeds from notes payable, related party

Borrowings on debt

Principal payments on debt, Convertible debt

Principal payments on debt

Net Cash Provided by Financing Activities

Net Cash Used by Financing Activities

Net Increase (Decrease) in Cash

1 unchanged sentence

Cash at End of Period

The accompanying notes are an integral part

of these financial statements

PCS EDVENTURES!.COM, INC.

Statements of Cash Flows (continued)

For the Six Months Ended

September 30,

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC.

of Cash Flows (continued)

For the Nine Months Ended

NON-CASH INVESTING & FINANCING ACTIVITIES

RSU accrued in prior period and issued in current period

Conversion of debt

Debt discount

Stock payable accrued in prior period and issued in current period

For the Nine Months Ended

CASH PAID FOR:

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Notes to the Financial Statements

September 30, 2015

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

The financial statements presented are those

of PCS Edventures!.com, Inc., an Idaho corporation (“PCS”

accompanying notes are an integral part of these financial statements.

EDVENTURES!.COM, INC

to the Financial Statements

1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

financial statements presented are those of PCS Edventures!.com, Inc., an Idaho corporation (“PCS”

or “the Company”).

In October 1994, PCS exchanged common stock

on a one-for-one basis for common stock of PCS Schools, Inc.

As a result of this exchange, PCS Schools, Inc.

became a wholly-owned

subsidiary of PCS.

In the late 1990s, the Company divested the stand-alone learning labs to focus on the creation of turn-key

lab modules coupled with web-based technology for use in the classroom and afterschool programs.

On March 27, 2000, PCS changed its name from

PCS Education Systems, Inc.

October 1994, PCS exchanged common stock on a one-for-one basis for common stock of PCS Schools, Inc.

As a result of this exchange,

PCS Schools, Inc.

became a wholly-owned subsidiary of PCS.

In the late 1990s, the Company divested the stand-alone learning labs

to focus on the creation of turn-key lab modules coupled with web-based technology for use in the classroom and afterschool programs.

March 27, 2000, PCS changed its name from PCS Education Systems, Inc.

to PCS Edventures!.

In August 2001, PCS successfully completed

an offering public pursuant to an SB-2 Registration Statement and began trading publicly on the OTC Bulletin Board (“OTCBB”).

On November 30, 2005, PCS entered into an

agreement with 511092 N.B.

LTD., a Canadian corporation (LabMentors), to exchange PCS common stock for common stock of 511092

LTD., which exchange was completed in December, 2005, with LabMentors becoming a wholly-owned subsidiary.

In December 2005,

the name of this subsidiary was formally changed to PCS LabMentors, Ltd.

August 2001, PCS successfully completed a public offering pursuant to an SB-2 Registration Statement and began trading publicly

on the OTC Bulletin Board (“OTCBB”).

November 30, 2005, PCS entered into an agreement with 511092 N.B.

LTD., a Canadian corporation (LabMentors), to exchange PCS common

stock for common stock of 511092 N.B.

LTD., which exchange was completed in December, 2005, with LabMentors becoming a wholly-owned

In December 2005, the name of this subsidiary was formally changed to PCS LabMentors, Ltd.

(See Note 17).

The Company divested LabMentors in August

In January, 2012, the Company committed to

a business plan enhancement, which included the opening, operating, and licensing of EdventuresLab private learning centers and

launched a pilot program in the spring of 2012.

As of June 30, 2014, two EdventuresLab programs had been opened and were

operating in the Idaho Treasure Valley.

On January 31, 2013, PCS formed a subsidiary

called Premiere Science, Inc., incorporated and registered in the State of Idaho.

The subsidiary is 100% wholly-owned by the Company

and was formed to use as an additional sales and marketing tool to gain other business opportunities.

There were no operations

for this subsidiary during the quarter year ended September 30, 2015.

On September 26, 2014, the shareholders voted

for the proposal to grant the Board of Directors the authority to change the name of the Company in a fashion that will remove

the “.com”, but retain the current brand.

On July 23, 2015, the Board of Directors resolved

that the name of the Company be changed to PCS Edventures!, Inc.

No amendment to the Company’s Articles of Incorporation

has yet been filed, though it is anticipated that following the assignment of a new Cusip Number and the required filing with

the Financial Industry Regulatory Authority, that this name change will become effective.

NOTE 2 - UNAUDITED FINANCIAL STATEMENTS

The September 30, 2015, financial

statements presented herein are unaudited, and in the opinion of management, include all adjustments (consisting of only normal

recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows.

Such financial

statements do not include all of the information and footnote disclosures normally included in financial statements prepared in

accordance with accounting principles generally accepted in the United States of America.

This Quarterly Report on Form 10-Q should

be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015.

Certain items for March 31, 2015 have been

reclassified to conform to presentation in the second quarter ended September 30, 2015.

The operating results for interim periods

are not necessarily indicative of the results for the entire year.

NOTE 3 - GOING CONCERN

The Company’s financial statements are

prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates

the realization of assets and liquidation of liabilities in the normal course of business.

The established sources of revenues

are not sufficient to cover the Company’s operating costs.

The Company has accumulated significant losses and payables and

generated negative cash flows.

The combination of these items raises substantial doubt about its ability to continue as a going

The ability of the Company to continue as

a going concern is dependent upon its ability to increase revenue, to raise capital as needed, to continue to monitor and reduce

overhead costs, and to attain profitable operations.

The accompanying consolidated financial statements do not include any adjustments

that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

divested LabMentors in August of 2013.

January, 2012, the Company committed to a business plan enhancement, which included the opening, operating, and licensing of EdventuresLab

private learning centers and launched a pilot program in the spring of 2012.

As of June 30, 2014, two EdventuresLab programs had

been opened and were operating in the Idaho Treasure Valley.

January 31, 2013, PCS formed a subsidiary called Premiere Science, Inc., incorporated and registered in the State of Idaho.

subsidiary is 100% wholly-owned by the Company and was formed to use as an additional sales and marketing tool to gain other business

opportunities.

There were no operations for this subsidiary during the quarter year ended December 31, 2015.

September 26, 2014, the shareholders voted for the proposal to grant the Board of Directors the authority to change the name of

the Company in a fashion that will remove the “.com”, but retain the current brand.

July 23, 2015, the Board of Directors resolved that the name of the Company be changed to PCS Edventures!, Inc.

No amendment to

the Company’s Articles of Incorporation has yet been filed, though it is anticipated that following the assignment of a

new Cusip Number and the required filing with the Financial Industry Regulatory Authority, that this name change will become effective.

2 - UNAUDITED FINANCIAL STATEMENTS

December 31, 2015, financial statements presented herein are unaudited, and in the opinion of management, include all adjustments

(consisting of only normal recurring accruals) necessary for a fair presentation of financial position, results of operations

and cash flows.

Such financial statements do not include all of the information and footnote disclosures normally included in

financial statements prepared in accordance with accounting principles generally accepted in the United States of America.

Quarterly Report on Form 10-Q should be read in conjunction with the Annual Report on Form 10-K for PCS Edventures!.com for the

fiscal year ended March 31, 2015.

items for March 31, 2015 have been reclassified to conform to presentation in the third quarter ending December 31, 2015.

operating results for the period ended December 31, 2015 are not necessarily indicative of the results that may be expected for

the fiscal year ending March 31, 2016.

3 - GOING CONCERN

Company’s financial statements are prepared using accounting principles generally accepted in the United States of America

applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course

The established sources of revenues are not sufficient to cover the Company’s operating costs.

has accumulated significant losses and payables and generated negative cash flows.

The combination of these items raises substantial

doubt about its ability to continue as a going concern.

ability of the Company to continue as a going concern is dependent upon its ability to increase revenue, to raise capital as needed,

to continue to monitor and reduce overhead costs, and to attain profitable operations.

The accompanying consolidated financial

statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Concentration of Credit Risk

The Company extends

credit to customers and is therefore subject to credit risk.

The Company performs initial and ongoing credit evaluations of its

customers’

Company extends credit to customers and is therefore subject to credit risk.

The Company performs initial and ongoing credit evaluations

of its customers’

financial condition and does not require collateral.

An allowance for doubtful accounts is recorded to account

for potential bad debts.

An allowance for doubtful accounts is recorded to

account for potential bad debts.

Estimates are used in determining the allowance for doubtful accounts and are based upon an assessment

2 unchanged sentences

the Company evaluates historical write-offs, and current trends in customer credit quality, as well as changes in credit policies.

At September 30, 2015, Tatweer Company for Educational Services and STEMfinity accounted for 52.5% and 26.2% of the Company’s

At December 31, 2015, Tatweer Company for Educational Services and STEMfinity accounted for 34.3% and 52.5% of the Company’s

accounts receivable, respectively.

NOTE 5 –

5 - PREPAID EXPENSES

Prepaid expenses for the periods are as follows:

September 30, 2015

expenses for the periods are as follows:

December 31, 2015

March 31, 2015

4 unchanged sentences

Total Prepaid Expenses

NOTE 6 –

Assets and depreciation for the periods are as follows:

September 30, 2015

6 - FIXED ASSETS

and depreciation for the periods are as follows:

December 31, 2015

March 31, 2015

Computer/office equipment

Accumulated depreciation

A Accumulated depreciation

Total Fixed Assets

Fixed asset depreciation expense for the six months ended September

30, 2015, and 2014, was $14,316 and $12,582, respectively.

NOTE 7 –

asset depreciation expense for the nine months ended December 31, 2015 and 2014 was $16,915 and $19,699 respectively.

7 - ACCRUED EXPENSES

Accrued expenses for the periods are as follows:

expenses for the periods are as follows:

December 31, 2015

March 31, 2015

Interest payable

4 unchanged sentences

Total accrued expenses

NOTE 8 –

8 - NOTES PAYABLE

Notes payable consisted of the following:

September 30, 2015

payable consisted of the following:

December 31, 2015

March 31, 2015

Short Term Debt

Short Term Convertible Note, Related Party net discount of $3,723

and $24,063 for period ended September 30, 2015 and March 31, 2015, respectively

Short Term Note Payable, Related Party, net discount of $0 and $38,184 for period ended September 30, 2015 and March 31, 2015, respectively

Total Short Debt

Short Term Convertible Note, Related Party net discount of $0 and $24,063 for period

ended December 31, 2015 and March 31, 2015, respectively

Short Term Note Payable, Related Party, net discount of $0 and $38,184

for period ended December 31, 2015 and March 31, 2015, respectively

Total Short Term Debt

Long Term Debt

7 unchanged sentences

Total Long Term Debt, less current portion

Long Term Note Payable

On May 1, 2014, the Company entered into a

36 month note payable of $20,000.

Term Note Payable

May 1, 2014, the Company entered into a 36 month note payable of $20,000.

The note bears interest at 12% per annum.

The Company has paid $5,155 in principal, leaving

a balance of $14,845 at September 30, 2015.

Total interest accrued as of September 30, 2015, was $1,973.

Line of Credit

On September 13, 2011, the Company drew down

a line of credit at a financial institution in the amount of $39,050.

The line of credit bears interest at 8.75% per annum.

Company makes variable monthly payments.

As of September 30, 2015, the Company has paid $19,592 in principal leaving a balance

of $19,458 payable.

Related Party Debt

Short term note payable

On October 21, 2014, the Company executed

a Promissory Note with one of our shareholders and board members in the amount of $870,457.

The note was partially taken out to

finance operations and inventory purchases and was partly a combination of the renewal of other notes with the same lender.

was due on May 31, 2015, was non-convertible, had an interest rate of 10% per annum, was secured by accounts receivable, fixed

assets, intellectual property and our net loss carry forward.

On January 1, 2015, accrued interest through

December 31, 2014, was rolled into the principal balance per the terms and conditions of the Promissory Note.

On January 1, 2015,

the Promissory Note principal balance was $892,679.

The balance was due in full on or before May 31, 2015, and was extended to

September 30, 2015, under the terms and conditions of the original Promissory Note.

On October 1, 2015, the Promissory Note executed

on October 21, 2014 went into default.

The lender has provided the Company with an extension of due dates for principle and accrued

interest of $66,768, until November 30, 2015.

On January 16, 2015, the Company executed a non-convertible promissory

note with warrants attached, with one of our shareholders and board members, for $400,000 at 10% interest per annum, due June

30, 2015, secured by T4EDU Contract 0006/2017 Work Orders 5, 6, 7, and 8 less Zakat and holdback, to finance operations and

inventory purchases.

The warrants were valued using the

Company’s common stock price on the date of grant, discount rates 0.35%, and volatility approximating 180%.

of the debt discount is accreted up to the face value of the promissory note over the term of the note using the effective

interest method.

This note was subsequently extended to October 31 November 30, 2015.

Total interest

accrued as of December 31, 2015 was $2,430.

The Company has paid $5,829 in principal, leaving a remaining balance at December

31, 2015 of $14,171.

September 13, 2011, the Company drew down a line of credit at a financial institution in the amount of $39,050.

The line of credit

bears interest at 8.75% per annum.

The Company makes variable monthly payments.

As of Deccember 31, 2015, the Company has paid

$20,598 in principal leaving a balance of $18,452 payable.

Short term notes payable

October 21, 2014, the Company executed a Promissory Note with one of our shareholders and board members in the amount of $870,457.

The note was partially taken out to finance operations and inventory purchases and was partly a combination of the renewal of

other notes with the same lender.

It was due on May 31, 2015, was non-convertible, had an interest rate of 10% per annum, was

secured by accounts receivable, fixed assets, intellectual property, and our net loss carry forward.

January 1, 2015, accrued interest through December 31, 2014, was rolled into the principal balance per the terms and conditions

of the Promissory Note.

On January 1, 2015, the Promissory Note principal balance was $892,679.

The balance was due in full on

or before May 31, 2015, and was extended to September 30, 2015, under the terms and conditions of the original Promissory Note.

On October 1, 2015, the Promissory Note executed on October 21, 2014, went into default.

The lender has provided the Company with

extensions of due dates for principal and accrued interest of $89,268, until January 31, 2016.

This note due date was subsequently

January 16, 2015, the Company executed a non-convertible Promissory Note with warrants attached, with one of our shareholders

and board members, for $400,000 at 10% interest per annum, due June 30, 2015, secured by T4EDU Contract 0006/2017 Work Orders

5, 6, 7, and 8 less Zakat and holdback, to finance operations and inventory purchases.

The warrants were valued using the Company’s

common stock price on the date of grant, discount rates 0.35%, and volatility approximating 180%.

The value of the debt discount

is accreted up to the face value of the Promissory Note over the term of the note using the effective interest method.

was extended to January 31, 2016.

The debt discount was calculated as $66,717.

The remaining $38,184 of the debt discount was amortized during the quarter ending June 30, 2015.

The principal

balance at September 30, 2015, was $400,000.

Total interest accrued as of September 30, 2015 was $10,082.

On February 17, 2015, the Company executed

a promissory note with one of our shareholders and board members, for $135,000 at 10% interest per annum, due June 30, 2015, secured

by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

This note was extended

to September 30, 2015, and then December 31, 2015.

There is no conversion feature associated with this promissory note.

Total interest accrued as of September 30, 2015 was $8,141.

On April 20, 2015, the Company executed a

promissory note with one of our shareholders and board members, for $135,000 at 10% interest per annum, due June 30, 2015, secured

by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

This note was extended

to September 30, 2015, and then December 31, 2015.

Principal payments of $95,000 were made by the Company in September 2015, leaving

a $40,000 principal balance outstanding on September 30, 2015.

The remaining $38,184 of the debt discount was

amortized during the quarter ending June 30, 2015.

The principal balance at December 31, 2015, was $400,000.

The lender has provided

the Company with extensions of due dates for principal and accrued interest of $20,164, until January 31, 2016.

This note due

date was subsequently extended.

February 17, 2015, the Company executed a Promissory Note with one of our shareholders and board members, for $135,000 at 10%

interest per annum, due June 30, 2015, secured by T4EDU and accounts receivable on completed contracts, to finance operations

and inventory purchases.

This note was extended to January 31, 2016.

There is no conversion feature associated with this Promissory

Total interest accrued as of September 30, 2015, was $6,029.

The lender has provided the Company with an extensions of due dates for principal of $135,000 and accrued interest of $11,544,

until January 31, 2016.

This note due date was subsequently extended.

April 20, 2015, the Company executed a Promissory Note with one of our shareholders and board members, for $135,000 at 10% interest

per annum, due June 30, 2015, secured by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

This note was extended to January 31, 2016.

Principal payments of $95,000 were made by the Company in September 2015, leaving

a $40,000 principal balance outstanding on December 31, 2015.

There is no conversion feature associated with this Promissory Note.

The lender has provided the Company with an extensions of due dates for principal and accrued interest of $7,037, until January

This note due date was subsequently extended.

Short term convertible note payable

On October 21, 2014, the Company entered into

at 10% Convertible Promissory Note with a current board member and shareholder, in the amount of $200,000, convertible into shares

of common stock of the Company, at the market price of $0.04.

The debt discount was calculated as $50,000.

As of September 30,

2015, $46,277 of discount was amortized.

The note principal balance net of discount at September 30, 2015 was $196,277.

was subsequently extended to November 30, 2015.

Total accrued interest as of September 30, 2015, was $18,849.

October 21, 2014, the Company entered into at 10% Convertible Promissory Note with a current board member and shareholder, in

the amount of $200,000, convertible into shares of common stock of the Company, at the market price of $0.04.

The debt discount

was calculated as $50,000.

As of December 31, 2015, the entire debt discount of $50,000 was amortized.

The note principal balance

net of discount at December 31, 2015 was $200,000.

The lender has provided the Company with an extensions of due dates for principal

and accrued interest of $23,890, until January 31, 2016.

This note due date was subsequently extended.

Long term convertible note

In 2011, the Company entered into several

convertible promissory notes in the aggregate amount of $215,000, including a note in the amount of $34,011 from a related party.

2011, the Company entered into several convertible Promissory Notes in the aggregate amount of $215,000, including a note in the

amount of $34,011 from a related party.

The notes are convertible into common stock at a rate of $0.15 per share.

The notes bear interest at ten percent (10%) per

annum and include attached warrants to purchase two shares of restricted Rule 144 common stock for every dollar loaned.

13, 2015, the related party holder of the convertible notes of the Company elected to convert their note and accrued interest

of $5,963 in to 266,492 shares of our common stock.

The notes bear

interest at 10% per annum and include attached warrants to purchase two shares of restricted Rule 144 common stock for every dollar

On July 13, 2015, the related party holder of the convertible notes of the Company elected to convert their note and accrued

interest of $5,963 into 266,492 shares of our common stock.

Due to conversion within the terms of the note, no gain of loss was

Long term note payable

13, 2012, the Company entered into two separate promissory notes in the amount of $35,000 each for an aggregate amount of $70,000.

January 13, 2012, the Company entered into two separate Promissory Notes in the amount of $35,000 each for an aggregate amount

The notes bear interest at 9% per annum and were previously due and payable on or before January 10, 2013.

Minimum monthly payments

of 1.5% of the loan balances are required and are submitted to the lender’s financial institution.

The notes were amended

April 1, 2013, and re-written with a new principal amount of $32,100 each for an aggregate amount of $64,200.

The notes bear interest

at nine percent (9%) per annum and are due and payable on or before April 1, 2020.

The underlying loan requires that the Company

pay to the lender’s financial institution monthly payments of $1,033 on or before the 1st day of each month, beginning May

1, 2013, and continuing each month in like amounts until the final payment due on April 1, 2020.

The Company has paid $17,827

in principal, leaving a balance of $46,373 at September 30, 2015.

2012, the Company entered into a long-term promissory note with a person who was then an officer and director of the Company for

$25,000, with an interest rate of 7.5% per annum.

monthly payments of 1.5% of the loan balances are required and are submitted to the lender’s financial institution.

notes were amended April 1, 2013, and re-written with a new principal amount of $32,100 each for an aggregate amount of $64,200.

The notes bear interest at 9% per annum and are due and payable on or before April 1, 2020.

The underlying loan requires that

the Company pay to the lender’s financial institution monthly payments of $1,033 on or before the 1st day of each month,

beginning May 1, 2013, and continuing each month in like amounts until the final payment due on April 1, 2020.

The Company has

paid $19,902 in principal, leaving a balance of $44,298 at December 31, 2015.

April 18, 2012, the Company entered into a long-term Promissory Note with a person who was then an officer and director of the

Company for $25,000, with an interest rate of 7.5% per annum.

The balance is due in full on or before April 18, 2017.

Monthly payments are

made for interest only to the lender’s financial intuition.

On September 30, 2015, a total of $3,005 in principal had been

paid, resulting in ending principal amount of $21,995 .

2014, the Company entered into a 36 month promissory note payable of $60,000.

The note bears interest at twelve percent

(12%) per annum.

payments are made for interest only to the lender’s financial intuition.

On December 31, 2015, a total of $3,908 in principal

had been paid, resulting in ending principal amount of $21,092.

April 11, 2014, the Company entered into a 36 month Promissory Note payable of $60,000.

The note bears interest at 12% per annum.

There is no conversion feature associated with this Promissory Note.

The company has paid $12,020 in principal,

leaving a balance of $47,980 at September 30, 2015.

Total interest accrued as of September 30, 2015, was $873 .

Convertible Note

In 2011, the Company entered into several convertible promissory

notes in the aggregate amount of $215,000, including a note in the amount of $34,011 from a related party.

The notes are convertible

into common stock at a rate of $0.15 per share.

The notes bear interest at ten percent (10%) per annum and include attached

warrants to purchase two shares of restricted Rule 144 common stock for every dollar loaned.

At the Lender’s sole option,

Lenders may elect to receive payment of their respective note and all accrued interest in restricted common stock of the Borrower

at the price per share of said common stock at same rate as the warrants.

The notes are secured by that portion or percentage

of the Borrower’s Intellectual Property which the principal amount of the note bears to the fair market value of all Intellectual

Property of the Borrower.

The notes had an original due date of June 29, 2011 but have been amended to extend the expiration dates

to April 30, 2016.

As of March 31, 2015, the ending principle balance was $226,740 including the related party convertible note

balance of $34,011.

On July 13, 2015, the holders of four the

convertible notes of the Company elected to convert those notes into shares of our common stock.

The aggregate principal amount

of the convertible notes being converted was $136,044.

Conversion of the aggregate principal and accrued interest of $23,857 resulted

in the issuance of 1,066,006 shares of our common stock.

Conversion occurred within the terms of the note, no gain or loss was

As of September 30, 2015, the principal balance of convertible notes payable, non-related party was $90,696.

interest as of September 30, 2015, related to these notes, was $18,139.

On April 30, 2013, the Company entered into

a loan transaction with an “accredited investor”

for a Promissory Note, payable with interest at 8% per annum in the

amount of $5,000, convertible into shares of common stock of the Company at a price of $0.20 per share.

The note was due 24 months

from the date of the note, or on or before August 31, 2015.

The note was paid in full with all accrued interest on June 25, 2015.

On July 30, 2013, the Company entered into

a loan transaction with an “accredited investor”

for a Promissory Note, payable with interest at 8% per annum in the

amount of $5,000, convertible into shares of common stock of the Company at a price of $0.20 per share.

The note was due 24 months

from the date of the note, or on or before July 30, 2015.

No debt discount was recognized as the conversion price was considered

“out of the money”;

therefore, no discount was necessary.

Total accrued interest as of July 23, 2015, was $795.

note was paid in full with all accrued interest on July 23, 2015.

NOTE 9 –

The Company has paid $14,356 in principal, leaving a balance

of $45,675 at December 31, 2015.

Total interest accrued as of December 31, 2015, was $2,208.

Term Convertible Note

2011, the Company entered into several convertible Promissory Notes in the aggregate amount of $215,000, including a note in the

amount of $34,011 from a related party.

The notes are convertible into common stock at a rate of $0.15 per share.

The notes bear

interest at 10% per annum and include attached warrants to purchase two shares of restricted Rule 144 common stock for every dollar

At the Lender’s sole option, Lenders may elect to receive payment of their respective note and all accrued interest

in restricted common stock of the Borrower at the price per share of said common stock at the same rate as the warrants.

are secured by that portion or percentage of the Borrower’s Intellectual Property which the principal amount of the note

bears to the fair market value of all Intellectual Property of the Borrower.

The notes had an original due date of June 29, 2011

but have been amended to extend the expiration dates to April 30, 2016.

As of March 31, 2015, the ending principal balance was

$226,740 including the related party convertible note balance of $34,011.

July 13, 2015, the holders of four of the convertible notes of the Company elected to convert those notes into shares of our common

The aggregate principal amount of the convertible notes being converted was $136,044.

Conversion of the aggregate principal

and accrued interest of $23,857 resulted in the issuance of 1,066,006 shares of our common stock.

Conversion occurred within the

terms of the note, no gain or loss was recognized.

As of December 31, 2015, the principal balance of convertible notes payable,

to a non-related party, was $90,696.

The accrued interest as of December 31, 2015, related to these notes, was $20,425.

9 - NOTE RECEIVABLE

On July 31, 2013, the Company signed a Memorandum

of Understanding with a Canadian company owned by Joseph Khoury (“JAK”) proposing a purchase agreement in which JAK

shall purchase LabMentors from PCS for USD $150,000.

JAK has agreed to assume 100% of LabMentors outstanding liabilities and to

pay the remainder of the USD $150,000 through a note payable.

The Company note receivable in the amount of $50,740, carries an

annual interest rate of 3% compounded annually and is to be paid over a period of 60 months in equal monthly payments beginning

in month 13 of the 60 month period.

July 31, 2013, the Company signed a Memorandum of Understanding with a Canadian company owned by Joseph Khoury (“JAK”),

proposing a purchase agreement in which JAK shall purchase LabMentors from PCS for USD $150,000.

JAK has agreed to assume 100%

of LabMentors outstanding liabilities and to pay the remainder of the USD $150,000 through a note payable.

The Company note receivable

in the amount of $50,740, carries an annual interest rate of 3% compounded annually and is to be paid over a period of 60 months

in equal monthly payments beginning in month 13 of the 60 month period.

This sale was finalized during the period ending September

On April 14, 2015, JAK informed PCS of the potential closure of LabMentors and an inability to meet its note obligations.

On April 14, 2015, JAK informed PCS of the potential closure of LabMentors and

an inability to meet its note obligations.

LabMentors had made three note payments as of the date of the notification totaling

The note receivable principal

balance at September 30, 2015, was $49,513.

The note receivable allowance balance at September 30, 2015 is $49,513.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

The note receivable principal balance at December 31, 2015 was $49,513.

The note receivable allowance balance at December

31, 2015 is $49,513.

10 - COMMITMENTS AND CONTINGENCIES

Operating Lease Obligation

The Company leases its main office under a

non-cancelable lease agreement accounted for as an operating lease.

On December 31, 2013, the Company signed an amendment to the

existing contract to reduce the leased square feet to 5,412 for $6,765/ month for the 12 months ending December 31, 2014.

On February 1, 2015, the Company signed a new lease to reduce the square feet to 3,609 for $4,511/ month for the 12 months ending

Company leases its main office under a non-cancelable lease agreement accounted for as an operating lease.

The lease expired in

This lease was extended for 13 months beginning June 1, 2012.

On December 31, 2013, the Company signed an amendment

to the existing contract to reduce the leased square feet to 5,412 for $6,765/ month for 12 months ending December 31, 2014.

February 1, 2015, the Company signed a new lease to reduce the square feet to 3,609 for $4,511/ month for the 12 months ending

January 31, 2016.

Rent expense including CAM charges for the corporate offices, was $14,106 and $21,196 for the quarters

ended September 30, 2015 and 2014, and $77,869 and $99,318 for the 12 months ended March 31, 2015 and 2014, respectively, under

this lease arrangement.

The Company leases additional warehouse space

in Boise, Idaho.

Rent expense for the corporate offices was $13,533 and $20,295 for the quarter ended December 31, 2015 and 2014,

and $49,467 and $63,684 for the 9 months ended December 31, 2015 and 2014, respectively, under this lease arrangement.

Company leases additional warehouse space in Boise, Idaho.

This warehouse space consists of approximately 2,880 square feet.

The lease expired in June 2012.

lease expired in June 2012.

This lease was extended for 24 months, beginning July 1, 2012.

The lease was extended to a new expiration of October 31,

The Company signed a sixth amendment on

April 15, 2015, to lease an additional approximately

1400 square foot bay adjacent to the existing leased space.

Rent expense for the warehouse was $6,345 and $3,975 for the quarters

ended September 30, 2015 and 2014, and $16,225 and $15,901 for the 12 months ended March 31, 2015, and 2014, respectively.

The Company leased and additional learning

lab site in Eagle Idaho in Q1 of fiscal year 2015.

The lease term is three years for 1,050 square feet for an annual base

rent of $16,640 or $1,387 per month, with 3% growth per year.

Anthony Maher brought suit against PCS in

January of 2014, claiming breach of an employment contract, interference with economic expectancy, and fraud.

was agreed in exchange for dismissal of the suit, and release of PCS from any liability to Mr.

Maher for any and all claims related

Maher’s employment contract with PCS;

PCS issued Mr.

Maher 400,000 shares of the common stock of PCS;

Maher $50,000.

PCS does not admit the allegations or any other wrongdoing, but settled the matter for a modest amount costing

the Company $10,000 after insurance settlement and $2,650 in mediation fees, to avoid the expense of litigation.

The settlement

agreement was executed on July 9, 2014.

On or about May 18, 2015, the Company was

named as a co-defendant in a legal action related to one of its employees, alleged to have been driving an automobile negligently

while on work related services for the Company, and causing damages to the plaintiffs in the action.

The Company has engaged

legal counsel to represent it in this matter, and it is not presently in a position to determine what, if any, liability it may

have for the actions of its employee, or even whether such employee was negligence in any manner.

The Fifth Lease Amendment was entered

into for the warehouse space extending the lease period through October 31, 2015.

The Company signed a sixth amendment on April

15, 2015, to lease an additional approximately 1400 square foot bay adjacent to the existing leased space.

The Company signed

a Seventh Lease Amendment on October 28, 2015, leasing the same three bays through April 30, 2016, at the cost of $730 per bay.

Rent expense for the warehouse was $6,535 and $2,780 for the quarter ended December 31, 2015 and 2014, and $18,500 and $12,055

for the 9 months ended December 31, 2015 and 2014, respectively, under this lease arrangement.

Company leased an additional learning lab site in Eagle, Idaho, in Q1 of fiscal year 2015.

The lease term is three years for 1,050

square feet for an annual base rent of $16,640 or $1,387 per month, with 3% growth per year.

Maher brought suit against PCS in January of 2014, claiming breach of an employment contract, interference with economic expectancy,

Settlement was agreed in principle during mediation on July 9, 2014, as follows:

in exchange for dismissal of the suit,

and release of PCS from any liability to Mr.

Maher for any and all claims related to Mr.

Maher’s employment contract with

PCS, PCS issued Mr.

Maher 400,000 shares of the common stock of PCS, and paid him $50,000.

PCS does not admit the allegations

or any other wrongdoing, but would rather settle the matter for a modest amount to avoid the expense of defending it in court.

The settlement agreement was executed on July 9, 2014.

There are no other lawsuits pending involving PCS.

or about May 18, 2015, the Company was named as a co-defendant in a legal action related to one of its employees, alleged to have

been driving an automobile negligently while on work related services for the Company, and causing damages to the plaintiffs in

The Company has engaged legal counsel to represent it in this matter, and it is not presently in a position to determine

what, if any, liability it may have for the actions of its employee, or even whether such employee was negligent in any manner.

Contingencies

On October 14, 2015, the Company received a demand letter alleging

patent infringement related to certain of our data processing systems.

The Company has responded to this demand and has

advised the claimed patent owner that the Company does not own the systems claimed to be used by us in this demand.

the Company believes that no such claimed infringement has occurred, we cannot presently evaluate the potential costs that we

might incur in regard to defending any legal action brought against us regarding such claims.

NOTE 11 - STOCKHOLDERS’

During the three months ended September 30,

2015, the Company expensed amounts related to stock options and warrants granted in the current period as well as prior periods

valued at $1,834.

During the three months ended September 30, 2015, a related party

one warrant holder exercised 120,000 warrants issued on January 11, 2013, at a price of $.07 for a total of $8,400, resulting

in 120,000 shares of “restricted”

October 14, 2015, the Company received a demand letter alleging patent infringement related to certain of our data processing

The Company has responded to this demand and has advised the claimed patent owner that the Company does not own the systems

claimed to be used by us in this demand.

While the Company believes that no such claimed infringement has occurred, we cannot

presently evaluate the potential costs that we might incur in regard to defending any legal action brought against us regarding

11 - STOCKHOLDERS’

the period ended December 31, 2015, the Company expensed $8,461 related to stock options and warrants granted in the current period

as well as prior periods.

the period ended December 31, 2015, a related party one warrant holder exercised 120,000 warrants issued on January 11, 2013,

at a price of $.07 for a total of $8,400, resulting in 120,000 shares of “restricted”

common stock.

During the three months ended September 30,

2015, the CEO exercised 25,000 options earned from an ISO agreement dated July 15, 2012, using the cashless option into 19,000

shares of “restricted”

the period ended December 31, 2015, the CEO exercised 25,000 options earned from an ISO agreement dated July 15, 2012, using the

cashless option into 19,000 shares of “restricted”

common stock.

During the three months ended September 30, 2015, the Company issued

200,000 shares of “restricted”

common stock for consulting services.

The shares were valued based on the fair market

price of $0.11 on the date of grant for a total of $22,000.

During the three months ended September 30, 2015, the Company accrued

$10,140 in stock payable for consulting services for 78,000 shares to be issued in future periods.

Each stock unit was valued

at $0.13, based on the closing price of the Company’s common stock at the date of grant.

During the three months ending September 30,

2015, $10,730 has been accrued in Restricted Stock Units payable for the issue of 165,082 shares for services that will be issued

in future periods.

Each Restricted Stock Unit was valued at $0.065, based on the closing price of the Company’s common stock

at the date of grant.

The total amount recorded in stock payable as of September 30, 2015, for deferred RSU’s and other

services was $20,140.

During the three months ended September 30,

2015, the holders of four convertible notes of the Company elected to convert such notes into shares of common stock.

The aggregate

principal and interest amount of the convertible notes being converted of $159,901 resulted in the issuance of 1,066,006 shares

the period ended December 31, 2015, the holders of four convertible notes of the Company elected to convert such notes into shares

of common stock.

conversion within terms of the note, no gain

or loss was recognized.

During the six months ending September

30, 2015, the Company expensed amounts related to stock options and warrants granted in the current period as well as prior periods

valued at $5,381.

During the six

months ended September 30, 2015, the Company accrued $18,980 payable in Restricted Stock Units to its non-management directors.

Each Restricted Stock Unit was valued at $0.065, based on the closing price of the Company’s common stock at the date of

These agreements call for payment of current

year director fees via issuance of Restricted Stock Units, required continued service through September 30, 2015, and re-election

at the September 25, 2015, annual shareholder meeting.

The Restricted Stock Units were revalued to $0.15 at the close of the market

on the date of vesting resulting in an additional accrual of $50,248.

As of September 30, 2015, $81,345 has been accrued for director

services and recorded in stock payable.

The aggregate principal and interest amount of the convertible notes being converted of $159,901 resulted in

the issuance of 1,066,006 shares of common stock.

Due to conversion within terms of the note, no gain of loss was recognized.

the period ended December 31, 2015, the Company authorized 50,000 shares of common stock for services to employee, Robert Grover.

The shares were valued based on fair market price on the date of grant, as of December 31, 2015, $5,000 has been accrued in stock

the period ended December 31, 2015, the Company issued 398,000 shares of common stock for services.

The shares were valued based

on the fair market price on the date of grant for a total of $48,440.

the period ended December 31, 2015, the Company issued 692,300 in Restricted Stock Units to its non-management directors.

agreements call for payment of current year director fees via issuance of Restricted Stock Units, required continued service through

September 30, 2015, and re-election at the September 25, 2015, annual shareholder meeting.

The shares were re-valued based on

the fair market price on the date of vesting for a total of $97,846.

Prior to the issuance, the Company accrued a total of $81,345

payable in Restricted Stock Units to its non-management directors and $9,000 stock payable to a former director.

As a result of

re-valuation, the Company recognized an additional compensation expense of $7,500.

During the same period, the Company accrued

$1,500 payable in Restricted Stock Units to its non-management director.

Each restricted stock unit is valued at $0.04, based

on the closing price of the Company’s common stock at the date of grant.

These agreements call for payment of current year

director fees via issuance of restricted stock units over a vesting period ending September 30, 2016, and reelection at the next

annual shareholder meeting.

Ranganathan, Britt Ide, Paula LuPriore, and K.

Sue Redman resigned from the board between November 1, 2015, to December 10, 2015,

forfeiting $10,260.

This amount was removed from Restricted Stock Units payable.

Preferred Stock

The Company has 20,000,000 authorized shares

of preferred stock.

As of September 30, 2015, there are no preferred shares issued or outstanding.

NOTE 12 - BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic net loss per common share for the three

month periods ended September 30, 2015, and 2014, are based on 74,917,541 and 60,843,159, respectively, of weighted average common

shares outstanding.

Dilutive net loss per common share for the six month periods ended September 30, 2015, and 2014, are based

on 74,365,634 and 60,825,672, respectively, of weighted average common shares outstanding.

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

Net income per common share:

Weighted Average Number

Outstanding, Basic and Diluted

NOTE 13 - DILUTIVE INSTRUMENTS

Stock Options and Warrants

The Company is required to recognize expense

of options or similar equity instruments issued to employees using the fair-value-based method of accounting for stock-based payments

in compliance with the financial accounting standard pertaining to share-based payments.

This standard covers a wide range of

share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation

rights, and employee share purchase plans.

Application of this standard requires significant judgment regarding the assumptions

used in the selected option pricing model, including stock price volatility and employee exercise behavior.

Most of these inputs

are either highly dependent on the current economic environment at the date of grant or forward-looking over the expected term

of the award.

Company has 20,000,000 authorized shares of preferred stock.

As of December 31, 2015, there are no preferred shares issued or

12 - BASIC AND DILUTED NET LOSS PER COMMON SHARE

and diluted net loss per common share for the three month periods ended December 31, 2015 and 2014, are based on 76,134,002 and

72,855,781, respectively, of weighted average common shares outstanding.

and diluted net loss per common share for the nine month periods ended December 31, 2015 and 2014, are based on 75,247,919 and

64,850,290, respectively, of weighted average common shares outstanding.

No adjustment has been made for any common

stock equivalents outstanding because their effects would be antidilutive.

13 - DILUTIVE INSTRUMENTS

Options and Warrants

Company is required to recognize expense of options or similar equity instruments issued to employees using the fair-value-based

method of accounting for stock-based payments in compliance with the financial accounting standard pertaining to share-based payments.

This standard covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based

awards, share appreciation rights, and employee share purchase plans.

Application of this standard requires significant judgment

regarding the assumptions used in the selected option pricing model, including stock price volatility and employee exercise behavior.

Most of these inputs are either highly dependent on the current economic environment at the date of grant or forward-looking over

the expected term of the award.

and Outstanding

1 unchanged sentence

Common Stock Options

Balance as of September 30, 2015

On July 14, 2015, the Company CEO converted

25,000 options using the cashless option into 19,000 shares of

“restricted”

common stock issued

during the period ended September 30, 2015.

The Board of Directors resolved on July 15,

2015, to increase the Company authorized common stock from 90,000,000 shares with no par value to 100,000,000 shares of common

stock with no par value.

The resolution was ratified on September 25, 2015, by the shareholders at the Annual Meeting.

January 1, 2014, the Company granted 40,000 incentive options each

to three employees per year for three years.

These options were issued as incentive compensation to the employees.

were valued using the Black-Scholes valuation model.

The options have an expected volatility rate of 259.07% calculated using

the Company stock price for a three-year period.

A risk free interest rate of 0.26% - 0.76% was used to value the options.

total value of these options was $17,726.

The options vest over a three year period and are exercisable at a range of $.05 to

$0.6 per share, which represented the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of September 30, 2014, $10,803 of the total value was expensed.

$2,530 was expensed in the six months ending September 30,

February 1, 2014, the Company granted 40,000 incentive options

to one employee per year for three years.

These options were issued as incentive compensation to the employee.

The options were

valued using the Black-Scholes valuation model.

The options have an expected volatility rate of 258.20% calculated using the Company

stock price for a three-year period.

A risk free interest rate of 0.41% - 0.64% was used to value the options.

Balance as of December 31, 2015

14, 2015, the Company CEO converted 25,000 options using the cashless option into 19,000 shares of “restricted”

stock issued during the period ended September 30, 2015.

Board of Directors resolved on July 15, 2015, to increase the Company authorized common stock from 90,000,000 shares with no par

value to 100,000,000 shares of common stock with no par value.

The resolution was ratified on September 25, 2015, by the shareholders

at the Annual Meeting.

1, 2014, the Company granted 40,000 incentive options each to three employees per year for three years.

These options were issued

as incentive compensation to the employees.

The options were valued using the Black-Scholes valuation model.

The options have

an expected volatility rate of 259.07% calculated using the Company stock price for a three-year period.

A risk free interest

rate of 0.26% - 0.76% was used to value the options.

The total value of these options was $17,726.

The options vest over a three

year period and are exercisable at a range of $.05 to $0.06 per share, which represented the fair market value at the date of

grant in accordance with the 2009 Equity Incentive Plan.

As of December 31, 2015, $12,278 of the total value was expensed.

was expensed in the three months ending December 31, 2015.

1, 2014, the Company granted 40,000 incentive options to one employee per year for three years.

These options were issued as incentive

compensation to the employee.

The options were valued using the Black-Scholes valuation model.

The options have an expected volatility

rate of 258.20% calculated using the Company stock price for a three-year period.

A risk free interest rate of 0.41% - 0.64% was

used to value the options.

The total value of these options was $4,701.

The options vest over a three-year period and are exercisable

at $.04 per share, which represents the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of December 31, 2015, $2,731 of the total value was expensed.

$341 was expensed in the three months ending December 31, 2015.

May 15, 2012, the Company granted 850,000 incentive stock options to an officer, Robert Grover.

The expected volatility rate of

223.62% calculated using the Company stock price over the period beginning June 1, 2009, through date of issue.

A risk free interest

rate of 0.38 % was used to value the options.

The options were valued using the Black-Scholes valuation model.

The total value

of these options was $4,107.

The options vest over a three-year period and are exercisable at a range of $.05 to $0.6 per share,

which represents the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of September

30, 2015, $2,389 of the total value was expensed.

$690 was expensed in the six months ending September 30, 2015.

On May 15, 2012, the Company granted 850,000 incentive stock options

to an officer, Robert Grover.

The expected volatility rate of 223.62% calculated using the Company stock price over the period

beginning June 1, 2009 through date of issue.

A risk free interest rate of 0.38 % was used to value the options.

The options were

valued using the Black-Scholes valuation model.

The total value of this option was $44,495.

The options vest over a three year

period and are exercisable at $0.06 per share which represents the fair market value at the date of grant in accordance with the

2009 Equity Incentive Plan.

As of June 30, 2015, the entire value of the options was expensed.

$2,161 was expensed in the six

months ending September 30, 2015.

On July 30, 2015, 120,000 common stock warrants were exercised

at a price of $.07 per share for a total of $8,400, resulting in the issuance of 120,000 shares of “restricted”

NOTE 14 - SUBSEQUENT EVENTS

On January 16, 2015, the Company executed

a non-convertible promissory note with warrants attached, with one of our shareholders and board members, for $400,000 at 10%

interest per annum, due June 30, 2015.

The note due date was subsequently amended to November 30, 2015.

On October 13, 2015, PCS filed

a Summons and Complaint against Ty Jacobsen (Ada County Case No.

CV OC 1517581) in the Idaho Fourth Judicial District Court.

parties to the suit are PCS Edventures!, Inc., plaintiff, v.

Ty Jacobsen d/b/a Jacobsen Enterprises, defendant.

Our claims primarily

involve defamation, breach of contract and injunctive relief.

Through the Complaint, PCS alleges Jacobsen violated the terms of

his Consulting Agreement, which included a non-disparagement agreement, by publishing false and defamatory material in a Facebook

forum and on his Twitter feed, along with making defamatory statements to other PCS investors or potential investors.

On October 21, 2014, the Company executed

a promissory note with one of our shareholders and board members in the amount of $870,457.

The note is non-convertible, bears

and interest rate of 10% per annum, is secured by accounts receivable, fixed assets, intellectual property, and the public entity

PCS net loss carry forward to finance operations and inventory purchases, due May 31, 2015.

This note due date was extended

to September 30, 2015, then amended and extended to November 30, 2015.

On October 21, 2014, the Company entered into

at 10% Convertible Promissory Note with a current board member and shareholder, in the amount of $200,000, convertible into shares

of common stock of the Company, at the market price of $0.04.

This note due date was extended to September 30, 2015, then amended

and extended to November 30, 2015.

On November 1, 2015, the Board of Directors of PCS Edventures!.com,

(the “Company”) has accepted the resignation of Britt E.

Ide as a member of the board of directors of the Company.

There were no disagreements between the Company and Ms.

Ide regarding her resignation.

Ide has no family relationships

with anyone at PCS.

Management’s Discussions and Analysis

of Financial Condition and Results of Operations .

Cautionary Statements for Purposes of “Safe Harbor

Provisions”

of this option was $46,175.

The options vest over a three year period and are exercisable at $0.06 per share which represents

the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of June 30, 2015, the entire

value of the options was expensed.

November 18, 2015, the Company granted 200,000 stock options to an officer, Robert Grover.

The expected volatility rate of 186.52%

calculated using the Company stock price over the period beginning November 17, 2015, through date of issue.

A risk free interest

rate of 0.80 % was used to value the options.

The options were valued using the Black-Scholes valuation model.

The total value

of this option was $14,659.

The options vest over a three year period and are exercisable at $0.09 per share which represents

the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

For the period ending December 31,

2015, $1,757 of the option value was expensed.

July 30, 2015, 120,000 common stock warrants were exercised at a price of $.07 per share for a total of $8,400, resulting in the

issuance of 120,000 shares of “restricted”

common stock.

14 - SUBSEQUENT EVENTS

January 28, 2016, Mr.

Hackett, the holder of these Promissory Notes, approved a Note Extension Agreement extending the due dates

of the specific Promissory Notes detailed in the Note Table below:

Original Principal Balance

Principal 11/30/15

Origination Date

Original Due Date

Amended Due Date

Interest Rate

2/17 & 3/5/15

February 6, 2016, the Company entered into at 10% Promissory Note with a current board member, CEO and shareholder, Todd Hackett

in the amount of $100,000, secured by accounts receivable and NOL carry forward to finance

operations and inventory purchases, due February 29, 2016.

Management’s Discussions and Analysis of Financial Condition and Results of Operations .

Statements for Purposes of “Safe Harbor Provisions”

of the Private Securities Litigation Reform Act of 1995:

Except for historical facts, all matters discussed

in this Quarterly Report, which are forward-looking, involve a high degree of risk and uncertainty.

Certain statements in this

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”

for historical facts, all matters discussed in this report, which are forward-looking, involve a high degree of risk and uncertainty.

Certain statements in this 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 the Company’s Securities and

Exchange Commission filings.

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 the Company’s Securities

and Exchange Commission filings.

The Company assumes 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 our audited financial statements and Management’s Discussion and Analysis of Financial Condition and Results

of Operations (“MD&A”) contained in our Form 10-K for the year ended March 31, 2015.

Plan of Operation

PCS sells into the STEM education market with

(1) an existing STEM library and deep expertise in creating STEM solutions comprised of curriculum and materials;

PCS learning methodology –

an adaptive (customizes to individual learners), experiential (hands-on in nature),

learning framework that can be monetized in a number of ways, with what we believe is an approach to educational assessment and

incentivizing students for the future, and PCS is an innovative leader in this area;

following discussion should be read in conjunction with our audited consolidated financial statements and Management’s Discussion

and Analysis of Financial Condition and Results of Operations (“MD&A”) contained in our Form 10-K for the year

ended March 31, 2015.

sells into the STEM education market with (1) an existing STEM library and deep expertise in creating STEM solutions comprised

of curriculum and materials;

(2) a unique PCS learning methodology –

an adaptive (customizes to individual learners), experiential

(hands-on in nature), learning framework that can be monetized in a number of ways, with what we believe is an approach to educational

assessment and incentivizing students for the future, and PCS is an innovative leader in this area;

(3) PCS has developed an innovative

1 unchanged sentence

such as hands-on physics and engineering and coding;

and (4) PCS entered the B2C space with a retail product launch this

year and also has a working model for experiential learning labs operational.

With a plan to expand higher margin digital

delivery products, PCS is now in the development stage of a unique, subscription-based online learning system that can be licensed

to schools or non-profit organizations, as well as be used in the home environment.

As we enter FY2016, our strategy is profitability

driven seeking to optimize and streamline operations while moving our digital learning and robotics product strategy forward.

A continued underlying principle will be the building of services and products with recurring revenue traits such as online licensing.

Tactically, we will focus on improving product quality, improving our delivery and support infrastructure to accommodate larger

scale delivery, improving our sales infrastructure, and building our new, higher margin digital products to add to our lineup

of STEM products and services.

We will continue to focus on the improvement of our web-based marketing efforts, expand

our sales force and channel partners, and tighten sales processes for our domestic STEM sales.

We will continue to use our EdventuresLab

program for (1) an R&D test bed for product improvement and refinement with a major emphasis on digital delivery of content

and (4) PCS entered the B2C space with a retail product launch this year

and also has a working model for experiential learning labs operational.

With a plan to expand higher margin digital delivery

products, PCS is now in the development stage of a unique, subscription-based online learning system that can be licensed to schools

or non-profit organizations, as well as be used in the home environment.

Phase one of this online learning platform, called EdApp,

was launched in Q3 with a product called EdApp Droneology.

Phase two is in the functional design stage and is planned to be developed

and deployed in Q4.

PCS expertise in the area of Drone technology evolved over the course of 12 months in 2015 as we developed

a drone curriculum, technical expertise, and a supply chain partner supplying drone solutions.

We believe the Drone market to

be highly viable for rapid growth of our retail product strategy.

In addition, the drone technology we are working on aligns strongly

with our STEM robotics product roadmap.

we approach FY2017, our strategy is growth and profitability driven seeking to optimize and streamline operations while aggressively

moving our digital learning and robotics product strategy forward.

A continued underlying principle will be the building of services

and products with recurring revenue traits such as online licensing.

Tactically, we will focus on improving product quality, improving

our delivery and support infrastructure to accommodate larger scale delivery, improving our sales infrastructure, and building

our new, higher margin digital products to add to our lineup of STEM products and services.

We will continue to focus on the improvement

of our web-based marketing efforts, expand our sales force and channel partners, and tighten sales processes for our domestic

We will also continue to fulfill existing and capture new STEM contracts on International projects where these make

We will continue to use our EdventuresLab program for (1) an R&D test bed for product improvement and refinement with

a major emphasis on digital delivery of content in FY2017;

(2) revenue generation through afterschool and summer course fees;

(3) revenue through licensing EdventuresLab

curriculum and methods;

(3) revenue through licensing EdventuresLab curriculum and methods;

and (4) revenues from STEM retail products.

We believe e-commerce sales of kits associated with STEM

learning targeting the families of students attending the centers as well as the larger home retail market will provide a consistent,

dependable boost in Q3 annual revenues to offset low education sales traditionally anticipated during this time frame.

will actively seek retail distribution methods and channels for our robotics retail products and expand their usability for other

market segments.

Results of Operations

For the six month period ended September 30,

2015, the Company reported a net loss of ($200,682) as compared to a net loss of ($1,088,143) for the six month period ended September

The $887,461 reduction in loss was

due to a 22% improvement in gross margin due

to sales mix and reduction in employee expenses over last year, and full amortization of the note payable discounts totaling $301,131

in the second quarter of fiscal 2015 , as a result of $646,500 in notes payable conversion into 18,455,666 shares of our common

The Basic Loss per Share for the six month period ended September 30, 2015, was ($0.00), which varies from the ($0.01)

loss per share for the six month period ended September 30, 2014.

for the six month period ended September 30, 2015, was $1,816,026, as compared to revenue during the six month period ended September

30, 2014, of $1,557,104.

The revenue increase was due to an increase in domestic product sales to our two major customers.

For the three months ended September 30, 2015,

the Company reported a net loss of ($331,548) as compared to a net loss of ($760,883) for the quarter ended September 30, 2014.

The loss reduction was predominantly due to the prior year full amortization of all note payable discounts totaling $301,131 on

July 21, 2014, as a result of $646,500 in notes payable conversion into 18,455,666 shares of our common stock.

The Basic Loss

per Share for the quarter ended September 30, 2015, was ($0.00), which varies from the ($0.01) loss per share for the three-month

period ended September 30, 2014.

Revenue for the three months ended September

30, 2015, was $524,807, as compared to revenue during the quarter ended September 30, 2014, of $554,539.

The decrease in revenue

was due to $218,409 less in international sales that was almost recaptured in a domestic sales increase of $175,550 over the same

period in the prior year.

Additional work orders from International efforts in the second quarter of fiscal 2016, though not

invoiced, were substantial, although not anticipated to continue beyond this fiscal year.

Operating expenses decreased by $7,686 (1%)

and $131,312 (11%) in the three and six months of fiscal 2016, respectively, relative to prior year periods.

The largest changes

decreases in the areas of product development, decreases in employee expenses, and increase in Restricted Stock Unit accrued

Product development expense decreased significantly due to prior year fulfillment of outreach contract custom product development

for Tatweer Company for Education Services.

Employee expenses decreased due to not filling open positions, product development,

and international contract administration.

The Restricted Stock Units were revalued at the close of the market on the date of

vesting for Board of Director compensation through September 30, 2015.

Interest expense decreased by $283,274 and

$252,552 in the three and first six months of fiscal 2016, respectively, relative to prior year periods.

Interest expense in the

second quarter of fiscal 2015 included amortization of note payable discounts totaling $301,131 as a result of $646,500 in conversion

of notes payable into common stock.

Cash provided by operations for the second

quarter of fiscal 2016 was $38,571 compared to cash used by operations of ($421,026) in the same period last year.

ended the second quarter of fiscal 2016 with $192,665 in cash, total current assets of $891,685, and total current liabilities

We believe e-commerce

sales of kits associated with STEM learning targeting the families of students attending the centers as well as the larger home

retail market will provide a consistent, dependable boost in Q3 annual revenues to offset low education sales traditionally anticipated

during this time frame.

We will actively seek retail distribution methods and channels for our robotics retail products and expand

their usability for other market segments.

We are actively pursuing an expansion strategy for retail and STEM education that involves

Drone technology.

of Operations

the nine-month period ended December 31, 2015, the Company reported a net loss of ($612,316) as compared to a net loss of ($1,123,512)

for the nine-month period ended December 31, 2014.

The significant reduction in net loss was predominantly due to the reduction

of interest expense year over year of $253,410.

The nine month period ending net loss December 31, 2014 included $301,131 in debt

discount amortized on July 21, 2014 as a result of $646,500 in notes payable conversion into 18,455,666 common stock shares.

remaining reduction in loss was due to a improvement in gross margin due to sales mix and reduction in employee expenses over

The Basic Loss per Share for nine-month period ended December 31, 2015, is ($0.01), which varies from the ($0.02) loss

per share for the nine-month period ended December 31, 2014.

for the nine month period ended December 31, 2015 decreased $193,707 to $2,145,719 as compared to revenue during the nine month

period ended December 31, 2014 of $2,339,426.

This was primarily due to the timing of acceptance of deliverables by our client

in Saudi Arabia.

Although contracted materials were delivered, the lack of official receiving notes from the client preclude this

revenue in this quarterly report.

We believe acceptance of these items to be imminent and will be reported in Q4.

of Sales for the nine month period ended December 31, 2015 decreased $349,579 to $953,448 (27%) as compared to cost of sales during

the nine month period ended December 31, 2014 of 1,303,027.

Gross margin was improved in the top three revenue catagories of Domestic,

Learning Centers, and International through a combination of sales mix and bill of materials and freight cost reduction.

expenses for the nine-month period ended December 31, 2015, decreased by $108,098 (6%) to $1,587,786 compared to $1,695,884 for

the nine-month period ended December 31, 2014.

The majority of savings stemming from employee expenses.

the three months ended December 31, 2015, the Company reported the net loss for the quarter was ($411,634) as compared to a net

loss of ($35,369) for the quarter ended December 31, 2014.

The Basic Loss per Share for the quarter ended December 31, 2015, is

($0.01), compared to the ($0.00) loss per share for the three month period ended December 31, 2014.

The increased loss per share

is the result of the decreased revenues not covering operations overhead.

for the three months ended December 31, 2015 decreased by $452,628 (58%) to $329,694, as compared to revenue during the quarter

ended December 31, 2014 of $782,322.

The significant difference in revenue from period to period is due to the large contract

received in FY2015 from Saudi Arabia and the non-reportable revenue for Q3 related to the current Saudi contract

expenses for the three month period ended December 31, 2015, increased by $23,214 (5%) to $521,863, as compared to $498,649 for

the three month period ended December 31, 2014.

used by operations for Q3 was ($92,392) compared to cash used by operations for Q3 ($512,325) in the same period last year.

Company ended the third quarter of FY 2016 with $57,820 in cash, total current assets of $544,707 and total current liabilities

of $2,463,427, resulting in a working capital deficit of $1,918,720 compared to a working capital deficit of $1,402,547 for the

year ended March 31, 2015.

The Company had a current ratio at September 30, 2015, and March

31, 2015, of .37 and .39, respectively.

used in financing activities FY 2016 to December 31, 2015, was $263,350 in short term debt repayments.

For financing activities

through December 31, 2014, management obtained $538,116 in cash for operations and working capital by issuing Promissory Notes.

Company had a current ratio at December 31, 2015, and March 31, 2015, of .22 and .39, respectively.

PCS Edventures!.com, Inc.

does not possess enough current assets to pay current liabilities.

The majority of the current liabilities relate to notes payable to one of its shareholders and board members.

This lender has

on numerous occasions provided the Company with extensions of due dates for principal and accrued interest.

The most recent grant

extended the due date until November 30, 2015 for these notes.

The company is continuing to pursue raising capital to pay these

There is no guarantee that this lender will continue to provide extensions for payments and the Company cannot predict

that it will be successful in obtaining funding or generating cash in order to pay the lender.

The Company has an accumulated

deficit of ($39,818,688) and shareholders’

equity (deficit) of ($1,598,036).

Quantitative and Qualitative Disclosures About Market

The Company is a smaller reporting company as defined by Rule 12b-2

of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is not required to provide the information

required under this item.

The majority of the current liabilities relate to notes payable

to one of its shareholders and board members.

This lender has on numerous occasions provided the Company with extensions of due

dates for principal and accrued interest.

The most recent grant extended the due date until February 29, 2015 for these notes.

The Company is continuing to pursue raising capital to pay these obligations.

There is no guarantee that this lender will continue

to provide extensions for payments and the Company cannot predict that it will be successful in obtaining funding or generating

cash in order to pay the lender.

The Company has an accumulated deficit of ($40,230,322) and shareholders’

equity (deficit)

of ($1,977,290).

Quantitative and Qualitative Disclosures About Market Risk.

Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange

Act”) and is not required to provide the information required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements