PCS Edventures!, Inc. 10-K

Item 9A. Controls and Procedures Disclosure 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’s Annual Report on Internal Control Over Financial Reporting . Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our management, including our Chief Executive Officer and Principal Financial Officer, in this case, our President, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Management believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented. 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 March 31, 2024, 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 not effective as of March 31, 2024, because of inadequate control and expertise over preparation of the preliminary financial statements and schedules for our auditor’s review, resulting in some minor errors in applying Accounting Standards Codifications used in the United States to organize and present accounting standards and principles. Management has concluded that we will take appropriate action to add additional expertise to assist us in the preparation of our future interim financial statements for our auditor’s review to ameliorate this weakness. Management acknowledges that as a smaller reporting entity, it is difficult to have adequate accounting staff to perform appropriate additional reviews of the financial statements. Changes in Internal Control Over Financial Reporting With the exception of management’s plan to take appropriate action to add additional expertise to assist us in the preparation of our future interim financial statements to ameliorate this weakness and to assist us in designing and implementing a system of adequate controls over the preparation of our financial statements and schedules, there have been no changes in our internal control over financial reporting during the fiscal year ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections. None. Not applicable. 31 PART III Item 10. Directors, Executive Officers and Corporate Governance Identification of Directors and Executive Officers. The following table sets forth the name, age and position of each officer and director of the Company: Name Age Positions Held Date of Election or Designation Todd R. Hackett 63 CEO and Chairman CEO, November 20, 2015 Chairman, December 10, 2015 Michael J. Bledsoe 58 President and Director President, August 21, 2018 Director, July 1, 2016 Term of Office. The terms of office of our current directors shall continue until an annual meeting of stockholders is held. The Company has no plans to conduct an annual meeting until the spring of 2025. The annual meeting of the Board of Directors immediately follows the annual meeting of stockholders, at which time executive officers for the coming year are elected. Business Experience. Todd R. Hackett – CEO and Chairman of the Board of Directors Mr. Hackett is the owner of a successful construction company in Iowa who first became aware of PCS as an investment opportunity in 2007. Over the past 10 years, his involvement with PCS has grown from a casual investor to a strong advocate for bringing educational opportunities to both children and young adults to strengthen their knowledge in math and science. He has demonstrated his abilities in the building of his own company from a startup in 1981 to a major construction firm now handling multimillion-dollar projects. Many of his projects involve educational institutions such as community colleges, middle schools, libraries, and applied technology labs. Mr. Hackett is actively involved in his community, is passionate about the potential of PCS and is actively engaged in helping to create a company with deep shareholder value which also actively works to improve STEM education around the world. Michael J. Bledsoe – President and Director Mr. Bledsoe joined PCS in July of 2016. As President and a member of the Board of Directors, he brings over 20 years of financial experience, executive leadership, and strategic management to his position. Mike received a BBA in Quantitative Management with an emphasis in Finance, from Boise State University in 1989, and was honored as the top graduate in his major. In 1993, he earned his MBA from Boise State University. Prior to joining PCS, Mike spent his career in the investment management field, most recently at D.A. Davidson, where he was a Senior Vice President and Portfolio Manager for 18 years. He earned the CFA Charterholder designation in 1994, and was an adjunct faculty member at Boise State University, where he taught classes in personal investing, fostering his passion for education and the sculpting of tomorrow’s best thinkers. We believe that, based on education and experience, both of our directors are qualified to serve. Significant Employees. None. Family Relationships. There are no family relationships between our officers and directors. 32 Involvement in Certain Legal Proceedings. During the past 10 years, none of our present directors, executive officers or persons nominated to become directors or executive officers have been involved in any of the following activities: (1) A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; (2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: (i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) Engaging in any type of business practice; or (iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; (4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; (5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; (6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; (7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) Any Federal or State securities or commodities law or regulation; or (ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. 33 Compliance with Section 16(a) of the Exchange Act. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended March 31, 2024, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial owners were complied with. Code of Ethics We adopted a Code of Ethics and revised it in 2016. The Code is attached as Exhibit 14 of this Annual Report. Nominating Committee. No changes have been made to the process by which shareholders may nominate a person or persons to serve as a member of the Company’s Board of Directors. Audit Committee. As a smaller reporting company, we are not required to have an audit committee. Item 11. Executive Compensation Compensation. SUMMARY COMPENSATION TABLE FOR FISCAL YEARS 2023-2024 The following table sets forth the aggregate compensation paid by us for services rendered during the periods indicated: SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation ($) All Other Compensation ($) Total ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Todd R. Hackett 3/31/24 - - - - - - - $ 0 CEO & Chairman 3/31/23 - - - - - - - $ 0 Michael J. Bledsoe 3/31/24 $ 112,957 $ 16,069 - - - - - $ 129,026 President & Director 3/31/23 $ 94,667 $ 10,093 - - - - - $ 104,760 Outstanding Equity Awards There were no options or warrants outstanding as of March 31, 2024 or March 31, 2023. Director Compensation Name Fees Earned or Paid in Cash ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Todd R. Hackett - - - - - - - Michael J. Bledsoe - - - - - - - The Company does not currently compensate its directors for service as directors and has not for the past five years. 34 Employment Agreements The Company does not have any employment agreements with any of its executive officers. Long-Term Incentive Plans There are no arrangements or plans in which the Company would provide pension, retirement or similar benefits for our directors or executive officers. Compensation Committee The Company currently does not have a compensation committee of the Board of Directors. The Board of Directors as a whole determines executive compensation. Options Grants in Last Fiscal Year. The Company did not grant any options during fiscal years 2024 or 2023. Audit Committee Financial Expert. Board members Mike J. Bledsoe and Todd R. Hackett engaged our accounting firm, which is currently Haynie & Company, CPAs, for the annual audit and quarterly reviews. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security Ownership of Certain Beneficial Owners Under Rule 13d-3 of the Commission, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the number of shares outstanding is deemed to include the number of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. The following table sets forth, as of September 30, 2023, the names, addresses and number of shares of common stock beneficially owned by all persons known to the management of PCS to be beneficial owners of more than 5% of the outstanding shares of common stock, and the names and number of shares beneficially owned by all directors of PCS and all executive officers and directors of PCS as a group (except as indicated, each beneficial owner listed exercises sole voting power and sole dispositive power over the shares beneficially owned). For purposes of this table, information as to the beneficial ownership of shares of common stock is determined in accordance with the rules of the Commission and includes general voting power and/or investment power with respect to securities. Except as otherwise indicated, all shares of our common stock are beneficially owned, and sole investment and voting power is held, by the person named. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock which such person has the right to acquire within 60 days after the date hereof. The inclusion herein of such shares listed beneficially owned does not constitute an admission of beneficial ownership. All percentages are calculated based upon a total number of 124,733,494 shares of common stock outstanding as of June 28, 2024, plus, in the case of the individual or entity for which the calculation is made, that number of options or warrants owned by such individual or entity that are currently exercisable or exercisable within 60 days. 35 Name and Address of Beneficial Owner of Common Stock Amount of Beneficial Ownership Percentage of Class Officers and Directors Todd R. Hackett 11915 W. Executive Dr., Suite 101 Boise, ID 83713 55,465,380 44.47 % Michael J. Bledsoe 11915 W. Executive Dr., Suite 101 Boise, ID 83713 2,734,235 2.19 % All Officers and Directors as a group (2 persons) 58,199,615 46.66 % >5% Holders Daniel Fuchs (1) 526 Shoup Ave. W., Suite K Twin Falls, ID 83301 11,662,001 9.35 % K2Red, LLC 526 Shoup Ave. W., Suite K Twin Falls, ID 83301 7,300,547 5.85 % (1) Includes shares owned in K2Red, LLC., in which Daniel Fuchs is a 33.3% owner and control person. Changes in Control. To our knowledge, there are no present arrangements or pledges of our securities that may result in a change in control of the Company. Item 13. Certain Relationships and Related Transactions, and Director Independence Transactions with Related Persons During the fiscal year ending March 31, 2024, the Company had no transactions with related persons. During the fiscal year ending March 31, 2023, the following related party transactions occurred: On August 21, 2018, the Company granted 1,000,000 stock options to our President, Michael J. Bledsoe. The expected volatility rate of 254.03% was calculated using the Company’s stock price over the period beginning August 21, 2018, through date of issue. A risk-free interest rate of 0.27% was used to value the options. The options were valued using the Black-Scholes valuation model. The options vested immediately and were exercisable at $0.025 per share which represents the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan. The maturity date was August 21, 2021. The entire value of the options were expensed at time of grant as they vested immediately. On August 21, 2021, the options expired and the Company issued 1,000,000 new options with a one year maturity and a strike price of $0.025 accounted for as a modification. These options were exercised on August 18, 2022. From April 1, 2013 to March 31, 2017, the Company executed related party promissory notes with the Chairman and CEO for $1,292,679, $175,000, $340,000 paid down to a principal balance of $220,648, with interest of 10% per annum. Monthly interest payments have been made in cash starting in January of 2019. On April 19, 2019, these notes were consolidated to one promissory note for $1,688,327, with interest of 10% per annum, and extending the due date to April 20, 2020. Total interest accrued and paid in the fiscal year ending March 31, 2020, totaled $142,210. Principal payments were made totaling $245,000 for an ending principal balance at March 31, 2020, of $1,443,327. The note was subsequently amended with a maturity date of May 1, 2021, with all other terms and conditions remaining the same. No principal payments were made on this note in fiscal year 2021, leaving a principal balance as of March 31, 2021, of $1,443,327. This promissory note due date was subsequently amended to a new due date of May 1, 2022, with all other terms and conditions remaining the same. No principal payments were made on this note during fiscal year 2022, leaving a principal balance as of March 31, 2022 of $1,443,327. During fiscal year 2023, this promissory note was paid in full. On February 1, 2017, the Company, in the capacity of borrower, executed a non-convertible promissory note payable, with no warrants attached, with lender Michael J. Bledsoe, a member of the Executive Management Team and Board of Directors, for $50,000 at 20% interest per annum, due April 30, 2017. The note’s principal balance of $50,000, and accrued interest of $23,342 as of May 31, 2019, was amended on June 1, 2019. The promissory note June 1, 2019, amendment reduced the interest rate to 10% per annum, but to accrue interest on both the $50,000 principal balance and the $23,342 accrued interest and extended the due date to May 31, 2020. This promissory note due date was subsequently amended to a new due date of May 31, 2021. As of March 31, 2021, the principal balance on this note was $50,000 and the accrued interest was $36,805. This promissory note due date was subsequently amended to a new due date of May 1, 2022, with all other terms and conditions remaining the same. During fiscal year 2023, the Company paid off this promissory note in full to Mike Bledsoe. 36 Transactions with Promoters and Control Persons Except as disclosed above, there were no material transactions, or series of similar transactions, during our Company’s last five fiscal years, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party and in which any promoter or founder of ours or any member of the immediate family of any of the foregoing persons, had an interest. We have not had any promoters or parents during the past five fiscal years. Parents. None, not applicable. Director Independence. Our Board of Directors is currently composed of two members, Todd R. Hackett and Michael J. Bledsoe, both of whom do not qualify as independent directors in accordance with the published listing requirements of the NASDAQ Global Market (the Company has no plans to list on the NASDAQ Global Market). The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the director, nor any of his family members has engaged in various types of business dealings with us. In addition, our Board of Directors has not made a subjective determination, as to our directors, that no relationships exist which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. Had our Board of Directors made these determinations, our Board of Directors would have reviewed and discussed information provided by our directors and us with regard to our directors’ business and personal activities and relationships as they may relate to us and our management. Securities Authorized for Issuance under Equity Compensation Plans Plan Category Number of Securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans excluding securities reflected in column (a) (a) (b) (c) Equity compensation plans approved by security holders - - None Equity compensation plans not approved by security holders - - None Total - - None Item 14. Principal Accountant Fees and Services The following table sets forth the fees the Company paid for accounting services during the past two fiscal years. Fee Category FY2024 FY2023 Audit Fees $ 71,500 $ 37,500 Audit Related Fees 3,000 0 Tax Fees 10,736 7,430 Total Fees $ 85,236 $ 44,930 37 Audit Fees - Consists of fees for professional services rendered by our principal accountants for the audit of our annual financial statements and review of the financial statements included in our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements. Audit-related Fees - Consists of fees for assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.” Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning. PART IV Item 15. Exhibits, Financial Statement Schedules (a)(3) Exhibits. The following exhibits are filed as part of this Annual Report: Exhibit 3.1 Second Amended and Restated Articles of Incorporation filed October 2, 2006. Filed with the Form 10/A filed on November 15, 2023, and incorporated herein by reference. Exhibit 3.2 Articles of Amendment to Second Amended and Restated Articles of Incorporation filed April 4, 2012. Filed with the Form 10/A on November 15, 2023, and incorporated herein by reference. Exhibit 3.3 Articles of Amendment dated September 25, 2014 Filed with the Form 10/A on November 15, 2023, and incorporated herein by reference. Exhibit 3.4 Articles of Amendment dated September 25, 2015 Filed with the Form 10/A on November 15, 2023, and incorporated herein by reference. Exhibit 3.5 Articles of Amendment dated September 25, 2016 Filed with the Form 10/A on November 15, 2023, and incorporated herein by reference. Exhibit 3.6 Third Amended Bylaws Filed with the Form 10/A on November 15, 2023, and incorporated herein by reference. Exhibit 4 Description of Registrant’s Securities Filed herewith. Exhibit 14 Code of Ethics Filed herewith. Exhibit 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith. Exhibit 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith. Exhibit 32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith. 101 The following materials from the Company’s Annual Report on Form 10K for the year ended March 31, 2024, were formatted in Inline XBRL (Extensible Business Reporting Language): (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) Notes to Financial Statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL. 38 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PCS Edventures!, Inc. Dated: 06/28/2024 By: /s/ Todd R. Hackett Todd R. Hackett Chairman of the Board and CEO Dated: 06/28/2024 By: /s/ Michael J. Bledsoe Michael J. Bledsoe President, Principal Financial Officer, Director 39