PCS Edventures!, Inc. 10-K

Item 8. Financial Statements Report of Independent Registered Public Accounting Firm 19 Balance Sheets as of March 31, 2026, and March 31, 2025 20 Statements of Operations for the years ended March 31, 2026, and 2025 21 Statements of Stockholders’ Equity for the years ended March 31, 2026, and 2025 22 Statements of Cash Flows for the years ended March 31, 2026, and 2025 23 Notes to Financial Statements 24 18 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of PCS Edventures!, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of PCS Edventures!, Inc. (the Company) as of March 31, 2026 and 2025, and the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended March 31, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended March 31, 2026, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involve especially challenging, subjective, or complex auditor judgments. We determined that there are no critical audit matters. /s/ Haynie Haynie Salt Lake City, Utah June 26, 2026 PCAOB # 457 We have served as the Company’s auditor since 2019. 19 PCS EDVENTURES!, INC. Balance Sheets (Audited) March 31, 2026 March 31, 2025 CURRENT ASSETS Cash $ 2,674,538 $ 3,223,147 Accounts receivable, net of allowance for credit losses of $ 41,889 and $ 38,027 , respectively 719,380 383,826 Accounts receivable, other receivables 3,227 55 Prepaid expenses 179,869 247,422 Inventory, net 2,054,008 2,064,534 Total Current Assets 5,631,022 5,918,984 NONCURRENT ASSETS Lease right-of-use asset 934,064 1,140,217 Deposits 29,747 29,747 Property and equipment, net 84,873 97,213 Deferred tax asset 2,222,414 2,276,861 Total Noncurrent Assets 3,271,098 3,544,038 TOTAL ASSETS $ 8,902,120 $ 9,463,022 CURRENT LIABILITIES Accounts payable $ 84,316 $ 24,991 Payroll liabilities and accrued expenses 115,582 171,398 Deferred revenue 21,240 20,026 Lease liability, current portion 227,718 110,024 Total Current Liabilities 448,856 326,439 Lease liability, net of current portion 760,504 1,081,614 TOTAL LIABILITIES 1,209,360 1,408,053 STOCKHOLDERS’ EQUITY (DEFICIT) Preferred stock, no par value, 20,000,000 authorized shares, no shares issued and outstanding - - Common stock, no par value, 12,000,000 authorized shares, 9,781,828 issued and 9,707,960 outstanding 10,182,853 shares issued and outstanding, respectively - - Additional Paid-in Capital 39,521,588 40,022,746 Treasury stock, 73,868 shares and 0 shares, respectively ( 114,233 ) - Accumulated deficit ( 31,714,595 ) ( 31,967,777 ) Total Stockholders’ Equity 7,692,760 8,054,969 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,902,120 $ 9,463,022 The accompanying notes are an integral part of these financial statements. 20 PCS EDVENTURES!, INC. Statements of Operations (Audited) 2026 2025 For the Years ended March 31, 2026 2025 REVENUE $ 6,349,761 $ 7,421,228 COST OF SALES 2,509,692 2,983,940 GROSS PROFIT 3,840,069 4,437,288 OPERATING EXPENSES Salaries and wages 2,205,008 1,914,941 General and administrative expenses 1,418,083 1,386,177 Total Operating Expenses 3,623,091 3,301,118 INCOME FROM OPERATIONS 216,978 1,136,170 OTHER INCOME AND EXPENSES Net interest income 104,477 127,930 NET INCOME BEFORE INCOME TAX PROVISION 321,455 1,264,100 Income Tax Benefit (Provision) ( 68,273 ) ( 317,235 ) NET INCOME $ 253,182 $ 946,865 Net income per common share: Basic 0.03 0.09 Diluted 0.03 0.09 Weighted Average Common Shares Outstanding Basic 9,914,691 10,320,469 Diluted 9,914,691 10,320,469 The accompanying notes are an integral part of these financial statements. 21 PCS EDVENTURES!, INC. Statements of Stockholders’ Equity (Audited) Shares O/S Stock Shares Capital Capital Deficit Equity Treasury Stock # of Common Common Treasury Additional Paid-in Additional Paid-in Accumulated Stockholders’ Shares O/S Stock Shares Capital Capital Deficit Equity Balance at 3/31/2024 10,394,830 - - $ - $ 40,570,459 $ ( 32,914,642 ) $ 7,655,817 Net Income - - - - - 946,865 946,865 Private shares purchased and cancelled ( 211,977 ) - - - ( 547,713 ) - ( 547,713 ) Balance at 3/31/2025 10,182,853 - - $ - $ 40,022,746 $ ( 31,967,777 ) $ 8,054,969 Balance 10,182,853 - - $ - $ 40,022,746 $ ( 31,967,777 ) $ 8,054,969 Net income - - - - - 253,182 253,182 Treasury shares purchased ( 393,549 ) - 393,549 ( 498,271 ) - - ( 498,271 ) Treasury shares cancelled - - ( 319,681 ) 384,038 ( 384,038 ) - - Private shares purchased and cancelled ( 88,012 ) - - - ( 128,048 ) - ( 128,048 ) Shares issued for Board comp 6,668 - - - 10,928 - 10,928 Balance at 3/31/2026 9,707,960 - 73,868 $ ( 114,233 ) $ 39,521,588 $ ( 31,714,595 ) $ 7,692,760 Balance 9,707,960 - 73,868 $ ( 114,233 ) $ 39,521,588 $ ( 31,714,595 ) $ 7,692,760 The accompanying notes are an integral part of these financial statements. 22 PCS EDVENTURES!, INC . Statements of Cash Flows (Audited) 2026 2025 For the years ended March 31, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 253,182 $ 946,865 Depreciation and amortization 31,069 26,339 Amortization of right of use asset 206,153 157,391 Provision for income tax 68,273 317,235 Stock based compensation for board member 10,928 - Bad debt expense 3,862 - Changes in operating assets and liabilities (Increase) decrease in accounts receivable ( 342,588 ) 1,291,978 (Increase) decrease in prepaid expenses 67,554 146,669 (Increase) decrease in inventories 10,526 ( 39,051 ) (Decrease) increase in accounts payable and accrued liabilities ( 10,317 ) ( 187,271 ) Increase (decrease) in lease liability ( 203,416 ) ( 121,220 ) Increase (decrease) in unearned revenue 1,214 5,477 (Increase) decrease in deposits - ( 23,446 ) Net Cash Provided by Operating Activities 96,440 2,520,966 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchase of fixed assets ( 18,730 ) ( 79,814 ) Net Cash Used by Investing Activities ( 18,730 ) ( 79,814 ) CASH FLOWS FROM FINANCING ACTIVITIES Cash paid for private purchases of common stock ( 128,048 ) ( 547,713 ) Cash paid for purchase of Treasures shares in open market ( 498,271 ) - Net Cash Used by Financing Activities ( 626,319 ) ( 547,713 ) Net Increase (Decrease) in Cash ( 548,609 ) 1,893,439 Cash at Beginning of Period 3,223,147 1,329,708 Cash at End of Period $ 2,674,538 $ 3,223,147 Cash paid for taxes $ 191,506 $ 125,861 Cash paid for interest $ - $ 999 The accompanying notes are an integral part of these financial statements. 23 PCS EDVENTURES!, INC. Notes to the Financial Statements March 31, 2026 (Audited) NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business The financial statements presented are those of PCS Edventures!, Inc., an Idaho corporation (the “Company,” “PCS,” “PCSV,” “we,” “our,” “us” or similar words), incorporated in 1994, in the State of Idaho. PCS specializes in experiential, hands-on, TK12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and TK-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks. Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer. Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels. PCS has developed and sells a variety of STEM education products into the K12 market, which can be categorized as follows: 1. Enrichment Programs These camps are for the informal learning market and are designed to be highly engaging for students while easily administered by the instructor. The Company offers approximately 36 different enrichment programs and typically develops at least two (2) new programs each year. Some of the more popular programs include Rockin’ Robots; Ready, Set, Drone!; Cubelets BOT Builder; Simple Machines; Drone Designers; Coding with Drones; Pirate Camp; Dirt Camp; and Claymation. 2. Discover Series Products These products are designed for the makerspace environment and include engaging STEM activities that motivate students to pursue educational pathways toward STEM careers. The Discover Series includes Discover Podcasting; Discover STEM Dynamic Duo; and Discover Digital Video Lab. 3. BrickLAB Products These products are designed for the grade school market and use the Company’s proprietary bricks (which are Lego compatible) and curriculum to engage students to explore, imagine and create within a STEM education framework. The Company offers a variety of grade-specific BrickLAB products. 4. Discover Drones, Add-on Drone Packages and Ala Carte Drone Items These products are designed around using drones as a platform for STEM education and career exploration. These titles include the Discover Drones series of Products; Discover Drones Indoor Coding Bundle; Discover Drones Indoor Racing Add-On; Discover Drones Outdoor Practice Add-on ; and all the spare parts and ala carte drone items offered in the Company’s comprehensive drone packages. 24 5. STEAMventures BUILD Activity Book These series of activity books are designed for the TK-3 market. The series includes 12 different issues. Instructor guides and/or family engagement guides are included. The Company also provides the necessary bricks for the builds in the activity books as a separate, but related product. 6. Professional Development Training The Company offers professional development trainings, for a fee, to educators who are implementing the Company’s products in their classroom. The Company intends to continue developing STEM education products that address demand from large markets. Accounting Method The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected a March 31 st fiscal year end. Cash and Cash Equivalents Cash and cash equivalents, totalling $ 2,674,538 and $ 3,223,147 at March 31, 2026, and March 31, 2025, respectively, consist of operating and savings accounts. For purposes of the statements of cash flows, the Company considers all highly-liquid investments with original maturities of three (3) months or less at date of purchase to be cash equivalents. Use of Estimates The preparation of these financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates include reserves related to accounts receivable and inventory, and the valuation allowance related to deferred tax assets. Concentration of Credit Risks and Significant Customers The Company extends credit to customers and is therefore subject to credit risk. Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade receivables. In the normal course of business, the Company provides credit terms to its customers. Accordingly, the Company performs ongoing credit evaluations of its customers and maintains allowances for possible losses which, when realized, have been within the range of management’s expectations. An allowance for credit losses is recorded to account for potential bad debts. Estimates are used in determining the allowance for credit losses and are based upon an assessment of selected accounts, historic averages, and as a percentage of remaining accounts receivable by aging category. In determining these percentages, the Company evaluates historical write-offs, and current trends in customer credit quality, as well as changes in credit policies. The Company generally does not require collateral from its customers. The Company has established an allowance for credit losses of $ 41,889 as of March 31, 2026, and $ 38,027 as of March 31, 2025. The following Table shows the Company’s concentration of credit risk, sorted by accounts receivable as of March 31, 2026, and 2025. SCHEDULE OF CONCENTRATION OF CREDIT RISK 2026 % of 3/31/2026 2025 % of 3/31/2025 Revenue % of A/R Revenue % of A/R Customer A 2.8 % 24.8 % 0.0 % 0.0 % Customer B 5.8 % 15.9 % 8.7 % 24.5 % Customer C 1.5 % 14.6 % 1.8 % 22.2 % Customer D 5.2 % 11.6 % 7.9 % 0.0 % Customer E 2.3 % 3.9 % 0.1 % 0.0 % 25 The following Table shows the Company’s concentration of credit risk, sorted by revenue for fiscal years 2026 and 2025. 2026 % of 3/31/2026 2025 % of 3/31/2025 Revenue % of A/R Revenue % of A/R Customer F 6.1 % 2.4 % 3.3 % 0.0 % Customer B 5.8 % 15.9 % 8.7 % 24.5 % Customer G 5.3 % 3.8 % 4.6 % 2.8 % Customer D 5.2 % 0.0 % 7.9 % 0.0 % Customer H 3.4 % 0.0 % 0.0 % 0.0 % Concentration of Credit Risk of Cash Deposits We have three (3) operating accounts at two (2) different banks. We have a checking and depository account at one bank and a checking account at another bank. From time to time, cash balances in these accounts exceed the $ 250,000 FDIC insurance limit. However, these instances occur infrequently as we strive to maintain balances below the $ 250,000 limit in each of these accounts. We also have a Vanguard money market account where we invest our cash assets that are in excess of our working capital needs. The Vanguard money market account is not subject to FDIC insurance and invests exclusively in repurchase agreements and short-term U.S. government securities. We also have a Schwab account that is used to make open market purchases of our common stock from time to time. This account holds cash, that is invested in a government money market fund, which is used to fund these purchases. Inventory Finished goods inventory is composed of items produced in-house, as well as items from outside suppliers. These items include, but are not limited to, Fischertechnik® manipulatives, Brick manipulatives, drone components, robotics components, school supplies, curriculum, and other miscellaneous items used in our various labs. Our inventory is carried at the lower of cost or net realizable value and valued using the average cost method for each item. When indicators of inventory impairment exist, the Company measures the carrying value of the inventory against its market value, and if the carrying value exceeds the market value, the inventory value is adjusted accordingly. The Company has established a provision for excess and obsolete inventory reserve of $ 2,646 as of March 31, 2026, and $ 3,981 as of March 31, 2025. Property, Plant and Equipment Depreciation on property and equipment is computed using the straight-line method over the estimated useful life of the asset. The Company had fully depreciated property and equipment prior to March 31, 2018. Beginning in fiscal year 2022 through the current reporting period, the Company purchased various warehouse and office equipment for $ 160,562 and recognized $ 75,689 in depreciation of that equipment for a total property and equipment of $ 84,873 as of March 31, 2026. As of March 31, 2025, property and equipment was $ 97,213 , which was net of $ 44,619 in depreciation recognized. Software has been fully depreciated as of March 31, 2026, and March 31, 2025. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment annually, or when events or circumstances arise that indicate the existence of impairment for patents and other intangibles. There was no impairment recorded during the years ended March 31, 2026, and 2025. 26 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17, “Income Taxes (“Topic 740”)-Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”), which requires reporting the net amount of deferred tax assets and liabilities as a single noncurrent item on the classified balance sheet. Before this change, the net amounts of current and noncurrent deferred tax assets and liabilities were reported separately. We account for income taxes in accordance with ASC 740. ASC 740 prescribes the use of the asset and liability method to compute the differences between the tax bases of assets and liabilities and the related financial amounts, using currently enacted tax laws. If necessary, a valuation allowance is established, based on the weight of available evidence, to reduce deferred tax assets to the amount that is more likely than not to be realized. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon achievement of sufficient future taxable income. We exercise significant judgment in determining our provisions for income taxes, our deferred tax assets and liabilities and our future taxable income for purposes of assessing our ability to utilize any future tax benefit from our deferred tax assets. In accordance with GAAP, the Company has analysed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years in such jurisdictions. The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions, and no adjustment to such reserves was required by GAAP. No interest or penalties have been levied against the Company and none are anticipated; therefore, no interest or penalty has been included in the provision for income taxes in the consolidated statements of operations. The Internal Revenue Code contains provisions which reduce or limit the availability and utilization of net operating loss (“NOL”) carry forwards in the event of a more than a 50-percentage point change in ownership. If such an ownership change occurs with the Company, the use of these net operating losses could be limited. The table below details the years that remain open to tax examinations: SCHEDULE OF INCOME TAX EXAMINATION Tax Year Fiscal Year End Filed Date Open Through 2024 3/31/2025 11/24/2025 11/24/2028 2023 3/31/2024 8/26/2024 8/26/2027 2022 3/31/2023 8/23/2023 8/23/2026 Revenue Recognition The Company accounts for revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers , which we adopted on April 1, 2018. Revenue amounts presented in our financial statements are recognized net of sales tax, value-added taxes, and other taxes. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped, or service performed. The Company had deferred revenue of $ 21,240 as of March 31 2026, related to contractual commitments with customers where the performance obligation will be satisfied within the fiscal year ending March 31, 2027. The revenue associated with these performance obligations is recognized as the obligation is satisfied. The Company had $ 20,026 of deferred revenue as of March 31, 2025. 27 The following table presents the changes in the Company’s deferred revenue balance for the years ended March 31, 2026, and 2025. SCHEDULE OF DEFERRED REVENUE March 31, 2026 March 31, 2025 Deferred revenue beginning balance $ 20,026 $ 14,549 Consideration received from customers 27,415 ( 20,724 ) Revenue recognized during the period ( 26,201 ) 26,201 Deferred revenue ending balance $ 21,240 $ 20,026 Most of our contracts with customers contain transaction prices with fixed consideration; however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in FASB ASC 606. For certain fixed-fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts. Stock-Based Compensation We recognize stock-based compensation expense under the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”). We use the Black-Scholes option pricing model to calculate the fair value of stock options at their respective grant date. The use of option valuation models requires the input of highly subjective assumptions, including the expected stock price volatility and the expected term of the option. The fair value of restricted stock awards is the fair market value on the date of grant. We recognize these compensation costs on a straight-line basis over the requisite service period, which is generally the vesting period of the award. During fiscal years 2026 and 2025, no performance options were issued or exercised. As of March 31, 2026, and March 31, 2025, the Company had no outstanding warrants or options. Business Segments and Related Information GAAP establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosure about products and services, geographic areas and major customers. The Company currently operates as one (1) business segment. Recently Adopted Accounting Pronouncements Beginning in fiscal year 2025 annual reporting, we adopted Accounting Standards Update (ASU) No. 2023-07, Segment Reporting (“Topic 280”): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) that was issued by the FASB. This new standard requires an enhanced disclosure of significant segment expenses on an annual basis. Beginning in fiscal year 2026 annual reporting, we adopted Accounting Standards Update (ASU) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This new standard requires enhanced annual disclosures primarily through greater disaggregation in our effective tax rate reconciliation and expanded tabular information regarding income taxes paid. We adopted the amendments on a prospective basis. The adoption of this standard only resulted in modified financial statement disclosures and did not have a material impact on our consolidated financial position, results of operations, or cash flows. 28 Reclassifications Certain reclassifications of tax expenses and tax provisions have been made to the financial statements for the year ended March 31, 2025, to conform to the financial presentation for the year ended March 31, 2026. These reclassifications had no effect on the net income or cash flows as previously reported. Operating Segments and Related Disclosures We manage our Company as one (1) reportable operating segment, STEM Supplies and Curriculum. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s President. Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the STEM Supplies and Curriculum segment and decides how to better allocate resources based on net income reported on the Statements of Operations. The Company’s objective in making resource allocation decisions is to optimize the financial results. The accounting policies of our STEM Supplies and Curriculum segment are the same as those described in the summary of significant account policies herein. For single reportable segment-level financial information, total assets, and significant non-cash transactions, see our Financial Statements. Net Earnings (Loss) Per Share of Common Stock The Company calculates net income (loss) per share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Under ASC 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming exercise of all dilutive unexercised stock options and warrants. The dilutive effect of these instruments was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded as income tax expense when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Common stock outstanding reflected in the Company’s balance sheets includes “restricted” stock awards outstanding. Securities that may participate in undistributed net income with common stock are considered participating securities. The computation of diluted earnings per share does not assume exercise or conversion of securities that would have an anti-dilutive effect. The following schedule presents the calculation of basic and diluted net income per share: SCHEDULE OF BASIC AND DILUTED NET INCOME 2026 2025 For the Years Ended March 31, 2026 2025 Net Income per common Share: Basic $ 0.03 $ 0.09 Diluted $ 0.03 $ 0.09 Weighted average number of common shares outstanding Basic 9,914,691 10,320,469 Weighted average number of common shares outstanding Fully Diluted 9,914,691 10,320,469 Net Income for the years ended March 31, 2026, and 2025, was $ 253,182 and $ 946,865 , respectively. As of March 31, 2026, and March 31, 2025, the Company had no outstanding dilutive instruments. 29 Recently Issued Accounting Pronouncements The Company has reviewed recent accounting pronouncements and has determined that they will not significantly impact the Company’s results of operations or financial position. NOTE 2 – BUSINESS CONDITION As of March 31, 2026, the Company had $ 2.7 million in cash, $ 2.1 million in inventory, and $ 0.7 million in accounts receivable, with no debt. Management strongly believes that the Company can sustain its operations over the course of the next 12 months with the cash it has on hand, and with the revenue and associated profit generated from the sales expected over the course of the next 12 months, especially given the Company’s large cash, inventory, and accounts receivable balances. NOTE 3 – ACCOUNTS RECEIVABLE In the Company’s normal course of business, the Company provides credit terms to its customers, which generally range from net 15 to 45 days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for credit losses of $ 41,889 at March 31, 2026, and $ 38,027 as of March 31, 2025. NOTE 4 – ACCOUNTS RECEIVABLE, OTHER RECEIVABLES Other Receivables include receivables due to the Company derived from activities outside of its typical business transactions. As of March 31, 2026, the Company had $ 3,227 of other receivables outstanding. As of March 31, 2025, the Company had $ 55 of other receivables outstanding. NOTE 5 - PREPAID EXPENSES Prepaid expenses for the periods are as follows: SCHEDULE OF PREPAID EXPENSES March 31, 2026 March 31, 2025 Prepaid insurance $ 13,922 $ 11,960 Prepaid tradeshows 4,800 13,362 Prepaid inventory 79,808 178,660 Prepaid software 42,359 31,612 Prepaid other 38,980 11,828 Total Prepaid Expenses $ 179,869 $ 247,422 NOTE 6 - COMMON AND PREFERRED STOCK TRANSACTIONS a. Common Stock The Company has 12,000,000 authorized shares of common stock, no par value. At March 31, 2026, the total common shares issued was 9,781,828 and the total common shares outstanding was 9,707,960 . As of March 31, 2025, the total common shares issued and outstanding was 10,182,853 . During the years ended March 31, 2026, and 2025, the Company had no option expense. During the year ended March 31, 2026, the Company issued 6,668 shares of Rule 144 “restricted” common stock to Sean P. Iddings, our independent Board member as compensation for his services. During the year ended March 31, 2025, no common stock was issued for Board services or any other reason. 30 During the year ended March 31, 2026, the Company made the following repurchase transactions: SCHEDULE OF COMMON STOCK REPURCHASE TRANSACTIONS Date Shares Price Total Consideration 5/20/2025 23,747 $ 1.68 $ 39,894 5/22/2025 8,333 $ 1.63 $ 13,607 7/7/2025 83,333 $ 1.44 $ 120,007 7/16/2025 16,666 $ 1.32 $ 22,007 7/21/2025 1,583 $ 1.14 $ 1,802 7/22/2025 1,917 $ 1.19 $ 2,284 7/23/2025 2,000 $ 1.13 $ 2,263 7/24/2025 2,167 $ 1.08 $ 2,347 7/25/2025 2,167 $ 1.07 $ 2,321 7/28/2025 201,514 $ 1.08 $ 217,400 7/29/2025 988 $ 1.32 $ 1,303 8/22/2025 5,458 $ 1.56 $ 8,516 9/19/2025 4,167 $ 1.56 $ 6,507 9/30/2025 8,647 $ 1.38 $ 11,933 10/28/2025 250 $ 1.50 $ 383 12/1/2025 10,873 $ 1.34 $ 14,620 12/4/2025 417 $ 1.44 $ 600 12/8/2025 2,031 $ 1.50 $ 3,046 12/10/2025 14,123 $ 1.32 $ 18,643 12/10/2025 133 $ 1.32 $ 176 12/12/2025 458 $ 1.47 $ 676 12/19/2025 2,500 $ 1.44 $ 3,607 12/23/2025 917 $ 1.56 $ 1,431 12/29/2025 1,571 $ 1.56 $ 2,458 1/9/2026 1,667 $ 1.59 $ 2,647 1/26/2026 35,566 $ 1.38 $ 49,081 2/2/2026 1,110 $ 1.62 $ 1,797 2/11/2026 1,250 $ 1.26 $ 1,575 2/19/2026 1,667 $ 1.50 $ 2,505 2/26/2026 16,667 $ 1.44 $ 24,007 3/13/2026 8,134 $ 1.61 $ 13,135 3/27/2026 11,207 $ 1.68 $ 18,834 3/31/2026 8,333 $ 1.79 $ 14,907 Total 481,561 $ 626,319 During the year ended March 31, 2026, the Company cancelled 319,681 shares of Treasury stock. During the year ended March 31, 2025, the Company repurchased 211,977 shares common stock for total consideration of $ 547,713 . b. Preferred Stock The Company has 20,000,000 authorized shares of preferred stock. As of March 31, 2026, and March 31, 2025, there were no preferred shares issued or outstanding. As of March 31, 2026, and 2025, the Company had no dilutive instruments outstanding. NOTE 7 – NOTES PAYABLE The Company had no notes payable outstanding as of March 31, 2026, and March 31, 2025. 31 NOTE 8 – COMMITMENTS AND CONTINGENCIES Leases The Company adopted ASC 842 as of November 9, 2019, using a modified retrospective transition approach for all leases existing at December 31, 2019, the date of the initial application. Consequently, financial information will not be updated, and disclosures required under ASC 842, will not be provided for dates and periods before January 1, 2020. The Company determines if a contract is a lease or contains a lease at inception. Right of use assets related to operating type leases are reported in other noncurrent assets and the present value of remaining lease obligations is reported in accrued and other liabilities and other noncurrent liabilities on the Balance Sheets. The Company does not currently have any financing type leases. Operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company’s leases do not provide an implicit rate. The Company determines the incremental borrowing rates applicable to the economic environment based on the information available at commencement date, in determining the present value of future payments. The right of use asset for operating leases is measured using the lease liability adjusted for the impact of lease payments made prior to commencement, lease incentives received, initial direct costs incurred and any asset impairments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the term of the lease. The Company re-measures and reallocates the consideration in a lease when there is a modification of the lease that is not accounted for as a separate contract. The lease liability is re-measured when there is a change in the lease term or a change in the assessment of whether the Company will exercise a lease option. The Company assesses right of use assets for impairment in accordance with its long-lived asset impairment policy. The Company accounts for lease agreements with contractually required lease and non-lease components on a combined basis. Lease payments made for cancellable leases, variable amounts that are not based on an observable index and lease agreements with an original duration of less than twelve months are recorded directly to lease expense. a. Warehouse The Company leases a 20,880 square foot warehouse facility located at 1135 N. Hickory Ave, Suite 130, Meridian, ID 83642, under a non-cancelable lease agreement, which commenced on October 1, 2024, and expires November 30, 2029 . The first two (2) payments were deferred. This lease is accounted for as an operating lease. Monthly lease rates excluding triple net expenses started at $ 15,660 and increase by 3 % from the previous amount in the month of December each year. b. Office The Company leases a 5,016 square foot office facility located at 941 S. Industry Way, Meridian, Idaho, 83642 under a non-cancelable lease agreement, which commenced on October 21, 2024, and expires November 30, 2029 . The first payment was deferred. The lease is accounted for as an operating lease. Monthly lease rates excluding triple net expenses started at $ 5,225 and increase by 3 % from the previous amount in the month of December each year. c. Equipment The Company leased a production printer for 63 months commencing on November 3, 2023. The first three (3) payments were deferred, with the first payment due February 3, 2024. Equipment lease expense was $ 57,215 for the years ended March 31, 2026, and 2025. 32 As of March 31, 2026, accounted for and presented under ASC 842 guidance, the future minimum lease payments on operating leases, were as follows: Total minimum lease obligation over the next five (5) years SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Fiscal Year Amount 2027 $ 315,803 2028 315,802 2029 315,802 2030 224,730 2031 0 Less: imputed interest / present value discount 193,915 Total $ 988,222 SCHEDULE OF LEASE PAYABLE Balance Sheet Location March 31, 2026 Right of use assets Other noncurrent assets $ 934,064 Lease payable Current liabilities $ 227,718 Lease payable, Current liabilities Current liabilities $ 227,718 Lease payable Long-term liabilities 760,504 Lease payable, Long-term liabilities Long-term liabilities 760,504 Total lease payable $ 988,222 Supplemental cash flow information related to operating leases: SCHEDULE OF SUPPLEMENTAL CASH FLOW INFORMATION RELATED TO OPERATING LEASES March 31, 2026 Operating cash paid to settle lease liabilities $ 313,066 Right of use asset additions in exchange for lease liabilities 0 March 31, 2026 March 31, 2025 Weighted average remaining lease term (in years) 3.5 4.6 Weighted average discount rate 10 % 10 % NOTE 9 – ACCOUNTS PAYABLE Accounts payable for the periods are as follows: SCHEDULE OF ACCOUNTS PAYABLE March 31, 2026 March 31, 2025 Accounts payable $ 86,097 $ 24,286 Credit cards payable ( 1,781 ) 705 Total $ 84,316 $ 24,991 NOTE 10 – PAYROLL LIABILITIES & ACCRUED EXPENSES Accrued expenses for the periods are as follows: SCHEDULE OF ACCRUED EXPENSES March 31, 2026 March 31, 2025 Payroll liabilities $ 81,507 $ 128,655 Sales tax payable 45,086 32,502 State income tax payable ( 25,996 ) ( 4,744 ) Accrued expenses 14,985 14,985 Total $ 115,582 $ 171,398 NOTE 11 – INCOME TAXES Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ending March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $ 1,011,466 . The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $ 1,529,793 for fiscal year 2024. Once the valuation allowance was fully removed, a provision for income taxes was disclosed. For the fiscal year ending March 31, 2026, the Company’s provision for income taxes was ($ 68,273 ). For the fiscal year ending March 31, 2025, the Company’s provision for income taxes was ($ 317,235 ). 33 FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties as of March 31, 2026. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company may be subject to potential examination by federal, state, and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions, and compliance with federal, state, and city tax laws. Management does not expect that the total amount of unrecognized tax benefits will materially change over the next 12 months. Although we believe that our tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to examination by tax authorities in the ordinary course of business. We periodically assess the likelihood of adverse outcomes resulting from these examinations to determine the impact on our deferred taxes and income tax liabilities and the adequacy of our provision for income taxes. Changes in income tax legislation, statutory income tax rates or future taxable income levels, among other things, could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. The Company files income tax returns in the United States, the State of Idaho and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed. The Company does not have any unrecognized tax benefits to report in the current period. Net deferred tax assets and liabilities consist of the following components as of March 31, 2026, and 2025: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES March 31, 2026 2025 Deferred tax assets Right of use liabilities $ 276,702 $ 333,659 Goodwill amortization 9,281 11,201 Charitable Contribution carryover - 700 NOL carryover 2,200,040 2,253,412 Total deferred tax assets 2,486,023 2,598,972 Deferred tax liabilities Right of use assets ( 261,538 ) ( 319,261 ) Depreciation ( 2,071 ) ( 2,850 ) Total deferred tax liabilities ( 263,609 ) ( 322,111 ) Net deferred tax assets $ 2,222,414 $ 2,276,861 34 The reconciliation of the Company’s net income taxes for fiscal years 2026, and 2025 are as follows: SCHEDULE OF RECONCILIATION NET INCOME TAXES March 31, 2026 March 31, 2025 Current federal $ - $ - Current state 13,827 52,837 Deferred federal 49,151 243,564 Deferred state 5,295 20,834 Total tax provision $ 68,273 $ 317,235 Net income before tax provision 321,455 1,264,100 Tax at federal statutory rate 67,467 21.00 % 265,461 21.00 % Non-deductible expenses 3,857 1.20 % 6,295 0.50 % Temporary differences ( 281 ) - 0.09 % 16,028 1.27 % State income taxes, net of federal benefit 19,184 5.97 % 80,675 6.38 % Return-to-provision adjustments/other ( 21,954 ) - 6.83 % ( 51,224 ) - 4.05 % Total income tax provision 68,273 21.25 % 317,235 25.10 % The Company files income tax returns in the United States, the State of Idaho, and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed. Summary of Federal Operating Loss Carryforwards SCHEDULE OF FEDERAL OPERATING LOSS CARRYFORWARDS Unused operating loss carryforward March 31, 2025 $ 7,911,114 Return to Provision $ 89,419 Total $ 8,000,533 Operating loss carryforwards realized $ 324,660 Unused operating loss carryforward March 31, 2026 $ 7,675,873 NOTE 12 - SUBSEQUENT EVENTS On April 1, 2026, the Company issued 20,000 shares of Rule 144 “restricted” common stock to Sean Iddings, our Independent board member, for services rendered in that capacity for the quarter ended March 31, 2026. Accounting for the effects of the reverse stock split, the number of shares issued to Mr. Iddings was 1,667 . On April 6, 2026, we purchased 219,106 shares of our common stock in the open market at $ 0.125 per share. The total amount of the transaction was $ 27,395 , which included a $ 7 commission. Accounting for the effects of the reverse stock split, the number of shares purchased in this transaction was 18,259 . On April 15, 2026, we purchased 167,999 shares of our common stock in the open market at $ 0.125 per share. The total amount of the transaction was $ 21,007 , which included a $ 7 commission. Accounting for the effects of the reverse stock split, the number of shares purchased in this transaction was 14,000 . On April 21, 2026, we purchased 67 shares of our common stock in the open market at $ 0.1355 per share. The total amount of the transaction was $ 16 , which included a $ 7 commission. Accounting for the effects of the reverse stock split, the number of shares purchased in this transaction was 6 . On May 4, 2026, the one (1) for 12 reverse split of our outstanding common stock, which was approved at our Special Meeting of Shareholders on April 20, 2026, became effective. On May 15, 2026, we purchased 291 shares of our common stock in the open market at $ 1.35 per share. The total amount of the transaction was $ 400 which included a $ 7 commission. 35 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.