PCS Edventures!, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from________ to________ Commission File No. 000-49990 PCS EDVENTURES!, INC. (Exact name of Registrant as specified in its charter) Idaho 82-0475383 (State or Other Jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 941 S. Industry Way Meridian , Idaho 83642 (Address of Principal Executive Offices) (208) 343-3110 (Registrant’s telephone number, including area code) 941 S. Industry Way Meridian , ID 83642 (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Not applicable. APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date: August 14, 2026: 9,677,687 shares of Common Stock Forward-Looking Statements This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate, and therefore, prospective investors are encouraged not to place undue reliance on forward-looking statements. You should carefully read this Quarterly Report completely, and it should be read and considered with all other reports filed by us with the United States Securities and Exchange Commission (the “SEC”) that are contained in the SEC Edgar Archives, including issues related to “Cybersecurity” enumerated in “Part I, Item 1C. Cybersecurity,” of our 10-K Annual Report for the fiscal year ended March 31, 2026, filed with the SEC on June 26, 2026 (the “Annual Report”), which commences on page 10 thereof, a copy of which is attached hereto by Hyperlink in Part II-Other Information, in Item 6, Exhibits, hereof, and is incorporated herein by reference. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future. Documents Incorporated by Reference See Part II, Other Information, Item 6, Exhibits, hereof. 2 PCS EDVENTURES!, INC. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 INDEX Page PART I - FINANCIAL INFORMATION 4 ITEM 1. Condensed Financial Statements (unaudited) 4 Condensed Balance Sheets as of June 30, 2026 (unaudited), and March 31, 2026 5 Condensed Statements of Operations for the Three months ended June 30, 2026, and 2025 (unaudited) 6 Condensed Statement of Stockholders’ Equity for the Three Months ended June 30, 2026, and 2025 (unaudited) 7 Condensed Statements of Cash Flows for the Three Months ended June 30, 2026, and 2025 (unaudited) 8 Notes to Condensed Financial Statements (unaudited) 9 ITEM 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations 16 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 19 ITEM 4. Controls and Procedures 19 PART II - OTHER INFORMATION 20 ITEM 1. Legal Proceedings 20 ITEM 1A. Risk Factors 20 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 20 ITEM 3. Defaults Upon Senior Securities 20 ITEM 4. Mine Safety Disclosures 20 ITEM 5. Other Information 20 ITEM 6. EXHIBIT INDEX 20 SIGNATURES 21 3 PART I –FINANCIAL INFORMATION PART I – FINANCIAL INFORMATION Item 1. Condensed Financial Statements The Condensed Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Condensed Financial Statements fairly present the financial condition of the Registrant. (This space intentionally left blank.) 4 PCS EDVENTURES!, INC. Condensed Balance Sheets June 30, 2026 March 31, 2026 (Unaudited) (Audited) CURRENT ASSETS Cash $ 2,647,668 $ 2,674,538 Accounts receivable, net of allowance for credit losses of $41,889 626,073 719,380 Accounts receivable, other receivables 3,213 3,227 Prepaid expenses 91,185 179,869 Inventory, net 2,290,713 2,054,008 Total Current Assets 5,658,852 5,631,022 NONCURRENT ASSETS Lease Right-of-Use Asset 879,263 934,064 Deposits 29,747 29,747 Property and equipment, net 78,834 84,873 Deferred tax asset 2,198,797 2,222,414 Total Noncurrent Assets 3,186,641 3,271,098 TOTAL ASSETS $ 8,845,493 8,902,120 CURRENT LIABILITIES Accounts payable $ ( 4,134 ) 84,316 Payroll liabilities and accrued expenses 135,352 115,582 Deferred revenue 60,166 21,240 Lease Liability, current portion 229,124 227,718 Total Current Liabilities 420,508 448,856 Lease Liability, net of current portion 703,728 760,504 TOTAL LIABILITIES $ 1,124,236 1,209,360 STOCKHOLDERS’ EQUITY 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, 9,784,898 issued and 9,678,474 outstanding, 9,781,828 issued, 9,707,960 outstanding, respectively - - Additional Paid-in Capital 39,524,308 39,521,588 Treasury Stock, 106,424 shares and 73,868 shares, respectively ( 163,051 ) ( 114,233 ) Accumulated deficit ( 31,640,000 ) ( 31,714,595 ) TOTAL SHAREHOLDERS’ EQUITY 7,721,257 7,692,760 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 8,845,493 8,902,120 The accompanying notes are an integral part of these unaudited condensed financial statements. 5 PCS EDVENTURES!, INC. Condensed Statements of Operations (unaudited) 2026 2025 For the three months ended June 30, 2026 2025 REVENUE $ 1,740,616 2,423,308 COST OF SALES 647,320 886,771 GROSS PROFIT 1,093,296 1,536,537 OPERATING EXPENSES Salaries and wages 601,346 610,293 General and administrative expenses 409,949 353,924 Total Operating Expenses 1,011,295 964,217 OPERATING INCOME 82,001 572,320 OTHER INCOME Interest income 20,846 22,831 Net Other Income 20,846 22,831 NET INCOME BEFORE TAXES 102,847 595,151 Provision for income taxes 28,252 149,998 NET INCOME $ 74,595 445,153 Net Income per common share: Basic $ 0.01 0.04 Fully Diluted $ 0.01 0.04 Weighted Average number of shares outstanding Basic 9,682,113 10,170,103 Fully diluted 9,682,113 10,170,103 The accompanying notes are an integral part of these condensed financial statements. 6 PCS EDVENTURES!, INC. Condensed Statement of Stockholders’ Equity (Unaudited) # of Common Shares O/S Common Stock Treasury Shares Treasury Paid-in Capital Additional Paid-in Capital Accumulated Deficit Stockholders’ Equity Balance at 3/31/2025 10,182,853 - - - $ 40,022,746 $ ( 31,967,777 ) 8,054,969 Net Income - - - - - 445,153 445,153 Private Shares Repurchased ( 23,747 ) - - - ( 39,894 ) - ( 39,894 ) Treasury Shares Repurchased ( 8,333 ) - 8,333 ( 13,607 ) - - ( 13,607 ) Shares Issued for Board Comp 1,667 - - - 2,480 - 2,480 Balance at 6/30/2025 10,152,440 - 8,333 ( 13,607 ) 39,985,332 ( 31,522,624 ) 8,449,101 Balance at 3/31/2026 9,707,960 - 73,868 ( 114,233 ) 39,521,588 ( 31,714,595 ) 7,692,760 Adjustment for Transfer Agent Reporting Delay 1,403 - - - - - - Net Income - - - - - 74,595 74,595 Private Shares Repurchased - - - - - - - Treasury Shares Repurchased ( 32,556 ) - 32,556 ( 48,818 ) - - ( 48,818 ) Shares Issued for Board Comp 1,667 - - - 2,720 - 2,720 Balance at 6/30/2026 9,678,474 - 106,424 ( 163,051 ) 39,524,308 ( 31,640,000 ) 7,721,257 The accompanying notes are an integral part of these condensed financial statements. 7 PCS EDVENTURES!, INC . Condensed Statements of Cash Flows (Unaudited) 2026 2025 For the three months ended June 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 74,595 $ 445,153 Depreciation and amortization 8,370 7,716 Amortization of right of use asset 54,801 49,678 Provision for income tax 28,252 127,673 Stock based compensation 5,351 2,480 Changes in operating assets and liabilities (Increase) decrease in accounts receivable 93,320 ( 456,491 ) (Increase) decrease in prepaid expenses 88,684 165,200 (Increase) in inventories ( 236,705 ) ( 13,397 ) Increase in accounts payable and accrued liabilities ( 75,945 ) 149,606 (Decrease) in lease liability ( 55,370 ) ( 44,225 ) Increase (decrease) in unearned revenue 38,926 ( 1,114 ) Net Cash Provided by Operating Activities 24,279 432,279 CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for purchase of fixed assets ( 2,331 ) ( 7,255 ) Net Cash Used by Investing Activities ( 2,331 ) ( 7,255 ) CASH FLOWS FROM FINANCING ACTIVITIES Cash paid for private purchase of common stock - ( 39,894 ) Cash paid for purchase of Treasury stock on open market ( 48,818 ) ( 13,607 ) Net Cash Used by Financing Activities ( 48,818 ) ( 53,501 ) Net Increase (Decrease) in Cash ( 26,870 ) 371,523 Cash at Beginning of Period 2,674,538 3,223,147 Cash at End of Period $ 2,647,668 $ 3,594,670 Cash paid for taxes $ 85,637 $ 11,604 Cash paid for interest $ - $ 3,476 The accompanying notes are an integral part of these condensed financial statements. 8 PCS EDVENTURES!, INC. Notes to the Condensed Financial Statements June 30, 2026 (Unaudited) NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business The condensed financial statements presented are those of PCS Edventures!, Inc., an Idaho corporation (the “Company,” “PCS,” “PCSV,” “we,” “our,” “us” or similar words), incorporated in 1994, in the State of Idaho. PCS specializes in experiential, hands-on, TK-12 education and drone technology. PCS has extensive experience and intellectual property (“IP”) that includes drone hardware, product designs, and TK-12 curriculum content. PCS continually develops new educational products based upon market needs that the Company identifies through its sales and customer networks. Our products facilitate STEM (“Science, Technology, Engineering, and Math”) education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies, with the goal of ultimately leading students to pursue STEM career pathways. Due to our exceptionally detailed curriculum, our products are easy to teach and do not require a teaching degree or experience to administer. Our educational products are developed from both in-house efforts and contracted services. They are marketed through reseller channels, direct sales efforts, partner networks, and web-based channels. PCS has developed and sells a variety of STEM education products into the TK-12 market, which can be categorized as follows: 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. 9 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. Interim Financial Information The accompanying unaudited condensed financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, the accompanying unaudited condensed financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments and reclassifications considered necessary in order to make the condensed financial statements not misleading and for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three (3) months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2027, or any future periods. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the SEC on June, 26, 2026 (the “Annual Report”). We manage our Company as one (1) reportable operating segment, STEM Supplies and Curriculum. The segment information aligns with how the Company’s Chief Operating Decision Maker (“CODM”) reviews and manages our business. The Company’s CODM is the Company’s President. Financial information and annual operating plans and forecasts are prepared and reviewed by the CODM at a consolidated level. The CODM assesses performance for the STEM Supplies and Curriculum segment and decides how to better allocate resources 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 accounting policies herein. For single reportable segment-level financial information, total assets, and significant non-cash transactions, see our Financial Statements. Use of Estimates The preparation of these 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. 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. 10 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 condensed financial statements are recognized net of sales tax, value-added taxes, and other taxes. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped, or service performed. The Company had deferred revenue of $ 60,166 as of June 30, 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 $ 21,240 of deferred revenue as of March 31, 2026. Most of our contracts with customers contain transaction prices with fixed consideration; however, some contracts may contain variable consideration in the form of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. This can result in recognition of revenue over time as we perform services or at a point in time when the deliverable is transferred to the customer, depending on an evaluation of the criteria for over time recognition in FASB ASC 606. For certain fixed-fee per transaction contracts, such as delivering training courses or conducting workshops, revenue is recognized during the period in which services are delivered in accordance with the pricing outlined in the contracts. 11 Reclassifications Certain reclassifications of tax expenses and tax provisions have been made to the financial statements for the quarter ended June 30, 2025, to conform to the financial presentation for the quarter ended June 30, 2026. These reclassifications had no effect on the net income or cash flows as previously reported. 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 schedules present the calculation of basic and diluted net income per share: SCHEDULE OF BASIC AND DILUTED NET INCOME 2026 2025 For the Three Months ended June 30, 2026 2025 Net Income per common share: Basic $ 0.01 $ 0.04 Diluted $ 0.01 $ 0.04 Weighted average number of common shares outstanding Basic 9,682,113 10,170,103 Weighted average number of common shares outstanding Fully Diluted 9,682,113 10,170,103 Net income for the three (3) months ended June 30, 2026, and 2025, was $ 74,595 and $ 445,153 , respectively. As of June 30, 2026, and June 30, 2025, the Company had no outstanding dilutive instruments. 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 June 30, 2026, the Company had $ 2.65 million in cash, $ 2.29 million in net inventory, and $ 0.63 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 inventory balance. 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 30 days. The Company performs ongoing credit evaluations of its customers. The Company established an allowance for credit losses accounts of $ 41,889 as of June 30, 2026, and March 31, 2026. 12 NOTE 4 - PREPAID EXPENSES Prepaid expenses for the periods are as follows: SCHEDULE OF PREPAID EXPENSES June 30, 2026 March 31, 2026 Prepaid insurance $ 6,746 $ 13,922 Prepaid tradeshows 4,526 4,800 Prepaid inventory - 79,808 Prepaid software 33,041 42,359 Prepaid other 46,872 38,980 Total Prepaid Expenses $ 91,185 $ 179,869 NOTE 5 - COMMON AND PREFERRED STOCK TRANSACTIONS a. Common Stock The Company has 12,000,000 authorized shares of common stock, no par value. As of June 30, 2026, the total common shares issued were 9,784,898 , and the total common shares outstanding were 9,678,474 , which includes the deduction of 106,424 shares of Company owned as Treasury stock. During the three (3) months ended June 30, 2026, the Company had no option expense. During the three (3) months ended June 30, 2026, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his services as a Board Director the quarter ended March 31, 2026. During the three months ended June 30, 2026, the Company repurchased 32,556 shares of its common stock on the open market for total consideration of $ 48,818 including commissions and held those shares as Treasury Stock as of June 30, 2026. The Company intends to cancel theses shares. b. Preferred Stock The Company has 20,000,000 authorized shares of preferred stock. As of June 30, 2026, and March 31, 2026, there were no preferred shares issued or outstanding. NOTE 6 – PAYROLL LIABILITIES & ACCRUED EXPENSES Accrued expenses for the periods are as follows: SCHEDULE OF ACCRUED EXPENSES June 30, 2026 March 31, 2026 Payroll liabilities $ 104,125 $ 81,507 Sales tax payable 34,974 45,086 State income tax payable ( 21,362 ) ( 25,996 ) Accrued expenses 17,615 14,985 Total $ 135,352 $ 115,582 NOTE 7 - RELATED PARTY TRANSACTIONS On April 8, 2025, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P. Iddings, an independent member of our Board of Directors, as compensation for his services for the quarter ended March 31, 2026. During the quarter ended June 30, 2025, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P. Iddings, an independent member of our Board of Directors, as compensation for his services for the quarter ended March 31, 2025. NOTE 8 – PROVISION FOR INCOME TAXES Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ended March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $ 1,011,466 . The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $ 1,529,793 for fiscal year 2024. Once the valuation allowance was fully removed, a provision for income taxes was disclosed. For the fiscal quarter ended June 30, 2026, the Company’s provision for income taxes was $ 28,252 . For the fiscal quarter ended June 30, 2025, the Company’s provision for income taxes was $ 149,998 . 13 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 June 30, 2026 or 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. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next 12 months. Although we believe that our tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to examination by tax authorities in the ordinary course of business. We periodically assess the likelihood of adverse outcomes resulting from these examinations to determine the impact on our deferred taxes and income tax liabilities and the adequacy of our provision for income taxes. Changes in income tax legislation, statutory income tax rates or future taxable income levels, among other things, could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. The Company files income tax returns in the United States, the State of Idaho and the State of California. The statute of limitations on a Federal tax return is the due date of the tax return plus three (3) years. In the case of NOLs, the year in which the NOL was generated remains open up to the amount of the NOL until the statute of limitations expires on the year it was used. All required tax returns of the Company due since inception have been filed. The Company does not have any unrecognized tax benefits to report in the current period. Net deferred tax assets and liabilities consist of the following components as of June 30, 2026, and March 31, 2026: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES June 30, 2026 March 31, 2026 Deferred tax assets Right of use liabilities 261,199 276,702 Goodwill amortization 8,801 9,281 NOL carryover 2,176,582 2,200,040 Total deferred tax assets 2,446,582 2,486,023 Deferred tax liabilities Right of use assets ( 246,194 ) ( 261,538 ) Depreciation ( 1,591 ) ( 2,071 ) Total deferred tax liabilities ( 247,785 ) ( 263,609 ) Net deferred tax assets 2,198,797 2,222,414 Less valuation allowance - - Net deferred tax assets 2,198,797 2,222,414 14 The reconciliations of the Company’s net income taxes for the three (3) months ended June 30, 2026, and 2025, are as follows: SCHEDULE OF RECONCILIATION NET INCOME TAXES June 30, 2026 June 30, 2025 Current federal - - Current state 4,634 22,325 Deferred federal 20,800 114,928 Deferred state 2,818 12,745 Total income tax provision 28,252 149,998 Net income before tax provision 102,847 595,151 U.S. Federal income tax at statutory rate 22,571 124,963 Non-deductible expenses 759 1,082 Temporary differences ( 120 ) 1,114 State income taxes, net of federal benefit 5,855 19,184 Return to provision adjustments / other ( 813 ) 3,655 Total income tax provision 28,252 149,998 The summary of Federal Operating Loss Carryforwards for the three (3) months ended of June 30, 2026 is as follows: SCHEDULE OF FEDERAL OPERATING LOSS CARRYFORWARDS Unused operating loss carryforwards at March 31, 2026 $ 7,675,873 Operating loss carryforwards realized $ 101,255 Unused operating loss carryforward at June 30, 2026 $ 7,574,618 NOTE 9 – SUBSEQUENT EVENTS On July 1, 2026, we instructed our transfer agent to issue 1,667 shares of Rule 144 “restricted” no par value common stock to Sean P. Iddings for his services as a Director of our Board for the quarter ended June 30, 2026. On August 3, 2026, those shares were issued. This payment was accrued on our financial statements dated June 30, 2026. On July 6, 2026, we purchased 43 shares of our no par value common stock on the open market for $ 1.55 per share. Including transactions costs, the total consideration for this purchase was $ 74 . On July 7, 2026,we purchased 11 shares of our no par value common stock on the open market for $ 1.55 per share. Including transactions costs, the total consideration for this purchase was $ 24 . On July 10, 2026, we purchased 400 shares of our no par value common stock on the open market for $ 1.55 per share. Including transactions costs, the total consideration for this purchase was $ 627 . On July 17, 2026, we purchased 2,000 shares of our no par value common stock on the open market for $ 1.65 per share. Including transactions costs, the total consideration for this purchase was $ 3,307 . 15 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Cautionary Statements for Purposes of “Safe Harbor Provisions” of the Private Securities Litigation Reform Act of 1995: Except for historical facts, all matters discussed in this Quarterly Report, which are forward-looking, involve a high degree of risk and uncertainty. Certain statements in this Quarterly Report set forth management’s intentions, plans, beliefs, expectations, or predictions of the future based on current facts and analyses. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” or similar expressions, we intend to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated in such statements, due to a variety of factors, risks, and uncertainties. Potential risks and uncertainties include, but are not limited to, competitive pressures from other companies within the Educational Industries, economic conditions in the Company’s primary markets, exchange rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing, government action, weather conditions and other uncertainties, including those detailed in our SEC filings. We assume no duty to update forward-looking statements to reflect events or circumstances after the date of such statements. The following discussion should be read in conjunction with Item 1, Condensed Financial Statements, in Part I of this Quarterly Report. Overview of Current and Planned Operations PCS Edventures!, Inc. sells STEM/STEAM products to educational and recreational entities serving youth. Because the majority of our customers work in out-of-school-time settings, we have not attempted to align our products to fit in the classroom setting, until recently. Classroom curriculum must promote academic achievement through rigorous alignment with specific state standards to be considered for use. Each state has its own unique set of standards, making classroom curriculum development a state by-state endeavor. On the other hand, out of school programs focus more broadly on the goals of engagement, career exploration and development of 21 st century skills. This difference makes it easier to penetrate out-of-school programs, as more freedoms exist for curriculum development. We focus our efforts on these out-of-school programs, which include summer school, summer camps, YMCA programs, Boys and Girls club programs, and various other programs offered outside of the classroom, at all times of the year, that are too numerous to list. Oftentimes, these programs are sponsored, administered, and/or supported by local school districts, and we employ considerable efforts to build relationships with these types of school districts to provide desired programming for their out-of-school programs. The majority of the time, the out-of-school programs offered are funded with grants; however, some programs are run on a for-profit basis. The Company sells to all of these types of entities. However, given the administration’s stated goals of removing federal influence and administration from education, and returning those functions to the states, we are now considering which of our products would be adaptable to the educational standards of certain larger states. We intend to continue to weigh state-level priorities much more heavily in the development of future products as well. We view a transition from federal dominance to state dominance of the application of educational standards to curriculum as likely, albeit over a long-time frame, and we are adapting our product development to this change in our market. Market feedback also indicates that products that have evidence of their effectiveness are increasingly being demanded, especially in state-funded programs and larger programs. While we maintain a library of the evidence we have accumulated about the outcomes one can expect when using our products, and while this library of evidence has helped us win larger orders, we believe that expanding this library and upgrading the tiers of evidence we have will produce meaningful benefits for future sales. We have engaged various firms to help us generate more compelling evidence of our products’ effectiveness. We are early in this process, but we intend to substantially build out our library of evidence of our products’ effectiveness. The course we take to accomplish this endeavor will depend on our experiences with these early initiatives. We offer professional development training for instructors using our products, and typically charge a fee for this service, with the fee primarily covering our expenses. Management does not view this service as a profit center, but rather 1) a customer service component of our product that adds to its uniqueness and value in the marketplace and 2) as a market development endeavor to build out the Company’s addressable market. The nature of our target market produces considerable seasonality for the Company’s revenue. The quarters ending June 30 and September 30 tend to be the peak of this seasonality (with the quarter ending March 31 being close to these quarters), while the quarter ending December 31 tends to be the low point of our seasonality. The Table below reflects this seasonality. Quarter Ended 2023 2024 2025 2026 March 31 2,521,470 2,262,772 1,292,819 1,642,060 June 30 2,605,281 3,159,923 2,423,308 1,740,616 September 30 3,767,326 2,267,338 1,529,503 December 31 459,087 701,147 754,889 During the quarter ended December 31, the Company focuses on product development, restocking inventory, and general planning for the next year. Sales and marketing activities remain fairly constant throughout the year. 16 Results of Operations Revenue For the quarter ended June 30, 2026, our revenue was $1,740,616, which was $682,692 less than our revenue for the quarter ended June 30, 2025, of $2,423,308. The difference in revenue was due to weak market conditions, characterized by fewer large orders and declining reseller revenue. The success of the Company initiative to solicit larger customers has waned since the onset of this period of market weakness. The table below shows customer transactions by size for the periods indicated. Number of Customer Transactions by size > $1 million >$500,000 > $100,000 > $50,000 > $25,000 > $10,000 Three (3) months ended June 30, 2026 0 0 2 8 15 43 Three (3) months ended June 30, 2025 0 0 4 13 22 46 Three (3) months ended June 30, 2024 0 0 8 13 26 50 Three (3) months ended June 30, 2023 0 0 6 12 19 42 Three (3) months ended June 30, 2022 0 0 3 7 12 24 We believe that once the uncertainty about funding streams is removed from our market, we can again show some success in soliciting larger customers; however, we cannot guarantee success, nor can we provide a numerical framework to describe the potential success. Risk factors include any developments that negatively impact education funding in the United States, challenges finding and retaining employees who meet our high standards, and disruptions to our supply chain of critical components. Reseller revenue for the quarter ended June 30, 2026, was $161,081 as compared to reseller revenue of $344,450 for the quarter ended June 30, 2025. This provides further evidence that the market weakness we are experiencing is widespread and not isolated to any individual factor. Cost of Sales We strive to have a cost of sales that is less than 40% of revenue. We price our products once per year, at the beginning of the calendar year, and maintain that pricing level throughout the year. During inflationary environments, when the price level of the Company’s raw materials is increasing, the Company must absorb that negative impact to gross margins until it can reprice its products at the beginning of the next calendar year. This repricing analysis considers the current pricing level of materials, as well as the likely increase in those levels in the year ahead. We attempt to incorporate shipping costs into the cost of raw materials, but oftentimes during the course of the year, we are compelled to ship in a more expedient manner, which is more expensive than our baseline assumptions. For the quarter ended June 30, 2026, our cost of sales was $647,320, or 37.2% of revenue. For the quarter ended June 30, 2025, our cost of sales was $886,771, or 36.6% of revenue. For any given quarter, and especially in low revenue quarters, the cost of sales can vary significantly from our desired 40% or less of revenue. However, for any given year, the calculation is relevant and desired to be 40% or less of revenue. Factors affecting cost of sales include: Helps sub 40% cost of sales Impedes sub 40% cost of sales Higher revenue Higher inflation Larger order size Expedited shipping Ability to take advantage of volume discounts Quality issues with raw materials Higher mix of sales from internal efforts Higher mix of sales from resellers 17 Operating Expenses Operating expenses are divided into two (2) categories – salary + wages, and general + administrative. Salary and wages tend to increase over time as the Company has been increasing its number of employees, and we expect to continue to do so in the future. Also, the Company desires to retain employees over the long term, which requires periodic increases in compensation as their value to the Company increases. Salary and wages were $601,346 for the quarter ended June 30, 2026. For the quarter ended June 30, 2025, salaries and wages were $610,293. For the quarter ended June 30, 2026, and going forward in time, the Company has a discretionary quarterly bonus program based on operating income. During quarters with higher operating income, salaries and wages will increase all other things equal. We had 28 full time employees and two (2) part-time employees as of June 30, 2026, versus 25 full time employees as of June 30, 2025. For the quarter ended June 30, 2025, the Company had a discretionary quarterly bonus program based on revenue. This produced a higher quarterly bonus pay out than the current program which is based on operating earnings. Despite a higher employee headcount, salary and wages were slightly less for the quarter ended June 30, 2026, than for the quarter ended June 30, 2025. The change in the bonus program pay out formula largely accounted for this decrease. General and administrative expenses include all operating expenses outside of salaries and wages. These include the following categories: 1. Advertising and marketing expenses 2. Trade show and travel expenses 3. Product development expenses 4. Finance charges 5. Contract labor expenses 6. Lease expenses 7. Insurance premiums 8. Workers’ compensation expenses 9. Office supplies and repairs 10. Professional expenses 11. Licenses 12. State sales tax expenses 13. Office and warehouse infrastructure expenses Most of these expenses are not correlated with changes in revenue, but they tend to increase over time. General and administrative expenses were $409,949 for the quarter ended June 30, 2026. For the quarter ended June 30, 2025, general and administrative expenses were $353,924. The increase in general and administrative expenses for the quarter ended June 30, 2026, was largely due to increased spending on sales and marketing expenses, as well as for professional fees. Other Income and Expenses Other income and expenses are those outside of the Company’s ordinary course of business. Interest income and interest expense are disclosed under other income and expenses. The Company has accumulated cash, which is invested in a Vanguard money market fund that invests exclusively in repurchase agreements and short-term U.S. government securities. The ticker symbol of this fund is VMFXX. The Company’s investments in this fund produce interest income. For the quarter ended June 30, 2026, other income and expenses were $20,846, with net interest income accounting for the entire amount. For the quarter ended June 30, 2025, other income and expenses were $22,831, with net interest income accounting for the entire amount. Net Income (Loss) Before Tax For the quarter ended June 30, 2026, net income before tax was $102,847 versus $595,151 for the quarter ended June 30, 2025. Lower revenue accounted for the majority of the difference in net income between the June 30, 2026, quarter versus the June 30, 2025, quarter. Taxes The Company has significant net operating losses which arose due to past losses. At June 30, 2026, the Company had net operating losses of approximately $7.57 million that may be used to offset against future taxable income. 18 Prior to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in the same amount. As it became clear that the Company will more likely than not use its tax loss carry-forward amounts, the valuation allowance was partially removed for the fiscal year ended March 31, 2023, such that the tax benefit recognized by us in fiscal year 2023 was $1,011,466. The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal year 2024. While we do not expect to pay federal income taxes for fiscal year 2027, the deferred tax asset will be adjusted on a quarterly basis to reflect the amount of taxes it is offsetting for the quarter. The provision for income tax is an unwinding of the tax benefit we recorded in prior periods when we recognized the value of the deferred tax asset on the income statement. For the quarter ended June 30, 2026, the provision for income taxes was $28,252. For the quarter ended June 30, 2025, the provision for income taxes was $149,998. Liquidity and Capital Resources Cash Flow from Operations For the three (3) months ended June 30, 2026, cash provided by operations was $24,279 compared to cash provided by operations of $432,279 for the three (3) months ended June 30, 2025. Cash provided by operations decreased significantly, due to the difference in net income and the increases in inventory and accounts receivable. As of June 30, 2026, total current assets were $5,658,852 and total current liabilities were $420,508, resulting in working capital of $5,238,344. As of March 31, 2026, total current assets were $5,631,022 and total current liabilities were $448,856, resulting in working capital of $5,182,166. Working capital increased largely due to a decrease in accounts payable. The Company had a current ratio as of June 30, 2026, of 13.5 compared to a current ratio of 12.5 as of March 31, 2026. As of June 30, 2026, cash and cash equivalents were $2,647,668, compared to $2,674,538 in cash and cash equivalents as of March 31, 2026.The slight decline in cash during the quarter was primarily driven by inventory purchases and share repurchases on the open market. Cash Flow from Investing Activities For the three (3) months ended June 30, 2026, cash used by investing activities was $2,331, compared to cash used by investing activities of $7,255 for the three (3) months ended June 30, 2025. Equipment purchases were less in the quarter ended June 30, 2026, versus that for the quarter ended June 30, 2025. Cash Flow from Financing Activities For the three (3) months ended June 30, 2026, cash used by financing activities was $48,818, compared to cash used by financing activities of $53,501 for the three (3) months ended June 30, 2025. For the quarter ended June 30, 2026, cash used by financing activities was due to the Company repurchasing 32,556 of its common stock on the open market for total consideration of $48,818. Off-Balance Sheet Arrangements We had no Off-Balance Sheet arrangements during the three (3) month periods ended June 30, 2026, and 2025. Item 3. Quantitative and Qualitative Disclosures about Market Risk. The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item. Item 4. Controls and Procedures. We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that material information relating to us is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our Chief Executive Officer and our President who acts as our Principal Financial Officer have evaluated the effectiveness, as of June 30, 2026, of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026, due to the Company engaging the professional CPA firm of B.A. Harris to assist the Company in preparing our preliminary condensed financial statements and schedules for our auditor’s review. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 19 PART II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 1A. Risk Factors. The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and is not required to provide the information required under this item. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. During the three (3) months ended June 30, 2026, the Company issued 1,667 shares of Rule 144 “restricted” common stock to Sean P. Iddings as compensation for his Director services for the quarter ended June 30, 2026. Item 3. Defaults Upon Senior Securities. None. Item 4. Mine Safety Disclosures. None; not applicable. Item 5. Other Information. No director or Section 16 officer adopted or terminated a trading arrangement intended to satisfy the affirmative defence conditions of Rule 10b5-1(c) or a “non-Rule 10b5–1” trading arrangement during the periods reported in this Form 10-Q. Item 6. Exhibits. (a) Index of Exhibits Exhibit No. Identification of Exhibit Location if other than attached hereto 3.1 Restated Articles of Incorporation Attached hereto 3.2 Third Amended Bylaws Attached to our Form 10 filed October 3, 2023 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Todd R. Hackett, Chief Executive Officer and Chairman Attached hereto 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Michael J. Bledsoe, President, Principal Financial Officer Attached hereto 32 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Todd R. Hackett, Chief Executive Officer and Chairman of the Board of Directors, and Michael J. Bledsoe, President and Principal Financial Officer Attached hereto 101.INS Inline XBRL Instance Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase 101.LAB Inline XBRL Taxonomy Extension Label Linkbase 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase 101.SCH Inline XBRL Taxonomy Extension Schema 104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL. 10-K Annual Report for the fiscal year ended March 31, 2026, filed with the SEC on June 26, 2026 (the “Annual Report”) 20 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PCS EDVENTURES!, INC. Dated: August 14, 2026 By: /s/ Todd R. Hackett Todd R. Hackett Chief Executive Officer and Chairman of the Board of Directors Dated: August 14, 2026 By: /s/ Michael J. Bledsoe Michael J. Bledsoe President, Principal Financial Officer and Director Dated: August 14, 2026 By: /s/ Sean P. Iddings Sean P. Iddings Director 21