What changed in this filing

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Item 1. Financial Statements

2015-08-13 compared with 2015-02-11 · 504 added, 545 removed, 247 unchanged (81% of the section changed)

Financial Statements

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

The Financial Statements

of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together

with related notes.

In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant.

PART I - FINANCIAL INFORMATION

Consolidated Balance Sheets 4

Consolidated Income Statements 6

Consolidated Statements of Stockholders Equity 7

Consolidated Statements of Cash Flows 8

Notes to the Consolidated Financial Statements 10

Managements Discussions and Analysis of Financial Condition and Results of Operations.

Balance sheet (Unaudited)

Statement of Operations (Unaudited)

Statement of Stockholders’ Equity (Unaudited)

Statement of Cash Flows (Unaudited)

Notes to Financial Statements (Unaudited)

Management's Discussion and Analysis of Financial Conditions and Results of Operations

Controls and Procedures

PART II - OTHER INFORMATION

SIGNATURES 28

EXHIBIT INDEX

PCS EDVENTURES!.COM, INC.

AND SUBSIDIARY

Consolidated Balance Sheets (USD $)

December 31, 201 4

Balance Sheets (USD $)

June 30, 2015

March 31, 2015

CURRENT ASSETS

Accounts receivable, net of allowance for doubtful accounts of $ 4,063 and $ 4,063 , respectively

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

and $4,063, respectively

Prepaid expenses

2 unchanged sentences

Total Current Assets

FIXED ASSETS, net of accumulated depreciation of $ 122,836 and $ 118,005 , respectively

Note Receivable, net of allowance of $ 47,743

FIXED ASSETS, net of accumulated depreciation of $147,419 and

$144,821, respectively

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

Total Other Assets

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

The accompanying notes are an integral part

of these financial statements

PCS EDVENTURES!.COM, INC.

AND SUBSIDIARY

Consolidated Balance Sheets (USD $)

December 31, 201 4

Balance Sheets (USD $)

June 30, 2015

March 31, 2015

4 unchanged sentences

Deferred revenue

Note payable, convertible, related party, net of $ 38,571 and $ 0 discount as of December 31, 2014 and March 31, 2014, respectively

Note payable, convertible, related party net of $14,306 discount

Note payable, related party

Line of credit payable

Current portion of Notes payable

Lines of credit payable

Total Current Liabilities

1 unchanged sentence

Notes payable, related party, long term

Normal 0 false false false EN-US ZH-CN X-NONE

Convertible notes payable, long term, related party, net of $ 0 and $ 315,721 discount as of December 31, 2014

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and March 2014, respectively

Convertible notes payable, long term, net of $ 0 and $ 4,693 discount as of December 31, 2014 and March 31, 2014, respectively

Total Long Term Liabilities

Notes payable, long term, convertible

Notes payable, convertible, related party, long term

Total Liabilities

STOCKHOLDERS' EQUITY (DEFICIT)

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

Common stock, no par value, 90,000,000 authorized shares, 73,745,998 and 52,970,332 shares issued and outstanding, respectively

STOCKHOLDERS’

EQUITY (DEFICIT)

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

issued and outstanding

Common stock, no par value, 90,000,000 authorized shares, 74,235,284

and 74,235,284 shares issued and outstanding, respectively

Stock payable

Restricted Stock Units payable

Accumulated deficit

Total Stockholders' Equity (Deficit)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

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

(39,487,141 )

(39,618,006 )

Total Stockholders’

Equity (Deficit)

TOTAL LIABILITIES AND STOCKHOLDERS’

EQUITY (DEFICIT)

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

AND SUBSIDIARY

Consolidated Income Statements (USD $)

For the Three Months Ended

For the Nine Months Ended

International service revenue

Statements of Operations (USD $)

For the three months

ended June 30,

Domestic STEM Sales

International Revenue

Learning Center Revenue

4 unchanged sentences

Salaries and wages

Depreciation and amortization

Depreciation and amortization expense

General and administrative expenses

2 unchanged sentences

OTHER INCOME AND (EXPENSES)

Interest income

Interest expense

Gain on Bad Debt Collection

Total Other Income and Expenses

LOSS FROM CONTINUING OPERATIONS

LOSS FROM DISCONTINUED OPERATIONS

INCOME (LOSS) FROM OPERATIONS

NET INCOME (LOSS)

NET COMPREHENSIVE INCOME (LOSS)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

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

Basic and diluted loss per share from continuing operations

Basic and diluted loss per share from discontinued operations

Basic and diluted net loss per share

Weighted Average Number of Shares Outstanding, Basic and Diluted

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

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

Net income per common share:

Weighted average number of shares outstanding

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Consolidated Statements of Stockholders Equity (Deficit)

Comprehensive

Stockholders

Statements of Stockholders’ Equity (Deficit)

Stockholders’

Balance at 03/31/15

Stock for Employee

$ (39,618,006 )

$ (1,673,404 )

Stock for Services

Stock for RSU's

Stock for Settlement

Conversion of Notes Payable

Option/Warrant Expense

Debt Discount

Net Loss through 12 / 31 / 2014

Stock for RSU’s

Option Expense

Net Income through 06/30/2015

Balance at 06/30/2015 (unaudited)

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

$ (39,487,141 )

$ (1,508,742 )

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC.

Consolidated Statements of Cash Flows

For the Nine Months Ended

Statements of Cash Flows

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES

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

Net Income (Loss)

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

Debt discount amortization

1 unchanged sentence

Common stock issued for services

Common stock for settlement

Amortization of fair value of stock options

Amortization of brain molds

Bad Debt Collection

Changes in operating assets and liabilities:

4 unchanged sentences

(Increase) decrease in other assets

(Decrease) increase in accounts payable and accrued liabilities

Increase (decrease) in deferred revenue

Net Cash Provided (Used) by Operating Activities)

Normal 0 false false false EN-IN X-NONE X-NONE

(Decrease) increase in accounts payable and accrued expenses

Increase (decrease) in unearned revenue

Net Cash Used by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for purchase of fixed assets

Normal 0 false false false EN-US ZH-CN X-NONE

Net Cash Used by Investing Activities

Normal 0 false false false EN-US ZH-CN X-NONE

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from notes payable

Proceeds from notes payable, related party

Principal payments on debt, related party

Proceeds from note payable

Proceeds from note payable –

related party

Principal payments on line of credit

Payment on debt –

Principal payments on debt –

related party

Net Cash Used by Financing Activities

Foreign currency translation

Net Increase (Decrease) in Cash

1 unchanged sentence

Cash at End of Period

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

The accompanying notes are an integral part

of these financial statements

PCS EDVENTURES!.COM, INC.

Consolidated Statements of Cash Flows (continued)

For the Nine Months Ended

Statements of Cash Flows (continued)

For the Three Months Ended

NON-CASH INVESTING & FINANCING ACTIVITIES

Common stock issued for services (stock payable)

Common stock issued for employee bonus (stock payable)

RSU Forfeiture

Conversion of debt

Debt discount

Sale of Subsidiary

Stock payable accrued in prior period and issued in current period

For the Nine Months Ended

CASH PAID FOR:

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

The accompanying notes are an integral part

of these financial statements.

PCS EDVENTURES!.COM, INC

Notes to the Consolidated Financial Statements

December 31, 201 4

Notes to the Financial Statements

June 30, 2015

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

The consolidated financial statements presented are those of PCS Edventures!.com, Inc., an Idaho corporation ( the Company).

On August 3, 1994, PCS Education Systems, Inc.

was incorporated under the laws of Idaho to develop and operate stand-alone learning labs.

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

The financial statements presented are those

of PCS Edventures!.com, Inc., an Idaho corporation (“PCS” or “the Company”).

In October 1994, PCS exchanged common stock

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

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

became a wholly owned subsidiary of PCS.

In the late 1990 s, the Company divested the stand-alone learning labs to focus on the creation of turn-key lab modules coupled with web-based technology for use in the classroom and afterschool programs.

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

to PCS Edventures!.com, Inc.

On September 26, 2014 the shareholders voted for the proposal to grant the board of directors the authority to change the name of the company in a fashion that will remove the .com but retain the current brand.

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

became a wholly-owned

subsidiary of PCS.

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

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

On March 27, 2000, PCS changed its name from

PCS Education Systems, Inc.

to PCS Edventures!.

In August 2001, PCS successfully completed

an SB2 registration and began trading publicly on the OTC exchange.

On November 30, 2005, PCS entered into an agreement

with 511092 N.B.

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

as disclosed in the 8-K as filed with the Securities and Exchange Commission (the SEC) on December 9, 2005 and amended on February 15, 2006.

As a result of the definitive Share Exchange Agreement, 511092 N.B.

became a wholly owned subsidiary of the Company.

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

It remains a Canadian corporation.

The Company had a memo of understanding with a company for the potential sale of LabMentors in Quarter ending June 30th, 2013 .

The Company divested the wholly owned subsidiary in August of 2013 .

In January of 2012 , PCS Edventures!.com Inc.

committed to a business plan enhancement which included the opening, operating, and licensing of EdventuresLab private learning centers and launched a pilot in the spring of 2012 .

As of June 30, 2014 two EdventuresLab programs have been opened and are operating in the Idaho Treasure Valley.

On January 31, 2013, PCS Edventures!.com, Inc.

formed a subsidiary called Premiere Science Inc.

incorporated and registered in the State of Idaho.

The subsidiary is 100 % wholly owned by PCS Edventures!.com,Inc.

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

In December 2005, the name

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

(See Note 17) The Company divested Labmentors, the wholly owned

subsidiary, in August of 2013.

In January, 2012, the Company committed to

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

launched a pilot program in the spring of 2012.

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

operating in the Idaho Treasure Valley.

On January 31, 2013, PCS formed a subsidiary

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

The subsidiary is 100% wholly-owned by the Company

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

There were no operations for the subsidiary during the quarter year ended December 31, 2014 .

NOTE 2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The December 31, 201 4 , consolidated financial statements presented herein are unaudited, and in the opinion of management, include all adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of financial position, results of operations and cash flows.

Such financial statements do not include all of the information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America.

This Quarterly Report on Form 10-Q should be read in conjunction with the Annual Report on Form 10-K for PCS Edventures!.com for the fiscal year ended March 31, 201 4 .

The March 31, 201 4 , consolidated balance sheet is derived from the audited balance sheet included therein.

The operating results for the period ended December 31, 201 4 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 201 5 .

There were no operations

for the subsidiary during the quarter year ended June 30, 2015.

On September 26, 2014, the shareholders voted

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

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

On July 23, 2015, the Board of Directors resolved

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

No amendment to the Company’s Articles of Incorporation

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

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

NOTE 2 - UNAUDITED FINANCIAL STATEMENTS

The June 30, 2015, financial statements presented

herein are unaudited, and in the opinion of management, include all adjustments (consisting of only normal recurring accruals)

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

Such financial statements do not

include all of the information and footnote disclosures normally included in financial statements prepared in accordance with accounting

principles generally accepted in the United States of America.

This Quarterly Report on Form 10-Q should be read in conjunction

with the Annual Report on Form 10-K for PCS Edventures!.com for the fiscal year ended March 31, 2015.

The March 31, 2015, balance

sheet is derived from the audited balance sheet included therein.

The operating results for the three-month period

ended June 30, 2015, are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2016.

NOTE 3 - GOING CONCERN

The Companys consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The established sources of revenues are not sufficient to cover the Companys operating costs.

The Company has accumulated significant losses, payables, and generated negative cash flows.

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

Managements plans with respect to alleviating this adverse position is to continue to develop and execute its strategic plan as outlined in the Plan of Operations.

The following highlights key areas of the plan and progress made in the past year:

1 ) In Q1-Q 3 PCS invested in product R&D to improve its robotics and engineering product lines and provide its expanding sales force an advantage over competitors.

Executive management continues in its conviction that the K 12 educational robotics market represents a significant market opportunity for PCS products and has committed resources to product development, inventory, and sales and marketing to pursue this opportunity.

2 ) Since January of 2014 PCS has increased its sales presence from 4 to 12 people through internal hires and the formation of a partnership with Priority Education Solutions of Florida.

We continue to actively se ek additional channel partners.

3 ) PCS is focused on actively promoting its two EdventuresLab locations in the Boise area for direct to consumer sales and is using these locations as a proving gro und for our retail offerings.

4 ) In December of 2014 , PCS formally launched its retail product line, an extension of its EdventuresLab consumer program, to further diversify its revenue streams during Q 3 , a typically slow institutional sales period.

PCS is now actively pursuing retail distribution cha nnels to grow this opportunity.

The introductory product is RiQ, an easy-to-program, fun way to learn robotics and coding.

The product has unique characteristics that position it strongly against competitors in the market that include price point, ease-of-use, availability on tablet devices, and a lot of expandability for the hobbyist market.

It has been very well received during its initial launch and is now selling through the PCS EdventuresLab website and Amazon.

5 ) PCS has existing contracts in Saudi Arabia that represent significant revenue potential for Q 4 and our FY 2015 and we are committed to delivering those contracts.

6 ) The Q 4 FY 2014 addition of Britt Ide to the Board of Directors has brought significant expertise in corporate governance and planning, and the fresh perspective of a woman engineer passionate about the need and opportunity for STEM education.

PCS plans to expand and strategically recruit new board members who can help the management team focus and execute its business plan.

Revenue for the period ending December 31 , 2014 was $ 782,322 compared to revenue of $ 348,341 , up approximately 125 % compared to the same period last fiscal year.

Net loss for the nine months ended was ($ 1, 123,512 ), compared to ($ 7 29, 1 19 ), a 54 % increase from the same period last year resulting from:

$ 331,696 of note payable discount taken to interest expense on notes payable and conversions, $ 741,280 increased cost of goods, investments in product development and marketing, with some mitigation by continued effort to keep costs down.

Cash flow used from operations for the nine months ended December 31, 2014 was $ ( 512,325 ) .

While the efforts put in by management and the entire employee team are beginning to be realized, as illustrated by increase in revenues this quarter , and the achievement of a cash positive EBIDTA for the quarter, the ability of the Company to continue as a going concern is dependent upon our ability to successfully accomplish the plans described , to raise capital as needed, to continue to monitor and reduce overhead costs, and to attain profitable operations.

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

The Company’s financial statements are

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

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

The established sources of revenues

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

The Company has accumulated significant losses and payables and

generated negative cash flows.

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

Management’s plans with respect to alleviating this adverse position are as follows:

During the fiscal year ending March 31,

2016, PCS began implementing a strategy of profitability- derived from by optimizing and streamlining operations while moving our

digital learning and robotics product strategy forward.

A continued underlying principle will be the building of services

and products with recurring revenue traits such as online licenses.

Tactically we are focusing on improving product quality, improving

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

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

We will continue to focus on

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

our domestic STEM sales.

We will continue to fulfill existing and capture new STEM contracts with the Kingdom of Saudi Arabia.

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

a major emphasis on digital delivery of content, (2) revenue generation through afterschool and summer course fees;

through licensing EdventuresLab curriculum and methods;

and (4) revenues from STEM retail products.

We believe e-commerce

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

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

during this time frame.

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

The business plan for fiscal year 2016 reflects

the continued promotion and growth of the PCS EdventuresLab.

The further demonstrated proof of the profitable concept provides

a marketable demonstration for the scalable licensing model.

The premise of the EdventuresLab aspect of the business plan is two-fold:

1) EdventuresLab revenues will be more consistent and predictable for the Company to plan and manage cash and growth;

established network of EdventuresLabs will serve as highly effective “showrooms” for sales of PCS products and services

into neighboring districts.

The EdventuresLab builds significant community and brand awareness for PCS Edventures!.

Also of note,

close partnerships with schools provide an opportunity to test and improve PCS products on a regular basis.

The EdventuresLab environment

is a highly effective R&D environment for the development of PCS STEM products.

Revenue for the quarter ending June 30, 2015

was $1,291,219 compared to revenue of $1,002,566, an increase of approximately 28% compared to the same quarter last fiscal year.

Net income for the three months ended was $130,865, compared to a net loss of ($327,260), a 350% increase from the same quarter

last year resulting from meeting the requirements of revenue recognition on two international contract milestones in the quarter

following when the majority of cost of sales was incurred.

Cash flow from operations for the three months ended June 30, 2015 was

($172,431), due to growth in receivables of international contracts.

While the efforts put in by management

and the entire employee team are beginning to be realized, as illustrated by strong increase in revenues this quarter, the ability

of the Company to continue as a going concern is dependent upon our ability to successfully accomplish the plans described to raise

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

The accompanying financial

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

NOTE 4 – PREPAID EXPENSES

Prepaid expenses for the periods are as follows:

December 31, 2014

June 30, 2015

March 31, 2015

Prepaid insurance

Prepaid trade show/travel

Prepaid inventory

3 unchanged sentences

NOTE 5 - FIXED ASSETS

Assets and depreciation for the periods are as follows:

December 31, 2014

Assets and accumulated depreciation for the periods are as follows:

June 30, 2015

March 31, 2015

2 unchanged sentences

Total Fixed Assets

Fixed asset depreciation expense for the nine months ended December 31, 201 4 and 201 3 was $ 19,699 and $ 14,036 respectively.

Fixed asset depreciation expense for the three

months ended June 30, 2015 and 2014 was $2,598 and $5,465, respectively.

NOTE 6 - ACCRUED EXPENSES

Accrued expenses for the periods are as follows:

December 31, 2014

June 30, 2015

March 31, 2015

7 unchanged sentences

Notes payable consisted of the following:

December 31, 2014

June 30, 2015

March 31, 2015

Short Term Note Payable, Related Party

Short Term Convertible Note, Related Party net discount of $ 38,571 as of December 31, 2014 and March 31, 2014

Short Term Convertible Note, Related Party net discount of $14,306

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

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

$38,184 for period ended June 30, 2015 and March 31, 2015,

Current Portion of Notes Payable

Line of Credit

Long Term Note Payable

Long Term Note Payable, Related Party

Convertible notes payable, long term, net of $ 0 and $ 4,693 discount as of December 31, 2014 and March 31, 2014, respectively

Convertible notes payable, long term, related party, net of discount of $ 0 and $ 315,721 , as of December 31, 2014 and March 31, 2014, respectively

Long Term Convertible Note

Long Term Convertible Note, Related Party

Total Notes Payable

2 unchanged sentences

The note bears interest at twelve percent (12%) per annum.

Total interest accrued as of December 3 1 , 2014 was $ 1, 611 .

The company has paid $3,827 in principal leaving a balance of $16,173 at June 30, 2015.

Total interest accrued as of June 30, 2015 was $1,685.

Note Payable – Related Party

On December 30, 2011, the Company entered into a note payable in the amount of $ 30,000 .

The note bears

interest at ten percent ( 10 %) per annum and was due on February 28, 2012 with no conversion feature .

This note extended under the same terms and conditions to March 31, 2015 .

Total interest accrued as of December 3 1 , 2014 was $ 8,770 .

On January 13, 2012, the Company entered into two separate promissory notes , which are non-convertible, in the amount of $ 35,000 each for an aggregate amount of $ 70,000 .

The notes bear interest at nine percent ( 9 %) per annum and are due and payable on or before January 10, 2013.

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

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

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

1 unchanged sentence

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

The underlying loan requires that the Company pay to the lenders financial institution monthly payments of $ 1,033 on or before the 1 st day of each month, beginning May 1, 2013, and continuing each month in like amount until the final payment due on April 1, 2020.

The company has paid $ 12,524 in principal leaving a balance of $ 51,676 at December 31 , 2014 .

On February 26, 2013, we executed a promissory note with one of our shareholders, for $ 65,000 at 15 % interest per annum, secured by seven of our sales orders to finance inventory purchases.

The promissory note was due on or before April 20, 2013.

There is no conversion feature associated with this promissory note.

A payment of $ 20,000 was made against the principal on the note on April 1, 2013.

The remaining $ 45,000 was extended and made part of the $ 95,000 convertible promissory note issued on May 24, 2013 which included an additional $ 50,000 promissory note as describe in the 8-K filed on May 24, 2013, with a maturity date of August 24, 2016 ( See Convertible Note Payable Related Party ) .

The debt discount was calculated as $ 21,923 .

This note was converted on July 21, 2014 with total accrued interest of $ 6,041 into 3,108,944 shares.

During the period ended September 30, 2014 , $ 1,639 discount was amortized and the remaining debt discount of $ 15,322 was fully expensed upon conversion .

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

On March 22, 2013, we entered into a loan transaction that bears interest at a rate of 8 % per annum, secured with one of our board members in the amount of $ 25,000 .

The note is secured by three of our accounts receivables to finance inventory purchases.

This note was extended on September 30, 2013 and reclassed to a long term convertible promissory note with board member and shareholder of an 8 % Convertible Promissory Note in the amount of $ 25,000 , convertible into shares of common stock of the Company, at a price of $ 0.04 per share ( See Convertible Note Payable Related Party) , which represents a 50 % discount from the market price as of the date of the note.

The note is due 36 months from the date of the note on or before September 30, 2016.

The debt discount was calculated as $ 25,000 .

This note was converted on July 21, 2014 with total accrued interest as of July 21, 2014 was $ 1,611 into 665,274 shares.

During the period ended September 30, 2014, $ 455 discount was amortized and the remaining $ 21,499 was fully expensed up conversion.

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

On January 22, 2014 the Company entered into a loan transaction with one of our board members in the amount of $ 200,000 , which was non-convertible .

The note bears interest at a rate of 15 % per annum, secured by Catapult PO NA 1314 - 001 to finance inventory purchases and payoff the promissory notes dated January 7 and January 15, 2014.

The promissory note and all accrued interest were due and payable on April 30, 2014.

This note was paid in full including all accrued interest on April 8, 2014.

The underlying loan requires that the Company pay to the lenders financial institution monthly payments of $1,033 on or before the 1st day of each month, beginning May 1, 2013, and continuing each month in like amounts until the final payment due on April 1, 2020.

The company has paid $14,825 in principal leaving a balance of $49,375 at June 30, 2015.

On April 18, 2012, the Company entered into a long-term promissory note with Anthony A.

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

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

Monthly payments are made for interest only to the lenders financial intuition.

On June 30, 2015, $1,998 over the interest only payment had been paid resulting in ending principle amount of $21,995.

On February 13, 2014, the Company entered into a loan transaction with one of our board members in the amount of $250,000, which was non-convertible.

2 unchanged sentences

This note was extended to September 30, 2014, to account for the delay in invoice acceptance and payment by Tatweer Company for Educational Services.

On September 9, 2014, the Company accrued and paid interest in the amount of $ 20,445 On October 21, 2014 this note was paid off when the Company entered into at 10 % Convertible Promissory Note with a current board member and shareholder , in the amount of $ 200,0 00 , convertible into shares of common stock of the Company, at the market price of $ 0.0 4 .

On September 9, 2014, the Company accrued and paid interest in the amount of $20,445.

On October 21, 2014, this note was paid off when the Company entered into a 10% Convertible Promissory Note with a current board member and shareholder, in the amount of $200,000, convertible into shares of common stock of the Company, at the market price of $0.04 per share.

The note is due on or before October 22, 2015.

T he remaining $ 50,000 was paid in full by the issuance of that certain Promissory Note of even date herewith in the principal amount of $ 870,457 .

Total interest accrued as of December 3 1 , 2014 was $ 5,137 .

On February 21, 2014 the Company entered into a loan transaction with one of our board members in the amount of $ 70,000 , which was non-convertible .

The note bears interest at a rate of 15 % per annum, secured by Catapult Learning PO NA 1314 - 090 to finance inventory purchases.

The promissory note and all accrued interest were due and payable on April 30, 2014.

This note was paid in full including all accrued interest on April 22, 2014.

The remaining $50,000 was paid in full by the issuance of that certain Promissory Note in the principal amount of $870,457 noted below.

On March 4, 2014, the Company entered into a loan transaction with one of our board members in the amount of $50,000.

The note is non-convertible and bears interest at a rate of 15 % per annum, secured by

T 4 EDU Training Academy Contract to finance inventory purchases.

The note is non-convertible and bears interest at a rate of 15% per annum, secured by T4EDU Training Academy Contract to finance inventory purchases.

The promissory note and all accrued interest were due and payable on April 30, 2014.

2 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 was $ 906 .

On April 3, 2014, the Company executed a promissory note with one of our board members, for $60,000 at 15% interest per annum, secured by sales orders finance operations and inventory purchases.

2 unchanged sentences

The note was extended on April 30, 2014, to September 30, 2014.

The note was replaced with note dated July 28, 2014 for $ 210,000 .

Total interest accrued up through date of replacement was $ 2,860 .

The note balance was rolled into a replacement note dated July 28, 2014 for $210,000.

This note was paid in full by the issuance of that certain Promissory Note of even date herewith in the principal amount of $870,457.

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

All accrued interest as of the date of replacement was paid in full.

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

The note bears interest at twelve percent (12%) per annum.

On June 1, 2014 this note holder became a board member.

There is no conversion feature associated with this promissory note.

Total interest accrued as of December 3 1 , 2014 was $ 5,708 .

The company has paid $7,477 in principal, leaving a balance of $52,523 at June 30, 2015.

Total interest accrued as of June 30, 2015 was $1,643.

On April 15, 2014, the Company executed a promissory note with one of our board members, for $160,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

The promissory note was due June 30, 2014.

There is no conversion feature associated with this promissory note.

The note was extended to September 30, 2014.

This note was replaced by three different notes:

$ 25,000 note payable executed June 3 , 2014 (which was replaced by a $ 25,000 note dated June 28, 2014) ;

$ 60,000 note payable executed August 20, 2014 ;

$ 75,000 of the $ 150,000 note payable executed June 27, 2014 (which was replaced by three other notes dated August 20, 2014, August 07, 2014 and July 28, 2014) .

On June 11, 2014 the Company paid $60,000 and executed a new note for $25,000 on June 3, 2014.

The remaining $75,000 was added to another $75,000 for a promissory note of $150,000 on June 27, 2014.

The $25,000 note was then replaced by a note of the same terms dated August 7, 2014.

The $150,000 note was There is no conversion feature associated with this promissory note.

On October 21, 2014, these notes were paid off by an issuance of a promissory note with one of our board members in the amount of $870,457.

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total Interest accrued during the period, up through the dates of replacement, is $ 4,159 .

All accrued interest as of the date of replacement was paid in full.

On May 1, 2014, the Company executed a promissory note with one of our shareholders and board members, for $60,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

2 unchanged sentences

The note was extended to September 30, 2014.

During the period ended September 30, 2014, the note s were separated split into two notes, $ 17,500 and $ 42,500 and included in two separate notes dated July 21, 2014 for $ 105,000 and July 28, 2014 for $ 210,000 , respectively.

During the period ended September 30, 2014, the notes were separated split into two notes, $17,500 and $42,500 and included in two separate notes dated July 21, 2014, for $105,000 and July 28, 2014, for $210,000, respectively.

On October 21, 2014, the notes for $105,000 and $210,000 were paid off by an issuance of a promissory note with one of our board members in the amount of $870,457.

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 w ere $ 906 and $ 1,812 respectively.

Accrued interest of $ 7,568 as of the date of replacement was paid in full.

On May 5, 2014, the Company executed a promissory note with one of our shareholders and board members, for $145,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

4 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 was $ 2,384 .

On May 16, 2014, the Company executed a promissory note with one of our shareholders and board members, for $150,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

2 unchanged sentences

$75,000 of this note was added to a $150,000 note payable executed June 21, 2014.

The other $ 75,000 was added to another $ 150,000 note dated June 27, 2014.

Total i nterest accrued up through dates of replacement was $ 3,329 .

The other $75,000 was added to another $150,000 note dated July 21, 2014 for $105,000.

Total interest accrued through dates of replacement was $3,329.

On May 21, 2014, the Company executed a promissory note with one of our shareholders and board members, for $50,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

5 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

On June 3, 2014 the Company executed a promissory note with one of our shareholders and board members

(part of a replacement note for promissory note dated April 15, 2014) , for $ 25,000 at 15 % interest per annum, secured by sales orders to finance operations and inventory purchases.

On June 3, 2014, the Company executed a promissory note with one of our shareholders and board members (part of a replacement note for promissory note dated April 15, 2014), for $25,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

The promissory note was due September 3, 2014.

22 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 w ere $ 906 .

On July 21, 2014, the C ompany converted $ 646,500 in convertible long term related party, notes payable, and the related $ 49,874 in accrued interest (individual notes identified in the convertible related parties notes payable section of (See Convertible note related party).

The strike price varied from $ 0.0325 to $ 0 .065 depending on the note terms.

The conversion resulted in 18,455,666 shares of common stock.

Total accrued interest of $ 2,243 as of the date of replacement was paid in full.

On July 28, 2014, the Company executed a promissory note with one of our shareholders and board members, for $210,000 at 15% interest per annum, secured by T4EDU Contract 0006/2014, to finance operations and inventory purchases.

9 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

On July 28, 2014 the Company executed a promissory note with one of our shareholders and board members, for $ 100,000 at 5 % interest per annum, secured by sales orders to finance operations and inventory purchases.

The promissory note is due November 28, 2014.

There is no conversion feature associated with this promissory note.

The note was paid in full on December 30, 2014.

Total interest accrued accrued and paid at payoff was$ 2,137 .

On August 7, 2014 the Company executed a promissory note with one of our shareholders and board members, for $25,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

4 unchanged sentences

The note is non-convertible and bears and interest rate of 10% per annum, and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 was $ 215 .

Accrued interest of $ 247 as of the date of replacement was paid in full.

On August 20, 2014, the Company executed a promissory note with one of our shareholders and board members, for $123,000 at 15% interest per annum, secured by sales orders to finance operations and inventory purchases.

3 unchanged sentences

On October 21, 2014, this note was paid off by an issuance of a promissory note with one of our board members in the amount of $870,457.

The note is non-convertible and bears and interest rate of 10 % per annum , and due October 22, 2015.

Total interest accrued as of December 3 1 , 2014 was $ 1,062 .

The note is non-convertible and bears and interest rate of 10% per annum, and due May 31, 2015.

Accrued interest of $2,072 as of the date of replacement was paid in full.

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

The note is non-convertible and bears and interest rate of 10 % per annum , and due October 22, 2015.

This note includes new cash le nt to Borrower under this note of $ 175,000 .

The note is non-convertible, bears and interest rate of 10% per annum, is secured by accounts receivable, fixed assets, intellectual property, and the public entity PCSV net loss carry forward to finance operations and inventory purchases, due May 31, 2015.

This note due date was subsequently extended to September 30, 2015.

This note includes new cash lent to Borrower under this note of $175,000.

This note includes $7,957 of accrued interest on the paid off notes listed below.

This note pays off the following notes:

$ 50,000 of the February 11, 2014 $ 250,000 Convertible long term related party;$ 145,000 dated May 7, 2014;

$50,000 of the February 11, 2014;

$250,000 Convertible long term related party;

$145,000 dated May 7, 2014;

$29,500 of the June 27, 2014;

1 unchanged sentence

$210,000 dated July 28, 2014;

$ 25,000 dated 08 / 08 / 2014 ;

$25,000 dated August 8, 2014;

Total interest accrued as of December 3 1 , 2014 was $ 16,932 .

On October 22, 2014 the Company executed a promissory note with a related party for credit up to $ 20,000 at 12 % interest per annum .

The promissory note was due December 3 1 , 2014 .

and $123,000 dated August 20, 2014.

$22,222 of interest was rolled into principal on January 1, 2015;

resulting in a principal balance of $892,679.

Total interest accrued as of June 30, 2015 was $44,267.

On February 17, 2015, the Company executed a promissory note with one of our shareholders and board members, for $135,000 at 10% interest per annum, due June 30, 2015, secured by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

This note was extended to September 30, 2015.

There is no conversion feature associated with this promissory note.

The principle balance on December 31, 2014 was $ 14,217 .

This note was subsequently extended to February 15, 2015.

Total interest accrued as of December 3 1 , 2014 was $ 221 .

Total interest accrued as of June 30, 2015 was $4,738.

On January 16, 2015, the Company executed a non-convertible promissory note with warrants attached, with one of our shareholders and board members, for $400,000 at 10% interest per annum, due June 30, 2015, secured by T4EDU Contract 0006/2017 Work Orders 5, 6, 7, and 8 less Zakat and holdback, to finance operations and inventory purchases.

The warrants were valued using the stock price on the date of grant, discount rates 0.35%, and volatility approximating 180%.

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

This note was subsequently extended to December 31, 2015.

The debt discount was calculated as $66,717.

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

Total interest accrued as of June 30, 2015 was $3,288.

On April 20, 2015, the Company executed a promissory note with one of our shareholders and board members, for $135,000 at 10% interest per annum, due June 30, 2015, secured by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

This note was extended to September 30, 2015.

There is no conversion feature associated with this promissory note.

Total interest accrued as of June 30, 2015, was $2,626.

On June 8, 2015, the Company executed a promissory note with one of our shareholders and board members, for $150,000 at 10% interest per annum, due June 30, 2015, secured by T4EDU existing AR on completed contracts, to finance operations and inventory purchases.

There is no conversion feature associated with this promissory note.

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

Line of Credit

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

On September 13, 2011, the Company drew down

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

The line of credit bears interest at 17.5% per annum.

The Company makes variable monthly payments.

As of September 30, 2014, the Company has paid $ 1 6 , 189 in principal leaving a balance of $ 22,861 payable.

Company makes variable monthly payments.

As of June 30, 2015, the Company has paid $18,535 in principal leaving a balance

of $20,515 payable.

Convertible Note Payable – Non-related party

2 unchanged sentences

At the Lender’s sole option, Lenders may elect to receive payment of their respective note and all accrued interest in restricted common stock of the Borrower at the price per share of said common stock at same rate as the warrants.

Subsequently and effective June 7, 2013, we executed an amendment to the loan transaction.

Effective June 7, 2013, we executed an amendment to the loan transaction.

The amended transaction involved the extension of the Promissory Note from April 30, 2013, to April 30, 2016, with the creditors waiving any default under the previous note.

The Company made interest payments to each of the eight note holders for all accrued interest from August 1, 2012, to April 30, 2013, for consideration of the extension.

On the fourth extension, all accrued interest was combined with the original princip al amount as of July 31, 2012.

On the fourth extension, all accrued interest was combined with the original principal amount as of July 31, 2012 bringing the aggregated principle amount to $243,745 including the $34011 related party promissory note.

The Company has agreed to make quarterly interest payments to each of the note holders during the term of the extension.

All other terms of the previous Promissory Note, Security Agreement and related warrants remain in full force and effect.

As of September 30, 2014, the ending principle balance was $ 243,745 , including the related party convertible note balance of $ 34,011 noted below.

Interest accrued as of December 31 , 2014 for the total set of notes was $ 30,084 .

On April 30, 2013, the Company entered into a loan transaction with an accredited investor for a Promissory Note, payable with interest at 8 % per annum in the amount of $ 5,000 , convertible into shares of common stock of the Company at a price of $ 0.20 per share.

The note is due twenty - four months from the date of the note, on or before August 31, 2015.

Total accrued interest as of December 31 , 2014 was $ 701 .

On July 30, 2013, the Company entered into a loan transaction with an accredited investor for a p romissory Note, payable with interest at 8 % per annum in the amount of $ 5,000 , convertible into shares of common stock of the Company at a price of $ 0.20 per share.

The note is due twenty - four months from the date of the note, on or before July 30, 2015.

No debt discount was recognized as the conversion price is considered out of the money, therefore no discount was necessary.

Total accrued interest as of December 31 , 2014 was $ 562 .

On March 30, 2015, $17,005 of this group of notes was satisfied with $15,000 in cash payments and $2,005 taken as Gain on Cancellation of debt.

As of June 30, 2015, the ending principle balance was $209,734, including the related party convertible note balance of $34,011 noted below.

Interest accrued as of June 30, 2015, for the total set of notes remaining was $39,338.

On July 13, 2015 four (4) convertible notes of the Company have subsequently elected to convert those notes into shares of our common stock.

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

Conversion of the aggregate principal and accrued interest of these notes will result in the issuance of 1,066,006 shares of our common stock.

$34,011 of the aggregate principal amount of these notes represent loans provided to us by one of the members of our Board of Directors also documented in the Convertible Note Payable – Related Party.

On April 30, 2013, the Company entered into

a loan transaction with an “accredited investor” for a Promissory Note, payable with interest at 8% per annum in the

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

The note is due twenty

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

The note was paid in full with all accrued interest on June

On July 30, 2013, the Company entered into

a loan transaction with an “accredited investor” for a Promissory Note, payable with interest at 8% per annum in the

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

The note is due twenty

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

No debt discount was recognized as the conversion price is considered

“out of the money”, therefore no discount was necessary.

Total accrued interest as of June 30, 2015, was $761.

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

Convertible Note Payable – Related Party

For the transactions described above in regard to the original $ 215,000 convertible notes, $ 34,011 was loaned from a related party and has been separated out as described in the Companys financial statements and accompanying notes at March 31, 2013.

Interest expense for the related party conv ertible note with the ending December 31 , 2014 principle balance was $ 4,802.

On February 26, 2013, we executed a promissory note with one of our shareholders, for $ 65,000 at 15 % interest per annum, secured by seven of our sales orders to finance inventory purchases.

The promissory note was due on or before April 20, 2013.

There is no conversion feature associated with this promissory note.

of $ 20,000 was made against the principal on the note on April 1, 2013.

The debt discount was calculated as $ 21,923 .

This note was converted on July 21, 2014 with total accrued interest of $ 6,041 into 3,108,944 shares.

During the period ended September 30, 2014 , $ 1,639 discount was amortized and the remaining debt discount of $ 15,322 was fully expensed upon conversion .

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

On February 29, 2012, the Company entered into three separate convertible promissory notes in the aggregate amount of $ 100,000 .

The notes bear interest at ten percent ( 10 %) per annum and were due on May 30, 2012.

At the sole option of each respective Lender, the outstanding balance of the notes may be converted into shares of restricted Rule 144 common stock of the Borrower at a price per share of $ 0.05 .

In the event Lender elects to convert any outstanding balance due under this note into such shares, Lender shall give written notice to the Borrower seven ( 7 ) days prior to the effective date of such exercise.

At Borrowers sole option, Borrower may elect to pay Lender in cash up to one -half ( 1 / 2 ) of the then principal and interest due under the note.

In such event, the remaining balance of principal and interest shall be converted as provided under the note agreement.

On June 14, 2012, one of the notes, in the amount of $ 50,000 , was converted into 1,028,770 shares of our restricted common stock in accordance with the terms of the convertible promissory note.

The remaining two notes were extended, with no changes to the terms, were due and payable on June 30, 2014.

On J uly 21 , 2014 the princip al balance of the notes at $ 35,000 and $ 15,000 totaling to the $ 50,000 plus the accrued interest of $ 11,959 was converted into 1,239,178 shares of our restricted common stock in accordance with the terms of the convertible promissory note.

Discount recognized on the convertible note were fully expensed in the prior period.

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

On December 3, 2012, the Company entered into a long term convertible promissory note with a board member and shareholder in the amount of $ 45,000 .

The note is convertible into common stock at a rate of $ 0.04 per share.

The note bears interest at eight ( 8 %) per annum and is due 36 months from the date of the agreement, on or before December 03, 2015.

The proceeds from the note were used by the company to pay off the Security Purchase Agreement (tranche 2 ) issued on June 4, 2012, along with any accrued interest, penalties and administrative costs.

The debt discount was calculated as $ 18,255 , of which $ 5,300 was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $ 11,722 .

This note was converted on July 21, 2014 with total accrued interest of $ 1,105 into 1,152,617 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

During the period ended September 30, 2014, $ 1,471 discount was amortized and the remaining $ 10,251 was fully expensed upon conversion of the promissory note.

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

On January 11, 2013, the Company entered into an 8 % Convertible Promissory Note with an accredited investor, in the amount of $ 21,500 , convertible into shares of common stock of the Company, at the market price of $ 0.065 .

The note is due thirty six months from the date of note.

The note is secured by a secondary security interest in all of the Companys intellectual property.

The proceeds received by the Company from the sale of this note w ere used by the Company for prepaying the Promissory Note dated June 5, 2012 (Tranche 3 ) issued to Asher Enterprises, Inc., as well as any administrative costs associated with the payment.

This final payment completes and pays off all outstanding notes with Asher Enterprises.

The Company recognized a discount on the debt issued related to the derivative liability.

This debt discount was calculated as $ 9,285 , of which $ 4 , 592 was amortized during the twelve months ended March 31, 2014.

This note was converted on July 21, 2014 with total accrued interest of $ 1,385 into 352,084 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

During the period ended September 30, 2014, $ 740 discount was amortized and the remaining $ 3,953 was fully expensed upon conversion of the promissory note.

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

On March 22, 2013, we entered into a loan transaction that bears interest at a rate of 8 % per annum, secured with one of our board members in the amount of $ 25,000 .

The note is secured by three of our accounts receivables to finance inventory purchases.

This note was extended on September 30, 2013 and reclassed to a long term convertible promissory note with board member and shareholder of an 8 % Convertible Promissory Note in the amount of $ 25,000 , convertible into shares of common stock of the Company, at a price of $ 0.04 per share, which represents a 50 % discount from the market price as of the date of the note.

The note is due 36 months from the date of the note on or before September 30, 2016.

The debt discount was calculated as $ 25,000 .

This note was converted on July 21, 2014 with total accrued interest as of July 21, 2014 was $ 1,611 into 665,274 shares.

During the period ended September 30, 2014, $ 455 discount was amortized and the remaining $ 21,499 was fully expensed up conversion.

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

On September 30, 2013, the Company entered into a long term convertible promissory note with board member

and shareholder of an 8 % Convertible Promissory Note in the amount of $ 150,000 , convertible into shares of common stock of the Company, at a price of $ 0.04 per share, which represents a 50 % discount from the market price as of the date of the note.

The note is due 36 months from the date of the note on or before September 30, 2016.

The debt discount was calculated as $ 150,000 , of which $ 18,579 was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $ 131,421 .

This note was converted on July 21, 2014 with total accrued interest of $ 9,666 into 3,991,644 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

During the period ended September 30, 2014, $ 2,728 was amortized and the remaining $ 128,693 was fully expensed upon conversion of the promissory note.

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

On September 30, 2013, the Company entered into a Promissory Note in the amount of $ 260,000 with one of our board members, payable with interest at 10 % per annum, in cash on or before November 29, 2013.

The Promissory Note funded payables and other corporate purposes of borrower.

This note is secured by that certain license agreement and other agreements between borrower and Kindle Education, now Creya Learning.

A long-term Convertible Promissory Note (convertible at a rate of $ 0.035 per share) was executed on January 8, 2014 that replace d the September 30, 2013, payable with interest at 8 % per annum on or before January 8, 2017.

The debt discount was calculated as $ 156,000 , of which $ 22,286 was amortized during the twelve months ended March 31, 2014, leaving the discount balance remaining of $ 133,714 .

This note was converted on July 21, 2014 with total accrued interest of $ 18,107 into 7,945,925 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

During the period ended September 30, 2014, $ 12,251 was amortized and the remaining $ 121,463 was fully expensed upon conversion of the promissory note.

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

On October 21, 2014 the Company entered into at 10 % Convertible Promissory Note with a current board member and shareholder , in the amount of $ 200,0 00 , convertible into shares of common stock of the Company, at the market price of $ 0.0 4 .

The note is due on or before October 22, 2015 .

For the transactions described above in regard

to the original $215,000 convertible notes, $34,011 was loaned from a related party and has been separated out as described in

the Company’s financial statements and accompanying notes at June 30, 2015.

Interest expense for the related party convertible

note ending June 30, 2015, was $5,974.

This note was subsequently converted on July 13, 2015.

On October 21, 2014, the Company entered into

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

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

The debt discount was calculated as $50,000.

During the period ended December 31, 2014, $ 11,429 discount was amortized.

NOTE 8 DERIVATIVE FINANCIAL INSTRUMENTS

The Company generally does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments.

The Company utilizes various types of financing to fund our business needs, including convertible debts with conversion features and other instruments not indexed to our stock.

The convertible notes include fluctuating conversion rates.

The Company uses a lattice model for valuation of the derivative.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and then re-valued at each reporting date, with changes in the fair value reported in income in accordance with ASC 815 .

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net cash settlement of the derivative instrument could be required within the 12 months of the balance sheet date.

The Company, in year ended March 31, 2013, issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions.

The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Companys common stock.

The number of shares of common stock to be issued is based on the future price of the Companys common stock.

Due to the fact that the number of shares of common stock issuable is not able to be determined definitively, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative.

Pursuant to ASC 815 - 15 Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

The fair values of the Companys derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model.

The Company eliminated the derivative as of March 31, 2013.

As a result, the loss on derivative liabilities was $- 0 - and $ - 0 - as of December 31, 201 4 and 201 3 .

As of June 30, 2015,

$35,694 discount was amortized.

The note principle balance was $200,000 at June 30, 2015.

Total accrued interest as of June 30,

2015, was $13,808.

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

On January 1 , 2008 , the Company adopted guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on a recurring basis, and expands disclosures about fair value measurements.

Beginning on January 1, 2009, the Company also applied the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and intangible assets.

The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used

when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Companys assumptions of what market participants would use in pricing the asset or liability developed based on

the best information available in the circumstances.

On January 1, 2008, the Company adopted

guidance which defines fair value, establishes a framework for using fair value to measure financial assets and liabilities on

a recurring basis, and expands disclosures about fair value measurements.

Beginning on January 1, 2009, the Company also applied

the guidance to non-financial assets and liabilities measured at fair value on a non-recurring basis, which includes goodwill and

intangible assets.

The guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable

inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained

from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions of what market

participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The hierarchy is broken down into three levels based on the reliability of the inputs as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of December 31, 201 4 and March 31, 2014:

Fair Value Measurements at December 31, 2014

Convertible notes

Level 1 - Inputs are unadjusted

quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement

Level 2 - Inputs include

quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities

in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest

rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation

or other means (market corroborated inputs).

Level 3 - Unobservable

inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The following schedules summarizes the valuation

of financial instruments at fair value on a recurring basis in the balance sheets as of June 30, 2015 and March 31, 2015:

Fair Value Measurements at June 30, 2015

Derivative Liabilities

The following schedule summarizes the valuation

of financial instruments at fair value on a recurring basis in the balance sheets as of March 31, 2015:

Fair Value Measurements at March 31, 2015

Convertible notes

NOTE 10 DISCONTINUED OPERATIONS

On July 31, 2013, the Company signed a Memorandum of Understanding with a Canadian company owned by Joseph Khoury (JAK) proposing a purchase agreement in which JAK shall purchase LabMentors from PCS for USD $ 150,000 .

JAK has agreed to assume 100 % of LabMentors outstanding liabilities and to pay the remainder of the USD $ 150,000 through a note payable.

The note shall carry an annual interest rate of 3 % compounded annually and be paid over a period of 60 months in equal monthly payments beginning in month 13 of the 60 month period.

Derivative Liabilities

NOTE 9 – NOTE RECEIVABLE

On July 31, 2013, the Company signed a Memorandum

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

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

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

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

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

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

13 of the 60 month period.

This sale was finalized during the period ending September 30, 2013.

The assets and liabilities of PCS LabMentors were segregated in the balance sheet and appropriately labeled as discontinued.

As of the LabMentors sale, income and expenses are netted in the income statement and appropriately labeled as discontinued operations.

A full allowance of 50,740 was recorded for the promissory note.

As payments are received, the principle payment portion is recognized as Gain On Bad Debt Collection against the note receivable allowance.

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

LabMentors had made three note payments as of the date of the notification totaling $3,399.

The note receivable principle

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

The note receivable allowance balance at June 30, 2015 is $47,998.

The difference of $1,515

was subsequently taken to bad debt expense on July 22, 2015.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Operat ing Lease Obligation

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

The lease expired in May 2012.

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

Rent expense for the corporate offices was $ 14,131 and 26,041 for the quarter ended December 31 , 201 4 and 201 3 , and $ 99,318 and $ 107,717 for the twelve months ended March 31, 201 4 and 201 3 , respectively, under this lease arrangement.

On December 31, 2013 the Company signed an amendment to the existing contract to reduce the

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

The Company leases additional warehouse space in Boise, Idaho.

Operating Lease Obligation

The Company leases its main office under a

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

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

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

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

Rent expense for the corporate offices was $14,185 and $21,196 for the quarters ended June 30, 2015 and 2014, and

$77,869 and $99,318 for the twelve months ended March 31, 2015 and 2014, respectively, under this lease arrangement.

The Company leases additional warehouse space

in Boise, Idaho.

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

1 unchanged sentence

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

The Fifth Lease Amendment was entered into for the warehouse space extending the lease period through October 31, 2015.

Rent expense for the warehouse was $ 2,780 and $ 3,975 for the three months ended December 31 , 2014 and 2013 , respectively.

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

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

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

The Company signed a sixth amendment on April 15, 2015 to lease an additional approximately 1400 square foot bay adjacent

to the existing leased space.

Rent expense for the warehouse was $5,620 and $5,300 for the quarter ended June 30, 2015 and 2014,

and $16,225 and $15,901 for the twelve-months ended March 31, 2015 and 2014, respectively.

The Company leased and additional learning

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

The lease term is 3 years for 1,050 sf for an annual base rent of $16,640

or $1,387 per month, with 3% growth per year.

Anthony Maher brought suit against PCS in January

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

A settlement was agreed

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

1 unchanged sentence

Maher’s employment contract with PCS, PCS issued Mr.

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

PCS does not admit the allegations or any other wrongdoing, but would rather settle the matter for a modest amount to avoid the expense of defending it in court.

The settlement agreement was execut ed on July 9 , 2014 .

There are no other lawsuits pending involving PCS.

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

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

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

settlement agreement was executed on July 9, 2014.

On or about May 18, 2015, the Company was named

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

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

The Company has engaged legal

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

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

The Company is presently evaluating

whether or not it has adequate insurance coverage for its legal representation and any potential liability.

Contingencies

NOTE 11 - STOCKHOLDERS’ EQUITY

During the period ending September 30, 2014, $ 77,160 has been accrued in stock payable that will be issued in future periods.

During the period ending September 30, 2014, the Company expensed amounts related to stock options and warrants granted in the current period as well as prior periods valued at $ 11,222 .

During the period ending September 30, 2014, the Company issued 750,000 shares of common stock for consulting services.

The shares were valued based on the fair market price on the date of grant for a total of $ 37,500 .

During the period ended September 30, 2014, the company accrued $ 12,308 payable in Restricted Stock Unit to its non-management directors.

Each restricted stock unit is valued at $ 0.05 , based on the closing price of the Companys common stock at the date of grant.

As of September 30, 201 4 , $ 44,808 has been accrued for director services.

For the directors who chose to defer payment in a prior year an entry was made to book fair market value of the RSU and $ 9,000 was reclassed to stock payable.

During the period ending September 30, 2014, the Company issued 400,000 shares to a related party for settlement of liabilities.

The shares were valued based on the fair market price on the date of grant for a total of $ 22,000 .

On July 21, 2014, a $ 95,000 note was converted with total accrued interest of $ 6,041 into 3,108,944 shares.

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

(See Convertible Note Payable Related Party)

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

(See Convertible Note Payable Related Party)

On July 21, 2014, a $ 45,000 note was converted with total accrued interest of $ 1,105 into 1,152,617 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

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

(See Convertible Note Payable Related Party)

On July 21, 2014, a $ 21,500 note was converted with total accrued interest of $ 1,385 into 352,084 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

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

(See Convertible Note Payable

Related Party)

O n July 21, 2014 , a $ 25,000 note was converted with total accrued interest as of July 21, 2014 was $ 1,611 into 665,274 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

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

(See Convertible Note Payable Related Party)

On July 21, 2014, a $ 150,000 note was converted with total accrued interest of $ 9,666 into 3,991,644 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

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

(See Convertible Note Payable Related Party)

On July 21, 2014, a $ 260,000 note was converted with total accrued interest of $ 18,107 into 7,945,925 shares of our restricted common stock in accordance with the terms of the convertible promissory note .

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

(See Convertible Note Payable Related Party)

During the period ending December 31, 201 4 , $ 0 has been accrued in stock payable that will be issued in future periods.

During the period ending December 31, 2014, the Company issued 1,0 1 0,000 shares of common stock for services.

The shares were valued based on the fair market price on the date of grant for a total of $ 60, 4 00 .

During the period ending December 31, 2014, the Company issued 16,000 shares of common stock for employees bonus.

The shares were valued based on the fair market price on the date of grant for a total of $ 7,760 .

During the period ending December 31, 201 4 , the Company recognized $ 5 0,000 in debt discount as an increase to stockholders equity pursuant to the terms of two different convertible promissory notes issued.

The debt discount consists of a beneficial conversion feature on both convertible promissory notes in which $ 11,429 was amortized for the period.

During the period ending December 31, 201 4 , the Company expensed $ 1,813 related to stock options and warrants granted in the current period as well as prior periods.

During the period ended December 31, 201 4 , the company accrued $ 6,924 payable in Restricted Stock Units to its non-management directors.

Each restricted stock unit is valued at $ 0.0 5 , based on the closing price of the Companys common stock at the date of grant.

These agreements call for payment of current year director fees via issuance of restricted stock units over a vesting period of not less than twelve months, and require continued service for twelve months and reelection at the next annual shareholder meeting.

As of December 31, 201 4 , $ 5 1 , 732 has been accrued for director services.

During the three months ending June 30, 2015,

$22,000 has been accrued in Restricted Stock Units payable for the issue of 200,000 shares for services that will be issued in

future periods.

Each restricted stock unit is valued at a range from $0.11, based on the closing price of the Company’s common

stock at the date of grant.

The total amount recorded in stock payable as of June 30, 2015, for these services and other prior

period services is $31,000.

During the three months ending June 30, 2015,

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

During the three months ended June 30, 2015,

the company accrued $8,250 payable in Restricted Stock Unit to its non-management directors.

Each restricted stock unit is valued

at a range from $0.05 to $0.10, based on the closing price of the Company’s common stock at the date of grant.

These agreements

call for payment of current year director fees via issuance of restricted stock units over a vesting period of not less than twelve

months, and require continued service for twelve months and reelection at the next annual shareholder meeting.

As of June 30, 2015,

$20,367 has been accrued for director services and recorded in stock payable.

Preferred Stock

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

As of December 31, 201 4 , there are no preferred shares issued or outstanding.

The Company has 20,000,000 authorized shares

of preferred stock.

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

NOTE 12 - BASIC AND DILUTED NET LOSS PER COMMON SHARE

Basic and diluted net loss per common share for the three month periods ended December 31, 201 4 and 201 3 , are based on 72,855,781 and 52,504,350 , respectively, of weighted average common shares outstanding.

Basic and diluted net loss per common share for the nine month periods ended December 31, 201 4 and 201 3 , are based on 64,850,290 and 51,434,182 , respectively, of weighted average common shares outstanding.

No adjustment has been made for any common stock equivalents outstanding because their effects would be antidilutive.

An adjustment has been made to show that effect on the loss per share from discontinued operations as outlined below.

Basic net loss per common share for the three-month

periods ended June 30, 2015, and 2014, are based on 74,235,284 and 53,335,167, respectively, of weighted average common shares

Dilutive net loss per common share for the three-month periods ended June 30, 2015, and 2014, are based

on 78,491,182 and 55,705,477, respectively, of weighted average common shares outstanding.

Net income (loss) per common share:

Weighted average number of common

shares outstanding

NOTE 13 - DILUTIVE INSTRUMENTS

Stock Options and Warrants

The Company is required to recognize expense of options or similar equity instruments issued to employees using the fair-value-based method of accounting for stock-based payments in compliance with the financial accounting standard pertaining to share-based payments.

This standard covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.

Application of this standard requires significant judgment regarding the assumptions used in the selected option pricing model, including stock price volatility and employee exercise behavior.

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

The Company is required to recognize expense

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

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

This standard covers a wide range of share-based

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

and employee share purchase plans.

Application of this pronouncement requires significant judgment regarding the assumptions used

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

Most of these inputs are

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

and Outstanding

Balance as of March 31, 2015

Balance as of December 31, 2014

No common stock options or warrants were issued, exercised , or cancelled during the period ended December 31, 201 4 .

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

These options were issued as incentive compensation to the employee.

Common Stock Options

Balance as of June 30, 2015

No common stock options were exercised during the quarter ended

June 30, 2015.

January 1, 2014, the Company granted 40,000

incentive options each to three employees per year for three years.

These options were issued as incentive compensation to the

employee and require the achievement of certain milestones.

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

The options have an expected volatility rate of 258.20 % calculated using the Company stock price for a three -year period.

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

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

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

The total value of these options was $15,926.

The options vest over a three -year period and are exercisable at a range of $ .05 to $ 0.6 per share, which represents the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of December 31 , 2014 , $ 1,027 of the total value was expensed.

$ 341 was expensed in the three months ending December 31 , 2014 .

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

The options vest

over a three-year period and are exercisable at a range of $.05 to $0.6 per share, which represents the fair market value

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

As of June 30, 2015, $6,923 of the total value was expensed.

$1,041 was expensed in the quarter ending June 30, 2015.

February 1, 2014, the company granted 40,000

incentive options each to one employee per year for three years.

These options were issued as incentive compensation to the employee

and require the achievement of certain milestones.

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

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

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

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

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

The total value of these options was $4,107.

As of December 31 , 2014 , $ 3,977 of the total value was expensed.

$ 1,473 was ex pensed in the three months ending December 31 , 2014 .

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

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

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

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

The options vest over

a three-year period and are exercisable at a range of $.05 to $0.6 per share, which represents the fair market value at the date

of grant in accordance with the 2009 Equity Incentive Plan.

As of June 30, 2015, $1,710 of the total value was expensed.

expensed in the quarter ending June 30, 2015.

On May 15, 2012, the Company granted 850,000

incentive stock options to an officer, Robert Grover and require the achievement of certain milestones.

The expected volatility

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

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

The options were valued using the Black-Scholes valuation

The total value of this option was $46,175.

The options vest over a three year period and are exercisable at $ 0.06 per share which represents the fair market value at the date of grant in accordance with the 2009 Equity Incentive Plan.

As of December 31 , 2014 , $ 40,452 in value of the options was expensed.

$ 8,031 was expensed in the three months ending December 31 , 2014 .

The options vest over a three year period and are exercisable at $0.06

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

the quarter ending June 30, 2015, $2,161 of the total value was expensed

On January 22,

2015, the Company issued 2,000,000 warrants to a shareholder and Board member with a 36 month term to purchase “restricted”

Rule 144 Common Stock, no par value (the "Share"), as consideration for the issuance of a promissory note in the amount

of $400,000, from the Company at a purchase price of $0.04 per share of Common Stock (the "Exercise Price").

Warrants are fully vested and exercisable.

The warrants were evaluated for embedded derivatives in accordance with ASC 815 and

were found to not include any embedded derivatives.

The warrants attached to the note were valued using the Black Scholes

Valuation Model.

The assumptions used in the model included the historical volatility of the Company’s stock of 180%,

and the risk-free rate for the periods within the expected life of the warrant based on the U.S.

Treasury yield curve in effect

The resulting fair value is $ 66,717.

This value was recorded as a debt discount

and is being amortized over the life of the loan.

The remaining $38,184 of the debt discount was amortized during the quarter ending

June 30, 2015.

NOTE 14 - SUBSEQUENT EVENTS

On January 22 , 2015 the Company entered into at 10 % Promissory Note with a current board member and shareholder, in the amount of $ 400,000 , secured by T 4 EDU Contract 000 6 / 0 0 17 , to finance operations and inventory purchases, due June 30, 2015 .

T he Lender has also issued warrants to acquire up to 2,000,000 shares of Companys common stock for $ 0.04 per share exercisable at any time within 36 months after the date of issuance of the Warrants.

The Board of Directors of PCS Edventures!.com, Inc.

(the Company) has accepted the resignation of Andrew J.

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

Scoggins resignation is effective as of January 31, 2015.

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

(the Company) has

Robert Grover as President and Co-Chief Executive Officer ;

Horsburgh as Vice President and Treasurer;

Todd Hackett as and Co-Chief Executive Office ;

and Britt Ide as Chair of the Board .

Managements Discussions 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 report, which are forward-looking, involve a high degree of risk and uncertainty.

Certain statements in this report set forth managements 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 Companys primary markets, exchange rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing, government action, weather conditions and other uncertainties, including those detailed in the Companys Securities and Exchange Commission filings.

The Company assumes no duty to update forward-looking statements to reflect events or circumstances after the date of such statements.

The following discussion should be read in conjunction with our audited consolidated financial statements and Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contained in our Form 10-K for the year ended March 31, 2014.

Plan of Operation

PCS holds a unique position in the STEM education market with 1) an existing STEM library and deep expertise in creating STEM solutions comprised of curriculum and materials;

2) a unique PCS learning methodology an adaptive (customizes to individual learners), experiential (hands-on in nature), learning framework that can be monetized in a number of ways.

This approach to educational assessment and incentivizing students is the educational approach for the future and PCS is a thought leader in this area;

3) PCS has developed an innovative K12 robotics and engineering system comprised of hardware and software specifically designed to engage students in STEM topics such as hands-on physics and engineering and coding;

4) PCS has established itself as a prime STEM provider in the Kingdom of Saudi Arabia and is growing its revenues from the K ingdom;

and 5) PCS entered the B2C space with a retail product launch this year and also has a working model for expe riential learning labs operational.

With a plan to expand its B2C offerings, PCS is now in the planning stages of a unique, subscription-based online learning system that can be scaled nationwide if successful.

In fiscal year 2015, PCS has continued its commitment to the research and development of PreK-16, brain-based learning programs in Science, Technology, Engineering and Math (STEM) that embed 21st century thinking skills and new technologies through the expansion of its engineering and robotics products and the deployment of a second EdventuresLab site in Eagle , Idaho.

PCS offers products and services to the following markets :

1) K6 STEM programs for the elementary classroom

2) Tech Ed STEM programs for grades 6-12 that include robotics and engineering products

3) STEM labs and packages for Afterschool programs

4) Customized STEM consulting solutions for the international market

5) Direct to consumer (B2C) sales of STEM services and retail products such as our retail robotics kit

During the remainder of fiscal year 2015 we will continue to focus on the improvement of our web-based marketing efforts, expand our sales force and channel partners , and tighten sales processes for our domestic STEM sales.

We will continue to fulfill existing and capture new STEM contracts with the Kingdom of Saudi Arabia.

We will continue to build our Edventures Lab program because it is a key strategic addition to our plan and serves the following purposes:

1) R&D test bed for product improvement and refinement;

2) Revenue generation through afterschool and summer course fees.

This course revenue stream will be more predictable and consistent compared to the seasonal revenues associated with education budgets;

3) S howrooms for PCS products in strategic locations and key districts around the country.

We believe this will provide PCS with significant competitive advantages over other solution providers since administrators and educators can visit local centers for support, training, and demonstrations of our products in action;

4) Revenues from STEM retail products .

We believe e-commerce sales of kits associated with STEM learning targeting the families of students attending the c enters as well

as the larger home retail market will provide a consistent, dependable boost in Q3 revenues to offset low education sales traditionally anticipated during this time frame.

We will actively seek retail distribution channels for our robotics retail products.

To further our EdventuresLab business plan, we deployed a second program in Eagle, Idaho in Q2.

The establishment of this initial network of centers will enable more rapid expansion in FY2015 and beyond.

We believe the strategic deployment of Edventures Labs to be a viable and sound approach based on our initial trial programs.

Results of Operations

For the nine-month period ended December 31, 2014, the Company reported a net loss of ($1, 123,512 ) as compared to a net loss of ($ 75 9, 487 ) for the nine-month period ended December 31, 2013.

The increased loss was predominantly due to the full amortization of all note payable discounts totaling $301,131 on July 21, 2014 as a result of $646,500 in notes payable conversion into 18,455,666 common stock shares .

The Basic Loss per Share for nine-month period ended December 31, 2014, is ($ 0.0 2), which varies from the ($0.01) loss per share for the nine-month period ended December 31, 2014.

Revenues for the nine month period ended December 31, 2014 increased $1,190,864 to $2,339,426 as compared to revenue during the nine month period ended December 31, 2013 of $1,148,563.

This was primarily due to the fulfillment of several in ternational contract milestones, with some growth in domestic sales.

Operating expenses for the nine-month period ended December 31, 2014, increased by $ 487,081 ( 4 0 %) to $1, 695,885 ;

compared to $ 1,208,804 for the nine-month period ended December 31, 2014.

For the three months ended December 31, 201 4 , the Company reported net ordinary income for the quarter was $11,067.69, and after interest and other expense the net loss for the quarter was ($ 35,369 ) as compared to a net loss of ($239,962 ) for the quarter ended December 31, 201 3 .

The Basic Loss per Share for the quarter ended December 31, 201 4 , is ($0.0), which is comparable to the ( $0.0 ) loss per share for the three month period ended December 31, 201 3 .

Revenue for the three months ended December 31, 201 4 increase by $433,983 (125%) to $ 782,322 , as compared to revenue during the quarter ended December 31, 201 3 of $348,339 .

The significant difference in revenue from period to period is due to the large contract received in FY201 5 from Saudi Arabia .

Operating expenses for the three month period ended December 31, 201 4 , increased by $ 117,392 ( 31 %) to $ 498,649 , as compared to $ 381,257 for the three month period ended December 31, 201 3 .

The table below identifies the quarter over quarter changes:

Operating Expenses

3 months ended

December 31 , 2014

9 months ended

December 31 , 2014

Product Development

Employee Expenses

Settlement Expense

Product Development KSA

International Administrative Travel & Consulting Expense

Professional Fees

Marketing Expense increased due to additional sales and promotional efforts at tradeshows, magazines, and locally for the learning centers.

Product Development Expense includes stock compensation for Cortex 5.0.

Employee Expenses increased due to filling of open positions for marketing and product development, and added international contract administration.

Bad Debt 2013 contained LabMentor Sales Allowance Note Receivable.

Settlement Expense of Anthony Maher July 9, 2014.

Product Development Kingdom Saudi Arabia (KSA) for specialized contract fulfillment.

International Travel for contract bids and Consulting travel and expense on International contract fulfilment.

Professional Fees increased due to cost incurred for capital raising efforts.

Cash used by operations for Q3 was ($ 512,325 ) compared to cash used by operations for Q3 ($529,671 ) in the same period last year.

The Company ended the third quarter of FY 201 5 with $ 20,323 in cash, total current assets of $ 646,325 and total current liabilities of $ 1,771,174 , resulting in a working capital deficit of $ 1,124,849 compared to a working capital deficit of $ 385,254 for the year ended March 31, 201 4 .

For financing activities in FY 201 5 , management obtained $ 538,116 by issuing Promissory Notes.

Proceeds were used for operations and working capital.

The Company had a current ratio at December 31, 201 4 and September 30, 201 4 of 0.3 6 and 0.

.34 , respectively.

This in crease in liquidity was due primarily to a n inc rease in international accounts receivable .

We have an accumulated deficit of ($ 39,293,698 ) and shareholders equity of ($1, 426,74 5 ).

The Company cannot predict that it will be successful in obtaining funding for its plans or that it will achieve profitability in fiscal year 201 5 .

Quantitative and Qualitative Disclosures About Market Risk.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the Exchange Act) and is not required to provide the information required under this item.

On January 16, 2015, the Company executed a

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

per annum, due June 30, 2015.

The note due date was subsequently amended to October 31, 2015.

On July 13, 2015, the holders of four (4) convertible

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

The aggregate principal amount of the convertible

notes being converted is $136,044.

Conversion of the aggregate principal and accrued interest of these notes will result in the

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

$34,011 of the aggregate principal amount of these notes represent loans provided

to us by one of the members of our Board of Directors.

With accrued interest, the conversion of these notes and interest payable,

reduces our total debt by $159,901.

On July 14, 2015, the Company CEO converted

25,000 options using the cashless option into 19,000 shares of “restricted” Rule 144, no par value, Common Stock.

On July 23, 2015, the Company paid the promissory

note dated July 30, 2013, payable with interest at 8% per annum in the amount of $5,000, convertible into shares of common stock

of the Company at a price of $0.20 per share.

The note was due twenty four months from the date of the note, on or before July

The note was paid in full with accrued interest of $795.

The Board of Directors resolved on July 15,

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

stock with no par value, and has further directed that management submit the resolution for ratification by the shareholders at

the Annual Meeting.

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

What changed 10-Q

Item 1. Financial Statements