What changed in this filing

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Item 1. Business

2025-06-30 compared with 2024-06-28 · 175 added, 145 removed, 187 unchanged (63% of the section changed)

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Inc.” On March 27, 2000, we changed our name from “PCS Education Systems, Inc.” to “PCS Edventures!.com, Inc.”;

On August 31, 2015, we changed our name from “PCS Edventures!.com, Inc.” to “PCS Edventures!, Inc.” PCS Edventures!,

and on August 31, 2015, we changed our name from “PCS Edventures!.com, Inc.” to “PCS Edventures!, Inc.” PCS Edventures!,

is our current company name.

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Registration Statement with the Commission on October 3, 2023, which became effective December 4, 2023 (the “Form 10 Registration

Company specializes in creating experiential, hands-on, K12 STEM (Science, Technology, Engineering, and Math) education products and

“STEM” is often abbreviated as STEAM – Science, Technology, Engineering, Arts, and Math – to include

We use the terms STEM and STEAM interchangeably throughout this Annual Report and make no significant distinction between the

Through our acquisition of Thrust-UAV, we developed educational drones and drone curriculum.

Our customers include schools

and school districts from the collegiate to kindergarten level, and providers of out-of-school programming, which include after-school

programs, military education programs, home-schooling programs, summer programs, and corporate outreach programs.

We sell predominately

in the United States and sell into nearly every state in the nation.

We have a few international customers, but revenue from customers

outside of the United States is not material, and we do not focus our sales efforts on international markets at this time.

January 22, 2025, the Board of Directors appointed Sean P.

Iddings to the Board, bringing the Board members to three (3) Directors.

Company specializes in creating experiential, hands-on, transitional kindergarten through 12 th grade (TK-12) STEM (Science,

Technology, Engineering, and Math) education products and curriculum.

“STEM” is often abbreviated as STEAM – Science,

Technology, Engineering, Arts, and Math – to include the arts.

We use the terms STEM and STEAM interchangeably throughout this

Annual Report and make no significant distinction between the two terms.

Through our acquisition of Thrust-UAV, we developed educational

drones and drone curriculum.

Our customers include schools and school districts from the collegiate to transitional kindergarten level,

and providers of out-of-school programming, which include after-school programs, military education programs, home-schooling programs,

summer programs, and corporate outreach programs.

We sell predominately in the United States and sell into nearly every state in the

We have a few international customers, but revenue from customers outside of the United States is not material, and we do not

focus our sales efforts on international markets at this time.

products facilitate STEM education by providing engaging activities that demonstrate STEM concepts and inspire further STEM studies,

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sales efforts, partner networks, and web-based channels.

has developed and sells a variety of STEM education products into the K12 market, which can be categorized as follows:

has developed and sells a variety of STEM education products into the TK-12 market, which can be categorized as follows:

camps are for the informal learning market and are designed to be highly engaging for students while easily administered by the instructor.

The Company offers approximately 36 different enrichment programs and typically develops at least two (2) new programs each year.

the more popular programs include Ready, Set, Drone!;

Traveling Artist;

Unleash Your Wild Side, Build a Better World;

Oceanic Exploration;

and Flight and Aerodynamics.

Some of the more popular programs include Podcasting;

Ready, Set, Drone!;Drone Designers;

Rockin Robots;

Influencer Camp;

The Science of Super Powers;

Flight and Aerodynamics;

and Build a Better World.

Series Products

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& Programming;

and Discover STEM.

products are designed for the grade school market and use the Company’s proprietary bricks (which are Lego compatible) and curriculum

to engage students to explore, imagine, and create within a STEM education framework.

The Company offers a variety of grade-specific

BrickLAB products.

Discover STEM;

Discover Digital Video;

and Discover Blocksmith:

3D Coding & Design.

products are designed for the grade school market and use the Company’s proprietary bricks (which are Lego compatible) and

curriculum to engage students to explore, imagine, and create within a STEM education framework.

The Company offers a variety of

grade-specific BrickLAB products.

Drones, Add-on Drone Packages, and Ala Carte Drone Items

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Discover Drones Indoor Racing Add-On;

Discover Drones Outdoor Practice

Discover Drones Outdoor

Practice Add-on ;

and all the spare parts and ala carte drone items offered in the Company’s comprehensive drone packages.

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BUILD Activity Book

series of activity books are designed for the K-3 market and ideal for a distance-learning environment.

The series includes 12 different

series of activity books are designed for the TK-3 market and are ideal for a distance-learning environment.

The series includes

12 different issues.

Instructor guides and/or family engagement guides are included.

The Company also provides the necessary bricks for the builds

in the activity books as a separate, but related product.

The Company also provides the necessary bricks

for the builds in the activity books as a separate, but related product.

Development Training

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Company sells its products directly to customers and through resellers.

The Company kits all of its products at its Boise, Idaho facility

The Company kits all of its products at its Meridian, Idaho facility

and ships the products directly to customers.

Resellers do not inventory the Company’s products and the Company “drop ships”

its products directly to the resellers’ customers.

Trainings and Professional Development sessions are conducted either at the

Company’s facilities or at the customer’s location, depending on the desires of the customer.

Customers can buy from the

Company’s website, from a reseller’s website, or by presenting the Company with a valid purchase order.

Resellers do not typically inventory the Company’s products and the Company “drop

ships” its products directly to the resellers’ customers.

Trainings and Professional Development sessions are conducted either

at the Company’s facilities or at the customer’s location, depending on the desires of the customer.

Customers can buy from

the Company’s website, from a reseller’s website, or by presenting the Company with a valid purchase order.

STEM education market is not well defined and is very fragmented.

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the education market with their products.

In this regard, the company competes directly with Lego, DJI, Fischertechnik, K’Nex (acquired

by Basic Fun), and Vex IQ, among many others.

are numerous companies of various sizes that develop and sell STEM educational products.

While there may be several characteristics that

differentiate our Company’s products from theirs, all of us are competing for a finite market.

There are several potential solutions

to STEM education demand and, oftentimes, companies can achieve a first-mover advantage by developing a relationship with a customer

or distributor, and integrating their suite of products and services into the supply chain before we can showcase our offerings.

In this regard, the Company competes directly with Lego, Robolink, Fischertechnik, K’Nex

(acquired by Basic Fun), and Vex IQ, among many others.

are numerous for-profit companies of various sizes that develop and sell STEM educational products.

A good example is Teacher Created

Materials, a company headquartered in Huntington Beach, California.

They are very similar to our company and much larger.

also compete against non-profit organizations, such as Project Lead The Way, who have a mission to promote and implement STEM education.

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competition for our products and services.

there may be several characteristics that differentiate our Company’s products from those of our competition, all of us are competing

for a finite market.

There are several potential solutions to STEM education demand and, oftentimes, companies can achieve a first-mover

advantage by developing a relationship with a customer or distributor, and integrating their suite of products and services into the

supply chain before we can showcase our offerings.

believe that we have a competitive advantage in curriculum development.

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The final creation of the product via kitting and packaging is done

at our corporate facility in Boise, Idaho.

The printing and digitizing of the curriculum, as well as all curriculum development oversight,

is performed at our corporate facility.

at our warehouse facility in Meridian, Idaho.

This includes the printing of the curriculum.

All curriculum development oversight is performed

at our corporate facility, also in Meridian, Idaho, but separate from our warehouse facility.

have been working closely with our vendors located outside of the United States to determine the impact of any tariff on our transactions.

Most vendors pass a portion of the tariff amount onto their customers, including us.

In some cases, we have negotiated to split the tariff

amount with the vendor.

Tariffs are a relatively new development, and we are proactively assessing the impact of them on our costs.

Discover series of products contains some proprietary products designed by our Company and manufactured abroad as well as non-proprietary,

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The RubiQ education drone’s components are manufactured abroad and quality-controlled at our corporate facility.

The final packaging

of all Discover products is done at our Boise, Idaho facility.

The printing and digitizing of the curriculum, as well as all curriculum

development oversight, is performed at our corporate facility.

The final creation

of the product via kitting and packaging is done at our warehouse facility in Meridian, Idaho.

This includes the printing of the curriculum.

All curriculum development oversight is performed at our corporate facility, also in Meridian, Idaho, but separate from our warehouse

BrickLAB products contain proprietary plastic building bricks (that are Lego compatible) manufactured for us by a long-time vendor with

manufacturing facilities in South Korea.

The printing and digitizing of the curriculum, as well as all curriculum development oversight,

is performed at our corporate facility.

The final creation of the product via kitting and packaging is done at our warehouse facility

in Meridian, Idaho.

This includes the printing of the curriculum;

and all curriculum development oversight is also performed at our corporate

STEAMventures BUILD Activity Book was developed at our corporate facility.

The printing of the product and final packaging are performed

The final creation of the product via kitting and packaging

is done at our warehouse facility.

This includes the printing of the curriculum;

and all curriculum development oversight is also performed

at our corporate facility.

and Availability of Raw Materials and Names of Principal Suppliers

material procurement has become more challenging since the Covid-19 pandemic.

Backlogs have created availability problems for a few items,

shipping congestion from time to time has significantly delayed shipment of many items, and prices of nearly all items have increased

We expect continued inflation in the materials we use in our final products, although we expect transportation costs to moderate.

material procurement became more challenging in the immediate aftermath of the Covid-19 pandemic.

Backlogs created availability problems

for a few items, shipping congestion from time to time significantly delayed shipment of many items, and prices of nearly all items increased

chains recovered as the Covid-19 pandemic receded, but recent tariff activity by the U.S.

has complicated supply chain management once

We expect continued inflation in the materials we use in our final products.

few exceptions, we can generally source materials from multiple vendors, although the pricing from different vendors varies considerably.

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raw materials increase.

response this challenging environment, we raised 2022 prices for many products to maintain our margin goals, and we were compelled to

do so again in 2023.

response these challenging environments, we have raised prices on selected items every year to reset our margins back to desirable levels

after price increases of inputs.

Additionally, we buy in bulk to achieve better pricing, and have increased general inventory levels.

While we purchase

from numerous vendors, below are our most used vendors by dollar volume:

While we purchase from numerous vendors, below are our most used vendors by dollar volume:

Fischertechnik

Hobby Technology

Packaging Solutions

on One or a Few Major Customers

Fiscal Year 2025, we had four (4) major customers who each accounted for at least 5% of sales and who, when aggregated, accounted for

One of these customers was a relatively new contract from the Air Force JROTC program and represented 13.7% of our revenue

in Fiscal Year 2024.

27.8% of sales.

The details of sales from our major customers are below:

Customer Designation

A and D are resellers.

The sales from reseller customers represent the aggregation of many purchase orders each of these customers placed

with us throughout the year.

A is a reseller.

The sales from reseller customers represent the aggregation of many purchase orders each of these customers placed with

us throughout the year.

Our reseller customers place an order with us when their customer orders our product from them.

recurs numerous times throughout any given year.

This cycle recurs

numerous times throughout any given year.

work closely and frequently with our larger customers to ensure that they are receiving the value proposition and service from us they

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no minimum order requirement in any given year, is not likely to experience the duration with us as our other major customers have, although

the possibility exists that a new contract will be created to replace the old one when it expires.

the possibility exists that a new contract will be created to replace the current one when it expires.

believe that the risk of losing any one (1) of these customers is small, and we are actively, and successfully, soliciting larger customers

to diversify our current customer concentration.

While we believe the risk of losing any one of these major customers over the next year

is small, the loss of any two of these customers would pose a significant risk to the financial health of the Company.

While we believe the risk of losing any one (1) of these major customers over the next

year is small, the loss of any two (2) of these customers, without similar replacement, would pose a significant risk to the financial

health of the Company.

business is subjected to strong seasonal patterns during any given year, with our busiest period coinciding with summer learning and

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For fiscal year 2022, the impact from

the pandemic was negligible, as most K-12 learning institutions and after-school programs resumed in-person learning and services.

reported record revenue for fiscal years 2023 and 2024, indicating that the any lingering effects of the pandemic are insignificant.

supply chain has experienced and continues to experience moderate delays due to the pandemic’s various effects on our vendors.

Our vendors are located in China, Europe, South Korea, and the U.S., with each region experiencing the cycles of the pandemic at different

times and reacting differently to it.

These conditions have caused some delays in us receiving our raw materials from vendors.

Port congestion

arises from time to time, elevating transportation costs due to increased storage fees at the port, and further adding to delays in us

receiving materials.

In situations when these delays in receiving our materials risk interrupting our customers’ programs, we have

often accommodated these customers, at the Company’s expense, with compensation in the form of free shipping to the customer, express

shipping to the customer, express shipping of materials from our vendor to us, product substitutions with the customer, or additional

materials given to the customer.

We believe that these supply chain issues are manageable and temporary, but they will continue to negatively

impact our profit margin until fully resolved.

supply shortages of semiconductors, attributed to the pandemic, have elevated the cost of the flight controller component of our proprietary

drone from $14.50 per unit to $50.00 per unit.

Given the global nature of this shortage, we will procure only what is needed and wait

to buy in bulk when supply returns to normal.

We have solicited additional vendors who supply drone materials to diversify our supply

Recently, prices have begun to moderate.

the pandemic was negligible, as most TK-12 learning institutions and after-school programs resumed in-person learning and services.

reported record revenue in fiscal year 2023 and again in fiscal year 2024, indicating that the any lingering effects of the pandemic

were insignificant.

the pandemic when our markets were significantly impaired by mandated lockdowns, we developed a STEM activity book, titled STEAMventures,

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that we have a better suite of offerings for distance-learning environments, should that environment arise again.

April 14, 2020, the Company received its first Paycheck Protection Program (“PPP”) loan in the amount of $193,375.

was subsequently forgiven in December of 2020.

On February 2, 2021, the Company received its second PPP loan in the amount of $221,050.

This amount was subsequently forgiven in September of 2021.

Company qualified for the Employee Retention Tax Credit (ERTC) for 2020 and the first three calendar quarters of 2021.

The Company has

filed an amended IRS Form 941 quarterly federal tax return for the April through June 2020 period to claim this credit as it was made

retroactive at the end of 2020.

We have also filed our quarterly Forms 941 claiming this credit.

The amounts of the credits are summarized

Amount Claimed

April 1, 2021 – March 31, 2022

April 1, 2022 - March 31, 2023

of the Policies of the New Administration

January, we had a change in the Presidency of the United States and, with it, a sharp turn from past education policy.

The current administration

wants to end the Department of Education, which administers billions of dollars of grants nationwide.

Some of these grants will likely

cease, and some will likely be administered by a different agency or allocated to the states to administer.

While nothing has been finalized

yet, the uncertainty of what might happen has created confusion and anxiety in our market, which has frozen decision makers.

that promote DEI policies have had funding terminated or have received threats of doing so should these policies continue to be promoted.

Some of these schools have pursued legal action against the administration.

This has also added to the confusion and anxiety in our market.

Additionally,

as early as April of 2024, the prior administration granted extensions to the deadline of using ESSER funds, from September 30, 2024,

to March of 2026.

The new administration rescinded these extensions, complicating budgets for many schools that were counting on this

funding extension.

This has further added to the confusion and anxiety in our market.

believes that as these uncertainties are removed, these disruptions to our market will recede.

Additionally,

the new administration has used tariffs as a policy tool to address trade imbalances.

While nothing has been finalized yet, management

believes that costs of raw materials procured from overseas suppliers will likely increase due to some sort of permanent tariff policy.

While the ultimate magnitude of these cost increases is yet unknown, the likelihood of their continued existence is high, which translates

into increased raw materials costs.

The Company has been working with its vendors, one at a time, to manage through these uncertain times

regarding tariff rates.

The Company reprices its products once per year, and will likely pass the majority of any tariff-related cost

increases on to the customer.

primary focus is to continue penetrating the U.S.

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product line, and we are prepared to compete intensely in this product category, as we believe that 1), our curriculum offers us a competitive

advantage in this space, and 2), the educational drone market is nascent and expected to continue to grow significantly.

Company reported record revenue and net income for fiscal year 2024, after a record fiscal year 2023, and our outlook is for continued

profitability in our fiscal year 2025.

The Company’s recent success, coupled with the Company’s established history of significant

aggregate profitability for the past six years, accomplished under the supervision of different Management than the team that oversaw

the period prior to fiscal year 2019, compelled Management, in consultation with Company tax advisors and auditors, to recognize the

remainder of the tax-loss carry-forward asset on the Company’s fiscal year 2024 financial statements.

In fiscal year 2023, the Company

recognized $1,011,466 of the tax-loss carry-forward asset.

In fiscal year 2024, the Company recognized the remaining $1,529,793 of the

total tax-loss carry-forward asset, which at March 31, 2024, was $2,541,259.

For the fiscal year ended March 31, 2023, the Company reported

net income of $2,776,176, which includes the recognition of the tax-deferred asset.

For the fiscal year ended March 31, 2024, the Company

reported net income of $4,441,188, which includes the recognition of the remainder of the tax-loss carry-forward asset not recognized

in fiscal year 2023.

advantage in this space, and 2), the educational drone market is nascent and is expected to continue to grow significantly.

response to new policies on education by the new administration, we are embarking on two (2) new initiatives that complement our current

The first initiative is to align our products more closely with state and standards and quality guidelines, especially where

such a conversion is easy.

In the past, we have aligned our products closer to national standards and quality guidelines (than state

standards) for the following three reasons:

Many of the programs we serve receive their funding from federal grants;

When state standards are relevant, they are loosely applied to out-of-school-time programs;

There is considerable overlap between federal standards and many of the state’s standards.

the new administration’s vocal desire to return education administration to the states, we believe that if it is successful in

that endeavor, then paying more attention to state-level priorities will enhance the competitiveness and attractiveness of our products.

second initiative is to provide evidence that our products accomplish certain desired educational outcomes.

Many of the opportunities

that we see that are sponsored by a state entity require evidence-based solutions.

We anticipate that the evidence-based requirement

will grow over time, so we are commissioning studies to be done on a handful of our products to produce evidence of various positive

We are early in this process and do not expect to have the final results until early in calendar year 2026.

and Environmental Compliance

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day being a Saturday), at which point our securities became registered pursuant to Section 12(g) of the Exchange Act.

securities registered under Section 12(g) are subject to numerous regulatory requirements under the Exchange Act.

For example, we will

be subject to the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act creates a strong and independent accounting oversight board to oversee

the conduct of auditors of public companies and strengthens auditor independence.

It also requires steps to enhance the direct responsibility

of senior members of management for financial reporting and for the quality of financial disclosures made by public companies;

Issuers with securities

registered under Section 12(g) are subject to numerous regulatory requirements under the Exchange Act.

For example, we are subject to

the Sarbanes-Oxley Act of 2002.

The Sarbanes-Oxley Act creates a strong and independent accounting oversight board to oversee the conduct

of auditors of public companies and strengthens auditor independence.

It also requires steps to enhance the direct responsibility of

senior members of management for financial reporting and for the quality of financial disclosures made by public companies;

clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts;

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Commission at least 10 days prior to the date that definitive copies of this information are forwarded to our stockholders.

the effectiveness of our Form 10 Registration Statement, we are also be required to file annual reports on Form 10-K and quarterly reports

the effectiveness of our Form 10 Registration Statement, we also became required to file annual reports on Form 10-K and quarterly reports

on Form 10-Q with the Commission on a regular basis, and will be required to timely disclose certain material events (e.g., changes in

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secrets to competitors or other third parties.

In addition, courts outside the United States are sometimes less willing to protect trade

Moreover, the Company’s competitors may independently develop equivalent knowledge, methods, and know-how.

If we are unable

to defend our trade secrets from others use, or if our competitors develop equivalent knowledge, it could have a material adverse effect

on our business.

Any infringement of our proprietary rights could result in significant litigation costs, and any failure to adequately

protect our proprietary rights could result in our competitors offering similar products, potentially resulting in loss of a competitive

advantage and decreased revenue.

Existing patent, copyright, trademark, and trade secret laws afford only limited protection.

the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States.

we may not be able to protect our proprietary rights against unauthorized third-party use.

Enforcing a claim that a third party illegally

obtained and is using the Company’s trade secrets could be expensive and time-consuming, and the outcome of such a claim is unpredictable.

Litigation may be necessary in the future to protect our trade secrets or to determine the validity and scope of the proprietary rights

This litigation could result in substantial costs and diversion of resources and could materially adversely affect our future

operating results.

In addition, courts outside the United States are sometimes

less willing to protect trade secrets.

Moreover, the Company’s competitors may independently develop equivalent knowledge, methods,

and know-how.

If we are unable to defend our trade secrets from others use, or if our competitors develop equivalent knowledge, it could

have a material adverse effect on our business.

Any infringement of our proprietary rights could result in significant litigation costs,

and any failure to adequately protect our proprietary rights could result in our competitors offering similar products, potentially resulting

in loss of a competitive advantage and decreased revenue.

Existing patent, copyright, trademark, and trade secret laws afford only limited

In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of

the United States.

Therefore, we may not be able to protect our proprietary rights against unauthorized third-party use.

claim that a third party illegally obtained and is using the Company’s trade secrets could be expensive and time-consuming, and

the outcome of such a claim is unpredictable.

Litigation may be necessary in the future to protect our trade secrets or to determine

the validity and scope of the proprietary rights of others.

This litigation could result in substantial costs and diversion of resources

and could materially adversely affect our future operating results.

a smaller reporting company, we are not required to respond to this Item.

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

What changed 10-K

Item 1. Business