What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-06-30 compared with 2024-06-28 · 109 added, 77 removed, 125 unchanged (60% of the section changed)

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rate fluctuation, reduced product demand, increased competition, inability to produce required capacity, unavailability of financing,

government action, weather conditions and other uncertainties, including those detailed in our SEC filings.

We assume no duty to update

forward-looking statements to reflect events or circumstances after the date of such statements.

following discussion should be read in conjunction with Item 8, Financial Statements, in Part II of this Annual Report.

government action, weather conditions, and other uncertainties, including those detailed in our Commission filings and at the forepart of this

Annual Report.

We assume no duty to update forward-looking statements to reflect events or circumstances after the date of such statements.

following discussion should be read in conjunction with our financial statements contained in Part II, Item 8, Financial Statements ,

below, of this Annual Report.

of Current and Planned Operations

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sells STEM/STEAM products to educational and recreational entities serving youth.

At this time, we do not attempt to

align our products to fit in the classroom setting although we are aware that some of our customers use our products to fill enrichment

time blocks in the classroom during formal school time.

Classroom curriculum must align with specific state standards to be considered

Each state has their own unique set of standards, making classroom curriculum development a state by-state endeavor.

the other hand, out of school programs are not subject to state governmental standard alignments, although these programs often require

that educational programs align with various sets of state or national educational standards.

This difference makes it easier to penetrate

out-of-school programs, as more freedoms exist for curriculum development.

We focus our efforts on these out-of-school programs, which

include summer school, summer camps, YMCA programs, Boys and Girls club programs, and various other programs offered outside of the classroom,

at all times of the year, that are too numerous to list.

Oftentimes, these programs are sponsored, administered and/or supported by local

school districts, and we employ considerable efforts to build relationships with these types of school districts to provide desired programing

for their out-of-school programs.

The majority of the time, the out-of-school programs offered are funded with grants;

however, some

programs are run on a for-profit basis.

The Company sells to all of these types of entities.

Because the majority of our customers

work in out-of-school-time settings, we have not attempted to align our products to fit in the classroom setting, until recently.

curriculum must promote academic achievement through rigorous alignment with specific state standards to be considered for use.

state has its own unique set of standards, making classroom curriculum development a state by-state endeavor.

the other hand, out of school programs focus more broadly on the goals of engagement, career exploration and development of 21 st

century skills.

This difference makes it easier to penetrate out-of-school programs, as more freedoms exist for curriculum development.

We focus our efforts on these out-of-school programs, which include summer school, summer camps, YMCA programs, Boys and Girls club programs,

and various other programs offered outside of the classroom, at all times of the year, that are too numerous to list.

Oftentimes, these

programs are sponsored, administered, and/or supported by local school districts, and we employ considerable efforts to build relationships

with these types of school districts to provide desired programing for their out-of-school programs.

The majority of the time, the out-of-school

programs offered are funded with grants;

however, some programs are run on a for-profit basis.

The Company sells to all of these types

given the new administration’s stated goals of removing federal influence and administration from education, and returning those

functions to the states, we are now considering which of our products would be adaptable to the educational standards of certain larger

We intend to continue to weigh state-level priorities much more heavily in the development of future products as well.

a transition from federal dominance to state dominance of the application of educational standards to curriculum as likely, albeit over

a long time frame, and we are adapting our product development to this change in our market.

feedback also indicates that products that have evidence of their effectiveness are increasingly being demanded, especially in state-funded

programs and larger programs.

While we maintain a library of the evidence we have accumulated about the outcomes one can expect when

using our products, and while this library of evidence has helped us win larger orders, we believe that expanding this library and upgrading

the tiers of evidence we have will produce meaningful benefits for future sales.

have engaged various firms to help us generate more compelling evidence of our products’ effectiveness.

We are early in this process,

but we intend to substantially build out our library of evidence of our products’ effectiveness.

The course we take to accomplish

this endeavor will depend on our experiences with these early initiatives.

offer professional development training for instructors using our products, and typically charge a fee for this service, with the fee

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nature of our target market produces considerable seasonality for the Company’s revenue.

The quarters ended June 30 and September

30 tend to be the peak of this seasonality (with the quarter ended March 31 being close to these quarters), while the quarter ended December

31 tends to be the low point of our seasonality.

The quarters ending June 30 and September

30 tend to be the peak of this seasonality (with the quarter ending March 31 being close to these quarters), while the quarter ending

December 31 tends to be the low point of our seasonality.

The Table below reflects this seasonality.

Quarterly Revenue

Company, through winning a competitive “Request For Proposal,” added the Air Force Junior Reserve Officers’ Training

Corp (“AFJROTC”) as a customer in the second half of calendar year 2022.

We experienced elevated sales due to the fulfillment

of the AFJROTC orders for the quarters ended December 31, 2022, March 31, 2023, and September 30, 2023.

One of the AFJROTC revenue quarters

was December 31, 2022, which corresponds with the lowest seasonal revenue quarter, so the effects of seasonality in 2022 was not as readily

apparent as in other calendar years.

The table below removes the AFJROTC revenue to highlight the seasonality that the Company experiences.

Quarterly Revenue

Less Air Force JROTC Revenue

the quarter ended December 31, we focused on product development, restocking inventory, and general planning for the next year.

marketing activities remain fairly constant throughout the year.

the quarter ending December 31, we focus on product development, restocking inventory, and general planning for the next year.

and marketing activities remain fairly constant throughout the year.

of Operations

the year ended March 31, 2025, our revenue was $7,421,228 compared to $9,094,466 for the year ended March 31, 2024.

Company has been soliciting larger customers for over two years and has seen some success.

There were five (5)

factors that negatively impacted our revenue in fiscal year 2025 versus that in fiscal year 2024.

did not win an Iowa STEM Scale-Up contract in fiscal year 2025 and reported no revenue from that customer.

In fiscal year 2024, our

revenue from our Iowa STEM Scale-Up contract was $823,143.

In fiscal year 2023, our revenue from this customer was $467,457.

a contract for fiscal year 2026 and expect associated revenue for this contract to be closer to our fiscal year 2023 experience.

Catapult order was significantly less in fiscal year 2025 versus that of fiscal year 2024.

Catapult administers summer programming

in Missouri due to the state’s public funding of such programs.

They experience annual fluctuations in their customer base,

and they inventory our products over the course of the year.

Thus, seasons when their customer base is down and when their inventory

of our products is high produce smaller orders than seasons when their customer base is up and they have a low inventory of our products.

We believe that their order placed with us in fiscal year 2025, in the aggregate amount of $587,100, was under the former conditions,

and that their order placed with us in fiscal year 2024, in the amount of $1,286,695, was under the latter conditions.

Air Force JROTC (“AFJROTC”) contract produces less revenue as the contract ages.

The AFJROTC has approximately 884 sites, and we have

sold into approximately 642 of them thus far.

expiration of ESSER funds on September 30, 2024, eliminated a key funding stream for our products during the second half of our fiscal

change in Presidential administration created significant changes in the education market regarding funding streams, administration

of grants, and general federal influence over education.

These changes were and still are disruptive to educational decision making

and, thus, disruptive to our market.

Company has been soliciting larger customers for over three (3) years and has seen some success.

The AFJROTC is the Company’s largest

success by a wide margin, producing revenue of $1,269,036 in the year ended March 31, 2024, and $2,655,336 in the year ended March 31,

have experienced other successes in its campaign to find larger customers.

success by a wide margin, producing revenue of $453,314 in the year ended March 31, 2025, $1,269,036 in the year ended March 31, 2024,

and $2,655,336 in the year ended March 31, 2023.

have experienced other successes in our campaign to find larger customers.

The table below shows customer transactions by size for the

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During inflationary environments, when the price level of the Company’s

raw materials is increasing, the Company must absorb that negative impact to gross margins until it can reprice its products at the beginning

raw materials is increasing, the Company must absorb that negative impact to gross margins until we can reprice our products at the beginning

of the next calendar year.

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issues with raw materials

percentage of reseller sales

expenses are divided into two categories – salary + wages, and general + administrative.

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and wages were $1,914,941 for the year ended March 31, 2025, compared to $1,778,946 for the year ended March 31, 2024.

As of March 31,

2025, we had 25 full-time employees.

As of March 31, 2024, we had 22 full-time employees.

and administrative expenses include all operating expenses outside of salaries and wages.

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and warehouse infrastructure expenses.

of these expenses are not correlated with changes in revenue, but they tend to increase over time.

General and administrative expenses

were $1,148,652 for the year ended March 31, 2024.

of these expenses are not strongly correlated with changes in revenue, but they tend to increase over time.

General and administrative

expenses were $1,439,014 for the year ended March 31, 2025.

For the year ended March 31, 2024, general and administrative expenses were

Company currently leases a 10,000 square foot facility which ends in October of 2024.

We are currently looking for new space, with the

expectation that we need at least double the amount of space we currently occupy to accommodate our needs in achieving our growth expectations.

This will cause general and administrative expenses to increase noticeably, as will the additional expenses associated with being a Commission

reporting company.

In late October and early November of 2024, we ended our lease on our 10,000 square foot combined warehouse and office facility,

and entered into two (2) new leases - a 20,880 square foot warehouse and R&D facility, and a 5,016 square foot corporate office facility.

This expansion was the primary driver in the increase in general and administrative expenses in fiscal year 2025 versus fiscal year 2024,

although general inflation also played a significant role.

Operating expenses for the year ended March 31, 2025, were $3,353,955, compared to $2,927,598 for the year ended March 31, 2024.

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income and expenses are those outside of the Company’s ordinary course of business.

During Covid, the Paycheck Protection Program

was offered to companies to keep employees on the payroll during the lockdowns.

The Company operated throughout this environment and

never initiated action to reduce employee headcount.

The financial benefits of the Payroll Protection Program was an item disclosed in

the other income and expenses category.

Likewise, the Employee Retention Tax Credit was offered for similar purposes, and the Company

qualified for those benefits, which are also disclosed under other income and expenses.

During the Covid pandemic, the Employee Retention

Tax Credit was offered to companies to keep employees on the payroll during the lockdowns.

The Company qualified for those benefits,

which are disclosed under other income and expenses.

income and interest expense are also disclosed under other income and expenses.

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government securities.

The ticker symbol of this fund is “VMFXX.” The Company’s switch from net debtor to net creditor explains the swing

from interest expense to interest income observable for the years ended March 31, 2024, and March 31, 2023.

the year ended March 31, 2024, other income and expenses were $104,328, with interest income totaling $48,904.

For the year ended March

31, 2023, other income and expenses were ($47,745), with interest expense totaling ($142,605).

The ticker symbol of this fund is “VMFXX.”

the year ended March 31, 2025, other income and expenses were $127,930, with net interest income comprising the entire amount.

year ended March 31, 2024, other income and expenses were $104,328, with interest income totaling $48,904.

Income Before Tax

the year ended March 31, 2025, net income before tax was $1,211,263 versus $2,911,395 for the year ended March 31, 2024.

experienced a higher sales level in fiscal year 2024 versus that of fiscal year 2023, which largely accounts for the difference in net

experienced a lower sales level in fiscal year 2025 versus that of fiscal year 2024, which largely accounts for the difference in net

income before tax for these two periods.

Operating expenses in fiscal year 2025 were also higher than those for fiscal year 2024.

Company has significant net operating losses which arose due to past losses.

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of approximately $8.0 million that may be offset against future taxable income.

The federal and state net operating losses and tax credits

expire in years beginning in 2026.

The federal net operating losses and tax credits expire

in years beginning in 2029.

The state net operating losses and tax credits expire in years beginning in 2026.

to fiscal year 2023, the Company offset its potential tax benefit from the operating loss carry-forwards with a valuation allowance in

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The valuation allowance was fully removed as of March 31, 2024, resulting in a tax benefit of $1,529,793 for fiscal

Once the valuation allowance was fully removed, a provision for income taxes was disclosed.

For the fiscal year ending March

31, 2025, the Company’s provision for income taxes was ($264,865).

the year ended March 31, 2025, net income was $946,865 versus $4,441,188 for the year ended March 31, 2024.

Removing the tax loss carry-forward

valuation allowance added $1,529,793 to net income for the year ended March 31, 2024, and $1,011,466 for the year ended March 31, 2023.

valuation allowance added $1,529,793 to net income for the year ended March 31, 2024.

and Capital Resources

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year ended March 31, 2024.

Increases in accounts receivable and inventory as of March 31, 2024, compared to March 31, 2023, were the

two largest factors in the difference in cash flow from operations for the two periods.

A decrease in accounts receivable and prepaid expenses, and a smaller increase in inventory as of March 31,

2025, compared to March 31, 2024, were the largest factors behind the increase of cash flow from operations in fiscal year 2025 over

that in fiscal year 2024.

of March 31, 2025, total current assets were $5,918,984 and total current liabilities were $326,439, resulting in working capital of

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The improvements

in working capital, current ratio, and cash on hand are all due to a significant increase in net income during fiscal year 2024 versus

that for fiscal year 2023.

in working capital, current ratio, and cash on hand are largely due to the realization of $1,675,859 of accounts receivable during fiscal

year 2025 that were on the books at the end of fiscal year 2024.

Flow from Investing Activities

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for the year ended March 31, 2024.

We purchased office equipment during these periods which accounts for the activity.

We purchased warehouse and office equipment related to our move from one facility to two during fiscal

year 2025, which accounts for the increase in cash used by investing activities.

Flow from Financing Activities

the year ended March 31, 2025, cash used by financing activities was $547,713.

We made the following common stock repurchase transactions

during fiscal year 2025, which accounts for this activity:

Total Consideration

the year ended March 31, 2024, cash used by financing activities was $64,933.

We purchased 998,985 shares of our common stock for $0.065

per share, which accounts for this activity.

For the year ended March 31, 2023, cash used by financing activities was $1,463,327.

this period, principal payments on debt accounted for $1,493,327 of the cash used by financing activities whereas we received $30,000

from the sale of 1.25 million shares of stock related to the exercise of 1,000,000 options by Michael J.

Bledsoe, our President, and

250,000 options by Michelle Fisher, our Director of Curriculum.

Sheet Arrangements

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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 7. Management’s Discussion and Analysis