United States Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 333-53458
PCS EDVENTURES!.COM, INC.
-------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
IDAHO 82-0475383
----- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
345 Bobwhite Court, Suite #200
Boise, Idaho 83706
------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (208) 343-3110
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
Check whether the Registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
18,080,646
June 30, 2003
Transitional Small Business Disclosure Format (Check One): Yes X No
--- ---
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003 and March 31, 2003
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Balance Sheets
ASSETS
June 30, March 31,
2003 2003
(Unaudited)
CURRENT ASSETS
Cash $ 30,041 $ 11,449
Accounts receivable 380,500 345,333
Inventory 2,835 2,073
Deferred costs 3,762 103,662
Debt extension costs, net 161 5,460
---------- ---------
Total Current Assets 417,299 467,977
---------- ---------
FIXED ASSETS (NET) 11,039 25,447
---------- ---------
OTHER ASSETS
Deposits 425 425
---------- ---------
Total Other Assets 425 425
---------- ---------
TOTAL ASSETS $ 428,763 $ 493,849
========== =========
The accompanying notes are an integral part of these consolidated financial
statements.
2
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
June 30, March 31,
2003 2003
(Unaudited)
CURRENT LIABILITIES
Bank overdraft $ - $ 8,053
Accounts payable 150,040 109,742
Wages payable 37,520 30,603
Payroll taxes payable 247,522 233,331
Accrued interest 35,210 55,035
Accrued expenses 137,751 170,328
Unearned revenue 374,389 382,489
Notes payable - related parties 165,882 165,882
Notes payable 663,626 762,859
---------- ----------
Total Current Liabilities 1,811,940 1,918,322
---------- ----------
Total Liabilities 1,811,940 1,918,322
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, no par value, authorized
50,000,000 shares; 18,080,646 and
17,832,301 shares issued and
outstanding, respectively 22,157,503 22,105,987
Accumulated deficit (23,540,680) (23,530,460)
----------- -----------
Total Stockholders' Equity (Deficit) (1,383,177) (1,424,473)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 428,763 $ 493,849
============ ===========
The accompanying notes are an integral part of these consolidated financial
statements.
3
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
2003 2002
REVENUE
Lab Revenue $ 449,126 $ 1,030,031
License Revenue 38,478 28,811
Subscription Revenue 3,750 3,794
------------ --------------
Total Revenues 491,354 1,062,636
------------ --------------
COST OF GOODS SOLD 185,266 361,149
------------ --------------
GROSS PROFIT 306,088 701,487
------------ --------------
OPERATING EXPENSES
Salaries and wages 127,641 144,619
Depreciation expense 14,408 20,708
General and administrative 148,979 226,693
------------ --------------
Total Operating Expenses 291,028 392,020
------------ --------------
OPERATING INCOME (LOSS) 15,060 309,467
------------ --------------
OTHER INCOME AND EXPENSES
Interest expense (25,280) (79,719)
------------ --------------
Total Other Income and Expenses (25,280) (79,719)
------------ --------------
NET (LOSS) BEFORE INCOME TAXES (10,220) 229,748
INCOME TAX EXPENSE (BENEFIT) - -
------------ --------------
NET INCOME (LOSS) $ (10,220) $ 229,748
============ ==============
BASIC INCOME (LOSS) PER SHARE $ (0.00) $ 0.02
============ ==============
DILUTED INCOME (LOSS) PER SHARE $ (0.00) $ 0.01
============ ==============
WEIGHTED AVERAGE NUMBER OF
BASIC SHARES OUTSTANDING 17,909,075 14,499,128
============ ==============
WEIGHTED AVERAGE NUMBER OF
DILUTED SHARES OUTSTANDING 17,909,075 18,231,793
============ ==============
The accompanying notes are an integral part of these consolidated financial
statements.
4
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)
Deferred
Common Shares Consulting Accumulated
Shares Amount Fees Deficit
Balance, March 31, 2001 12,383,959 $ 21,247,795 $(173,066)$ (21,515,949)
Common stock issued for
conversion of debt at
$0.25 per share 100,000 25,000 - -
Common stock issued for
conversion of warrants
at $0.75 per share 67,025 50,269 - -
Stock offering costs - (49,599) - -
Common stock issued for
services at $0.75 per
share 6,000 4,500 - -
Common stock issued for
cash at $0.10 per share 250,000 25,000 - -
Warrants issued in
conjunction with private
placement memorandum at
$0.73 per warrant - 191,634 - -
Common stock issued for
services at $0.28 per
share 20,000 5,600 - -
Common stock issued for
services at $0.30 per
share 15,000 4,500 - -
Common stock issued as
consideration for notes
payable at $0.28 per share 20,000 5,600 - -
Common stock issued for
conversion of payable at
$0.63 per share 75,538 47,774 - -
Common stock issued as
consideration for notes
payable at $0.30 per share 15,000 4,500 - -
Common stock issued for
cash at $0.10 per share 250,000 25,000 - -
Common stock issued as
consideration for notes
payable at $0.14 per share 59,000 8,430 - -
Amortization of expenses
prepaid with common stock - - 145,722 -
Net loss for the year ended
March 31, 2002 - - - (1,560,348)
Balance, March 31, 2002 13,261,522 $21,596,003 $ (27,344) $(23,076,297)
The accompanying notes are an integral part of these consolidated financial
statements.
5
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)(Continued)
Deferred
Common Shares Consulting Accumulated
Shares Amount Fees Deficit
Balance, March 31, 2002 13,261,522 $21,596,003 $ (27,344) $(23,076,297)
Common stock issued for
conversion of accounts
payable at $0.08 per
share (unaudited) 50,000 4,250 - -
Common stock issued for
conversion of accounts
payable at $0.30 per
share (unaudited) 15,000 4,500 - -
Common stock issued for
conversion of accounts
payable at $0.07 per
share (unaudited) 248,417 17,389 - -
Common stock issued for
prepaid services at $0.05
per share (unaudited) 515,000 27,500 (27,500) -
Common stock issued for
prepaid services at $0.07
per share (unaudited) 100,000 7,000 (7,000) -
Common stock issued for
services at $0.07 per
share (unaudited) 157,500 11,025 - -
Cancelled common stock
previously issued for
services that had not been
performed (unaudited) (20,000) - - -
Common stock issued for
conversion of debt at $0.13
per share (unaudited) 204,000 27,541 - -
Common stock issued for
conversion of warrants at
$0.01 per share (unaudited) 9,808 98 - -
Common stock issued for
services at $0.16 per share
(unaudited) 100,800 16,128 - -
Common stock issued for
conversion of warrants at
$0.01 per share (unaudited) 10,500 105 - -
Common stock issued for
extension of debt, valued
at an average of $0.17 per
share (unaudited) 233,250 41,353 - -
Common stock issued for
services at $0.16 per
share (unaudited) 78,125 12,500 - -
Common stock issued for
conversion of warrants
at $0.01 per share 13,055 131 - -
---------- ------------- --------- ------------
Balance Forward 14,976,977 $ 21,765,523 $ (61,844) $(23,076,297)
The accompanying notes are an integral part of these consolidated financial
statements.
6
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)(Continued)
Deferred
Common Shares Consulting Accumulated
Shares Amount Fees Deficit
Balance Forward 14,976,977 $ 21,765,523 $ (61,844) $(23,076,297)
Common stock issued for
conversion of warrants at
$0.01 per share 10,500 105 - -
Common stock issued for
prepaid services at $0.17
Per share 304,500 51,765 (51,765) -
Common stock issued for
conversion of accounts
payable at $0.07 per
share 181,289 11,888 - -
Options issued to
Directors for
accrued Director's Fees - 45,000 - -
Common stock issued for
services at $0.095 per
share 90,000 8,550 - -
Common stock issued for
services at $0.095 per
share 153,125 14,547 - -
Common stock issued for
services at $0.095 per
share 130,000 12,350 - -
Common stock issued for
conversion of debt at
$0.10 per share 1,290,000 129,000 - -
Common stock issued for
cash at $0.10 per share 670,000 67,000 - -
Common stock issued for
conversion of warrants at
$0.01 per share 25,910 259 - -
Amortization of deferred
consulting expense - - 113,609 -
Net loss for the year ended
March 31, 2003 - - - (454,163)
---------- ----------- --------- ------------
Balance, March 31, 2003 17,832,301 22,105,987 - (23,530,460)
Common stock issued for
conversion of debt and
interest at $0.09 per
share (unaudited) 35,000 3,150 - -
Options issued for
accrued directors fees
(unaudited) - 27,143 - -
---------- ----------- --------- ------------
Balance Forward 17,867,301 $22,136,280 $ - $(23,530,460)
---------- ----------- --------- ------------
The accompanying notes are an integral part of these consolidated financial
statements.
6
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)(Continued)
Deferred
Common Shares Consulting Accumulated
Shares Amount Fees Deficit
Balance Forward 17,867,301 $22,136,280 $ - $(23,530,460)
Common stock issued for
conversion of accounts
payable at $0.09 per
share (unaudited) 11,111 1,000 - -
Common stock issued to
related party for
conversion of accrued
interest at $0.10 per
share (unaudited) 202,234 20,223 - -
Net loss for the three
months ended June 30,
2003(unaudited) - - - (10,220)
---------- ----------- --------- ------------
Balance, June 30, 2003 18,080,646 $22,157,503 $ - $(23,540,680)
========== =========== ========= ============
The accompanying notes are an integral part of these consolidated financial
statements.
8
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
For the
Three Months Ended
June 30
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (10,220) $ 229,748
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation 14,408 20,708
Common stock issued for services - 27,153
Common stock issued for debt extensions - 41,353
Amortization of debt discount - 22,648
Amortization of debt offering and extension
costs 5,299 18,015
Amortization of deferred consulting costs - 32,469
Changes in operating assets and liabilities:
(Increase) in accounts receivable (35,167) (278,373)
(Increase) decrease in prepaid expenses 99,900 (1,786)
(Increase) in inventory (762) (9,142)
(Increase) in deposits - (1,425)
Increase (decrease) in accounts payable and
accrued liabilities 78,544 154,886
Increase (decrease) in interest payable (19,825) 6,285
(Decrease) in unearned revenue (8,100) (99,203)
--------- -----------
Net Cash Provided by Operating
Activities 124,077 163,336
--------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES - -
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) in cash overdraft (8,053) (44,722)
Payments to related parties - (10,000)
Payments on long term debt (164,811) (351,617)
Proceeds from long term debt 67,379 340,614
Debt extension costs - (50,982)
Proceeds from common stock - 203
---------- ----------
Net Cash Used by Financing
Activities (105,485) (116,504)
---------- ----------
INCREASE IN CASH 18,592 46,832
CASH AT BEGINNING OF PERIOD 11,449 1,046
---------- ----------
CASH AT END OF PERIOD $ 30,041 $ 47,878
========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
9
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
For the
Three Months Ended
June 30,
2003 2002
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of stock for payment on notes payable
and interest $ 23,373 $ 27,541
Common stock issued for services $ - $ 27,153
Common stock issued for payment on accounts
Payable $ 28,143 $ 26,139
Common stock issued for debt extensions $ - $ 41,353
Cash Paid For:
Interest $ 16,367 $ 28,485
Income taxes $ - $ -
The accompanying notes are an integral part of these consolidated financial
statements.
10
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2003 and March 31, 2003
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted in accordance with such rules and regulations.
The information furnished in the interim condensed consolidated financial
statements include normal recurring adjustments and reflects all adjustments,
which, in the opinion of management, are necessary for a fair presentation of
such financial statements. Although management believes the disclosures and
information presented are adequate to make the information not misleading, it
is suggested that these interim condensed consolidated financial statements be
read in conjunction with the Company's most recent audited financial
statements and notes thereto included in its March 31, 2003 Annual Report on
Form 10-KSB. Operating results for the three months ended June 30, 2003 are
not necessarily indicative of the results that may be expected for the year
ending March 31, 2004.
NOTE 2 - GOING CONCERN
The Company's consolidated financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company does not have significant
cash or other material assets, nor does it have an established source of
revenues sufficient to cover its operating costs. Additionally, the Company
has accumulated significant losses, has negative working capital, and a
deficit in stockholders' equity. All of these items raise substantial doubt
about its ability to continue as a going concern. The Company has expanded
its product line to include three additional educational labs, which they
believe will significantly boost future revenues. The Company also intends to
continue offerings of its common stock to raise the capital necessary to cover
operating costs not provided for by current revenues. The ability of the
Company to continue as a going concern is dependent upon its ability to
successfully accomplish this plan and to eventually 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.
NOTE 3 - DILUTIVE INSTRUMENTS
a. Stock Options
The Company applied Accounting Principles Board ("APB") Opinion 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for all stock option plans. Under APB Opinion 25, compensation
cost is recognized for stock options granted to employees when the option
price is less than the market price of the underlying common stock on the date
of grant.
11
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2003 and March 31, 2003
NOTE 3 - DILUTIVE INSTRUMENTS (Continued)
FASB Statement 123, "Accounting for Stock-Based Compensation" (SFAS No. 123"),
requires the Company to provide proforma information regarding net income and
net income per share as if compensation costs for the Company's stock option
plans and other stock awards had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The Company estimates the fair
value of each stock award at the grant date by using the Black-Scholes option
pricing model with the following weighted average assumptions used for grants,
respectively; dividend yield of zero percent for all years; expected
volatility of 84% to 128% percent for all years; risk-free interest rates of
3% to 6%, and expected lives of 3 to 10 years.
For the Three Months Ended
June 30,
2003 2002
Net income (loss):
As reported $ (10,220) $ 229,748
Pro Forma (80,921) 74,766
Net income (loss) per share:
As reported $ (0.00) $ 0.02
Pro Forma (0.01) 0.01
The Company has granted the following options as of June 30, 2003:
Date of Exercise Exercise Amount
Description Grant Number Price Exercised
----------- ------- -------- -------- ---------
1) Consultant 9-20-00 200,000 $ 0.50 0
2) Employees 9-01-00 200,000 $ 0.75 0
3) Director 10-01-00 200,000 $ 0.75 0
4) Employee 1-05-01 25,000 $ 0.75 0
5) Employee 6-15-01 25,000 $ 0.75 0
6) Employee 10-24-01 50,000 $ 0.30 0
7) Employee 12-1-01 24,230 $ 0.15 0
8) Board Members 12-10-01 1,000,000 $ 0.30 0
9) Board Members 6-03-02 1,000,000 $ 0.16 0
10) Employees 7-01-02 335,000 $ 0.16 0
11) Employees 7-15-02 15,000 $ 0.16 0
12) Employees 8-15-02 5,000 $ 0.16 0
13) Board Members 10-21-02 499,998 $ 0.09 0
14) Board Members 5-15-03 892,855 $ 0.07 0
15) Employee 5-20-03 100,000 $ 0.07 0
---------
4,572,083
=========
12
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2003 and March 31, 2003
NOTE 3 - DILUTIVE INSTRUMENTS (Continued)
a. Stock Options (Continued)
Risk-Free
Fair Interest Expected Expected
Description Value Rate Life Volatility
----------- ----- --------- -------- ----------
1) Consultant $ 0.42 6.15% 3 89.37%
2) Employees $ 0.52 6.21% 3 85.69%
3) Director $ 0.52 6.21% 3 84.39%
4) Employee $ 0.52 6.21% 3 84.39%
5) Employee $ 0.39 3.76% 3 76.69%
6) Employee $ 0.19 3.76% 3 100.52%
7) Employee $ 0.14 3.76% 3 99.80%
8) Board Members $ 0.20 5.69% 10 99.80%
9) Board Members $ 0.15 5.48% 10 128.91%
10) Employees $ 0.14 2.84% 3.5 157.77%
11) Employees $ 0.14 2.84% 3.5 152.96%
12) Employees $ 0.14 2.84% 3.3 163.78%
13) Board Members $ 0.09 3.94% 10 158.83%
14) Board Members $ 0.09 3.94% 10 151.61%
15) Employee $ 0.06 2.54 4 151.61%
On June 15, 2001, the Company granted 25,000 options to an employee. These
options had an exercise price of $ 0.75 per option and a three year life with
a fair value determined by Black Scholes of $0.39.
On December 1, 2001, the Company granted employees 24,230 options to
employees. The options have an exercise price of $0.15 per share. As the
exercise price of the shares was less than the trading price of the Company's
common shares on the date of issuance, the Company has recognized $1,696 of
expense related to these options.
On December 5, 2001, the Company's Board of Directors approved the granting of
1,050,000 options to employees and board members. On October 24, 2001, the
Company granted 50,000 shares to an employee. On December 10, 2001, the
Company granted 1,000,000 shares to board members. Each option granted has an
exercise price of $0.30 and a fair value determined by Black Scholes of $0.14
and $0.20, respectively.
On May 14, 2002, the Company authorized the issuance of 1,000,000 options to
members of the board of directors. These options vested immediately and have
an exercise price of $0.16 per share and are exercisable for ten years. All
1,000,000 of the options were granted on June 3, 2002. The options were
determined to have a fair value of $0.15 per share using the Black-Scholes
valuation model. The granting of these options had a $154,983 impact on the
pro forma net income of for the Company.
13
PCS EDVENTURES!.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2003 and March 31, 2002
NOTE 3 - DILUTIVE INSTRUMENTS (Continued)
a. Stock Options (Continued)
On May 14, 2002, the Company also authorized the issuance of 500,000 options
to employees. These options vest over three and one-half years and have an
exercise price of $0.16 per share. The Company granted 355,000 of the options
to employees during July and August of 2002. The options were determined to
have a fair value of $0.14 per share using the Black-Scholes valuation model.
As none of these options have vested as of March 31, 2003, their granting had
no impact on the pro form net income of the Company.
On October 21, 2002, the Company authorized and issued 499,998 options to
Board Members as payment for accrued directors fees. These options vested
immediately and have an exercise price of $0.09 per share. The options were
determined to have a fair value of $0.09 per share using the Black-Scholes
valuation model. The granting of these options had a $44,556 impact on the
pro forma net income of for the Company.
On May 15, 2003, the Company authorized and issued 892,855 options to Board
Members as payment for accrued directors fees. These options vested
immediately and have an exercise price of $0.07 per share. The options were
determined to have a fair value of $0.09 per share using the Black-Scholes
valuation model. The intrinsic value of the shares, of $0.02 per share or
$17,857, was recorded as an offset to the accrued liability with the net
balance being applied to equity. The granting of these options had a $61,545
impact on the pro forma net income of for the Company.
On May 20, 3003, the Company authorized and issued 100,000 options to an
employee. These options vest over three years and have an exercise price of
$0.07 per share. The options were determined to have a fair value of $0.06
per share using the Black-Scholes valuation model. The granting of these
options had a $5,725 impact on the pro forma net income of for the Company.
b. Warrants
During the year ended March 31, 2002, the Company issued warrants allowing the
holders to purchase 263,607 shares of the Company's common stock. The
warrants were issued in conjunction with the private placement memorandum and
are exercisable at a price of $0.01 per share for two years. The fair value
of the warrants, as determined by Black Scholes, was $191,634, and was
recorded as debt discount. This discount has been fully amortized as of March
31, 2003.
During the year ended March 31, 2003, 69,773 of these warrants were exercised
and converted into an equivalent number of common shares in exchange for $698
in cash.
14
Item 2. Management's Discussion and Analysis or Plan of Operation.
--------------------------------------------------------------------
Results of Operations.
----------------------
Three months ended June 30, 2003, compared to three months ended June 30,
2002.
-----
Revenues for the three month period ended June 30, 2003, decreased to
$491,354 as compared to $1,062,636 for the three month period ended June 30,
2002. Revenues decreased due to decreased lab sales over the same period last
year.
General and administrative costs have decreased to $148,979 for the
three month period ended June 30, 2003, as compared to $226,693 for the
three month period ended June 30, 2002.
Interest expense for the three month period ended June 30, 2003,
decreased to $25,280 as compared to $79,719 for the three month period ended
June 30, 2002.
We had a net loss of $(10,220) for the three months ended June 30,
2003, as compared to a net income of $229,748 for the quarterly period
ended June 30, 2002.
Liquidity and Capital Resources.
--------------------------------
We had $30,041 in cash at June 30, 2003. Management believes that
the cash received from delivered sales orders as well as continued private
exempt offerings of our common stock, will be sufficient to meet our operating
expenses.
Item 3. Controls and Procedures.
----------------------------------
(a) Evaluation of Disclosure Controls and Procedures
PCS's Chief Executive Officer and Chief Financial Officer have evaluated
our Company's disclosure controls and procedures as of August 18, 2003, and
they have concluded that these controls and procedures are effective.
(b) Changes in Internal Controls
There are no significant changes in internal controls or in other factors
that could significantly affect these controls subsequent to August 18, 2003.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
----------------------------
Warren Black v. PCS.
--------------------
On January 18, 2002, Warren Black, a former independent contractor for
the Company, filed a complaint against the Company alleging breach of
contract. Mr. Black seeks the return of certain software products that he
claimed to have provided the Company during his employment, or their monetary
equivalent, which he claims to be $15,000. The Company settled this action in
February 2003. Per the terms of the settlement agreement, the Company agreed
to issue Mr. Black a $6,000 note in full satisfaction of his claim. The note
is payable in quarterly installments of $1,500 and accrues interest at 8.0%
per annum. The Company made a payment of $1,500 as of June 30, 2003.
Item 2. Changes in Securities and Use of Proceeds.
----------------------------------------------------
Sales of Unregistered Securities During the Last Quarter.
---------------------------------------------------------
Description Shares Amount
----------- ------ ------
Common stock issued for conversion of
debt and interest at $0.09 per share 35,000 3,150.00
Common stock issued for conversion of
accounts payable at $0.09 per share 11,111 1,000.00
Common stock issued to related party for
conversion of accrued interest at $0.10
per share 202,234 20,223.00
-------
Total 248,345
Item 3. Defaults Upon Senior Securities.
------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
--------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
----------------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
-------------------------------------------
(a) Exhibits.
31.1 302 Certification of Anthony A. Maher
31.2 302 Certification of Christina M. Vaughn
32 906 Certifications
SB-2 Registration Statement Filed with an Effective Date
of May 11, 2001*
* Incorporated by Reference.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PCS EDVENTURES.COM, INC.
Date: 8/19/03 By:/s/Anthony A. Maher
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Anthony A. Maher
Chief Executive Officer, President and
Chairman of the Board of Directors
Date: 8/19/03 By:/s/Christina M. Vaughn
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Christina M. Vaughn
Chief Financial Officer
Date: 8/19/03 By:/s/Roy M. Svee
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Roy M. Svee
Treasurer and Director