Amesite(AMST) - 2023 Q3 - Quarterly Report

PART I – FINANCIAL INFORMATION Financial Statements The company presents unaudited condensed financial statements as of March 31, 2023, reporting a reduced net loss and decreased total assets primarily due to cash used in operations Condensed Balance Sheets Total assets decreased to $7.27 million as of March 31, 2023, from $8.88 million at June 30, 2022, driven by reduced cash and cash equivalents Condensed Balance Sheet Highlights (unaudited) | Account | March 31, 2023 ($) | June 30, 2022 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,128,610 | $7,155,367 | | Total current assets | $6,346,356 | $7,729,996 | | Total assets | $7,268,354 | $8,883,860 | | Liabilities & Equity | | | | Total current liabilities | $311,171 | $748,108 | | Total stockholders' equity | $6,957,183 | $8,135,752 | | Total liabilities and stockholders' equity | $7,268,354 | $8,883,860 | Condensed Statements of Operations Net revenue for the nine months ended March 31, 2023, was $722,010, with a net loss of $3.2 million, reflecting significant reductions in operating expenses and net loss due to cost-cutting Statement of Operations Summary (unaudited) | Metric | Three Months Ended Mar 31, 2023 ($) | Three Months Ended Mar 31, 2022 ($) | Nine Months Ended Mar 31, 2023 ($) | Nine Months Ended Mar 31, 2022 ($) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $204,589 | $209,518 | $722,010 | $539,383 | | Total Operating Expenses | $1,150,067 | $2,421,788 | $3,961,738 | $7,457,922 | | Loss from Operations | ($945,478) | ($2,212,270) | ($3,239,728) | ($6,918,539) | | Net Loss | ($927,997) | ($2,216,112) | ($3,204,819) | ($6,916,507) | | Basic and Diluted Loss Per Share | ($0.37) | ($1.12) | ($1.31) | ($3.80) | Condensed Statements of Cash Flows Net cash used in operating activities for the nine months ended March 31, 2023, improved to $2.58 million, with cash and cash equivalents decreasing by $1.03 million to end at $6.13 million Cash Flow Summary for Nine Months Ended March 31 (unaudited) | Cash Flow Activity | 2023 ($) | 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,583,495) | ($5,088,820) | | Net cash used in investing activities | ($293,763) | ($588,390) | | Net cash from financing activities | $1,850,501 | $3,869,550 | | Net (decrease) in cash | ($1,026,757) | ($1,807,660) | | Cash and cash equivalents, end of period | $6,128,610 | $8,905,431 | Notes to Condensed Financial Statements Notes detail the company's AI-driven platform business, key accounting policies including revenue recognition and software capitalization, and significant customer concentration - The company is an artificial intelligence-driven platform and course designer for businesses, universities, and K-12 schools[20] - Revenue is primarily derived from annual licensing arrangements and is recognized ratably over the contract term. For the nine months ended March 31, 2023, three customers accounted for about 70% of total revenue, with one customer representing 34%[36][38] - The company capitalizes costs for internal-use software development and amortizes them over three years. Amortization expense for the nine months ended March 31, 2023, was approximately $507,000[34] - As of March 31, 2023, the company had approximately $30.8 million of net operating loss carryforwards available to reduce future income taxes[57] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the significant reduction in net loss due to cost-saving measures, revenue growth driven by contract renewals, and the company's sufficient cash position for future operations Results of Operations Revenue for the nine months ended March 31, 2023, increased to $722,010, while operating expenses significantly decreased across all categories, leading to a substantially lower net loss of $3.2 million Revenue Comparison (unaudited) | Period | Revenue ($) | Prior Period Revenue ($) | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended Mar 31, 2023 | $204,589 | $209,518 | -2.3% | | Nine Months Ended Mar 31, 2023 | $722,010 | $539,383 | +33.9% | Operating Expense Comparison - Nine Months Ended March 31 (unaudited) | Expense Category | 2023 ($) | 2022 ($) | Change (%) | | :--- | :--- | :--- | :--- | | General and Administrative | $1,945,796 | $3,926,901 | -50.4% | | Technology and Content Development | $1,191,273 | $2,377,077 | -49.9% | | Sales and Marketing | $824,669 | $1,153,944 | -28.5% | - The decrease in operating expenses is primarily due to deliberate cost reductions, including lower headcount, as certain platform features are now complete and require less staffing to maintain[78][80] - Net loss for the nine months ended March 31, 2023, was $3.2 million, a significant improvement from the $6.9 million net loss in the same period of 2022, due to cost savings and more efficient operations[83] Financial Position, Liquidity, and Capital Resources The company's cash balance was $6.1 million as of March 31, 2023, with management believing it has sufficient liquidity for the next twelve months, alleviating going concern doubts - The company's cash balance was $6.1 million as of March 31, 2023[88] - In September 2022, the company closed a public offering of common stock and a private placement of warrants, receiving approximately $1.85 million in net proceeds[88] - Management believes it has sufficient cash to maintain planned operations for the next twelve months following the issuance of the financial statements[89] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - The Company is not required to provide the information required by this Item as it is a "smaller reporting company"[91] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2023, following remediation efforts for previously identified material weaknesses - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[91] - The company has taken steps to remediate previously identified material weaknesses, including a full risk assessment using the COSO framework, enhancing control activities, and implementing monitoring processes[92] PART II – OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - None[93] Risk Factors The company addresses its history of net losses, concluding that recent financing has alleviated substantial doubt about its ability to continue as a going concern - The company previously had substantial doubt about its ability to continue as a going concern due to a history of net losses[94] - After completing a public offering in September 2022 with net proceeds of $1.85 million, management has concluded that the current conditions no longer raise substantial doubt about its ability to continue as a going concern[95] [Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[95] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Key exhibits filed include certifications by the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[97]