| Significant Accounting Policies | Note
2 - Significant Accounting Policies Basis
of Presentation The
condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally
accepted in the United States of America ("GAAP") and considering the requirements of the United States Securities and
Exchange Commission ("SEC"). The Company has a fiscal year with a June 30 year end. In the opinion of management,
the financial statements of the Company as of December 31, 2018 and for the three and six-month periods ended December 31, 2018
include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair
presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full
year. Certain information and footnote
disclosures normally included in financial statements prepared in accordance with GAAP have been condensed in or omitted from this
report pursuant to the rules and regulations of the SEC. These financial statements should be read together with the condensed
consolidated financial statements and notes thereto included in the Company's Transition on Form 10-K for the year ended
June 30, 2018. Principles
of Consolidation The
condensed consolidated financial statements of the Company include the accounts of Amesite, Inc. and its wholly owned subsidiary,
Amesite Operating Company. All material intercompany accounts and transactions have been eliminated in consolidation. Use
of Estimates The
preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates. Fair
Value Measurements Accounting
standards require certain assets and liabilities be reported at fair value in the financial statements and provide a framework
for establishing that fair value. The framework for determining fair value is based on a hierarchy that prioritizes the inputs
and valuation techniques used to measure fair value. Fair
values determined by Level 1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has
the ability to access. Fair
values determined by Level 2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs
include quoted prices for similar assets and liabilities in active markets and other inputs such as interest rates and yield curves
that are observable at commonly quoted intervals. Level
3 inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity
for the related asset. These Level 3 fair value measurements are based primarily on management's own estimates using pricing
models, discounted cash flow methodologies, or similar techniques. In
instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements
in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company's assessment
of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to
each asset or liability. Cash
Equivalents The
Company considers all investments with an original maturity of three months or less when purchased to be cash equivalents. The
total amount of bank deposits (checking, savings, and investment accounts) that was insured by the FDIC at year end was $250,000. Property
and Equipment Property
and equipment are recorded at cost. The straight-line method is used for computing depreciation and amortization. Assets are depreciated
over their estimated useful lives. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length
of the related leases or the estimated useful lives of the assets. Costs of maintenance and repairs are charged to expense when
incurred.
Depreciable Life - Years
Leasehold improvements Shorter of estimated lease term or 10 years
Furniture and fixtures 7 years
Computer equipment and software 5 years Capitalized
Software Costs The Company capitalizes significant
costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and
payroll and payroll-related costs for employees incurred in developing internal use computer software once final selection of the
software is made. Costs incurred prior to the final selection of software and costs not qualifying for capitalization are charged
to expense. The Company began amortizing the first generation of its platform on October 1, 2018 over a period of three years and
recognized amortization expense of approximately $26,000 for the three and six-month periods ended December 31, 2018. Income
Taxes A
current tax liability or asset is recognized for the estimated taxes payable or refundable on tax returns for the year. Deferred
tax liabilities or assets are recognized for the estimated future tax effects of temporary differences between financial reporting
and tax accounting. Deferred
tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets
will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the consolidated statement of operations in the period that includes the
enactment date. Risks
and Uncertainties The
Company intends to operate in an industry subject to rapid change. The Company's operations will be subject to significant risk
and uncertainties including financial, operational, technological, and other risks associated with an early stage company, including
the potential risk of business failure. The
accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going
concern. The
Company has incurred losses since inception, is still in the early stages of developing its service platform, and has not completed
its efforts to establish a stabilized source of revenues sufficient to cover costs over an extended period of time. These factors
raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as
a going concern is dependent on its ability to raise additional capital and implement its business plan. Despite management's
ongoing efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially
viable. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Research
and Development Research and development expenditures
are charged to expense as incurred. Research and development expense of approximately $36,000 and $94,000 was charged to expense
during the three and six-months ended December 31, 2018, respectively. Net
Loss per Share Basic net loss per share is computed
by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period.
Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods
such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting
period. For the three and six-months ended December 31, 2018, the Company had 1,067,375 and 292,114 potentially dilutive shares
of common stock related to common stock options and common stock warrants, as determined using the if-converted method. For the
three and six-months ended December 31, 2018, the dilutive effect of common stock options and common stock warrants has not been
included in the average shares outstanding for the calculation of net loss per share as the effect would be anti-dilutive as a
result of our net losses in this period. Stock-Based
Payments Financial
Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 "Compensation-Stock
Compensation" requires companies to measure the cost of employee services received in exchange for the award of equity instruments
based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which
an employee is required to provide services in exchange for the award. The Company accounts for shares of common stock, stock
options and warrants issued to employees based on the fair value of the stock, stock option or warrant, if that value is more
reliably measurable than the fair value of the consideration or services received. The Company accounts for stock
options and restricted shares of common stock issued to non-employees in accordance with the FASB ASC Subtopic 505-50 "Equity-Based
Payments to Non-Employees". Accordingly, the fair value of the stock compensation issued to non-employees is based upon the
measurement date as determined at the earlier of either a) the date at which a performance commitment is reached, or b) the date
which the necessary performance to earn the equity instruments is complete. As a measurement date has not yet been reached for
the stock options outstanding held by non-employees, the Company remeasures these outstanding options to fair value at each reporting
period. The measurement date for all outstanding restricted shares may not be reached until the contractual end of the contract
in September 2019. Accordingly, the Company has estimated the fair value of those services performed through December 31, 2018,
and recorded an expense in the condensed consolidated statements of operations. Upcoming
Accounting Pronouncements In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition In
February 2016 the FASB issued ASU 2016-02, Leases (ASU 2016-02), which requires lessees to recognize most leases on the balance
sheet thereby resulting in the recognition of lease assets and liabilities for those leases currently classified as operating
leases. ASU 2016-02 is effective beginning July 1, 2020 with early adoption permitted. The Company is continuing to assess the
impact of ASU 2016-02 with respect to implementation activities to permit adoption on July 1, 2019. The Company's primary impact
to its consolidated financial position upon adoption will be the recognition, on a discounted basis, of minimum commitments under
noncancelable operating leases on its consolidated balance sheet resulting in the recording of right of use assets and lease obligations.
Current minimum commitments under noncancelable operating leases are disclosed in Note 5. |
