| Significant Accounting Policies | Note 2 - Significant Accounting Policies Basis of Presentation The condensed 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
condensed financial statements of the Company as of September 30, 2021 and 2020 and for the three months ended September 30, 2021
and 2020 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 financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended June 30,
2021. Use of Estimates The preparation of condensed
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 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 and 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 September 30, 2021 was $500,000. 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. Planning costs incurred prior to the development
of software and costs not qualifying for capitalization are charged to expense. The Company amortizes capitalized software over a period
of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately $208,000
and $158,000 for the three month periods ended September 30, 2021 and 2020, respectively. Accumulated amortization at September 30, 2021
and 2020 was $1,545,483 and $762,416, respectively. Revenue Recognition We generate substantially all of our
revenue from contractual arrangements with our businesses, colleges and universities, and non-profit organizations to provide a comprehensive
platform of integrated technology and technology enabled services related to product offerings. Performance Obligations and Timing
of Recognition A performance obligation is a promise
in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct
performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We derive revenue from annual licensing
arrangements, including maintenance fees, setup fees and other variable fees for course development and miscellaneous items. Our contracts
with partners generally have two year terms and have a single performance obligation. The promises to set up and provide a hosted
platform of tightly integrated technology and services partners need to attract, enroll, educate and support students are not distinct
within the context of the contracts. This performance obligation is satisfied as the partners receive and consume benefits, which occurs
ratably over the contract term. Occasionally, we will provide professional
services, such as custom development, non-complex implementation activities, training, and other various professional services. We evaluate
these services to determine if they are distinct and separately identifiable in the context of the contract. In our contracts with customers
that contain multiple performance obligations as a result of this assessment, we allocate the transaction price to each separate performance
obligation on a relative standalone selling price basis. Standalone selling prices of our solutions and services are typically estimated
based on observable transactions when the solutions or services are sold on a standalone basis. When standalone selling prices are not
observable, we utilize a cost plus margin approach to allocate the transaction price. We do not disclose the value of unsatisfied
performance obligations because the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service
that forms part of a single performance obligation (i.e., consideration received is based on the level of product offerings, which is
unknown in advance). For the three month periods ended September 30, 2021 and 2020, all of the revenue recognized has been recognized
over the related contract periods. Additionally, for the three month period ended September 30, 2021, three customers comprised approximately
86% of total revenue. During the three month period ended September 30, 2020, two customers comprised approximately 98% of total revenue. We also receive fees that are fixed
in nature, such as annual license and maintenance charges, in place of or in conjunction with variable consideration. The fees are independent
of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the service
period of the contract that the Company’s platform is made available to the customer (i.e. the customer simultaneously receives
and consumes the benefit of the software over the contract service period). The following factors affect the nature,
amount, timing, and uncertainty of our revenue and cash flows:
● The majority of our customers are private and public learning institutions across various domestic regions
● The majority of our customers have annual payment terms Contract Fulfilment Costs We incur certain fulfilment costs related
to software design of specific course offerings for our customers, primarily comprised of software development, configuration costs, and
implementation costs. These costs are capitalized and recorded on a contract-by-contract basis and amortized using the straight-line method
over the length of the contract (i.e. on a systematic basis that is consistent with the transfer to the customer of the goods or services
to which the asset relates). There were no costs to fulfill capitalized or amortized as of September 30, 2021 or 2020. Accounts Receivable, Contract Assets
and Liabilities Balance sheet items related to contracts
consist of accounts receivable (net) and contract liabilities on our condensed balance sheets. Accounts receivable (net) is stated at
net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management’s evaluation of the
collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience and a
review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not significantly
differed from prior estimates. There was no allowance for doubtful accounts on accounts receivable balances as of September 30, 2021 and
2020. We may recognize revenue prior to billing
a customer when we have satisfied or partially satisfied our performance obligations as billings to our customers may not be made until
after the service period has commenced. As of September 30, 2021 and 2020, we do not have any contract assets. Contract liabilities as of each balance
sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our condensed statements
of operations as of the end of the reporting period, and such amounts are reflected as a current liability on our condensed balance sheets
as deferred revenue. We generally receive payments prior to completion of the service period and our performance obligations. These payments
are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is
recognized. Some contracts also involve annual license
fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of the platform’s
launch are recorded as contract liabilities. The following table provides information
on the changes in the balance of contract liabilities for the three months ended September 30:
2021 2020
Opening balance $ 333,200 $ 380,000
Billings 216,806 572,130
Less revenue recognized from continuing operations (net of cancellations): (140,691 ) (110,109 )
Closing balance $ 409,314 $ 842,021 Revenue recognized during the three months ended September 30, 2021
and 2020 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately
$98,000 and $74,000, respectively. The deferred revenue balance as of September
30, 2021 is expected to be recognized over the next 12 months. Technology and Content Development Technology and content development expenditures
consist primarily of personnel and personnel-related expense and contracted services associated with the maintenance of our platform as
well as hosting and licensing costs and are charged to expense as incurred. It also includes amortization of capitalized software costs
and research and development costs related to improving our platform and creating content that are charged to expense as incurred. Stock-Based Compensation Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) Topic 718 “Compensation-Stock Compensation” requires
companies to measure the cost of employee and nonemployee 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
and nonemployees based on the fair value of the stock, stock option or warrant. 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 Company has estimated the fair value of those
services performed through September 30, 2021 and 2020, and recorded an expense in the condensed statement of operations. Income Taxes In calculating the provision for interim
income taxes, in accordance with Accounting Standards Codification (ASC) 740, Income Taxes, we apply an estimated annual effective tax
rate to year-to-date ordinary income. At the end of each interim period, we estimate the effective tax rate expected to be applicable
for the full fiscal year. 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
condensed statement of operations in the period that includes the enactment date. 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 the treasury stock method in the
determination of dilutive shares outstanding during each reporting period. For the three months ended September 30, 2021, the Company
had 3,187,125 and 1,234,239 potentially dilutive shares of common stock related to common stock options and warrants, respectively, as
determined using the treasury stock method. For the three months ended September 30, 2020, the Company had 3,013,833 and 2,068,783 potentially
dilutive shares of common stock related to common stock options and warrants, as determined using the treasury stock method. For all periods
presented, 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 these periods. Risks and Uncertainties The Company operates 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. On March 11, 2020, the World Health
Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a “pandemic.” First identified
in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many countries, including
the United States, have implemented measures to combat the outbreak which have impacted global business operations. While management believes
the Company’s operations have not been significantly impacted, the Company continues to monitor the situation. In addition, while
the Company’s results of operations, cash flows and financial condition could be negatively impacted, the extent of the impact cannot
be reasonably estimated at this time. |
