Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Sep. 30, 2023 | Nov. 10, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | AMESITE INC. | |
Trading Symbol | AMST | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 2,542,440 | |
Amendment Flag | false | |
Entity Central Index Key | 0001807166 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39553 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3431718 | |
Entity Address, Address Line One | 607 Shelby Street | |
Entity Address, Address Line Two | Suite 700 PMB 214 | |
Entity Address, City or Town | Detroit | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48226 | |
City Area Code | (734) | |
Local Phone Number | 876-8130 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Current Assets | ||
Cash and cash equivalents | $ 4,636,682 | $ 5,360,661 |
Accounts receivable | 18,750 | 15,000 |
Prepaid expenses and other current assets | 76,469 | 106,679 |
Total current assets | 4,731,901 | 5,482,340 |
Noncurrent Assets | ||
Property and equipment - net | 82,629 | 88,966 |
Capitalized software - net | 697,625 | 778,446 |
Total noncurrent assets | 780,254 | 867,412 |
Total assets | 5,512,155 | 6,349,752 |
Current Liabilities | ||
Accounts payable | 78,890 | 70,070 |
Accrued and other current liabilities: | ||
Accrued compensation | 105,900 | 64,500 |
Deferred revenue | 24,375 | 53,958 |
Other accrued liabilities | 54,160 | 76,799 |
Total current liabilities | 263,325 | 265,327 |
Stockholders equity | ||
Common stock, $.0001 par value; 100,000,000 shares authorized; 2,542,440 shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively. | 255 | 255 |
Preferred stock, $.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding at September 30, 2023 and June 30, 2023 | 0 | 0 |
Additional paid-in capital | 39,569,587 | 39,514,489 |
Accumulated earnings deficit | (34,321,012) | (33,430,319) |
Total stockholders equity | 5,248,830 | 6,084,425 |
Total liabilities and stockholders equity | $ 5,512,155 | $ 6,349,752 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2023 | Jun. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 2,542,440 | 2,542,440 |
Common stock, shares outstanding | 2,542,440 | 2,542,440 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Net Revenue | $ 63,333 | $ 280,282 |
Operating Expenses | ||
General and administrative expenses | 438,262 | 976,320 |
Technology and content development | 333,434 | 480,775 |
Sales and marketing | 241,627 | 405,445 |
Total operating expenses | 1,013,323 | 1,862,540 |
Loss from Operations | (949,990) | (1,582,258) |
Other Income (Expense) | ||
Interest income | 59,297 | 5,451 |
Other expense | (531) | |
Total other income | 59,297 | 4,920 |
Net Loss | $ (890,693) | $ (1,577,338) |
Earnings per Share | ||
Basic loss per share (in Dollars per share) | $ (0.35) | $ (0.69) |
Weighted average shares outstanding (in Shares) | 2,542,440 | 2,285,031 |
Statements of Operations (Una_2
Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Diluted loss per share | $ (0.35) | $ (0.69) |
Statement of Stockholders Equit
Statement of Stockholders Equity (unaudited) - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Jun. 30, 2022 | $ 217 | $ 37,412,551 | $ (29,277,016) | $ 8,135,752 |
Balance (in Shares) at Jun. 30, 2022 | 2,166,124 | |||
Net loss | (1,577,338) | (1,577,338) | ||
Issuance of common stock for consulting services | $ 1 | 61,249 | 61,250 | |
Issuance of common stock for consulting services (in Shares) | 10,417 | |||
Issuance of common stock | $ 35 | 1,850,466 | 1,850,501 | |
Issuance of common stock (in Shares) | 348,485 | |||
Stock-based compensation expense | 175,779 | 175,779 | ||
Balance at Sep. 30, 2022 | $ 253 | 39,500,045 | (30,854,354) | 8,645,944 |
Balance (in Shares) at Sep. 30, 2022 | 2,525,025 | |||
Balance at Jun. 30, 2023 | $ 255 | 39,514,489 | (33,430,319) | $ 6,084,425 |
Balance (in Shares) at Jun. 30, 2023 | 2,542,440 | 2,542,440 | ||
Net loss | (890,693) | $ (890,693) | ||
Stock-based compensation expense | 55,098 | 55,098 | ||
Balance at Sep. 30, 2023 | $ 255 | $ 39,569,587 | $ (34,321,012) | $ 5,248,830 |
Balance (in Shares) at Sep. 30, 2023 | 2,542,440 | 2,542,440 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flows from Operating Activities | ||
Net Loss | $ (890,693) | $ (1,577,338) |
Adjustments to reconcile change in net loss to net cash used in operating activities: | ||
Depreciation and amortization | 152,358 | 187,036 |
Stock-based compensation expense | 55,098 | 175,779 |
Value of common stock issued in exchange for consulting services | 61,250 | |
Changes in operating assets and liabilities which used cash: | ||
Accounts Receivable | (3,750) | (51,531) |
Prepaid expenses and other current assets | 30,210 | 399,281 |
Accounts payable | 8,820 | (88,381) |
Accrued compensation | 41,400 | 48,076 |
Deferred revenue | (29,583) | (1,002) |
Accrued and other liabilities | (22,639) | 37,064 |
Net cash and cash equivalents used in operating activities | (658,779) | (809,766) |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (2,861) | |
Investment in capitalized software | (65,200) | (109,537) |
Net cash and cash equivalents used in investing activities | (65,200) | (112,398) |
Cash flows from Financing Activity | ||
Issuance of common stock - net of issuance costs | 1,850,501 | |
Net cash and cash equivalents provided by financing activity | 0 | 1,850,501 |
Net (decrease) increase in cash and cash equivalents | (723,979) | 928,337 |
Cash and cash equivalents - Beginning of period | 5,360,661 | 7,155,367 |
Cash and cash equivalents - End of period | 4,636,682 | 8,083,704 |
Significant Noncash Transactions: | ||
Issuance of common stock in exchange for consulting services | $ 61,250 |
Nature of Business
Nature of Business | 3 Months Ended |
Sep. 30, 2023 | |
Nature of Business [Abstract] | |
Nature of Business | Note 1 - Nature of Business Amesite Inc. (the “Company”) was incorporated in November 2017. The Company is an artificial intelligence driven platform and course designer, that provides customized, high performance and scalable online products for schools and businesses. The Company uses machine learning to provide a novel, mass customized experience to learners. The Company’s Customers are businesses, universities and colleges, and K-12 schools. The Company’s activities are subject to significant risks and uncertainties. The Company’s operations are considered to be in one segment. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2023 | |
Significant Accounting Policies [Abstract] | |
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, 2023 and 2022 and for the three months ended September 30, 2023 and 2022 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 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023. Use of Estimates The preparation of 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 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. 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 and savings accounts) 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 costs incurred in the development of software for its Customers, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing 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 capitalized software of $65,200 and $109,775 and recognized amortization expense of $146,021 and $180,659 for the three months ended September 30, 2023 and 2022, respectively. The following table summarizes capitalized software balances and amortization for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Beginning balance, gross $ 3,618,990 $ 3,250,081 Additions 65,200 109,775 Ending balance, gross 3,684,190 3,359,618 Accumulated amortization (2,986,565 ) (2,364,066 ) Closing balance, net $ 697,625 $ 995,552 Revenue Recognition We generate our revenue from contractual arrangements with businesses, colleges and universities to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings. During the three months ended September, 2023 and 2022, we recognized revenue from contracts with Customers of $63,333 and $280,282, respectively, related to services provided over time. 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. This performance obligation is satisfied as the partners receive and consume benefits, which occur ratably over the contract term. Occasionally, we 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 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 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). For the three months ended September 30, 2023 and 2022, all revenue recognized has been recognized over the related contract periods. For the three months ended September 30, 2023, one Customer represents 24% and four represent 18% each of total revenue. Accounts Receivable, Contract Assets and Liabilities Balance sheet items related to contracts consist of accounts receivable and deferred revenue liabilities. Accounts receivable 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. There was no allowance for doubtful accounts on accounts receivable balances as of September 30, 2023 or June 30, 2023. 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, 2023 and June 30, 2023, we do not have any such contract assets. Deferred revenue as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our 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. Payments received prior to the completion of the service period for our performance obligations or as annual license fees are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized. The following table provides information on deferred revenue balances and changes for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Opening balance of deferred revenue $ 53,948 $ 342,672 Plus billings 33,750 216,500 Less revenue recognized (63,323 ) (217,502 ) Closing balance of deferred revenue $ 24,375 $ 341,670 Revenue recognized during the three months ended September 30, 2023 and 2022 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $26,250 and $175,000, respectively. The deferred revenue balance as of September 30, 2023 is expected to be recognized over the next 7 months. Stock-Based Compensation We have issued four types of stock-based awards under our stock plans: stock options, restricted stock units, deferred stock units, and stock warrants. All stock-based awards granted to employees, directors and independent contractors are measured at fair value at each grant date. We rely on the Black-Scholes option pricing model for estimating the fair value of stock-based awards granted, and expected volatility is based on the historical volatility of the Company’s stock prices. Stock options generally vest over two years from the grant date and generally have ten-year contractual terms. Restricted stock units generally have a term of 12 months from the closing date of the agreement. Stock warrants issued have a term of five years. Information about the assumptions used in the calculation of stock-based compensation expense is set forth in Note 3 in the Notes to Financial Statements. 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. 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 wherein 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. 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 statement of operations in the period that includes the enactment date. Net Loss per Share At September 30, 2023 and June 30, 2023, the Company had 757,315 and 758,079 potentially dilutive shares of common stock related to common stock options and warrants, respectively, as determined using the if-converted method. For the three months ended September 30, 2023 and 2022, 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. Subsequent Events The Company evaluated subsequent events through the date of this Form 10-Q and has determined that no events have occurred that would require recognition or disclosure in the financial statements. 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. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2023 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 3 - Stock-Based Compensation The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over two years from the grant date and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan). The Company has reserved 383,333 shares of common stock to be available for granting under the Plan. The Company estimates the fair value of each option award using a Black Scholes Model (“BSM”) that uses the weighted average assumptions included in the table below. Expected volatilities are based on historical volatility of comparable companies. The Company uses historical data to estimate option exercise within the valuation model or estimates the expected option exercise when historical data is unavailable. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur. No options were granted for the three months ended September 30, 2023 or 2022.: A summary of options terminated in the three months ended September 30, 2023 is presented below: Options Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual Term Outstanding at July 1, 2023 237,041 21.73 6.39 Terminated (764 ) (21.73 ) (7.76 ) Outstanding and expected to vest at September 30, 2023 236,277 21.72 6.14 For the three months ended September 30, 2023 and 2022, the Company recovered $7,402 and $16,421, in expense related to Plan terminations, respectively. Beginning in January 2022, Board of Directors compensation at the rate of $305,500 annually was implemented with Directors opting for receipt via stock options under the Equity Incentive Plan or cash. For the three months ended September 30, 2023, $62,500 in deferred stock units were awarded. As of September 30, 2023, there was approximately $52,731 of total unrecognized compensation cost for employees and non-employees related to nonvested options. These costs are expected to be recognized through December 2026. |
Warrants
Warrants | 3 Months Ended |
Sep. 30, 2023 | |
Warrants [Abstract] | |
Warrants | Note 4 - Warrants As of September 30, 2023 and June 30, 2023, there were 521,038 warrants outstanding. The Company measures the fair value of warrants using Black-Scholes Model. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2023 | |
Income Tax [Abstract] | |
Income Taxes | Note 5 - Income Taxes For the three months ended September 30, 2023 and prior periods since inception, the Company’s activities have not generated taxable income or tax liabilities. Accordingly, the Company has not recognized an income tax benefit on the Condensed Statements of Operations for the three months ended September 30, 2023 and 2022. The Company has approximately $24.9 million of net operating loss carryforwards available to reduce future income taxes, of which approximately $17,000 of net operating loss carryforwards expire in 2037. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2023 and 2022 and for the three months ended September 30, 2023 and 2022 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 financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2023. |
Use of Estimates | Use of Estimates The preparation of 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 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. |
Cash and Cash Equivalents | 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 and savings accounts) insured by the FDIC at year end was $250,000. |
Property and Equipment | 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 | Capitalized Software Costs The Company capitalizes costs incurred in the development of software for its Customers, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing 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 capitalized software of $65,200 and $109,775 and recognized amortization expense of $146,021 and $180,659 for the three months ended September 30, 2023 and 2022, respectively. The following table summarizes capitalized software balances and amortization for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Beginning balance, gross $ 3,618,990 $ 3,250,081 Additions 65,200 109,775 Ending balance, gross 3,684,190 3,359,618 Accumulated amortization (2,986,565 ) (2,364,066 ) Closing balance, net $ 697,625 $ 995,552 |
Revenue Recognition | Revenue Recognition We generate our revenue from contractual arrangements with businesses, colleges and universities to provide a comprehensive platform of integrated technology and technology enabled services related to product offerings. During the three months ended September, 2023 and 2022, we recognized revenue from contracts with Customers of $63,333 and $280,282, respectively, related to services provided over time. 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. This performance obligation is satisfied as the partners receive and consume benefits, which occur ratably over the contract term. Occasionally, we 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 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 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). For the three months ended September 30, 2023 and 2022, all revenue recognized has been recognized over the related contract periods. For the three months ended September 30, 2023, one Customer represents 24% and four represent 18% each of total revenue. Accounts Receivable, Contract Assets and Liabilities Balance sheet items related to contracts consist of accounts receivable and deferred revenue liabilities. Accounts receivable 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. There was no allowance for doubtful accounts on accounts receivable balances as of September 30, 2023 or June 30, 2023. 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, 2023 and June 30, 2023, we do not have any such contract assets. Deferred revenue as of each balance sheet date represent the excess of amounts billed or received as compared to amounts recognized in revenue on our 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. Payments received prior to the completion of the service period for our performance obligations or as annual license fees are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at which time revenue is recognized. The following table provides information on deferred revenue balances and changes for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Opening balance of deferred revenue $ 53,948 $ 342,672 Plus billings 33,750 216,500 Less revenue recognized (63,323 ) (217,502 ) Closing balance of deferred revenue $ 24,375 $ 341,670 Revenue recognized during the three months ended September 30, 2023 and 2022 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately $26,250 and $175,000, respectively. The deferred revenue balance as of September 30, 2023 is expected to be recognized over the next 7 months. |
Stock-Based Compensation | Stock-Based Compensation We have issued four types of stock-based awards under our stock plans: stock options, restricted stock units, deferred stock units, and stock warrants. All stock-based awards granted to employees, directors and independent contractors are measured at fair value at each grant date. We rely on the Black-Scholes option pricing model for estimating the fair value of stock-based awards granted, and expected volatility is based on the historical volatility of the Company’s stock prices. Stock options generally vest over two years from the grant date and generally have ten-year contractual terms. Restricted stock units generally have a term of 12 months from the closing date of the agreement. Stock warrants issued have a term of five years. Information about the assumptions used in the calculation of stock-based compensation expense is set forth in Note 3 in the Notes to Financial Statements. |
Technology and Content Development | 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. |
Fair Value Measurements | 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 wherein 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. |
Income Taxes | 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 statement of operations in the period that includes the enactment date. |
Subsequent Events | Subsequent Events The Company evaluated subsequent events through the date of this Form 10-Q and has determined that no events have occurred that would require recognition or disclosure in the financial statements. |
Risks and Uncertainties | 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. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Significant Accounting Policies [Abstract] | |
Schedule of Property and Equipment Recorded at Cost | 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 |
Schedule of Capitalized Software Balances and Amortization | The following table summarizes capitalized software balances and amortization for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Beginning balance, gross $ 3,618,990 $ 3,250,081 Additions 65,200 109,775 Ending balance, gross 3,684,190 3,359,618 Accumulated amortization (2,986,565 ) (2,364,066 ) Closing balance, net $ 697,625 $ 995,552 |
Schedule of Changes in Balance of Contract Liabilities | The following table provides information on deferred revenue balances and changes for the three months ended September 30, 2023 and 2022: Three Months Ended September 30, 2023 2022 Opening balance of deferred revenue $ 53,948 $ 342,672 Plus billings 33,750 216,500 Less revenue recognized (63,323 ) (217,502 ) Closing balance of deferred revenue $ 24,375 $ 341,670 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Stock-Based Compensation [Abstract] | |
Schedule of Option Activity | A summary of options terminated in the three months ended September 30, 2023 is presented below: Options Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual Term Outstanding at July 1, 2023 237,041 21.73 6.39 Terminated (764 ) (21.73 ) (7.76 ) Outstanding and expected to vest at September 30, 2023 236,277 21.72 6.14 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Significant Accounting Policies (Details) [Line Items] | ||||
Cash FDIC insured amount | $ 250,000 | $ 250,000 | ||
Capitalized software | 65,200 | $ 109,775 | ||
Amortization expense | $ 146,021 | $ 146,021 | 180,659 | |
Customers revenue | 280,282 | |||
Total revenue | 24% | 24% | ||
Revenue recognized | $ 26,250 | $ 175,000 | ||
Potentially dilutive (in Shares) | 757,315 | 758,079 | ||
One customer [Member] | ||||
Significant Accounting Policies (Details) [Line Items] | ||||
Total revenue | 18% | 18% | ||
Services Transferred [Member] | ||||
Significant Accounting Policies (Details) [Line Items] | ||||
Customers revenue | $ 63,333 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of Property and Equipment Recorded at Cost | 3 Months Ended |
Sep. 30, 2023 | |
Leasehold improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Shorter of estimated lease term or 10 years |
Furniture and fixtures [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Computer equipment and software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of Capitalized Software Balances and Amortization - USD ($) | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Schedule of Capitalized Software Balances and Amortization [Abstract] | |||
Beginning balance, gross | $ 3,618,990 | $ 3,250,081 | |
Ending balance, gross | 3,684,190 | 3,359,618 | |
Closing balance, net | 697,625 | 995,552 | $ 778,446 |
Additions | 65,200 | 109,775 | |
Accumulated amortization | $ (2,986,565) | $ (2,364,066) |
Significant Accounting Polici_6
Significant Accounting Policies (Details) - Schedule of Changes in Balance of Contract Liabilities - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule Of Changes In Balance Of Contract Liabilities Abstract | ||
Opening balance of deferred revenue | $ 53,948 | $ 342,672 |
Closing balance of deferred revenue | 24,375 | 341,670 |
Plus billings | 33,750 | 216,500 |
Less revenue recognized | $ (63,323) | $ (217,502) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Stock-Based Compensation (Details) [Line Items] | ||
Shares issued of grant value | 7,402 | 16,421 |
Deferred stock units | 62,500 | |
Total unrecognized (in Dollars) | $ 52,731 | |
Common Stock [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
Shares issued of grant value | 383,333 | |
Board of Directors [Member] | ||
Stock-Based Compensation (Details) [Line Items] | ||
Shares issued of grant value | 305,500 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of Option Activity | 3 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Schedule Of Option Activity [Abstract] | |
Number of Shares Outstanding, Beginning balance | shares | 237,041 |
Weighted Average Exercise Price Outstanding, Beginning balance | $ / shares | $ 21.73 |
Weighted Average Remaining Contractual Term (in years) Outstanding, Beginning balance | 6 years 4 months 20 days |
Number of Shares, Terminated | shares | (764) |
Weighted Average Exercise Price, Terminated | $ / shares | $ (21.73) |
Weighted Average Remaining Contractual Term (in years), Terminated | 7 years 9 months 3 days |
Number of Shares Outstanding, Ending balance | shares | 236,277 |
Weighted Average Exercise Price Outstanding, Ending balance | $ / shares | $ 21.72 |
Weighted Average Remaining Contractual Term (in years) Outstanding, Ending balance | 6 years 1 month 20 days |
Warrants (Details)
Warrants (Details) - shares | Sep. 30, 2023 | Jun. 30, 2023 |
Warrants [Abstract] | ||
Warrants outstanding | 521,038 | 521,038 |
Income Taxes (Details)
Income Taxes (Details) | Sep. 30, 2023 USD ($) |
Income Tax [Abstract] | |
Operating loss | $ 24,900,000 |
Net operating loss carryforwards | $ 17,000 |