| Significant Accounting Policies | Note 2 - Significant Accounting Policies Basis of Presentation The 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. 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. 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. 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) that were insured by the FDIC at year end was $250,000. As of June 30, 2024 the Company reclassified a portion of its cash
balance to “Restricted Cash” in the balance sheets to reflect amounts pledged as collateral for the Company’s credit
card facility. This change in presentation has been applied retrospectively, and prior period amounts have been reclassified to conform
to the current period presentation. As of June 30, 2024 and 2023, restricted cash totaled $100,000. This reclassification had no impact
on the Company’s statements of operations, stockholders’ equity, or cash flows for any periods presented. 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. 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. 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 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. Software development projects generally include three
stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized
and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Capitalization
of costs requires judgment in determining when a project has reached the application development stage, the proportion of time spent in
the application development stage, and the period over which we expect to benefit from the use of that software. Once the software is
placed in service, these costs are amortized on the straight-line method over the estimated useful life of the software, which is generally
three years.
Year Ended
June 30,
2024 2023
Beginning capitalized software $ 3,618,991 $ 3,250,082
Additions 374,700 368,909
Ending capitalized software 3,993,691 3,618,991
Beginning accumulated amortization 2,840,545 2,183,408
Amortization expense 508,318 657,137
Ending accumulated amortization 3,348,863 2,840,545
Capitalized software - net $ 644,828 $ 778,446 Amortization expense for the years
ended June 30, 2024 and 2023 was $508,318 and $657,137, respectively and included as part of “Technology and content development”
in the Statements of Operations. Future Estimated Amortization:
FY2025 $ 354,055
FY2026 $ 200,123
FY2027 90,650
Total $ 644,828 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 year-end June 30, 2024 and 2023, we recognized revenue from contracts with customers of $166,881 and $845,009,
respectively, of which $0 related to services transferred at a point in time and the remainder 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. We derive revenue from annual licensing arrangements, including maintenance
fees, setup fees and other fees for course development and miscellaneous items. Our contracts with customers generally have a one-year
term. The promises to set up and provide a hosted platform of tightly integrated technology and services customers need to attract, enroll,
educate, and support students are not distinct within the context of the contracts. This performance obligation is satisfied as the customers
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 because 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 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). During the years ended
June 30, 2024 and 2023, five customers comprised approximately 97% and 87% of total revenue, respectively. We also receive fees that are fixed in nature, such as annual license
and maintenance charges. 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 The following table shows revenue from contracts with customers by
customer type for the years ended June 30, 2024 and 2023, respectively.
Customer Type 2024 2023
Enterprise $ 116,208 $ 510,258
University 49,113 334,751
K-12 1,560 -
Total $ 166,881 $ 845,009 Accounts Receivable, Contract Assets and Liabilities Balance sheet items related to contracts
consist of accounts receivable (net) and contract liabilities on our 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 June 30, 2024 and 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 June 30, 2024 and 2023, we had $15,000 and $0, respectively, of 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 statements of operations
as of the end of the reporting period, and such amounts are reflected as a current liability on our 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 years ended June 30:
2024 2023
Opening balance $ 53,958 $ 342,672
Plus billings 112,923 556,295
Less revenue recognized from continuing operations (166,881 ) (845,009 )
Closing balance $ - $ 53,958 Revenue recognized during the years
ended June 30, 2024 and 2023 that was included in the deferred revenue balance that existed in the opening balance of each year was approximately
$53,958 and $311,806, respectively. The deferred revenue balance as of June 30, 2024 is $0 Net Loss per Share Basic net loss per share is calculated
by dividing the net loss for the year 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. At June 30, 2024 and June 30, 2023,
the Company had 633,000 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 years ended June 30, 2024 and 2023, 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 years. 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 Notes
4 and 6 in the Notes to Financial Statements. Risks and Uncertainties The Company operates in an industry
subject to rapid change. The Company’s operations are 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. Recent Accounting Pronouncements The Company has evaluated recently issued accounting pronouncements
and has determined that none of the new or recently adopted standards issued by the Financial Accounting Standards Board (FASB) are expected
to have a material impact on its financial statements or related disclosures. |
