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What changed in Amesite Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Amesite Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+169 added−139 removedSource: 10-K (2024-09-30) vs 10-K (2023-10-06)

Top changes in Amesite Inc.'s 2024 10-K

169 paragraphs added · 139 removed · 80 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur competitors fall primarily into the following groups: ● Online Program Management (OPM) firms, who create and launch educational products for EIs and businesses, using either their own or others’ Learning Management Systems (LMSs). ● Learning Management System (LMS) technology firms, who offer technology platforms suitable for offering online educational or training products ● Learning product aggregators, who offer multiple ‘institutions or businesses’ learning products on online platforms for direct purchase by learners, or through licenses by institutions.
Biggest changeWhile we believe that our platform, programs, technology, knowledge, experience, and resources provide us with competitive advantages, we face competition from major online companies, academic institutions, governmental agencies, and public and private research institutions, among other competitors, including: ● Online Program Management (OPM) firms, who create and launch educational products for EIs and businesses, using either their own or others’ Learning Management Systems (LMSs). ● LMS technology firms, who offer technology platforms suitable for offering online educational or training products. ● Learning product aggregators, who offer multiple ‘institutions or businesses’ learning products on online platforms for direct purchase by learners, or through licenses by institutions. -3- Government Regulation and Product Approval The healthcare industry is highly regulated, and products that provide services or tools to healthcare professionals are subject to stringent oversight from various regulatory bodies.
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. The information contained in the SEC’s website is not intended to be a part of this filing.
Additionally, the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. The information contained in the SEC’s website is not intended to be a part of this filing. -6-
In connection with the same, we filed a Certificate of Ownership and Merger with the Secretary of State of the State of Delaware, and changed our name from “Amesite Operating Company” to “Amesite Inc.” The stockholders of Amesite Parent approved the Merger Agreement on August 4, 2020.
In connection with the same, we filed a Certificate of Ownership and Merger with the Secretary of State of the State of Delaware, and changed our name from “Amesite Operating Company” to “Amesite Inc.” The stockholders of Amesite Parent approved the Merger Agreement on August 4, 2020. The directors and officers of Amesite Parent became our directors and officers.
We believe an equitable and inclusive environment with diverse teams produces more creative solutions and results in better outcomes for our Customers, partners, employees, and stakeholders. We strive to attract, retain, and promote diverse talent at all levels of the organization. Our management team is 57% female, 29% racially diverse, and 71% female or racially diverse.
We believe an equitable and inclusive environment with diverse teams produces more creative solutions and results in better outcomes for our customers, partners, employees, and stakeholders. We strive to attract, retain, and promote diverse talent at all levels of the organization. Our management team is 66% female, 33% racially diverse, and 83% female or racially diverse.
The Company’s operations are in one segment. On September 18, 2020, we consummated a reorganizational merger (the “Reorganization”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated July 14, 2020, whereby Amesite Inc. (“Amesite Parent”), our former parent corporation, merged with and into us, with our Company resulting as the surviving entity.
On September 18, 2020, we consummated a reorganizational merger (the “Reorganization”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated July 14, 2020, whereby Amesite Inc. (“Amesite Parent”), our former parent corporation, merged with and into us, with our Company resulting as the surviving entity.
The directors and officers of Amesite Parent became our directors and officers. 6 Pursuant to the Merger Agreement, on the Effective Date, each share of Amesite Parent’s common stock, $0.0001 par value per share, issued and outstanding immediately before the Effective Date, was converted, on a one-for-one basis, into shares of our common stock.
Pursuant to the Merger Agreement, on the Effective Date, each share of Amesite Parent’s common stock, $0.0001 par value per share, issued and outstanding immediately before the Effective Date, was converted, on a one-for-one basis, into shares of our common stock.
Ted holds a M.S. degree in sociology from Pepperdine University and a B.S. in political science from Tennessee State University. 5 Human Capital Management General Information About Our Human Capital Resources As of September 30, 2023, we have 12 full-time employees and 2 consultants. We intend to engage consultants in general administration on an as-needed basis.
Ted holds a M.S. degree in sociology from Pepperdine University and a B.S. in political science from Tennessee State University. Human Capital Management General Information About Our Human Capital Resources As of June 30, 2024, we have 9 full-time employees and 2 consultants. We intend to engage consultants in general administration on an as-needed basis.
The entire Amesite team is 50% female, 43% racially diverse, and 71% female or racially diverse. Additional information regarding Amesite’s social impact can be found in our 2021 ESG Report available at www.amesite.com. Corporate Information The Company was incorporated in November 2017.
The entire Amesite team is 55% female, 36% racially diverse, and 73% female or racially diverse. Additional information regarding Amesite’s social impact can be found in our 2023 ESG Report available at www.amesite.com. Corporate Information The Company was incorporated in November 2017. The Company is Amesite Inc.
We also intend to engage experts in operations, finance and general business to advise us in various capacities. None of our employees are covered by a collective bargaining agreement, and we believe our relationship with our employees is good to excellent. Our Culture Amesite’s mission is to improve the way the world learns.
We also intend to engage experts in operations, finance and general business to advise us in various capacities. None of our employees are covered by a collective bargaining agreement, and we believe our relationship with our employees is good to excellent. -5- Our Culture Amesite’s mission is to empower people with AI tools.
Each of these entities promulgates and enforces its own laws, regulations and standards, which we refer to collectively as education laws. We contract with higher education institutions that are subject to education laws.
Department of Education (the “DOE”), accrediting agencies, and state licensing authorities. Each of these entities promulgates and enforces its own laws, regulations and standards, which we refer to collectively as education laws. We contract with higher education institutions that are subject to education laws.
Michael Blumenthal and then as Senior Legislative Aide to U.S. Senator Bill Bradley. She has also served as Special Assistant to the Governor of Washington, Research Social Scientist at the Battelle Seattle Research Center, and was a free-lance consultant to the Organization for Economic Cooperation and Development and other international organizations for four years in Paris. Theodore l.
She has also served as Special Assistant to the Governor of Washington, Research Social Scientist at the Battelle Seattle Research Center, and was a free-lance consultant to the Organization for Economic Cooperation and Development and other international organizations for four years in Paris. Theodore l. Spencer, Member Mr. Spencer is Senior Advisor on Admissions Outreach at the University of Michigan.
Bernard is the founder and President of Bernard Financial Group and Bernard Financial Servicing Group (“BFG”). BFG is the largest commercial mortgage banking firm in Michigan, financing, on average, over $1.0 billion annually. Mr. Bernard has been involved with over 1,200 commercial real estate financial transactions totaling over $18.6 billion. Mr.
Board of Advisors Dennis Bernard, Chairman of the Board of Advisors Mr. Bernard is the founder and President of Bernard Financial Group and Bernard Financial Servicing Group (“BFG”). BFG is the largest commercial mortgage banking firm in Michigan, financing, on average, over $1.0 billion annually. Mr.
Spencer, Member Mr. Spencer is Senior Advisor on Admissions Outreach at the University of Michigan. Prior to September 2014, he was Associate Vice Provost and Executive Director of Undergraduate Admissions. Before joining Michigan in 1989, he was an Associate Director of Admissions at the United States Air Force Academy.
Prior to September 2014, he was Associate Vice Provost and Executive Director of Undergraduate Admissions. Before joining Michigan in 1989, he was an Associate Director of Admissions at the United States Air Force Academy. He is a graduate of the Military Air War College and was one of thirty-five Air Force recruiting commanders in the United States.
He has previously served as a Trustee for the College Board and on the faculty for the Harvard Summer Institute on College Admissions.
He has received numerous awards and was recognized as the Point Man on Diversity Defense for affirmative action in college admissions. He has previously served as a Trustee for the College Board and on the faculty for the Harvard Summer Institute on College Admissions.
We have received service marks for AMESITE SM , KEEP LEARNING SM and LCE SM from the United States Patent and Trademark Office. We have registered a service mark for LEARNING COMMUNITY ENVIRONMENT ® with the United States Patent and Trademark Office. We have also secured domain names, including amesite.com, amesite.co, amesite.net, and others.
We have also registered our trademarks at the United States Patent and Trademark Office for AMESITE ® , KEEP LEARNING ®, and LEARNING COMMUNITY ENVIRONMENT ® , as well as have pending trademark applications for PREACTO™ and NURSEMAGIC℠. We have also secured domain names, including amesite.com, amesite.co, amesite.net, and others.
Any patent issued from these applications are expected to expire in 2038, not including any applicable patent term adjustment or extension or design patents. We have protected our source codes, methodologies, algorithms, and techniques directed to other aspects of our artificial intelligence learning platform using our trade secret rights.
We have protected our source codes, methodologies, algorithms, and techniques directed to other aspects of our artificial intelligence learning platform using our trade secret rights.
We have established business procedures designed to maintain the confidentiality of our proprietary information, including the use of confidentiality agreements with employees, independent contractors, consultants and entities with which we conduct business. Competition The online and software industries for higher education are characterized by rapid evolution of technologies, fierce competition, government regulation, and strong defense of intellectual property.
The online and software industries for higher education are characterized by rapid evolution of technologies, fierce competition, government regulation, and strong defense of intellectual property.
Bernard specializes in both debt and equity placement with commercial lenders and institutional joint venture participants. Martha A. Darling, Member Over the past 22 years, Ms. Darling has held volunteer leadership roles nationally and in Michigan and has consulted on education policy issues for the National Academy of Sciences and other non-profit organizations. Prior to moving to Ann Arbor, Ms.
Darling has held volunteer leadership roles nationally and in Michigan and has consulted on education policy issues for the National Academy of Sciences and other non-profit organizations. Prior to moving to Ann Arbor, Ms. Darling was a Senior Program Manager at The Boeing Company in Seattle, from which she retired in 1998.
He is a graduate of the Military Air War College and was one of thirty-five Air Force recruiting commanders in the United States. He is a retired Lieutenant Colonel in the United States Air Force. Early in his career, he was a salesman for the IBM Corporation in the City of Detroit.
He is a retired Lieutenant Colonel in the United States Air Force. Early in his career, he was a salesman for the IBM Corporation in the City of Detroit. Ted has presented at numerous professional conferences state-wide, nationally and internationally, and has written and published articles on the college admissions process.
Previously, she was Vice President for Strategic Planning at Seattle-First National Bank and then, on loan from Seattle-First, she served as Executive Director of the Washington Business Roundtable’s Education Study. From 1977 to 1982 she served in Washington, D.C. as White House Fellow and Executive Assistant to Secretary of the Treasury W.
She joined Boeing in 1987, with assignments in 747 Program Management, Government Affairs and Boeing’s Corporate Offices, where she supported the chief executive officer and other executives. Previously, she was Vice President for Strategic Planning at Seattle-First National Bank and then, on loan from Seattle-First, she served as Executive Director of the Washington Business Roundtable’s Education Study.
We are passionate about understanding the needs of our learners, and we work hard to build products that deliver—for each and every one. We also believe that supporting our team with a wonderful environment supports and powers us to accomplish our goals.
We believe that supporting our team with a wonderful environment supports and powers us to accomplish our goals.
These regulations include, but are not limited to, consumer marketing and unfair trade practices laws and regulations, including those promulgated and enforced by the Federal Trade Commission, as well as federal and state data protection and privacy requirements. 4 Sales and Marketing We plan to grow our sales and marketing program as we build our Customer base, advancing from our small, direct sales force to a distribution network that has existing relationships with colleges, universities, non-profit organizations and businesses.
Our activities on behalf of our customers are also subject to other federal and state laws. These regulations include, but are not limited to, consumer marketing and unfair trade practices laws and regulations, including those promulgated and enforced by the Federal Trade Commission, as well as federal and state data protection and privacy requirements.
Institutions of higher education that award degrees and certificates to signify the successful completion of an academic program are subject to regulation from three primary entities, namely, the U.S. Department of Education (the “DOE”), accrediting agencies, and state licensing authorities.
Failure to comply with these regulations could result in legal liabilities, penalties, or restrictions on our ability to operate within certain healthcare modalities. The education industry is also heavily regulated. Institutions of higher education that award degrees and certificates to signify the successful completion of an academic program are subject to regulation from three primary entities, namely, the U.S.
We utilize artificial intelligence to achieve improved engagement, and continuous integration of current, qualified information into our learning products. Our technology utilizes a flexible and scalable full stack solution, with robust tools powering front-end technology. Our code architecture offers outstanding accessibility and agility for engineers, using best-in-class languages for both client and server-side functions.
Robust tools power our front-end technology. Our code architecture offers outstanding accessibility and agility for engineers, using best-in-class languages for both client and server-side functions. We also utilize tools employed by many high-end platforms, and our own proprietary models that we train on select corpuses that add value for our users and customers.
We’ve received two U.S. patents and currently have five pending U.S. patent applications, including one to cover the artificial intelligence platform, and others related to security, power consumption, blockchain, design and other technologies, including methods and systems.
As a result of our dedicated R&D and focus on deployability, our solutions require zero integrations to run for any organization, and NurseMagic TM is 100% deployable to any employee in an enterprise, 24/7, with in-app administration, and its features are 100% customizable to any customer. -2- Our Intellectual Property We’ve received eleven U.S. patents (8 utility, 3 design) and currently have four pending U.S. patent applications, including one to cover the artificial intelligence platform, and others related to security, power consumption, blockchain, design and other technologies, including methods and systems.
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ITEM 1. BUSINESS Overview Amesite’s smart, intuitive learning environments help organizations thrive. Amesite is a high-tech artificial intelligence software company offering a cloud-based platform and content creation services for business and university-delivered education and upskilling. Amesite-offered courses and programs are branded to our part.
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ITEM 1. BUSINESS Overview Our mission is to empower people with AI tools. We have products in two sectors: higher education and healthcare. Higher education is presently challenged to offer useful, affordable professional development and workforce learning programs that generate revenue for them.
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Amesite uses artificial intelligence technologies to provide customized environments for learners, easy-to-manage interfaces for instructors, and greater accessibility for learners in the US education market and beyond. The Company leverages existing institutional infrastructures, adding mass customization and cutting-edge technology to provide cost-effective, scalable and engaging experiences for learners anywhere.
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Healthcare is presently challenged to integrate highly efficient, AI solutions into workflows in order to relieve the prodigious strain on services due to workforce shortages and high turnover. Amesite’s AI-powered solutions aim to solve both of these problems. Artificial Intelligence is broadly transforming human work and learning.
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We are passionate about improving the learner experience and learner outcomes in online learning products and improving our Customers’ ability to create and deliver both. We are focused on creating the best possible technology solutions and have been awarded an innovation award for our product.
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The emergence of large language models (LLMs) has resulted in reshaping of whole industries. We believe that all successful companies and organizations will have to successfully implement AI solutions in order to maintain excellence and competitiveness. While LLMs offer the promise of transformation, software solutions that successfully incorporate functions and features that are fit for purpose are essential.
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We are committed to our team, and have been recognized with 10 workplace excellence awards, 4 of them national. Amesite offers our white label platform to our Customers: universities, museums, businesses and government agencies. Amesite’s Customers offer learning to their users, who are students, professional learners and / or their own employees.
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Scaled software platforms are often slow to integrate new technology, because they are burdened by the need to assure backward compatibility, and the inertial effects of large volumes of interlocking practices, from technology to sales to customer success. Small startups often lack the experience needed to create offerings that are both scalable and compliant with relevant regulations.
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Amesite derives revenue from the licensing of our platform, and user fees associated with its use by our Customers for their users. Some of our Customers generate revenue using our systems, including Universities and Museums.
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We believe that Amesite is uniquely positioned to address these markets. We are both agile and experienced. We believe our team is perfectly sized and skilled to create processes that fit the present technology moment – rapidly – while still offering nearly 50 combined years of technology experience, and decades of additional experience on team in sales, marketing and finance.
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Our Strategy We deliver Learning Community Environment ® s (LCE SM s) to businesses and educational institutions (EIs) that enable them to offer branded learning products to their students, professional learners or employees with ease. Our business model offers flexibility for our Customers.
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Our higher education platform, Amesite Engage, enables colleges and universities to offer courses and programs that build professional skills. Customers in higher education can use their own content, content provided by Amesite, or third-party content to deliver learning solutions. Amesite additionally supports higher education customers with instructional staff who contract with us.
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Our Customers license our platform and can also contract with to us to create and maintain customized learning products, or easily launch their own learning products on the platform. We have entered into master service agreements with our Customers, including, but not limited to, universities such as Wayne State University and enterprises such as The Henry Ford Museum.
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This enables any college or university to offer accessibly-priced and outstanding programs to build workforce and professional skills with a turnkey system that delivers the highest learner completion rate in the industry of over 96%.
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These agreements include statements of work detailing the services to be rendered and programs or products to be delivered on the platform. We use the proprietary data we collect on learner behavior and responses with their consent, to deliver to learners engaging, effective courses and programs.
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NurseMagic TM , our healthcare app, specifically targets the largest segments in healthcare – nurses and caregivers – providing them support to do their jobs, manage stress, complete documentation and perform many other tasks.
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Our Customers gain efficiency, flexibility and can generate high return on investment and revenue through partnership with us, because of the speed, flexibility, effectiveness and scalability of the LCE SM s we build for them. Universities need to be able to launch programs that upskill their alumni and other professionals, accessibly and at scale.
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Nurses and caregivers can use the app for free, and we are presently marketing the app to enterprises, including home health care companies, skilled nursing companies and other organizations that deliver care and have had early success in entering pilot programs.
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Museums need to engage their patrons and visitors with high quality digital learning opportunities. Businesses need learning systems that enable them to upskill people quickly and efficiently. Retention and execution of strategic plans require that employees stay engaged and learn effectively. Government needs to be able to offer learning programs that allow job seekers to advance skills.
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Our Sales Motion and Technology Pipeline We offer a free version of NurseMagic TM , which enables us to determine needs, create desirable features and continuously improve the product, while building our reputation as a fast-growing, highly rated app.
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Amesite’s cloud-based platform addresses all of these key needs. We target Customers who already have large cohorts of users who can consume their delivered learning programs. Our revenues are derived from license fees, but more importantly, by user fees, that we believe will enable us to scale revenue.
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To generate revenue, we target healthcare organizations that have incredible pain in staffing, which limits their ability to provide excellent care, control costs and generate revenue. Modalities of care delivered by these enterprises include skilled nursing, assisted living, memory care, residential, continuing care retirement communities, home health and rehabilitation centers.
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Importantly, we aim to serve our Customers by delivering learning programs at price points that are accessible and are highly targeted to their needs. 1 Our Proprietary Technology We believe that online learning products are essential for accessibility, engagement and scalability for businesses and EIs alike.
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Our sales motion is simple: we outreach these organizations to demonstrate the incredible cost savings and removal of barriers to generating revenue. They offer an enterprise version of the app to their teams, working to improve patient care and reduce stress and turnover, via pilot phases. Pilot phases are designed to be short to speed time to close enterprise licenses.
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We also use tools employed by many high-end platforms. Our architecture enables us to achieve full integration of best-in-class third party tools, and custom-built features, delivering on-demand and as-needed, such as leading calendar platform integrations, and high quality, encrypted video calling. Our architecture enables us to utilize artificial intelligence algorithms to ultimately improve learning outcomes.
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We estimate that the return on investment for these enterprises is as much as 15X, given that documentation requirements alone can consume up to 40% of nurses’ time. In higher education, we principally target community colleges who are charged with driving workforce development as part of their missions.
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Much as artificial intelligence algorithms presently recognize and respond to natural language on commercial platforms, predict behaviors and deliver suggestions, our algorithms have been developed to assist learners in accessing, utilizing and remaining engaged with platform content, their instructors and their peers.
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Here again, our sales motion is simple: we offer a no-fee setup that enables them to pay our license fees based on registrations, and we manage the entire system for them, even populating their branded offerings with content and providing them with instructors.
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We generate content for our Customers using the highest standards in business and higher education, and our business model enables us to deliver content for our Customers efficiently and rapidly. Rapidly evolving technology has driven the need to continuously upskill students and workforces, and we use the highest possible standards to deliver this content according to Customer needs.
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Our Platform includes our products and services and all of the technology and business services that create them, in part or whole: a blend of software, hardware, content, and technology that includes everything from behind-the-scenes processes to the user interface, our website, data handling, communication, and advanced analytics.
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This substantially reduces the time it takes for traditional program creation by businesses or EIs. We market to our Customers, and enable them to offer and monetize learning products, or to deliver learning products to their own employees efficiently and cost effectively.
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We constantly improve both our product features and the infrastructure to deliver them, utilizing common infrastructure elements to seamlessly deliver turnkey products that are simple to use and operate, in two markets. -1- Our Proprietary Technology Our Platform utilizes a common infrastructure to deliver both Amesite Engage for higher education and NurseMagic TM for healthcare.
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Our Customers want the capability of delivery to their own Customers and are best able to market to them. We deliver the content and technology to enable this. We protect and utilize learner data solely to improve learning outcomes.
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We integrate new tools rapidly as they become available because our architecture enables fast integration of APIs. We protect and utilize data to improve product performance. Data and information about user behavior and use cases are collected with user permission. We validate algorithms using both offline and online testing.
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Learner data is collected with learner permission, and information about learner behavior, study preferences and preferences for types of material delivered as part of learning products, will be used to improve learning outcomes and learner experiences. We will validate algorithms using both offline and online testing.
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Our Research and Development We continuously improve our products and have a practice, based on decades of experience in technology and higher education, on best-in-class metrics. For example, we train our algorithms on corpuses that our users rely upon, and 100% of our R&D is dedicated to improved product performance for users.
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By correlating learner behaviors with specific outcomes as identified by qualified instructors, we will train our algorithms specifically for important learning outcomes, enabling it to be a useful tool for instructors. We believe that the combinations of information that will be collected through our educational products, and outcomes measured using our online learning products will be unique, and constantly improving.
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We create 5 new features per week on average, and build out those most useful to our users.
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We will never sell or distribute our learner data to third parties without the explicit permission of learners. We will not deliver unwanted content or advertising to learners or to Customer personnel. Our proprietary technology is developed solely for purposes of improving learner experiences and outcomes and improving the ability of our Customers to deliver outstanding educational products.
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Competition The software industry in healthcare is a mixture of large and midsized firms’ platform offerings, with apps available for narrow functionalities. The industry is characterized by high regulatory requirements, including HIPAA, and barriers to entry due to inertia common in large organizations.
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Our Research and Development Programs We use advanced technologies to create effective and accessible learning environments. We seek to improve learning at many levels, including college and professional. Our research and development programs will expand continuously based on learner preferences, outcomes and the desires of our Customers.
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While we believe that NurseMagic TM is uniquely well-positioned since it focuses on utility for the user and was honed on data and specific needs of users, we face stiff competition from major Electronic Medical Record and Electronic Health Record (EMR and EHRs) companies.
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Some of these will include: ● Improvements in learner engagement with cloud-based platforms . We will continuously gather data on how learners engage with us and other online platforms and conduct research and development to create and incorporate useful tools for learning on our platform. ● Improvements in instructor experience using our platform .
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These regulations include compliance with federal and state laws, as well as industry standards specific to healthcare practices. We contract with healthcare providers and facilities across various modalities such as skilled nursing, assisted living, memory care, home health, and rehabilitation centers.
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We will continuously develop tools designed to improve the ability of our Customers to deliver timely and relevant content, deliver assessments which are fair, correctly represent educational objectives and give repeatable outcomes when employed on our platform. 2 ● Integration of new technology in the delivery of learning products .
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In these settings, we are required to comply with healthcare regulations that govern the use of technology in clinical environments. Our role as a service provider to healthcare professionals and facilities, either directly or through contractual agreements, necessitates compliance with these regulations.
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A “technology stack” is a combination of software products and programming languages used to create our platform. We will continuously develop improvements to our technology stack, inventing and integrating best-in-class online engagement features.
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Any failure on our part, or on the part of our customers, to adhere to these regulations could negatively impact our operations and our ability to deliver services. Therefore, we work closely with our customers to ensure adherence to applicable healthcare laws and standards.
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These will range from invention of novel user experience features to integration of capabilities offered by other vendors and developers. ● Qualification of information for use by learners in all sectors .
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We will comply with healthcare laws, including but not limited to, regulations concerning data privacy and security, clinical documentation standards, and patient consent requirements. We closely monitor developments in state and federal healthcare regulations and will assist our customers in obtaining necessary approvals to use NurseMagic™ in their practice settings.
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We plan to provide both our Customers and our learners with the constantly improving ability to find and integrate qualified information into products on our platform, and maximize learner ability to utilize qualified information, designed to offer learners the most carefully curated, most relevant, timely and engaging materials in every discipline in which we offer products.
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Our activities on behalf of our customers are also subject to federal and state laws, including consumer protection laws, data protection and privacy laws, and industry-specific regulations enforced by bodies such as the U.S. Department of Health and Human Services (HHS), the Food and Drug Administration (FDA), and the Federal Trade Commission (FTC).
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Our Intellectual Property Our intellectual property rights include patent applications, trade secrets, trademark rights, and contractual agreements. Our patent applications are directed to our proprietary technology, including an artificial intelligence platform for learning, and will seek patent protection for our designs, development, and related alternatives by filing and prosecuting patent applications in the U.S. and other countries as appropriate.
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Sales and Marketing We offer a free version of NurseMagic™, which allows us to identify user needs, create valuable features, and continuously refine the app, all while establishing our reputation as a fast-growing, highly-rated product. This free version serves as a critical tool for building brand awareness and gathering feedback, which informs our development and marketing strategies.
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We ensure that we own intellectual property created for us by signing agreements with employees, independent contractors, consultants, companies, and any other third party that creates intellectual property for us or that assign any intellectual property rights to us. Portions of our platform may rely upon third-party licensed intellectual property.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may also not be able to convince them to dedicate significant resources to moving courses onto our platform and gain their trust in operating them collaboratively. If our learning products are not better, or only modestly better than the incumbent versions, we will be unable to grow and gain more Customers, which will materially harm our business.
Biggest changeIf our learning products are not better, or only modestly better than the incumbent versions, we will be unable to grow and gain more customers, which will materially harm our business. -8- We will be relying on our college, university and museum customers to drive enrollment and revenue and continue to license our platform and pay for our services.
We also may not achieve the anticipated benefits from the acquired business due to several factors, including: ● inability to integrate or benefit from acquired technologies or services in a profitable manner; ● unanticipated costs or liabilities associated with the acquisition; ● difficulty integrating the accounting systems, operations and personnel of the acquired business; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; ● difficulty converting the Customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; ● diversion of management’s attention from other business concerns; ● adverse effects to our existing business relationships with business partners and Customers because of the acquisition; ● the potential loss of key employees; ● use of resources that are needed in other parts of our business; and ● use of substantial portions of our available cash to consummate the acquisition.
We also may not achieve the anticipated benefits from the acquired business due to several factors, including: ● inability to integrate or benefit from acquired technologies or services in a profitable manner; ● unanticipated costs or liabilities associated with the acquisition; ● difficulty integrating the accounting systems, operations and personnel of the acquired business; ● difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; -13- ● difficulty converting the customers of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support or professional services model of the acquired company; ● diversion of management’s attention from other business concerns; ● adverse effects to our existing business relationships with business partners and customers because of the acquisition; ● the potential loss of key employees; ● use of resources that are needed in other parts of our business; and ● use of substantial portions of our available cash to consummate the acquisition.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. 13 We may be at risk of securities class action litigation.
In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. As such, our financial statements may not be comparable to companies that comply with public company effective dates. We may be at risk of securities class action litigation.
We cannot assure you that such additional funding will be available on favorable terms, or at all. 9 We may have risks related to managing any growth we may experience. We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our financial condition and operating results.
We cannot assure you that such additional funding will be available on favorable terms, or at all. We may have risks related to managing any growth we may experience. We may engage in future acquisitions that could disrupt our business, cause dilution to our stockholders and harm our financial condition and operating results.
In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. 12 Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.
In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.
Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems. 14 Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Moreover, despite recent reforms made possible by the JOBS Act, the reporting requirements, rules, and regulations will make some activities more time-consuming and costly, particularly after we are no longer an “emerging growth company.” Our management and other personnel devote a substantial amount of time to ensure that we comply with all of these requirements and to keep pace with new regulations, otherwise we may fall out of compliance and risk becoming subject to litigation or being delisted, among other potential problems. -15- Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders. We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.
Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights superior to our existing shareholders. -14- We do not intend to pay cash dividends on our shares of common stock so any returns will be limited to the value of our shares.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control and the impact of health and safety concerns, such as those relating to the current coronavirus pandemic (“COVID-19”).
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets, including conditions that are outside of our control and the impact of health and safety concerns, such as those relating to the coronavirus pandemic (“COVID-19”).
Alternatively, if a court were to find our choice of forum provisions contained in either our certificate of incorporation or bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, results of operations, and financial condition. 15 Certain provisions of our certificate of incorporation and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in stockholders’ interest.
Alternatively, if a court were to find our choice of forum provisions contained in either our certificate of incorporation or bylaws to be inapplicable or unenforceable in an action, the Company may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, results of operations, and financial condition. -16- Certain provisions of our certificate of incorporation and Delaware law make it more difficult for a third party to acquire us and make a takeover more difficult to complete, even if such a transaction were in stockholders’ interest.
Due to the nature of our product, we face an increasing number of threats to our platform and computer systems including unauthorized activity and access, system viruses, worms, malicious code, denial of service attacks, and organized cyberattacks, any of which could breach our security and disrupt our platform.
Due to the nature of our products, we face an increasing number of threats to our platform and computer systems including unauthorized activity and access, system viruses, worms, malicious code, denial of service attacks, and organized cyberattacks, any of which could breach our security and disrupt our platform.
There can be no assurance that we will be able to do so in the future. We will incur significant losses in launching products and we may not realize sufficient subscriptions or profits in order to sustain our business. We have not yet developed a strong Customer base and we have not generated sustainable revenue since inception.
We have only recently developed a significant customer base and we have not generated sustainable revenue since inception. There can be no assurance that we will be able to do so in the future. We will incur significant losses in launching products and we may not realize sufficient subscriptions or profits in order to sustain our business.
We depend on the services of a number of key management personnel, employees, advisors and consultants and our future performance will largely depend on the talents and efforts of such individuals. We do not currently maintain “key person” life insurance on any of our employees, except for our Chief Executive Officer.
We operate leanly, but as such we depend on the services of a number of key management personnel, employees, advisors and consultants and our future performance will largely depend on the talents and efforts of such individuals. We do not currently maintain “key person” life insurance on any of our employees, except for our Chief Executive Officer.
Furthermore, future acquisitions could pose numerous additional risks to our expected operations, including: ● problems integrating the purchased business, products, or technologies; ● challenges in achieving strategic objectives, cost savings and other anticipated benefits; ● increases to our expenses; ● the assumption of significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying party; ● inability to maintain relationships with prospective key Customers, vendors, and other business partners of the acquired businesses; ● diversion of management’s attention from their day-to-day responsibilities; ● difficulty in maintaining controls, procedures and policies during the transition and integration; ● entrance into marketplaces where we have limited or no prior experience and where competitors have stronger marketplace positions; ● potential loss of key employees, particularly those of the acquired entity; ● that historical financial information may not be representative or indicative of results as a combined entity; and ● that our business and operations would suffer in the event of system failures, and our operations are vulnerable to interruption by natural disasters, terrorist activity, power loss and other events beyond our control, the occurrence of which could materially harm our business. 10 If our security measures or those of our future business partners are breached or fail and result in unauthorized disclosure of data, we could lose Customers and/or fail to attract new Customers.
Furthermore, future acquisitions could pose numerous additional risks to our expected operations, including: ● problems integrating the purchased business, products, or technologies; ● challenges in achieving strategic objectives, cost savings and other anticipated benefits; ● increases to our expenses; ● the assumption of significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying party; -11- ● inability to maintain relationships with prospective key customers, vendors, and other business partners of the acquired businesses; ● diversion of management’s attention from their day-to-day responsibilities; ● difficulty in maintaining controls, procedures and policies during the transition and integration; ● entrance into marketplaces where we have limited or no prior experience and where competitors have stronger marketplace positions; ● potential loss of key employees, particularly those of the acquired entity; ● that historical financial information may not be representative or indicative of results as a combined entity; and ● that our business and operations would suffer in the event of system failures, and our operations are vulnerable to interruption by natural disasters, terrorist activity, power loss and other events beyond our control, the occurrence of which could materially harm our business.
The recent global financial crisis in connection with COVID-19 has caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.
The recent global financial crisis in connection with COVID-19 caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn caused by this or other general conditions could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all.
Our directors, executive officers and each of our stockholders who owned greater than 5% of our outstanding Common Stock beneficially, as of June 30, 2023, own approximately 37% of our common stock.
Our directors, executive officers and each of our stockholders who owned greater than 5% of our outstanding Common Stock beneficially, as of June 30, 2024, own approximately 32% of our common stock.
If our Customers fail to successfully execute our marketing strategies, they may not continue to license our platform. ● Damage to Customer reputation. Our Customers’ rankings, reputation and marketing efforts strongly affect enrollments, none of which we control.
Our customers’ marketing efforts are required to drive enrollment of our online courses. If our customers fail to successfully execute our marketing strategies, they may not continue to license our platform. ● Damage to customer reputation. Our customers’ rankings, reputation and marketing efforts strongly affect enrollments, none of which we control.
Workers may reject the opportunity to take courses online through their employers. We will face intense competition, which may cause pricing pressures, decreased gross margins and loss of market share, and may materially and adversely affect our business, financial condition and results of operations. We will compete with other online education services companies, and colleges and universities themselves.
We face intense competition, which may cause pricing pressures, decreased gross margins and loss of market share, and may materially and adversely affect our business, financial condition and results of operations. We compete with other online education services companies, and colleges and universities themselves.
We anticipate that our operating expenses may increase in the foreseeable future as we continue to pursue the development of our platform, invest in marketing, sales and distribution of our platform to grow our business, acquire Customers, and commercialize our technology.
If our expectations prove incorrect, our business, operating results and financial condition will be materially and adversely affected. We anticipate that our operating expenses may increase in the foreseeable future as we continue to pursue the development of our platform, invest in marketing, sales and distribution of our platform to grow our business, acquire customers, and commercialize our technology.
Students may reject the opportunity to take courses online, when residential courses are offered as an option, due to negative perceptions of online education. ● Ineffective marketing efforts. Our Customers’ marketing efforts are required to drive enrollment of our online courses.
Factors within and outside of our control will affect enrollments and include the following: ● Negative perceptions about online courses. Students may reject the opportunity to take courses online, when residential courses are offered as an option, due to negative perceptions of online education. ● Ineffective marketing efforts.
Such departures could have an adverse impact on the anticipated benefits of an acquisition. 8 We have risk factors within and outside of our control that may inhibit our ability to deliver products on our platform.
Such departures could have an adverse impact on the anticipated benefits of an acquisition. We have risk factors within and outside of our control that may inhibit our ability to deliver products on our platform. Our customers will rely on us to deliver stable platforms, with correct measures of performance in a manner that users can easily use.
Such breach or failure could also harm our reputation and expose us to protracted and costly lawsuits. Our platform and computer systems store and transmit proprietary and confidential information that is subject to stringent legal and regulatory obligations.
Our platform and computer systems store and transmit proprietary and confidential information that is subject to stringent legal and regulatory obligations.
As a result, we may be required to expend significant additional resources to protect against the threat of these disruptions and security breaches or to alleviate problems caused by such disruptions or breaches. We may have risks related to regulatory requirements. Online education is subject to ongoing regulatory obligations and review.
As a result, we may be required to expend significant additional resources to protect against the threat of these disruptions and security breaches or to alleviate problems caused by such disruptions or breaches. Unfavorable global economic, business, or political conditions could adversely affect our business, financial condition or results of operations.
We are subject to the substantial risk of failure facing businesses seeking to develop and commercialize new products and technologies. Maintaining and improving our platform will require significant capital. We also incur substantial accounting, legal and other overhead costs as a public company.
We have only recently demonstrated growth in our customer base and we have not generated sustainable revenue since inception. We are subject to the substantial risk of failure facing businesses seeking to develop and commercialize new products and technologies. Maintaining and improving our platform will require significant capital.
If we fail to attract Customers, or to negotiate agreements with them that provide us with sustainable revenue, it will impair our ability to operate and grow our business. We may not be able to convince educational institutions and businesses that our methods will produce better outcomes than their current approaches to online learning products, in a cost-effective manner.
We may not be able to convince educational institutions and businesses that our methods will produce better outcomes than their current approaches to online learning products, in a cost-effective manner. We may also not be able to convince them to dedicate significant resources to moving courses onto our platform and gain their trust in operating them collaboratively.
If our offerings to Customers are unsuccessful, result in insufficient revenue or result in us not being able to sustain revenue, we will be forced to reduce expenses, which may result in an inability to gain new Customers. 7 Our business model relies on us successfully licensing our platform and providing services to colleges, universities, and businesses for creation and online delivery of their learning products.
We also incur substantial accounting, legal and other overhead costs as a public company. If our offerings to customers are unsuccessful, result in insufficient revenue or result in us not being able to sustain revenue, we will be forced to reduce expenses, which may result in an inability to gain new customers.
Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business. 11 Risks Related to Our Common Stock An active trading market for our common stock may not be sustained.
Any of the foregoing could harm our business and we cannot anticipate all the ways in which the current economic climate and financial market conditions could adversely impact our business. -12- Cyber security risks and the failure to maintain the integrity of internal, partner, and consumer data could result in damages to our reputation, the disruption of operations and/or subject us to costs, fines or lawsuits.
Additional risks or uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Risks Related to Our Business We have a short operating history in online programs and may fail to grow our Customer base. We were incorporated in November 2017 and have no operating history in offering online courses.
Failure to manage these risks could materially and adversely affect our business, financial condition, and results of operations. Risks Related to Our Higher Education Business We have a limited operating history in online programs and may fail to grow our customer base. We were incorporated in November 2017 and have only recently closed a significant number of seven (7) customers.
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Historically, we have had no significant tangible assets other than cash. If our assumptions about market needs are incorrect, we may fail to launch courses and gain initial Customers.
Added
Additional risks or uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Risks Related to Our Healthcare Business We have significant compliance and regulatory risks. NurseMagic™ is designed for use across various healthcare modalities, such as skilled nursing, assisted living, memory care, home health, and rehabilitation centers.
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Even if we launch courses in a timely manner, our assumptions regarding recovery of upfront costs and growth of revenue may differ substantially from reality, in which case we will fail to achieve our revenue goals. We have not developed a strong Customer base and we have not generated sustainable revenue since inception.
Added
The healthcare sector is highly regulated, and our app is currently not HIPAA compliant. This lack of compliance poses significant risks when healthcare providers use the app in environments where Protected Health Information (PHI) is handled.
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We will be relying on our college, university and museum Customers to drive enrollment and revenue and continue to license our platform and pay for our services. Factors within and outside of our control will affect enrollments and include the following: ● Negative perceptions about online courses.
Added
Any unauthorized access, disclosure, or misuse of PHI could lead to substantial fines, legal actions, and reputational damage, adversely affecting our business operations and financial condition.
Removed
We will be relying on our enterprise Customers to prioritize providing online learning programs to train or upskill their workforces. Factors within and outside of our control will affect enrollments and include the following: ● General economic conditions. Any contraction in the economy could be expected to cause business leaders to deprioritize workforce training. ● Negative perceptions about online courses.
Added
Additionally, the use of the app in global markets exposes us to compliance risks under various international regulations, such as the General Data Protection Regulation (GDPR) in the European Union and other local privacy laws.
Removed
Our Customers will rely on us to deliver a stable platform, with correct measures of performance in a manner that instructors, lecturers, graduate student assistants and professors can easily use.
Added
Certain states have also adopted comparable privacy and security laws and regulations, which govern the privacy, collection, use, processing, disclosure, and protection of health-related and other personal information. Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our customers.
Removed
Even if we are successful in delivering a stable platform, our operating results may fluctuate as a result of a number of factors, many of which are outside of our control.
Added
Such laws are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
Removed
The following factors may affect our operating results: ● our ability to compete effectively; ● our ability to continue to attract users to our platform; ● our ability to attract new Customers to our platform; ● our ability to attract colleges and universities to our platform; ● the mix in our net revenues generated from Customers and colleges and universities; ● the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our business, operations and infrastructure; ● our focus on long term goals over short-term results; ● the results of our investments in risky projects; ● general economic conditions and those economic conditions specific to our online courses; ● our ability to keep our platform operational at a reasonable cost and without service interruptions; ● the success of our geographical and product expansion; ● our ability to attract, motivate and retain top-quality employees; ● foreign, federal, state or local government regulation that could impede our ability to operate our platform; ● our ability to upgrade and develop our systems, infrastructure and products; ● new technologies or services that block our platform and user adoption of these technologies; ● the costs and results of litigation that we may face; ● our ability to protect our intellectual property rights; ● our ability to forecast revenue; ● our ability to manage fraud and other activities that violate our terms of services; ● our ability to successfully integrate and manage our colleges and universities; and ● geopolitical events such as war, threat of war, or terrorist actions.
Added
Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other obligations, any actual or perceived failure by us or our employees, representatives, contractors, consultants, or other third parties to comply with such requirements or adequately address data privacy and security concerns, even if unfounded, could result in, among other adverse impacts, damage to our reputation, loss of customer confidence in our security measures, withdrawal or withholding of customer consent for using patient data, government investigations, and enforcement actions and litigation and claims by third parties, any of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.
Removed
We do not expect more than nominal revenues until at least some point during the fiscal year ending June 30, 2024. If our expectations prove incorrect, our business, operating results and financial condition will be materially and adversely affected.
Added
We have risks in gaining market adoption and winning customers from competitors. The healthcare app market is rapidly evolving and increasingly competitive, with numerous established players offering compliant and integrated solutions tailored to specific healthcare needs.
Removed
Maintaining compliance with these requirements may result in significant additional expense to us and any failure to maintain such compliance could cause our business to suffer. Noncompliance with applicable regulations or requirements could subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions.
Added
NurseMagic™ may struggle to gain traction against these competitors, particularly in modalities where compliance and integration with existing Electronic Health Record (EHR) systems are crucial. Failure to demonstrate clear value and differentiation could result in low adoption rates, impeding our ability to scale and achieve sustainable revenue growth.
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An adverse outcome in any such litigation could require us to pay contractual damages, compensatory damages, punitive damages, attorneys’ fees and other costs. These enforcement actions could harm our business, financial condition, and results of operations.
Added
We are seeking to expand our business to the healthcare sector by offering highly efficient, AI solutions into home health aide and skilled nursing workflows to relieve the prodigious strain on services due to workforce shortages and high turnover, but it is uncertain whether our offerings will achieve and sustain high levels of demand and market adoption.
Removed
If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition, and results of operations could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of our management’s attention and resources and an increase in professional fees.
Added
Our future financial performance depends in part on growth in this market, our ability to market effectively and in a cost-efficient manner, and our ability to adapt to emerging demands of potential customers and the evolving regulatory landscape. It is difficult to predict the future growth rate and size of our target market.
Removed
Unfavorable global economic, business, or political conditions could adversely affect our business, financial condition or results of operations.
Added
Though we have already closed 5 pilot programs with healthcare providers, our reliance on pilot programs and the free version of the app to generate interest may prove inadequate in terms of conversions to enterprise licenses.
Added
If healthcare organizations do not perceive a significant return on investment or fail to see measurable improvements in staff efficiency and patient care, our sales efforts may not translate into long-term revenue.
Added
Our success depends in part on the willingness of providers and healthcare organizations to partner with us, increase their use of our platform, and our ability to demonstrate the value of our technology to providers, as well as potential customers.
Added
If providers, healthcare organizations or regulators work in opposition to us or if we are unable to reduce healthcare costs or drive positive outcomes for our customers, then the market for our services may not continue to develop, or it might develop more slowly than we expect. -7- We face significant operational and financial risks.
Added
Implementing and maintaining NurseMagic™ across diverse healthcare environments poses significant operational challenges. Each modality has unique requirements and workflows, and the app must be highly adaptable to meet these needs. The cost and complexity of developing features tailored to specific healthcare settings, as well as ensuring robust data security and performance, require substantial investment.
Added
If we are unable to effectively allocate resources to these areas, our growth and operational stability could be compromised. As a public company, we incur significant overhead costs related to compliance, accounting, and legal obligations.
Added
If NurseMagic™ does not achieve the expected revenue or market penetration, we may be forced to scale back development and marketing efforts, which could hinder our ability to attract new customers and retain existing ones. We face combined legal and reputational risks because of the data we manage and the nature of the business.
Added
Failure to meet regulatory standards or to ensure the app's reliability and security could result in negative publicity, loss of trust, and damage to our brand reputation. This could lead to decreased user engagement and lower conversion rates for enterprise licenses.
Added
Additionally, any legal actions taken against us for non-compliance, data breaches, or misuse of the app could result in significant financial penalties and long-term damage to our business prospects. In summary, the success of NurseMagic™ depends on our ability to navigate complex regulatory landscapes, effectively differentiate ourselves in a competitive market, and maintain operational and financial stability.
Added
We rely on the intent and the marketing investments and support of our customers to build revenue with this product, and if colleges and universities are not incentivized to dedicate resources to engage in workforce training and professional learning, we could fail to grow this line of business.
Added
Our business model relies on us successfully licensing our platform and providing services to colleges, universities, and businesses for creation and online delivery of their learning products. If we fail to attract customers, or to negotiate agreements with them that provide us with sustainable revenue, it will impair our ability to operate and grow our business.
Added
General Risks There is substantial doubt about our ability to continue as a going concern. We are in the early stages of developing our customer base and have not completed our efforts to establish a stabilized source of revenue sufficient to cover our costs over an extended period of time.
Added
For the years ended June 30, 2024 and 2023, we had net losses of $4,403,182 and $4,153,303, respectively. The assessment of the Company’s ability to meet its future obligations is inherently judgmental, subjective and susceptible to change. -9- The assessment of the Company’s ability to meet its future obligations is inherently judgmental, subjective and susceptible to change.
Added
Based on their current forecast, management believes that it may not have sufficient cash and cash equivalents to maintain the Company’s planned operations for the next twelve months following the issuance of these financial statements.
Added
The Company has considered both quantitative and qualitative factors that are known or reasonably known as of the date of these financial statements are issued and concluded that there are conditions present in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern.
Added
In response to the conditions, management plans include generating cash by completing financing transactions, which may include offerings of common stock. However, these plans are subject to market conditions, and are not within the Company’s control, and therefore, cannot be deemed probable. There is no assurance that the Company will be successful in implementing their plans.
Added
As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Added
Our operating results are highly susceptible to fluctuations due to numerous factors, many of which are beyond our control. We may be unable to compete effectively in the marketplace, which could hinder our ability to attract and retain users, customers, and educational institutions on our platform.
Added
The mix of net revenues generated from different customer segments may not align with our expectations, leading to unpredictable financial outcomes. Additionally, the timing and magnitude of operating costs and capital expenditures required to maintain and expand our business, operations, and infrastructure may exceed our forecasts, adversely impacting our profitability.
Added
Our focus on long-term objectives over immediate financial performance could result in periods of suboptimal results, and our investments in high-risk projects may fail to generate anticipated returns. Adverse economic conditions, both broadly and specific to our industry, could further weaken our financial position.
Added
We may struggle to keep our platform operational at a reasonable cost or without service interruptions, which could damage our reputation and erode user trust. -10- Our geographical and product expansion initiatives may not achieve the intended outcomes, and we may fail to attract, inspire, and retain top-tier talent, impeding our ability to succeed at any scale.
Added
Government regulations—whether foreign, federal, state, or local—could impose constraints on our operations, potentially limiting our growth. We may be unable to effectively upgrade and develop our systems, infrastructure, and products, or to address emerging technologies or services that block our platform, leading to reduced user engagement.
Added
We could face substantial costs and uncertainties from litigation, and we may not be able to protect our intellectual property rights, which could erode our competitive position. Our revenue forecasting may be inaccurate, leading to misguided strategic decisions. Additionally, we may fail to manage fraud and other activities that violate our terms of service, further compromising our platform’s integrity.
Added
Our ability to successfully integrate and manage our relationships with enterprises in healthcare and with colleges and universities is uncertain, and any failure in either segment could diminish our reputation. Finally, geopolitical events such as war, threats of war, or terrorist actions could disrupt our operations and significantly impair our business performance.
Added
If our security measures or those of our future business partners are breached or fail and result in unauthorized disclosure of data, we could lose customers and/or fail to attract new customers. Such breach or failure could also harm our reputation and expose us to protracted and costly lawsuits.
Added
We have and will continue to collect and retain large volumes of internal, partner and consumer data, including personally identifiable information, for business purposes, including for transactional or target marketing and promotional purposes, and our various information technology systems enter, process, summarize and report such data. We also maintain personally identifiable information about our employees.
Added
The integrity and protection of our customer, employee, and company data is critical to our business and our customers and employees are likely to have a high expectation that we will adequately protect their personal information.
Added
The regulatory environment, as well as the requirements imposed on us by the credit card industry, governing information, security and privacy laws is increasingly demanding and continues to evolve. Maintaining compliance with applicable security and privacy regulations may increase our operating costs and/or adversely impact our ability to market our products and services.
Added
We also rely on accounting, financial and operational management information technology systems to conduct our operations. If these information technology systems suffer severe damage, disruption or shutdown and our business continuity plans do not effectively resolve the issues in a timely manner, our business, financial condition and results of operations could be materially adversely affected.
Added
We may face various security threats, including cyber security attacks on our data (including our vendors’ and customers’ data) and/or information technology infrastructure. Although we utilize various procedures and controls to monitor and mitigate these threats, there can be no assurance that these procedures and controls will be sufficient to prevent penetrations or disruptions to our systems.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located at 607 Shelby Street, Suite 700 PMB 214, Detroit, Michigan 48226. The lease term for our office and laboratory space in Ann Arbor, Michigan commenced in November 2017 with an expiration date of May 5, 2019 (the “Ann Arbor Lease”).
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located at 607 Shelby Street, Suite 700 PMB 214, Detroit, Michigan 48226. We currently operate remotely with no lease obligations. We believe that our existing remote environment is adequate for our current needs. We believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.
Removed
In March 2019, the Ann Arbor Lease was extended through May 2022 with monthly payments of $7,942 through May 2022. In May 2020, we terminated the Ann Arbor Lease and began operating remotely with no further lease obligations. We believe that our existing remote environment is adequate for our current needs.
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We believe that suitable additional or alternative space will be available in the future on commercially reasonable terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition, or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 16 PART II
Biggest changeWe are not currently a party to or aware of any proceedings that we believe will have, individually or in aggregate, a material adverse effect on our business, financial condition, or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. -17- PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAlso, during the year ended June 30, 2023, 14,083 shares of common stock were issued to consultants. The foregoing issuances were exempt from registration under Section 4(a)(2) of the Securities Act. ITEM 6. [RESERVED].
Biggest changeRecent Sales of Unregistered Securities During the year ended June 30, 2024; 6,292 options to purchase common stock were issued to employees under our 2018 Equity Incentive Plan. The foregoing issuances were exempt from registration under Section 4(a)(2) of the Securities Act. ITEM 6. [RESERVED].
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “AMST.” Shareholders As of September 21, 2023, there were approximately 40 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “AMST.” Shareholders As of September 30, 2024, there were approximately 41 stockholders of record of our common stock.
Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not representative of the total number of beneficial owners of our stock. On September 21, 2023, the closing price of our common stock was $2.55.
Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, this number is not representative of the total number of beneficial owners of our stock. On September 27, 2024, the closing price of our common stock was $2.51.
Removed
Recent Sales of Unregistered Securities During the year ended June 30, 2023, 999 options to purchase common stock were issued to employees under our 2018 Equity Incentive Plan. On July 12, 2022, the Company issued 10,417 shares of its common stock totaling approximately $61,250 in value to various consultants in exchange for strategic investor relations services.
Removed
These shares vested immediately upon issuance. In connection with the Company’s September 2022 public offering of 348,485 shares of common stock, in a concurrent private placement, the Company issued warrants to purchase an aggregate of 348,485 shares of common stock.
Removed
The warrants were issued pursuant to an exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. On December 20, 2022, the Company issued 3,667 shares of its common stock totaling approximately $10,560 in value to various consultants in exchange for strategic investor relations services. These shares vested immediately upon issuance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOn September 25, 2020, we completed the Offering of 250,000 shares of its common stock, $0.0001 par value per share, at an offering price of $60.00 per share (total net proceeds of approximately $12.8 million after underwriting discounts, commissions, and other offering costs). 21 On August 2, 2021, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, we may sell up to $16.5 million of shares of common stock.
Biggest changeOn September 25, 2020, we completed the Offering of 250,000 shares of its common stock, $0.0001 par value per share, at an offering price of $60.00 per share (total net proceeds of approximately $12.8 million after underwriting discounts, commissions, and other offering costs).
We will continue to capitalize significant software development costs, comprised primarily of internal payroll, payroll related and contractor costs, as we build out and complete our technology platforms. Financial Position, Liquidity, and Capital Resources Overview We are not currently profitable, and we cannot provide any assurance that we will ever be profitable, as indicated by our losses noted above.
We will continue to capitalize significant software development costs, comprised primarily of internal payroll, payroll related and contractor costs, as we build out and complete our technology platforms. -22- Financial Position, Liquidity, and Capital Resources Overview We are not currently profitable, and we cannot provide any assurance that we will ever be profitable, as indicated by our losses noted above.
When standalone selling prices are not observable, we utilize a cost-plus margin approach to allocate the transaction price. 19 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).
When standalone selling prices are not observable, we utilize a cost-plus margin approach to allocate the transaction price. -20- 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).
While our significant accounting policies are more fully described in Note 2 in the “Notes to Financial Statements,” we believe the following accounting policies are critical to the process of making significant judgments and estimates in preparation of our financial statements. 18 Internally-Developed Capitalized Software We capitalize certain costs related to internal-use software, primarily consisting of direct labor and third-party vendor costs associated with creating the software.
While our significant accounting policies are more fully described in Note 2 in the “Notes to Financial Statements,” we believe the following accounting policies are critical to the process of making significant judgments and estimates in preparation of our financial statements. -19- Internally-Developed Capitalized Software We capitalize certain costs related to internal-use software, primarily consisting of direct labor and third-party vendor costs associated with creating the software.
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, 2023 and 2022, respectively.
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, respectively.
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.
Stock options generally vest over four 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.
On September 1, 2022, we closed a public offering of 348,485 shares of common stock and a concurrent private placement of warrants to purchase 348,485 shares of common stock at a combined purchase price of $6.60 per share. The net proceeds to the Company were approximately $1.85 million. As of June 30, 2023, our cash balance totaled $5.36 million.
On September 1, 2022, we closed a public offering of 348,485 shares of common stock and a concurrent private placement of warrants to purchase 348,485 shares of common stock at a combined purchase price of $6.60 per share. The net proceeds to the Company were approximately $1.85 million. As of June 30, 2024, our cash balance totaled $2,171,016.
During the year ended June 30, 2023, five Customers comprised approximately 84% of total revenue. During the year ended June 30, 2022, three Customers comprised approximately 69% of total revenue. We also receive fees that are fixed in nature, such as annual license and maintenance charges.
During the year ended June 30, 2024, five customers comprised approximately 97% of total revenue. During the year ended June 30, 2023, five customers comprised approximately 84% of total revenue. We also receive fees that are fixed in nature, such as annual license and maintenance charges.
Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements because of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere in this Form 10-K.
Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements because of many factors, including those discussed under “Item 1A. Risk Factors” and elsewhere in this Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Form 10-K.
In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities. Results of Operations Revenue We generated revenues of $845,009 for the year ended June 30, 2023 as compared to $697,001 for the year ended June 30, 2022.
In these contracts, the license fees received in advance of the platform’s launch are recorded as contract liabilities. Results of Operations Revenue We generated revenues of $166,881 for the year ended June 30, 2024 as compared to $845,009 for the year ended June 30, 2023.
At the Special Meeting, the stockholders also approved a proposal to amend the Company’s certificate of incorporation to effect a reverse split of the Company’s outstanding shares of common stock, par value $0.0001 at a specific ratio within a range of one-for five (1-for-5) to a maximum of one-for-fifty (1-for-50) to be determined by the Company’s board of directors in its sole discretion.
At the Special Meeting, the stockholders also approved a proposal to amend the Company’s certificate of incorporation to affect a reverse split of the Company’s outstanding shares of common stock, par value $0.0001 at a specific ratio within a range of one-for five (1-for-5) to a maximum of one-for-fifty (1-for-50) to be determined by the Company’s board of directors in its sole discretion. -18- Following the Special Meeting, the board of directors approved a one-for-twelve (1-for-12) reverse split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”).
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, 2023 and 2022, we do not have any contract assets.
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.
Technology and content expenses also include the amortization of capitalized software costs. Technology and content development expenses for the year ended June 30, 2023, were $1,523,547 as compared to $3,059,962 for the year ended June 30, 2022. The decrease of $1,536,415 is primarily due to savings in employee payroll and contracted programming.
Technology and content expenses also include the amortization of capitalized software costs. Technology and content development expenses for the year ended June 30, 2024, were $1,074,000 as compared to $1,523,547 for the year ended June 30, 2023. The decrease of $449,219 is primarily due to savings in employee payroll and contracted programming.
The decrease of $2,691,086 is primarily due to savings in the areas of employee payroll, legal and audit, and insurance. 20 Technology and Content Development Technology and content development expenses consist primarily of personnel and personnel-related expenses and contracted services associated with the ongoing improvement and maintenance of our platform as well as hosting and licensing costs.
The increase of $415,512 is primarily due to Board Compensation net of significant savings in the areas of employee payroll, legal and audit, and insurance. -21- Technology and Content Development Technology and content development expenses consist primarily of personnel and personnel-related expenses and contracted services associated with the ongoing improvement and maintenance of our platform as well as hosting and licensing costs.
Sales and marketing expenses for the year ended June 30, 2023 were $1,053,193 as compared to $1,509,694 for the year ended June 30, 2022. The decrease of $456,501 is primarily due to savings with outside vendors.
Sales and marketing expenses for the year ended June 30, 2024 were $763,915 as compared to $1,053,193 for the year ended June 30, 2023. The decrease of $289,278 is primarily due to savings with outside vendors.
General and administrative expenses for the year ended June 30, 2023, were $2,492,777 as compared to $5,183,863 for the year ended June 30, 2022.
General and administrative expenses for the year ended June 30, 2024, were $2,908,289 as compared to $2,492,777 for the year ended June 30, 2023.
Capital Expenditures During the years ended June 30, 2023 and 2022, we had capital asset additions of $396,033 and $616,235, respectively, which were comprised of $368,909 and $599,660 respectively, in capitalized technology and content development, and $27,124 and $16,575, respectively, of property and equipment, including primarily computer equipment and software.
Capital Expenditures During the years ended June 30, 2024 and 2023, we had capital asset additions of $375,866 and $396,033, respectively, which were comprised of $374,700 and $368,909 respectively, in capitalized technology and content development, and $1,166 and $27,124, respectively, of property and equipment, including primarily computer equipment and software.
See “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Form 10-K. 17 Overview The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the twelve months ended June 30, 2023 and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein.
Overview The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the twelve months ended June 30, 2024 and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein.
General and Administrative General and administrative expenses consist primarily of personnel and personnel-related expenses, including executive management, legal, finance, human resources and other departments that do not provide direct operational services. General and administrative expenses also include professional fees and other corporate expense.
The NurseMagic TM app is the first of these and has already gained traction with larger entities. General and Administrative General and administrative expenses consist primarily of personnel and personnel-related expenses, including executive management, legal, finance, human resources and other departments that do not provide direct operational services. General and administrative expenses also include professional fees and other corporate expense.
Interest Income For the year ended June 30, 2023, interest income totaled $72,824 as compared to interest income of $9,230 for the year ended June 30, 2022. Interest Expense. Interest expense amounted to $1,619 for the year ended June 30, 2023 as compared to interest expense (including amortization of issuance costs) of $12,635 for the year ended June 30, 2022.
Interest Income For the year ended June 30, 2024, interest income totaled $176,469 as compared to interest income of $72,824 for the year ended June 30, 2023. Interest Expense. Interest expense amounted to $0 for the year ended June 30, 2024 as compared to interest expense of $1,619 for the year ended June 30, 2023.
Net Loss Our net loss for the year ended June 30, 2023 was $4,153,303 as compared to a net loss for the year ended June 30, 2022 of $9,059,923. The loss was substantially lower during the year ended June 30, 2023 compared to 2022 as a result of the savings discussed above.
Net Loss Our net loss for the year ended June 30, 2024 was $4,403,182 as compared to a net loss for the year ended June 30, 2023 of $4,153,303. The loss was $249,879 higher during the year ended June 30, 2024 compared to 2023 primarily due to Board Compensation net of significant savings in the areas discussed above.
We incurred a net loss of $(4,153,303) for the twelve months ended June 30, 2023, and we incurred a net loss of $(33,449,021) for the period from November 14, 2017 (date of incorporation) to June 30, 2023. Basis of Presentation The financial statements contained herein have been prepared in accordance with GAAP and the requirements of the SEC.
We incurred a net loss of $(4,403,182) for the twelve months ended June 30, 2024, and we incurred a net loss of $(37,833,501) for the period from November 14, 2017 (date of incorporation) to June 30, 2024. The assessment of the Company’s ability to meet its future obligations is inherently judgmental, subjective and susceptible to change.
Revenue growth compared to prior year for the twelve months ended June 30, 2022 was primarily driven by growth in the sale of annual license fees and associated implementation and customization services.
Revenue compared to prior year for the twelve months ended June 30, 2024 was primarily from the sale of monthly license fees. We have strongly pivoted to grow our customer base while reducing risk and losses, resulting in a larger client base, a short-term reduction in overall revenue and a dramatic reduction in cash burn.
Removed
Following the Special Meeting, the board of directors approved a one-for-twelve (1-for-12) reverse split of the Company’s issued and outstanding shares of common stock (the “Reverse Stock Split”).
Added
Based on their current forecast, management believes that it will have sufficient cash and cash equivalents to maintain the Company’s planned operations for the next twelve months following the issuance of these financial statements; however, there is uncertainty in the forecast and therefore the Company cannot assert that it is probable.
Removed
Off-Balance Sheet Arrangements We did not have during the periods presented, nor do we currently have, any off-balance sheet arrangements as defined under applicable SEC rules.
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The Company has considered both quantitative and qualitative factors that are known or reasonably knowable as of the date of these financial statements are issued and concluded that there are conditions present in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern.
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In response to the conditions, management plans include generating cash by completing financing transactions, which may include offerings of common stock. However, these plans are subject to market conditions, and are not within the Company’s control, and therefore, cannot be deemed probable. There is no assurance that the Company will be successful in implementing their plans.
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As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern. Basis of Presentation The financial statements contained herein have been prepared in accordance with GAAP and the requirements of the SEC.
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Larger, cash-upfront deals were struggling to produce sustainable revenue, as administrative barriers within nonprofits, high price points set by customers, and inability or unwillingness of customers to partner with schools, businesses and other entities to purchase products hampered growth.
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We continue to believe that AI-powered learning programs, priced affordably, will supplant other academic products in the mid to long term, but have defocused on securing “change agent” customers, and are now offering our academic platform for use by any community college on a fee-per-course basis.
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The incremental cost to Amesite in delivering the system is de minimis , as the system is turnkey, and the technology stack is robust. We have focused all new development work on delivering AI tools to markets hungry for increased capability that immediately impacts both their performance and their bottom line.
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On August 2, 2021, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), under which, subject to specified terms and conditions, we may sell up to $16.5 million of shares of common stock.

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