Amesite Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended June 30, 2021, compared with FY2020. The request metadata says “2020 Q4,” but this filing covers FY2021. Amesite provides an AI-driven online learning platform and related course-development services for businesses and educational institutions.
Financial performance and position
| Metric | FY2021 / June 30, 2021 | FY2020 / June 30, 2020 |
|---|---|---|
| Revenue | $674,580 | $59,749 |
| Operating expenses | $8,648,592 | $4,142,133 |
| Net loss | $11,586,292 | $4,170,303 |
| Basic loss per share | $0.59 | $0.27 |
| Cash and cash equivalents | $10,713,091 | $4,093,874 |
| Current liabilities | $741,743 | $2,704,777 |
| Net cash used in operating activities | $5,334,686 | $2,810,102 |
| Capital expenditures and software investment | $842,326 | $795,748 |
- Revenue rose substantially year over year, driven by annual license fees, implementation and customization services, and variable user fees. Enterprise customers generated $553,703 of FY2021 revenue; K-12 customers $67,895; and universities $52,982.
- The filing does not clearly report gross profit or gross margin. Operating expenses exceeded revenue by approximately $8.0 million.
- Interest expense was $3,613,873, including a $3,383,546 charge related to the conversion discount on notes and $182,900 of remaining debt issuance costs amortized at conversion.
- The $2,182,500 principal amount of convertible notes, plus accrued interest, converted into 1,127,872 common shares in connection with the September 2020 offering. No notes payable remained on the June 30, 2021 balance sheet.
- FY2021 financing cash flow included $12,796,229 in net proceeds from the September 2020 stock offering. At year-end, stockholders’ equity was $11,735,090 and accumulated deficit was $20,217,093.
Material changes versus FY2020
- Revenue increased from $59,749 to $674,580, while net loss widened from $4,170,303 to $11,586,292.
- General and administrative expense increased to $4,620,431; technology and content development expense to $2,276,555; and sales and marketing expense to $1,751,606. The company attributed increases to hiring, professional fees, platform development, and higher marketing activity.
- Operating cash use increased to $5,334,686. Cash nevertheless rose to $10,713,091, primarily following the public stock offering.
- The company implemented an enterprise solution for The Henry Ford and launched services on Microsoft Azure. It continued development of its Gen 4 platform.
Outlook, risks, and unusual items
- Management said year-end cash and available liquidity were expected to fund operating and investing needs for at least 12 months. The financial statements state that management did not believe substantial doubt about continuing as a going concern existed; elsewhere, the filing describes historical going-concern doubt and continuing reliance on additional financing.
- The company said it did not expect more than nominal revenue until at least some point in FY2022. Gen 4 platform availability was targeted by the end of Q1 2022. These are forward-looking targets, not guarantees.
- On August 2, 2021, after year-end, Amesite entered an agreement allowing it to sell up to $16.5 million of shares to Lincoln Park, subject to conditions. The initial sale raised $1.5 million gross and $1.38 million net; the arrangement may cause substantial dilution, and proceeds depend on sales and share prices.
- Key risks include limited operating history and customer base, continued losses and funding needs, competition, dependence on customer enrollment and marketing, cybersecurity and privacy exposure, education-sector regulation, and possible effects of COVID-19 variants on sales and pipeline growth.
- The company reported no material legal proceedings and no off-balance-sheet arrangements. The auditor issued an unqualified opinion on the financial statements; it did not audit internal control effectiveness.
Important facts for investors to verify
- Whether revenue growth converts into recurring, sustainable customer revenue and improved operating cash flow.
- Cash runway and actual financing needs, including the timing, net proceeds, and dilution from any further Lincoln Park sales.
- The composition of the $3.6 million interest expense, especially the noncash conversion-related charge, and the effect of equity compensation and share issuance.
- Progress toward Gen 4 availability and evidence supporting management’s comments on learner retention and product reviews.
- That the reported liquidity outlook remains adequate as expenses grow; reported losses and operating cash use remain significant relative to revenue.