Amesite Inc. — Form 10-Q Summary
Reporting period: Fiscal second quarter and six months ended December 31, 2021. Amesite provides an AI-driven online learning platform and related services to businesses, educational institutions, and nonprofits. The filing was signed February 18, 2022.
Financial performance and position
| Metric | Three months ended Dec. 31, 2021 | Six months ended Dec. 31, 2021 | Comparable 2020 period |
|---|---|---|---|
| Revenue | $189,174 | $329,865 | $106,812 and $216,921, respectively |
| Operating expenses | $2,517,024 | $5,036,134 | $2,394,993 and $3,977,548, respectively |
| Net loss | $2.32 million* | $4,700,396 | $2,287,574 and $7,373,838, respectively |
| Basic loss per share | $0.11 | $0.22 | $0.11 and $0.40, respectively |
| Cash used in operating activities | Not separately provided | $3,812,921 | $2,748,757 for the six-month period |
- Revenue increased about 77% for the quarter and 52% for the six-month period year over year, primarily from annual license fees and implementation and customization services.
- Operating expenses rose about 5% for the quarter and 27% for the six-month period. Technology and content development and sales and marketing costs increased; quarterly general and administrative costs declined year over year.
- No gross profit or gross margin is presented. Operating expenses substantially exceeded revenue.
- Cash and cash equivalents were $7.75 million at December 31, down $2.96 million from June 30. Current assets were $8.54 million and current liabilities $754,650; no debt balance is listed at period end.
- Capitalized software totaled $1.35 million net. Six-month investment in capitalized software was $500,624.
Changes, liquidity, and outlook
- The six-month net loss improved year over year, mainly because the prior-year period included substantial interest expense related to convertible notes that converted in connection with the 2020 IPO. The quarterly net loss was broadly similar to the prior year.
- Management said the company had substantial doubt about its ability to continue as a going concern before a subsequent financing. On February 16, 2022, Amesite completed a public offering of 3.75 million shares at $0.80 per share, receiving approximately $2.49 million net. Management stated the proceeds, together with available cash, were expected to fund obligations through February 2023 and that the going-concern doubt was resolved.
- A separate August 2021 agreement permits Amesite, subject to conditions, to sell up to $16.5 million of stock to Lincoln Park Capital. Proceeds depend on sales volume and share prices; the filing says the company planned further sales but offers no assurance of proceeds.
- No specific revenue, profitability, or other operating guidance is provided. Management cautions that the company is not profitable and may need additional financing.
Risks and unusual items
- Customer concentration remains significant: five customers represented approximately 89% of revenue in the three- and six-month periods ended December 31, 2021.
- Stock-based compensation was $811,611 for the six-month period, including compensation awards to board members. The company also issued 13,901 shares valued at $22,698 for consulting services during the quarter.
- The filing identifies early-stage operating, financing, technology, intellectual property, third-party reliance, staffing, and competitive risks. Management said COVID-19 had not significantly affected operations to date but that future effects could not be estimated.
- Management reported effective disclosure controls and no material changes in internal control over financial reporting. No legal proceedings were reported.
Important facts for investors to verify
- Net-loss inconsistency: The statements of operations report quarterly net loss of $2,322,329, while MD&A reports $2,322,539 and the statement of stockholders’ equity reflects $2,322,239. The filing does not provide a clear reconciled value.
- Assess whether revenue growth and customer diversification can support the company’s expense base and reduce reliance on external financing.
- Review subsequent share dilution: common shares outstanding were 21,989,679 at December 31, 2021 and 25,739,679 as of February 17, 2022 after the offering.
- Monitor actual proceeds and dilution under the Lincoln Park agreement, and compare cash usage with management’s stated funding horizon.
*The quarterly net-loss amount differs among sections of the filing; see the verification item above.