Amesite Inc. — Form 10-Q Summary
Business context and reporting period. Amesite provides an AI-driven online learning platform and related content and services to businesses, educational institutions, and nonprofits. This filing covers the fiscal first quarter ended September 30, 2021; comparable results are for the three months ended September 30, 2020. The financial statements are unaudited.
Key financial metrics
| Metric | Quarter ended Sep. 30, 2021 | Quarter ended Sep. 30, 2020 |
|---|---|---|
| Revenue | $140,691 | $110,109 |
| Operating expenses | $2,519,110 | $1,582,555 |
| Net loss | $(2,378,157) | $(5,086,264) |
| Net loss per share, basic | $(0.11) | $(0.31) |
| Cash used in operating activities | $1,209,372 | $312,890 |
| Cash used in investing activities | $273,147 | $222,049 |
- Revenue increased 27.8% year over year, attributed to annual licenses, implementation and customization services, and variable customer-user fees.
- Operating expenses rose 59.2%: general and administrative expense increased to $1.236 million, technology and content development to $796,108, and sales and marketing to $487,232.
- The smaller net loss primarily reflects the absence of $3.614 million in prior-year interest expense, largely associated with the discount on convertible notes converted in the 2020 IPO and amortization of debt issuance costs. The company still reported an operating loss.
- At September 30, cash and cash equivalents were $10.591 million; current assets were $10.787 million and current liabilities were $1.125 million. Total assets were $12.231 million and stockholders’ equity was $11.106 million. No notes payable were outstanding.
- Quarter-end cash declined $122,519 after $1.360 million of net equity financing. Capitalized software was $1.350 million. Deferred revenue was $409,314, expected to be recognized over the following 12 months.
Material changes and business developments
- Three customers accounted for approximately 86% of quarterly revenue, compared with two customers accounting for approximately 98% in the prior-year quarter.
- Common shares outstanding increased to 21,975,778 at September 30 from 21,063,954 at June 30, including shares issued in connection with the Lincoln Park agreement and other equity activity.
- In August 2021, Amesite entered into a stock purchase agreement that permits sales of up to $16.5 million of common stock through August 2023, subject to its terms. The initial sale generated $1.5 million gross and $1.36 million net proceeds; additional sales could dilute shareholders.
- The company reported launching platform Version 4.0 in October 2021, with enterprise features including streamlined onboarding, Microsoft Directory integration, and a global learner dashboard. It also described simplified tiered pricing and announced a workforce-training contract with Michigan Works! Southeast.
Outlook, risks, and other notable items
- Management stated that cash and available liquidity should cover anticipated operating and investing needs for at least the next 12 months. The company is not profitable and gave no quantified revenue, earnings, or cash-flow guidance.
- Management’s stated priorities include expanding sales and marketing, pursuing larger enterprise contracts, and continuing platform development. Management cautioned that actual results may differ materially from forward-looking statements.
- Risks highlighted include ongoing losses and operating cash use, the need for additional funding, customer concentration, dependence on third-party providers and partners, competition and rapid technology change, and uncertainty about converting product capabilities and sales pipeline into revenue. Management also noted potential adverse effects from COVID-19 variants and related disruption.
- The company reported no material legal proceedings, no off-balance-sheet arrangements, and effective disclosure controls and procedures. It concluded that no conditions or events raised substantial doubt about its ability to continue as a going concern.
Most important facts for investors to verify
- Whether revenue growth and the announced enterprise and workforce opportunities translate into sustained, recurring revenue, given quarterly revenue of $140,691 and customer concentration.
- Whether operating cash burn remains consistent with management’s stated 12-month liquidity outlook, and the timing and amount of any further funding needs.
- The terms, actual usage, share issuance, fees, and potential dilution associated with the Lincoln Park purchase agreement.
- Whether Version 4.0 and increased sales and marketing investment produce larger contracts, while operating expenses continue to grow materially faster than revenue.