Amesite Inc.

Amesite, Inc.

Notes to Condensed Financial Statements (unaudited)

March 31, 2026 and 2025

Note 1 - Nature of Business

Amesite Inc. (the “Company”) was incorporated in November 2017. Amesite is a pioneering technology company specializing in the development and marketing of B2C and B2B AI-driven solutions, including its higher ed platform and healthcare app. Leveraging its proprietary AI infrastructure, Amesite offers cutting-edge applications that cater to both individual and professional needs. NurseMagic™, the company’s mobile healthcare app, streamlines creation of nursing notes and documentation tasks, enhances patient communication, and offers personalized guidance to nurses on patient care, medications, and handling challenging workplace situations.

Note 2 - Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements.

In the opinion of management, the condensed financial statements of the Company as of March 31, 2026 and 2025 and for the three months and nine months ended March 31, 2026 and 2025 include all adjustments and accruals, consisting only of normal, recurring accrual adjustments, which are necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.

Certain information and footnote disclosures normally included in condensed financial statements prepared in accordance with GAAP have been condensed in or omitted from this report pursuant to the rules and regulations of the SEC. These condensed financial statements should be read together with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

There have been no material changes to the Company’s significant accounting policies as described in Note 2, “Significant Accounting Policies,” to the financial statements included in that Form 10-K. The Company has applied those accounting policies consistently to all periods presented herein.

Going Concern

The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

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The Company is developing its customer base and has not completed its efforts to establish a stabilized source of revenue sufficient to cover its expenses. The Company has had a history of net losses and negative cash flows from operating activities since inception and expects to continue to incur net losses and use cash in its operations in the foreseeable future.

The assessment of the Company’s ability to meet its future obligations is inherently judgmental, subjective and susceptible to change. 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 condensed financial statements.

The Company has considered both quantitative and qualitative factors that are known or reasonably known as of the date of these condensed 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. 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. 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 condensed 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.

Use of Estimates

The preparation of condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash, Cash Equivalents, and Restricted Cash

The Company considers all investments with an original maturity of three months or less when purchased to be cash equivalents. The total amount of bank deposits (checking and savings accounts) insured by the FDIC at March 31, 2026 and June 30, 2025 was $250,000.

“Restricted Cash” in the balance sheets reflects amounts pledged as collateral for the Company’s credit card facility. As of March 31, 2026 and June 30, 2025, restricted cash totaled $100,000.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable consists of amounts due from B2B annual subscription customers billed monthly under annual agreements and customer collections held by a third-party payment processor for B2C monthly subscriptions. Accounts receivable are recorded at the invoiced amount and do not bear interest. B2B and B2C amounts are generally collected within 60 days of the related sales transaction.

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The Company estimates expected credit losses on current accounts receivable in accordance with ASC 326, as amended by ASU 2025-05, which became effective for the Company for its annual period beginning July 1, 2025 and interim periods therein. The Company has elected the practical expedient under ASU 2025-05, pursuant to which expected credit loss estimates are based on historical loss experience and current conditions as of the balance sheet date, without adjustment for projected future changes in macroeconomic conditions.

The allowance for doubtful accounts is determined using specific identification of B2B receivable balances based on each customer's payment history, receivable age, and status of collection efforts. As the Company's B2B segment is early-stage, no statistically derived general reserve has been recorded beyond the specific identification analysis.

As of March 31, 2026, one B2B customer had ceased remitting monthly payments required under their annual subscription agreement. The Company has exhausted internal collection efforts with respect to the account and referred the outstanding balance to a third-party collections agency. Accordingly, the Company recorded an allowance for doubtful accounts of $7,964 as of March 31, 2026.

Prepaid Expenses

The Company considers all items incurred for future services to be prepaid expenses. At March 31, 2026 and June 30, 2025, the Company’s prepaid expenses consisted of the following.

Property and Equipment

Property and equipment are recorded at cost. The straight-line method is used for computing depreciation and amortization. Assets are depreciated over their estimated useful lives. The cost of leasehold improvements is depreciated (amortized) over the lesser of the length of the related leases or the estimated useful lives of the assets. Costs of maintenance and repairs are charged to expense when incurred.

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Capitalized Software Costs

The Company capitalizes costs incurred in the development of software for its customers, including the costs of the software, materials, consultants, and payroll and payroll related costs for employees incurred in developing computer software. Software development projects generally include three stages: the preliminary project stage (all costs are expensed as incurred), the application development stage (certain costs are capitalized and certain costs are expensed as incurred) and the post-implementation/operation stage (all costs are expensed as incurred). Capitalization of costs requires judgment in determining when a project has reached the application development stage, the proportion of time spent in the application development stage, and the period over which we expect to benefit from the use of that software. Once the software is placed in service, these costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three years.

Amortization expense is included as part of “Technology and content development” in the Statements of Operations. Future estimated amortization is as follows:

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606,Revenue from Contracts with Customers (Topic 606). There have been no material changes to the Company’s revenue recognition policies from those disclosed in Note 2, Significant Accounting Policies, to the financial statements included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025.

As of March 31, 2026 and June 30, 2025, the balance of deferred revenue was $3,975 and $36,745, respectively, all of which is expected to be realized within 12 months.

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The following table shows revenue from contracts with customers by customer type for the three and nine months ended March 31, 2026 and 2025, respectively.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

Earnings (Loss) per Share

At March 31, 2026 and June 30, 2025, the Company had 706,663 and 601,538, respectively, potentially dilutive shares of common stock related to common stock options and warrants as determined using the if-converted method. Additionally, there were restricted stock units and deferred stock units outstanding to Board members representing potentially dilutive shares totaling 462,360 and 355,295 at March 31, 2026 and June 30, 2025, respectively. For the three months and nine months ended March 31, 2026 and 2025, the dilutive effect of common stock has not been included in the average shares outstanding for the calculation of net loss per share as the effect would be anti-dilutive as a result of our net losses in these periods.

Subsequent Events

The Company evaluated subsequent events through the date this Form 10-Q was filed and has determined that no events have occurred that would require recognition or disclosure in the condensed financial statements except that disclosed at Note 6.

Risks and Uncertainties

The Company operates in an industry subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, and other risks associated with an early-stage company, including the potential risk of business failure.

Significant Concentrations and Risks

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash, cash equivalents, and restricted cash. As of March 31, 2026 and June 30, 2025, all of the Company’s cash, cash equivalents, and restricted cash were deposited in financial institutions located in the United States, which management believes are of high credit quality.

During the three months and nine months ended March 31, 2026, one customer accounted for 14% and 12% of the Company’s revenues, respectively. During the three months and nine months ended March 31, 2025, one customer accounted for 33% and 63% of the Company’s revenues, respectively.

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Recently Issued Accounting Standards

The Company has evaluated recently issued accounting pronouncements and has determined that none of the new or recently adopted standards issued by the Financial Accounting Standards Board (FASB) are expected to have a material impact on its financial statements or related disclosures.

Note 3 - Stock-Based Compensation

The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and deferred stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards align the interests of its employees, directors, and consultants with those of its stockholders.

Options

No options were granted for the nine months ended March 31, 2026 or 2025. As of March 31, 2026, there were approximately $251,780 of total unrecognized compensation costs for employees and non-employees related to nonvested options. These costs are expected to be recognized through May 2029.

A summary of options terminated, as well as those that vested, during the three months ended March 31, 2026 is presented below:

A summary of options terminated, as well as those that vested, during the nine months ended March 31, 2026 is presented below:

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A summary of options terminated, as well as those that vested, during the three months ended March 31, 2025 is presented below:

A summary of options terminated, as well as those that vested, during the nine months ended March 31, 2025 is presented below:

Warrants

A summary of warrant activity during the three months ended March 31, 2026 is presented below:

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A summary of warrant activity during the nine months ended March 31, 2026 is presented below:

A summary of warrant activity during the three months ended March 31, 2025 is presented below:

A summary of warrant activity during the nine months ended March 31, 2025 is presented below:

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Board of Directors: Deferred Stock Units and Restricted Stock Units

For the nine months ended March 31, 2026, $157,125 in deferred stock units were awarded. For the nine months ended March 31, 2025, $153,375 in deferred stock units were awarded and $27,750 in cash compensation was paid.

A summary of deferred stock units terminated/settled, as well as those that vested, during the nine months ended March 31, 2026 and 2025 is presented below:

Note: the weighted average remaining contractual term is not applicable since these do not vest until the director leaves service.

As of March 31, 2026, the Company has 361,567 shares of common stock available for granting under the Plan.

On September 29, 2021, the Board instituted annual restricted stock units (RSU) for directors in the amount of $100,000 per director. These restricted stock units vest on their one year anniversary if the director served the entire year. During the fiscal year ended June 30, 2025, the Company issued the vested RSUs from 2022 and 2024. The calendar year 2023 RSUs were not formally granted so common stock was issued under similar terms to the directors in fiscal year ended June 30, 2025.

A summary of restricted stock units terminated, as well as those that vested, during the nine months ended March 31, 2026 and 2025 is presented below:

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Note 4 - Income Taxes

For the nine months ended March 31, 2026 and prior periods since inception, the Company’s activities have not generated taxable income or tax liabilities. The provision (benefit) for income taxes for the nine months ended March 31, 2026 and 2025 assumes a 21% effective tax rate for federal income taxes and a 6% effective tax rate for state income tax purposes.

The Company has approximately $41.8 million of net operating loss carryforwards for federal and state, available to reduce future income taxes at March 31, 2026. Approximately $17,000 of the federal net operating losses will expire in 2037 and the balance can be utilized indefinitely. Due to uncertainty as to the realization of the net operating loss carryforwards and other deferred tax assets as a result of the Company’s limited operating history and operating losses since inception, a full valuation allowance has been recorded against the Company’s deferred tax assets. Accordingly, the Company has not recognized an income tax benefit on the Condensed Statements of Operations for the nine months ended March 31, 2026 and 2025.

Note 5 - Segment Information

Information about reported segment revenue, segment net income (loss), and significant segment expenses is shown as follows:

Note 6 - Subsequent Events

On April 28, 2026, the Company closed a registered direct offering, a concurrent private placement, and an insider-led private placement, issuing in the aggregate 1,114,984 shares of common stock, pre-funded warrants to purchase 696,866 shares (exercise price $0.001), and Series A-1 and Series A-2 common warrants to purchase up to 1,811,850 shares each at an exercise price of $1.435 per share. Aggregate gross proceeds were approximately $2.6 million, of which approximately $0.6 million was invested by certain officers and directors of the Company, including the Chairman and Chief Executive Officer and another member of the Board of Directors, at a per-share price equal to that of the registered direct offering, with one-for-one Series A-1 and Series A-2 warrant coverage. The common warrants become exercisable upon stockholder approval; the Series A-1 warrants expire five years, and the Series A-2 warrants expire eighteen months, after the later of stockholder approval and the effective date of the related resale registration statement. The placement agent received a 7.0% cash fee,1.0% management fee, expense reimbursement, and warrants to purchase 97,561 shares at $1.7938 per share. The Company intends to use the net proceeds for working capital and general corporate purposes.

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