| Significant Accounting Policies | Note 2 - Significant Accounting
Policies Basis of Presentation The Company's fiscal year
ends June 30. The financial statements of the
Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP")
and the requirements of the Securities and Exchange Commission ("SEC"). Certain prior year amounts have
been reclassified to conform with the current year presentation. Principles of Consolidation The consolidated financial statements
of the Company include the accounts of Amesite Inc. and its wholly owned subsidiary, Amesite Operating Company ("Amesite
Operating Company"). All material intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those
estimates. Fair Value Measurements Accounting standards require
certain assets and liabilities be reported at fair value in the financial statements and provide a framework for establishing that
fair value. The framework for determining fair value is based on a hierarchy that prioritizes the inputs and valuation techniques
used to measure fair value. Fair values determined by Level
1 inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Fair values determined by Level
2 inputs use other inputs that are observable, either directly or indirectly. These Level 2 inputs include quoted prices for similar
assets and liabilities in active markets and other inputs such as interest rates and yield curves that are observable at commonly
quoted intervals. Level 3 inputs are unobservable
inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset.
These Level 3 fair value measurements are based primarily on management's own estimates using pricing models, discounted
cash flow methodologies, or similar techniques. In instances wherein inputs used
to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are
categorized based on the lowest level input that is significant to the valuation. The Company's assessment of the significance
of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability. Cash and Cash Equivalents 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) that was insured by the FDIC at year end was $250,000. 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.
Depreciable
Life - Years
Leasehold improvements Shorter of estimated lease term or 10 years
Furniture and fixtures 7 years
Computer equipment and software 5 years Capitalized Software Costs The Company capitalizes significant
costs incurred in the development of software for internal use, including the costs of the software, materials, consultants, and
payroll and payroll related costs for employees incurred in developing internal use computer software once a final selection of
the software is made. Planning costs incurred prior to the development of software and costs not qualifying for capitalization
are charged to expense. The Company amortizes capitalized software as part of technology and content development expenses over
a period of three years, which is the expected useful life of the software. The Company recognized amortization expense of approximately
$482,000 and $122,000 for the years ended June 30, 2020 and June 30, 2019, respectively. Revenue Recognition On July 1, 2019, we adopted ASU
No. 2014-09, Revenue from Contracts with Customers (Topic 606) and the related amendments using the modified retrospective
transition method and concluded that doing so did not have a material impact on the amount and timing of either our revenue or
costs. As part of our assessment, we completed reviews of our contracts and evaluated our costs, including costs of obtaining contracts
with our university partners and costs associated with content development. Certain of these contract and content costs will be
capitalized under the new standard. The adoption of ASU 2014-09 did not have a material impact as of July 1, 2019, and no
cumulative adjustment was recorded. We generate substantially all
of our revenue from contractual arrangements with either our university partners or students to provide a comprehensive platform
of tightly integrated technology and technology enabled services related to graduate programs and short courses. Performance Obligations and
Timing of Recognition A performance obligation is a
promise in a contract to transfer a distinct good or service to the customer. A contract's transaction price is allocated
to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The Company derives revenue primarily
from contractually specified percentages of the amounts our educational institution partners receive from their students in Amesite
hosted programs for tuition and fees, less credit card fees and other specified charges we have agreed to exclude in certain partner
contracts. Our contracts with partners generally have three to six-year terms and have a single performance obligation, as the
promises to provide a hosted platform of tightly integrated technology and services partners need to attract, enroll, educate and
support students are not distinct within the context of the contracts. The single performance obligation is delivered as the partners
receive and consume benefits, which occurs ratably over a series of academic terms. The fees received from partners over the term
of the arrangement are variable in nature in that they are dependent upon the number of students that are enrolled in the program
within each academic term. The fees are allocated to and are recognized ratably over the related academic term, defined as the
period beginning on the first day of classes through the last. A refund allowance is established for our share of tuition and fees
ultimately uncollected by university partners. We do not disclose the value
of unsatisfied performance obligations because the variable 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 student headcount,
which is unknown in advance). We also receive fees that are
fixed in nature, such as annual license charges, in place of or in conjunction with variable consideration. The fees are independent
of the number of students that are enrolled in courses with our customers and are allocated to and recognized ratably over the
service period of the contract that the Amesite platform is made available to the customer (i.e. the customer simultaneously receives
and consumes the benefit of the software over the contract service period). Contract Fulfilment Costs We incur certain fulfilment costs
related to software design of specific course offerings for our customers, primarily comprised of software development, configuration
costs, and implementation costs. These costs are capitalized and recorded on a contract-by-contract basis and amortized using the
straight-line method over the length of the contract. There were no costs to fulfill capitalized as of June 30, 2020. Accounts Receivable, Contract
Assets and Liabilities Balance sheet items related to
contracts consist of accounts receivable (net) and contract liabilities on our balance sheets. Accounts receivable (net) is stated
at net realizable value, and we utilize the allowance method to provide for doubtful accounts based on management's evaluation
of the collectability of the amounts due. Our estimates are reviewed and revised periodically based on historical collection experience
and a review of the current status of accounts receivable. Historically, actual write-offs for uncollectible accounts have not
significantly differed from prior estimates. We may recognize revenue prior to billing a customer when we have satisfied or partially
satisfied our performance obligations as billings to university partners may not be made until after the academic term has commenced
and final enrollment becomes available. Contract liabilities as of
each balance sheet date represents the excess of amounts billed or received as compared to amounts recognized in revenue on
our statements of operations as of the end of the reporting period, and such amounts are reflected as a current liability on
our balance sheets as deferred revenue. We generally receive payments for our share of tuition and fees from university
partners early in each academic term, prior to completion of the service period and our performance obligations. These
payments are recorded as deferred revenue until the services are delivered or until our obligations are otherwise met, at
which time revenue is recognized. Some contracts also involve annual
license fees, for which upfront amounts are received from customers. In these contracts, the license fees received in advance of
the platform's launch are recorded as contract liabilities. Income Taxes A current tax liability or asset
is recognized for the estimated taxes payable or refundable on tax returns for the year. Deferred tax liabilities or assets are
recognized for the estimated future tax effects of temporary differences between financial reporting and tax accounting. Deferred tax assets are reduced
by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in the statement of operations in the period that includes the enactment date. Risks and Uncertainties The Company intends to operate
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. On March 11, 2020, the World
Health Organization declared the outbreak of a respiratory disease caused by a novel coronavirus as a "pandemic." First
identified in late 2019 and known now as COVID-19, the outbreak has impacted thousands of individuals worldwide. In response, many
countries, including the United States, have implemented measures to combat the outbreak which have impacted global business operations.
While management believes the Company's operations have not been significantly impacted, the Company continues to monitor
the situation. In addition, while the Company's results of operations, cash flows and financial condition could be negatively
impacted, the extent of the impact cannot be reasonably estimated at this time. Going Concern The accompanying 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. The Company has incurred losses
since its inception, is still developing its service platform, and has not completed its efforts to establish a stabilized source
of revenues sufficient to cover costs over an extended period of time. The Company does not have sufficient cash on hand or available
liquidity that can be utilized to fund future operations for at least twelve months from the date of issuance of the financial
statements. These conditions and events raise substantial doubt about the Company's ability to continue as a going concern. The Company's ability to
continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. Despite management's
ongoing efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially
viable. 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. These financial statements do
not include any adjustments 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. Technology and Content
Development Technology and content development expenditures
consist primarily of personnel and personnel-related expense and contracted services associated with the maintenance of our platform
as well as hosting and licensing costs and are charged to expense as incurred. It also includes amortization of capitalized software
costs and research and development costs related to improving our platform and creating content that are charged to expense as
incurred. Net Loss per Share Basic
net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares
outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options and
warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares
outstanding during each reporting period. At June 30, 2020 and June 30, 2019, the Company had 5,008,148 and 2,863,025 potentially
dilutive shares of common stock related to common stock options and warrants, respectively, as determined using the if-converted
method. For the years ended June 30, 2020 and 2019, the dilutive effect of common stock options and common stock warrants 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 this period. Stock-Based Payments Financial Accounting Standards
Board ("FASB") Accounting Standards Codification ("ASC") Topic 718 Compensation-Stock Compensation The Company accounts for stock
options and restricted shares of common stock issued to non-employees in accordance with the FASB ASC Subtopic 505-50 "Equity-Based
Payments to Non-Employees". Accordingly, the fair value of the stock compensation issued to non-employees is based upon the
measurement date as determined at the earlier of either a) the date at which a performance commitment is reached, or b) the date
at which the necessary performance to earn the equity instruments is complete. As a measurement date has not yet been reached for
the stock options outstanding held by non-employees, the Company re-measures these outstanding options to fair value at each reporting
period. The Company has estimated the fair value of those services performed through June 30, 2020, and recorded an expense in
the consolidated statement of operations. |
