PCS EDVENTURES COM INC, SB-2, 2001-01-10

PCS EDVENTURES COM INC
SB-2, 2001-01-10

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As filed with the Securities and Exchange Commission on January 9, 2001
Registration No. ______________

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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
PCS EDVENTURES!.COM, INC.
(Exact name of Small Business Issuer as specified in charter)

Idaho (8299) 82-0475383
------- ------ -------------
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Classification Code Number) Identification Number)
Incorporation or
Organization)

1655 Fairview Avenue, Suite 100
Boise, Idaho 83702
(208) 343-3110
-------------------------------------------------------
(Address and telephone number of principal executive office)

Anthony A. Maher
1655 Fairview Avenue, Suite 100
Boise, Idaho 83702
(208) 343-3110
-------------------------------------------------------
(Name, address and telephone number of agent for service)

with copies to:

A.O. Headman, Jr., Esq.
Cohne, Rappaport & Segal
525 East 100 South Fifth Floor
(801) 532-2666
Salt Lake City, Utah 84102

Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities Being Price Per Offering Registration
Being Registered Registered Unit Price Fee
==============================================================================
Common Stock, $.001
Par Value (1) 3,140,056 $ .75 $2,355,042 $ 628.00
Common Stock, $.001 (1)(2) 69,835 $ .01 $ 699 $ 2.43
Common Stock, $.001 par 22,222 $.675 $ 15,000 $ 5.17
value (1)(3)
==============================================================================
Total 3,232,113 $2,370,741 $ 635.60
==============================================================================

(1) These shares are registered on behalf of selling shareholders and the
offering price and gross offering proceeds are estimated solely for the
purpose of calculating the registration fee in accordance with Rule 457
under the Securities Act of 1933.

(2) Represents shares issuable upon the exercise of Class B Warrants issued
by the Company having an exercise price of $.01 per share. Also includes
such additional shares as may be issuable as a result of the
anti-dilution provisions of said warrants.

(3) Represents shares issuable upon the exercise of Class A Warrants issued
by the Company having an exercise price of $.675 per share. Also includes
such additional shares as may be issuable as a result of the
anti-dilution provisions of said warrants.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

===============================================================================

CROSS REFERENCE SHEET

Form SB-2 Item No. and Caption Prospectus Caption
------------------------------- ---------------------

Item 1. Front of Registration Statement and Outside Front Cover
Outside Front Cover Page of Prospectus

Item 2. Inside Front and Outside Back Cover Pages Inside Front and Outside
of Prospectus Back Cover Pages

Item 3. Summary Information and Risk Factors Prospectus Summary; Risk
Factors

Item 4. Use of Proceeds Use of Proceeds

Item 5. Determination of Offering Price

Item 6. Dilution Not Applicable

Item 7. Selling Security Holders Not Applicable

Item 8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution

Item 9. Legal Proceedings Legal Proceedings

Item 10.Directors, Executive Officers, Promoters Management
and Control Persons

Item 11.Security Ownership of Certain Beneficial Principal Stockholders
Owners and Management

Item 12.Description of Securities Outside Front Cover Page;
Description of Securities

Item 13.Interest of Named Experts and Counsel Legal Matters; Experts

Item 14.Disclosure of Commission Position on Description of Securities;
Indemnification for Securities Act Plan of Distribution
Liabilities

Item 15.Organization Within the Last Five Years Certain Transactions

Item 16.Description of Business Business of PCS
Edventures!.com

<PAGE>

Item 17.Management's Discussion and Analysis Management's Discussion
or Plan of Operation and Analysis

Item 18.Description of Property Business - Properties

Item 19.Certain Relationships and Certain Transactions
Transactions Related

Item 20.Market for Common Equity and Related Price Range of Common
Stockholder Matters Stock and Dividend Policy,
Description of Securities

Item 21.Executive Compensation Management - Executive
Compensation

Item 22.Financial Statements Financial Statements

Item 23.Changes in and Disagreements with Not Applicable
Accountants on Accounting
and Financial Disclosure

<PAGE>

SUBJECT TO COMPLETION, DATED JANUARY __, 2001

PROSPECTUS

PCS EDVENTURES!.COM, INC.

3,232,113 Shares offered by Selling Shareholders

---------------

PCS EDVENTURES!.COM., INC., is a development stage company engaged in the
development and marketing of technology based educational programs delivered
through software programs and through the internet. This prospectus relates to
the sale of up to 3,140,056 shares of our common stock, which may be offered for
sale from time to time by the selling stockholders listed on pages 34-38. A
total of 1,654,588, of these shares were issued in a recently completed private
placement. A total of 1,483,468 of these shares are shares that we issued from
time to time since May 2000 for cash, services or other consideration. This
prospectus also relates to 92,057 shares of common stock, which certain selling
stockholders will receive if they exercise common stock purchase warrants
("Warrants") for the purchase of shares of common stock. We are registering the
re-sale of the shares of common stock that will be issued upon the exercise of
the Warrants.

This prospectus is filed to comply with our undertaking to register
shares of our common stock issued in our recent private placement.

We have been advised that the selling stockholders intend to sell the
shares at various times for their own account in the open market at the then
prevailing prices or in individually negotiated transactions at such prices as
may be agreed upon. The selling stockholders will bear all expenses with respect
to the offering and sale of shares owned by them except the costs associated
with this registration of their shares under the Securities Act and the
preparation and printing of this prospectus. We will not receive any part of the
proceeds from the sale of any of these shares by the selling stockholders. We
will receive approximately $15,698 from the exercise of the Warrants if all of
the Warrants are exercised for cash.

This is not an underwritten offering. There is currently no public
market for our common stock.

WE URGE YOU TO READ CAREFULLY THE "RISK FACTORS" SECTION BEGINNING ON PAGE 7
WHERE WE DESCRIBE SPECIFIC RISKS ASSOCIATED WITH AN INVESTMENT IN PCS
EDVENTURES, AND THESE SECURITIES BEFORE YOU MAKE YOUR INVESTMENT DECISION.

THESE SHARES HAVE NOT BEEN APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAVE THESE ORGANIZATIONS DETERMINED WHETHER
THIS PROSPECTUS IS COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

---------------

THE DATE OF THIS PROSPECTUS IS JANUARY ___, 2001

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY.

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION BY ANYONE
TO ANY PERSON IN ANY STATE, TERRITORY, OR POSSESSION OF THE UNITED STATES IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED BY THE LAWS THEREOF, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.

TABLE OF CONTENTS

Page

SUMMARY......................................................................3
FORWARD LOOKING STATEMENTS...................................................5
RISK FACTORS.................................................................7
USE OF PROCEEDS.............................................................12
DILUTION....................................................................13
MARKET FOR COMMON STOCK AND DIVIDEND POLICY.................................13
MANAGEMENT'S DISCUSSION AND ANALYSIS........................................13
BUSINESS OF PCS EDVENTURES!.COM.............................................17
MANAGEMENT..................................................................26
MANAGEMENT COMPENSATION.....................................................28
PRINCIPAL STOCKHOLDERS......................................................29
DESCRIPTION OF SECURITIES...................................................31
PLAN OF DISTRIBUTION........................................................33
SELLING SHAREHOLDERS........................................................34
CERTAIN TRANSACTIONS........................................................38
LEGAL PROCEEDINGS...........................................................38
SHARES ELIGIBLE FOR FUTURE SALE.............................................38
EXPERTS.....................................................................39
LEGAL OPINION...............................................................39
WHERE YOU CAN GET MORE INFORMATION..........................................39
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.........................F-1
CONSOLIDATED FINANCIAL STATEMENTS..........................................F-2

<PAGE>

PROSPECTUS SUMMARY

THIS IS ONLY A SUMMARY AND DOES NOT CONTAIN ALL THE INFORMATION THAT MAY BE
IMPORTANT TO YOU. YOU SHOULD READ THE MORE DETAILED INFORMATION CONTAINED LATER
IN THIS PROSPECTUS AND ALL OTHER INFORMATION, INCLUDING THE FINANCIAL
INFORMATION AND STATEMENTS WITH NOTES, INCLUDED IN THIS PROSPECTUS AS DISCUSSED
IN THE "WHERE YOU CAN FIND MORE INFORMATION" SECTION OF THIS PROSPECTUS.

References in this Prospectus to "PCS", "we", "us", and "our" refer to PCS
Edventures!.Com, Inc.

Information About Us

We are a development stage company engaged in the development and
marketing of technology based educational programs. We have developed three
innovative technology based educational programs for the kindergarten through
12th grade ("K-12") school market and the home market. Separately, and in
combination, these three products present a platform for delivering educational
services and support, and create a virtual community of learners and parents on
the web. It is our intent that as this community grows, it becomes an education
portal through which additional PCS programs and services can be deployed. These
three technologies are as follows:

o Academy of Engineering. Our Academy of Engineering ("AOE") product is a
turnkey site license program designed for use within various K-12
environments. Using the AOE, students develop, design, and produce exciting
hands-on projects ranging from catapults to robots. The current AOE product
includes three books for the mechanical engineering strand. Future topic
strands for expanding the program include structural, electrical and
software engineering. Each strand, when completed, includes courseware for
over 272 hours of instruction. An AOE site license currently sells for
between $15,000 and $19,500 and includes: materials, manipulatives,
curriculum, a custom designed storage and organization unit, a digital
camera, web- based support by our Edventures!.com product, various
electronic assessment tools and two days of teacher training.

o Edventures! Labs is a scaled down model of the AOE site license system
intended for those destinations that have space or funding restrictions. It
contains the same curriculum, storage cabinets and other material, but has
a reduced inventory of Legos and relies on Edventures!.com for delivery of
the curriculum. A site license for an Edventures! Lab currently costs
$5,000 which includes a 50-student block license for access to
Edventures!.com. Additional student access in blocks of 50 cost $1,750 per
year for the Edventures! Labs.

o Edventures!.com is an Internet delivered program that provides a safe,
secure and exciting learning environment within which students can interact
from home and/or school. Edventures!.com includes online curriculum and
assessment, filtered communication tools, forums and a variety of
additional online services. The program utilizes Internet based resources
and services as a stand-alone product and also serves as an extension
service to our school-based AOE product. Edventures.com can be viewed on
the web at www.edventures.com This program allows students to continue
their learning programs from home via the Internet, and to show parents
their digital portfolios from our AOE program. The environment

<PAGE>

also features over 200 do-at-home projects organized into a
sophisticated learning model (Merit System), an animated glossary,
monitored chat rooms, live interaction with online instructors,
personal email accounts for all students and more. The
Edventures!.com at-home curriculum utilizes found materials, LEGO
products, software and other resources to teach concepts in physics,
electricity, internet, programming, art, architecture and
engineering. Edventures!.com is included in the Academy of
Engineering site license as an on-line support tool and provides a
framework within which students can safely communicate, collaborate,
and learn. Edventures!.com is also available as a stand-alone, home
based subscription product for $7.95 per month.

Market Overview. The educational marketplace is significant but is
fragmented into various segments ranging from non-profit educational programs to
the public school system. We intend to focus our sales and marketing efforts on
specific market segments in an integrated strategy that will build brand and
name awareness of PCS products in schools, at home and within the larger
educational marketplace. Our Academy of Engineering product and our Edventures!
Labs product can be applied to a wide range of K-12 educational environments.
The on-line Edventures!.com program is currently designed for K-6 students, with
a plan to expand that to K-12 over the coming 18 months.

Our History. We were formed under the laws of the State of Idaho in 1994
under the name of PCS Educational Systems, Inc. In October 1994, we acquired PCS
Schools, Inc. ("PCS Schools") as a wholly owned subsidiary. PCS Schools had
created an educational enrichment program that was delivered in owner-operated,
free standing Learning Centers. This program offered a unique atmosphere
conducive to individual styles of learning and a system that utilized computer
technology to increase areas of inquiry and application. We subsequently revised
our business strategy and divested the Learning Centers started by PCS Schools
and began developing technology and web based educational systems utilizing PCS
Schools legacy curriculum.

Offices

We maintain our executive offices at 1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702, and our telephone number is (208) 343-3110.

The Offering

Common stock outstanding 11,901,964 shares

Common stock offered by the
Selling Stockholders 3,232,113 shares

Use of Proceeds We will not receive any proceeds from the sale of the
shares of common stock by the Selling Stockholders.
We will only receive proceeds upon the exercise of the
Warrants if the Warrants are exercised for cash. Those
proceeds, if any, will be used for working capital
requirements and other general corporate purposes.
See "Use of Proceeds."

Risk Factors The securities offered hereby involve a high degree of
risk. See "Risk Factors."

<PAGE>

SUMMARY FINANCIAL INFORMATION

<TABLE>
<CAPTION>
For the six months ended For the fiscal year ended
Statement of Operations September 30, March 31,
------------------------------ -------------------------------
Data: 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Sales 149,287 132,533 160,444 285,295
Cost of Sales 58,281 0 64,246 0
Operating expenses 1,262,728 450,512 1,000,957 1,294,446
Operating loss (1,171,722) (317,979) (904,759) (1,009,151)
Other income (expenses) (12,488) (11,884) (32,812) (23,823)
Loss from continuing
operations
before loss from discontinued
operations (1,184,210) (329,863) (937,571) (1,032,974)
Income (loss) from
discontinued opera 0 (92,292) 4,455 (187,707)
Net loss (1,184,210) (422,155) (933,116) (1,220,681)
Net loss per common
share
continuing operations (0.13) (0.05) (0.14) (0.23)
discontinued operations 0.00 (0.01) 0.00 (0.04)
------------------------------ -------------------------------
Basic loss per share (0.13) (.06) (0.14) (0.27)
Shares used in computing
net loss per 9,251,827 6,626,085 6,547,462 4,507,444

Balance Sheet Data

Current assets 458,248 72,833 84,068 31,489
Current liabilities 372,454 578,510 478,245 617,869
Working capital 85,794 (505,677) (394,177) (586,380)
Total assets 515,200 199,495 171,919 195,351
Long -term debt,
less current porti 60,500 0 0 48,100
Accumulated deficit (20,018,798) (18,283,121) (18,834,588) (17,901,472)
Stockholders' equi 82,246 379,016 306,326 519,685

</TABLE>

FORWARD LOOKING STATEMENTS

Some of the statements contained in this prospectus discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and was
derived using numerous assumptions. Important factors that may cause actual
results to differ from projections include, for example:

o We have an unproven business model and a limited operating history. Because
we were incorporated in November 1994 and only launched our network in June
1998, we have a limited operating history from which investors can base an
evaluation of our business and prospects. Our revenue and income potential
are unproven and our business model is unique, constantly evolving and will
continue to evolve. We only recently began generating revenue from
subscriptions and to date, we have not generated any material revenue from
e-commerce or network services. We have limited insight into trends that
may emerge and affect our business.

<PAGE>

o We have incurred substantial losses and anticipate continued losses. We
incurred net losses of more than $20,000,000 for the period of inception
through September 30, 2000. These losses resulted primarily from costs
related to developing the PCS network, deploying the PCS network to schools
and developing content and features for the PCS network. We have not
achieved profitability. We expect to have increasing net losses and
negative cash flows for the foreseeable future. The size of these net
losses will depend in part, on the rate of growth in our revenues from our
sponsors, e-commerce offerings and network services and on the level of our
expenses. We intend to increase our operating expenses substantially as we:

o increase the number of users of our network through the deployment
of our labs to schools;

o increase our network usage through marketing activities and the
addition of new features; and

o increase our general and administrative functions to support our
growing operations.

o We rely heavily on our key partners and if they terminate their strategic
alliances with us or if the arrangement fails to meet our objectives, we
may experience difficulty or delays in installing and maintaining our
network and our revenue growth may suffer.

o We are subject to all of those risks set forth in the "Risk Factors section
of this Prospectus.

<PAGE>

RISK FACTORS

An investment in shares of our common stock involves a high degree of risk.
Prospective investors should carefully consider the following risk factors, in
addition to the other information set forth in this Prospectus, before making an
investment in the shares offered hereby. This Prospectus contains
forward-looking statements. Those statements appear in a number of places herein
and include statements regarding the intent, belief or current expectations of
PCS primarily with respect to the future operating performance of PCS or related
industry developments. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results and industry developments may
differ from those described in the forward-looking statements as a result of
various factors, many of which are beyond the control of PCS. The information
contained herein, including, without limitation, the information set forth below
and the information under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations," identifies important factors
that could cause such differences.

Financial Matters Related Risks

Early Stage of Development; Limited Operating History. We are at an early
stage of market development and must be evaluated in light of the uncertainties
and complications present in a development stage company. The likelihood of our
success must be considered in light of the problems, expenses, difficulties,
complications and delays, many of which are beyond our control, frequently
encountered with the development of new products and services, the utilization
of new technology and the competitive environment in which we plan to operate.
No significant revenues have been generated from the sale of any of our
educational products and services. The products and services currently under
development will require significant additional research and development efforts
prior to commercialization. There can be no assurance that our development
efforts will be successful or that any commercially successful educational
products and services will ultimately be developed by the Company. Even if
developed, these products and services may not be successfully introduced and
marketed at prices that would permit us to operate profitably. See the "Business
of PCS Edventures!.com".

Operating Losses and Accumulated Deficit; Uncertainty of Future
Profitability. We have incurred significant operating losses since our
inception. At September 30, 2000, our accumulated deficit was more than
$20,000,000. Such losses have resulted principally from expenses incurred in our
development programs and to a lesser extent from general and administrative
expenses. We expect that losses will fluctuate from quarter to quarter and that
such fluctuations may be substantial. There can be no assurance that we will
successfully develop, commercialize, manufacture or market our products and
services or ever achieve or sustain product and service revenues or
profitability. See "Financial Statements". We intend to increase our operating
expenses substantially as we:

o increase the number of users of our network through the deployment
of our labs to schools;

o increase our network usage through marketing activities and the
addition of new features;

o increase our general and administrative functions to support our
growing operations.

As a result, we expect that our operating expenses will increase
significantly for the foreseeable future. With increased expenses, we will need
to generate significant additional revenues to achieve profitability.
Consequently, it is possible that we will never achieve profitability, and

<PAGE>

even if we do achieve profitability, we may not sustain or increase
profitability on a quarterly or annual basis in the future. If we do not achieve
or sustain profitability in the future, then we may be unable to continue our
operations. Our auditor's report dated September 25, 2000 on our financial
statements for the year ended March 31, 2000 included a going concern
qualification which stated that there was substantial doubt as to our ability to
continue as a going concern. Although we raised additional capital subsequent to
March 31, 2000 from the sale of our common stock in a private placement, we
continue to be undercapitalized because of our continued losses from operations.

We Expect Net Losses to Occur Through at Least 2001. We expect to continue
experiencing losses through at least the end of the year 2001. Because we expect
to continue to incur significant product development, sales and marketing, and
administrative expenses, we will need to generate significant revenues to become
profitable and sustain profitability on a quarterly or annual basis. We may not
achieve or sustain our revenue or profit goals. To the extent that increases in
operating expenses are not matched by increased revenue, our business, operating
results and financial condition will be harmed.

We Will Likely Need Additional Financing in Order to Fully Implement Our
Business Plan. To date, we have had insufficient revenues to satisfy our ongoing
expenses of operation and we have been funded, primarily by the sale of our
securities in private transactions. Due to our history of losses, we cannot
assure you that we will ever be profitable. If we do not become profitable or
obtain additional financing, we will be unable to continue our current level of
operations and fully implement our growth objectives outlined in our business
plan. As a result, we cannot assure you we will have adequate capital to
implement our business plan and to maintain our current level of operation. Our
failure to obtain sufficient additional financing could result in the delay or
abandonment of some or all of our operations, which could have a negative effect
on us and on the value of our common stock.

We May Not Be Able to Obtain Additional Financing. We currently have no
commitments or understandings with any third parties to obtain any additional
financing. We cannot assure you that we will be able to obtain any additional
financing in the amounts or at the times we may require the financing, or if we
do obtain any financing that it would be on acceptable terms. Moreover, our
access to additional funds may be limited by: (1) market conditions affecting
the business communications industry; and (2) specific factors affecting our
attractiveness as a borrower or an investment vehicle including:(a) the
potential commercial opportunities and risks associated with implementation of
our business plan; (b) the market's perception of our performance and assets;
and (c) the actual amount of cash we need to pursue our business strategy.

Our Methods of Generating Revenues Are New and Largely Untested. The
success of our business will depend on our ability to generate revenue. We have
only recently begun to generate revenue and because our methods of generating
revenue are new and largely untested we may generate lower revenues than we
expect. Further, if we are unable to generate multiple new sources of revenue,
our future revenue growth will suffer. We initially expect to receive the
majority of our revenue from:

o ad sharing revenue;

o AOE lab sales to schools;

o network subscription services.

<PAGE>

From inception through September 30, 2000, we generated approximately 10%
of our revenue from subscriptions and site licenses. Although we expect to
generate a portion of our future revenue through ad revenue sharing, we have not
generated any material ad sharing revenue through September 30, 2000. As a
result, our expected primary methods of generating revenue are relatively new to
us and largely untested. We expect that revenue from ad sharing will make up a
significant amount of our revenue for the foreseeable future, although we may
never achieve significant advertising revenue. If Internet and online
advertising do not continue to grow, or if subscriptions on the PCS network do
not achieve market acceptance, our revenues generated from advertising will be
lower than expected, and may be insufficient to support our business model.

In the future, we expect to generate revenue through network services. For
example, we have entered into an agreement with a strategic partner who will use
the PCS labs after school hours and, in return, will pay us a portion of its
revenue or profits. We anticipate entering into other arrangements similar to
this one; however, if we are unable to structure such arrangements, if they
develop more slowly than expected, or if our partners are unable or unwilling to
make full and effective use of our PCS labs and network, our revenue generated
from network services will be lower than expected.

Business Related Risks

Brand Recognition. Our efforts to develop widespread PCS brand recognition
are likely to be expensive and may fail. The development of our PCS brand is
important to our future success. If we fail to develop sufficient brand
recognition, our ability to attract subscription revenue may be impaired, and
our revenue will suffer. Our business and future revenue growth will suffer if
we fail to retain and grow our user base, generate frequent and recurring usage
by our users, or demonstrate that our users are actually using our service.

Increasing Customer Base. The success of our business will depend on our
ability to add users and demonstrate that our users are using the PCS network on
a regular basis. Our ability to grow our user base depends largely on our
ability to deploy our network to additional schools and extend our network to
home users. If we are unable to rapidly deploy our network to a large number of
additional schools, we will not be able to grow our core school user base, and
our ability to generate revenue and implement our strategy will be severely
limited. Our ability to grow our user base also depends on our success with the
development and implementation of programs designed to help schools encourage
their students to register. We must also encourage our users to use our service
regularly and for long periods of time. PCS has developed programs and features
to encourage this type of use of our network; however, these programs could
fail, in whole or in part.

Failure to Manage the Growth of Our Operations Could Harm Our Business and
Strain Our Managerial, Operational and Financial Resources. We have rapidly and
significantly expanded our operations. We anticipate that further significant
expansion will be required to grow our user base if we are to be successful in
implementing our business strategy. We may not be able to implement management
information and control systems in an efficient and timely manner, and our
current or planned personnel, systems, procedures and controls may not be
adequate to support our future operations. If we are unable to manage growth
effectively, our business would suffer.

Technological Obsolescence. The industry in which we operate is
characterized by rapid technological changes. The recent growth of the Internet
and intense competition in our industry exacerbate these market characteristics.
Our future success will depend on our ability to adapt to rapidly changing
technologies by continually improving the performance, features and reliability
of our network. There can be no assurance that any of our products and services
will not be rendered obsolete as a result of technological developments. New
developments are expected to continue at

<PAGE>

a rapid pace in both industry and academia. There can be no assurance that
research and development by others will not render our products and services
noncompetitive or obsolete. Many companies with substantially greater resources
than we have are engaged in the development of products and services to provide
content and solutions and to address issues in education. Commercial
availability of such products and services could render our products and
services obsolete, and would have a material adverse effect on our business,
financial condition and results of operations.

Competition. Both the education marketplace and the Internet are highly
competitive and rapidly evolving fields, and are expected to continue to undergo
significant and rapid technological change. Other companies may develop products
and services and technologies superior to our products which may result in our
products and services becoming less competitive. We are aware of several
development stage and established enterprises, which are exploring the fields of
online educational products and services or are actively engaged in research and
development of products and services targeted at these fields. Many of these
companies have substantially greater financial, manufacturing, marketing and
technical resources than we have and represent significant long-term
competition. To the extent that these companies offer comparable products and
services at lower prices, or higher quality and more cost effective, our
business could be adversely affected.

Limited Marketing Experience. We intend to market and sell some of our
products and services directly, while relying on the sales and marketing
expertise of potential corporate partners for other products and services. We
are currently developing a specific and comprehensive sales and marketing plan
through our officers and outside consultants. There can be no assurance that we
will be able to successfully market and sell our products and services or that
we will be able to establish such relationships on acceptable terms, if at all.

Dependence on Key Personnel. We are highly dependent on the continued
services of our management team and development staff and in particular on
Anthony A. Maher, our Chairman, President and Chief Executive Officer, and Mr.
Robert O. Grover our Executive Vice President and Chief Technology Officer. The
loss of the services of any key personnel, particularly senior management, could
seriously harm our business. In addition, we believe that our future success
will depend in large part on our ability to attract and retain highly skilled
development, managerial, marketing and technical personnel. We will face
competition for hiring such personnel from other companies, research and
academic institutions, government entities and other organizations. We may not
be able to attract and retain the necessary personnel to accomplish our business
objectives, and we may experience constraints that will adversely affect our
ability to deploy the PCS network in a timely fashion or to support our users
and operations. We have at times experienced, and continue to experience,
difficulty in recruiting qualified personnel. Recruiting qualified personnel is
an intensely competitive and time-consuming process. There can be no assurance
that we will be successful in hiring or retaining the personnel it requires for
operating its business.

Dependence on Collaborative Relationships. Our strategy for the
development and commercialization of certain of our products and services
includes entering into various collaborations with corporate partners,
licensors, licensees and others. There can be no assurance that we will be able
to negotiate collaborative arrangements in the future on acceptable terms, if at
all, or that such arrangements will be successful.

Our Network Is New and We May Need to Develop Tools to Attract Subscribers
and Partners. It is important to our customers that we accurately measure the
user base demographics and subscription delivery on our network. We are
currently implementing systems designed to leverage non-personally identifying
demographic data about our users, including age, gender, and school location by
zip code, in such a way as to permit sponsors to address their intended market
segment.

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This effort may be complicated by the remote nature of the PCS labs and on-line
subscribers in which this information is generated and recorded before being
transmitted back to our network operations center. If we fail to implement these
systems successfully, we may not be able to accurately evaluate the demographic
characteristics of our users. Companies may choose not to sponsor our network or
may pay less for subscriptions if they perceive our measurements to be
unreliable.

Seasonal and Cyclical Patterns May Affect Our Revenue and Results of
Operations. We believe that in-school sales and e-commerce sales will be lower
during the summer, in late December and early January and during other school
holiday periods when most users of the PCS network will be on vacation and away
from school. In addition, advertising sales in traditional media, such as
television and radio, generally are lower in the first and third calendar
quarters of each year. If our market makes the transition from an emerging to a
more developed market, these traditional seasonal and cyclical patterns may
develop in the future. These patterns would exacerbate seasonality to which we
are subject by further reducing advertising revenues in the first and third
calendar quarter of each year. Seasonal and cyclical patterns in online
subscriptions and e-commerce in general may also affect our revenue. Because our
operating history is so limited, it is difficult for us to accurately predict
these trends and plan accordingly. Since our operating expenses are based on
future revenue performance, it is possible that seasonal fluctuations could
materially and adversely affect our revenue and results of operations.

Stock Related Risks

There Is No Market for Our Common Stock. There is no trading market for
our common stock and it is not anticipated that a trading market will develop in
the foreseeable future. If no market develops, it may be difficult or impossible
for you to resell your shares if you should desire to do so. Even if you are
able to sell your shares, we cannot assure you that you will be able to resell
your shares at the purchase price paid or at any price.

Because Our Common Stock Price, like That of Many Technology Companies, Is
Likely to Be Highly Volatile, If a Market for Our Common Stock Develops, the
Market Price of Our Common Stock May Be Lower than You Expected. Even if a
market were to develop for our stock, the market price of our common stock is
likely to be highly volatile, because the stock market in general, and the
market for technology companies in particular, have experienced significant
volume and price fluctuations. You may not be able to resell your shares
following periods of volatility because of the market's negative reaction to
that volatility. The trading prices of many technology companies' stocks have
reached historical highs within the last year and have reflected relative
valuations substantially above historical levels. However, during the same
period, these companies' stocks have also been highly volatile and several
companies' stocks have recorded lows well below their historical highs. These
factors may significantly and negatively affect the price of our common stock,
regardless of our operating performance.

No Dividends Anticipated to Be Paid. We have never paid any cash dividends
on our common stock and we do not anticipate paying cash dividends on our common
stock in the future. The future payment of dividends is directly dependent upon
our future earnings, capital requirements, financial requirements and other
factors to be determined by our Board of Directors. It is anticipated that
future earnings, if any, which may be generated from our operations will be used
to finance our growth, and that cash dividends will not be paid to our
stockholders.

Potential Adverse Market Impact of Shares Eligible for Sale. We have never
had a public market for our common stock. It is our intent to attempt to have a
market develop in the future. The registration statement of which this
prospectus is a part, registers 3,232,113 of our total shares issued

<PAGE>

and outstanding. Most of the remaining shares outstanding have been held long
enough to allow the owners of such shares to sell their shares under SEC Rule
144. Because substantially all of our outstanding shares our currently available
for sale if a market existed, we anticipate that when and if a market develops
in the future, many shareholders will desire to liquidate their shares. In such
event, we anticipate that our stock price may be hurt by future sales of our
shares or the perception that such sales may occur.

Risks of Penny Stocks. Our common stock may be deemed to be "penny stock"
as that term is defined in Reg. Section 240.3a51-1 of the Securities and
Exchange Commission. Penny Stocks are stocks (i) with a price of less than five
dollars per share (ii) that are not traded on a "recognized" national exchange,
(iii) whose prices are not quoted on the NASDAQ automated quotation system
(NASDAQ listed stocks must still meet requirement (i) above); or (iv) in issuers
with net tangible assets less than $2,000,000 (if the issuer has been in
continuous operation for at least three years) or $5,000,000 (if in continuous
operation for less than three years) or, with average revenues of less than
$6,000,000 for the last three years.

Subject to compliance with applicable listing standards, we plan to
attempt to qualify for listing on the OTC Bulletin Board of NASD.

Section 15(g) of the 1934 Act, as amended, and Reg. Section 240.15 g-2 of
the Securities and Exchange Commission require broker-dealers dealing in penny
stocks to provide potential investors with a document disclosing the risks of
penny stocks and to obtain a manually signed and dated written receipt of the
document before effecting any transaction in a penny stock for the investor's
account. Potential investors in our common stock are urged to obtain and read
such disclosures carefully before purchasing any shares that are deemed to be
"penny stock".

Moreover, Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transaction in penny stocks are suitable for the investor and that the
investor has significant knowledge and experience to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from such investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objects.
Compliance with these requirements may make it more difficult for investors in
our common stock to resell the shares to third parties or to otherwise dispose
of them.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of common
stock offered by the Selling Stockholders pursuant to this Prospectus. If the
holders of the Warrants exercise the Warrants, the holders will pay an exercise
price to PCS. We estimate that the total proceeds to PCS from the exercise of
the Warrants will be $15,698. We will use any proceeds from the exercise of
Warrants for working capital and general corporate purposes. We estimate we will
spend approximately $65,000 in registering the shares under the prospectus.

<PAGE>

DILUTION

This prospectus is for sales of stock by certain of our shareholders on a
continuous or delayed basis in the future. Sales of common stock by shareholders
will not result in any substantial change to the net tangible book value per
share before and after the distribution of shares by the selling shareholders.
There will be no change in net tangible book value per share attributable to
cash payments made by purchasers of the shares being offered. Prospective
investors should be aware, however, that the price of shares covered by this
prospectus may not bear any rational relationship to net tangible book value per
share of PCS

MARKET FOR COMMON STOCK AND DIVIDEND POLICY

Market

Currently, there is no market for our common stock. Subject to compliance
with applicable listing standards, we plan to attempt to qualify for listing on
the OTC Bulletin Board of NASD.

Holders

As of December 14, 2000, there were 11,901,964 shares of common stock
outstanding and approximately 300 stockholders of record of common stock. The
number of stockholders of record does not include an indeterminate number of
stockholders whose shares are held by brokers in "street name."

Dividends

We have not paid any cash dividends since our inception and do not
anticipate or contemplate paying dividends in the foreseeable future. It is the
present intention of management to utilize all available funds for the
development of our business.

MANAGEMENT'S DISCUSSION AND ANALYSIS

THE FOLLOWING DISCUSSION OF OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SHOULD BE READ IN CONJUNCTION WITH OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE
RELATED NOTES, AND THE OTHER FINANCIAL INFORMATION INCLUDED IN THIS PROSPECTUS.
THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE
RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF SPECIFIED
FACTORS, INCLUDING THOSE SET FORTH IN THE RISK FACTORS SECTION OF THIS
PROSPECTUS AND ELSEWHERE IN THIS PROSPECTUS.

As described in the "Business of PCS.edventures!.com" section of this
Prospectus, we are in the business of developing and marketing education
technologies and products. As of November 29, 2000, we had deployed AOE labs to
approximately 20 schools in six states. Total student enrollment in schools with
deployed PCS labs was over 10,000 each of whom has access to a PCS user account.
As of September 30, 2000, we had 200 children subscribing to our
Edventures!.com.

In order to achieve our strategic plan, we intend to continue to invest
heavily in deploying our marketing, promotion, technology and web site
operations. We purchase the LEGO material we install in schools including
cameras, storage units and other LEGO and PCS produced material.

<PAGE>

We have incurred net losses of approximately $20,000,000 for the period of
inception through September 30, 2000. We expect to incur additional losses for
the foreseeable future due to the increased cost of sales and marketing,
advertising and promotion, expanded network features and research and
development. We expect that the size of these losses will fluctuate from quarter
to quarter and that these fluctuations may be substantial. In view of the
rapidly evolving nature of our business and our limited operating history, we
believe that period-to-period comparisons of our operating results are not
necessarily meaningful and should not be relied upon as an indication of future
performance.

Our auditor's report dated September 25, 2000 on our financial statements
for the year ended March 31, 2000 included a going concern qualification which
stated that there was substantial doubt as to our ability to continue as a going
concern. Although we raise additional capital subsequent to March 31, 2000 from
the sale of our common stock in a private placement, we continue to be
undercapitalized because of our continued losses from operations.

Results of Operations

We have discontinued our previous former operations associated with our
education centers and VR Quest product line. As a result, the financial
statements attached hereto have been restated to exclude items related to such
discontinued operations and product line. Our current business plan is to
continue to develop and market our AOE products and our edventures.com web site.
Our revenues from these new operations are generated primarily from content
subscription fees paid monthly at $7.95 by individuals and from AOE Lab site
license sales to schools and Boys & Girls Clubs at $19,950.00 each. It is our
plan to generate revenue from ad revenue from our relationship with ZapMe!,
Crosswalk.com, HomeSchool Zone, and others. E-commerce revenue currently
consists of shared revenue subscribers. Other revenue consists of revenue from
the distribution of content and products which are delivered through our
network, and from educational services delivered in the PCS labs such as teacher
training, and other educational programs offered through a strategic alliance
with LEGO Pitsco Dacta Learning Systems. To date, no programs have been offered
under this arrangement, and additionally, no material e-commerce or network
services have been delivered and no significant revenue has been recognized by
PCS.

Because of our discontinued operations and our recent change of business
plan to our current line of business, comparisons in our results of operations
may not be as meaningful as it may be in future quarters. Furthermore, we are in
a development stage and therefore, anticipate continued fluctuations in revenues
and expenses.

Revenues

Revenues increased 12.6% or $16,754 for the six months ended September 30,
2000 compared to the six month ended September 30, 1999. Revenues decreased
36.6% or $36,057 for the three months ended September 30, 2000 compared to the
three months ended September 30, 1999. Revenues decreased during that period
when the company was in the process of phasing out of its "discontinued
products" and into our new core products.

Revenues decreased 43.8% or $124,851 for the year ended March 31, 2000
compared to year ended March 31, 1999, again due to a change in the Company's
product lines from its old and discontinued products and into our new products.

<PAGE>

Cost of Goods Sold

Cost of good sold consist primarily of the costs associated with
purchasing LEGO, digital cameras, storage units and other miscellaneous printed
material associated with the sale of site license labs into public and private
school classrooms and into Boys & Girls Clubs. Cost of goods varies directly
with the number of schools.

Cost of goods totaled $58,281 for the six months and $37, 107 for the
three months ended September 30, 2000. No costs were attributed to costs of good
sold for the same periods ended September 30, 1999, because the "discontinued
products" carried no cost of goods.

Cost of goods sold for the year ended March 31, 2000 were $64,246 compared
to -0- for the year ended March 31, 1999, because the "discontinued products"
carried no associated costs.

Gross Profit

Gross profit was 61% of total revenue for the six months ended September
30, 2000 and 60% for the three months ended September 30, 2000. For the year
ended March 31, 2000 gross profit was 40% of revenue.

General and Administrative

General and Administrative expenses increased significantly during the
last year due primarily to increased personnel and related overhead necessary to
support our increased scale of operations, particularly the addition of key
executive staff. We expect general and administrative expenses to increase as we
expand our management and staff, incur additional costs related to expansion of
our operations and incur the additional costs associated with being a publicly
reporting company. Sales and marketing expenses also increased significantly due
primarily to compensation associated with the increased number of sales and
marketing personnel and related overhead, and increased travel costs associated
with our direct selling efforts. We expect selling and marketing expenses to
increase in absolute dollars in future periods as we hire additional personnel,
promote our home client, and develop incentive programs to increase in-school
and at-home usage of the PCS products.

General and administrative costs for the year ended March 31, 2000 were
$945,894 compared to $1,269,135 for the year ended March 31, 1999.

General and administrative costs for the six months and three months ended
September 30, 2000 were $1,156,978 and $568,783 compared to $379,762 and
$263,927 for the six months ended three months ended September 30, 1999.

Research and Development Expenses, were $68,850 and $37,132 for the six
months and three months ended September 30, 2000 compared to $33,850 and $18,963
for the six months and three months ended September 30, 1999. Research and
development expenses increased to approximately $150,000 for the twelve months
ended March 31, 2000, from approximately $100,000 for the twelve months ended
March 31, 1999. The increase in research and development was due primarily to
increased payroll and consulting fees as we continue to develop our database and
software capabilities. We believe that continued investment in research and
development will contribute to attaining our strategic objectives and, as a
result, expect research and development expenses to increase in future periods.

<PAGE>

Net Loss

Our net loss from continuing operations for the six months and three
months ended September 30, 2000 was $1,184,210 and $605,418 respective compared
to $329,863 and $210,275 for the six months and three months ended September 30,
1999.

Our net loss from continuing operations for the year ended March 31, 2000
was $937,571 compared to $1,220,681 for the year ended March 31, 1999.

Liquidity and Capital Resources.

We are currently unable to finance our operations from operating
activities and historically have relied on loans and private placements of
common stock to fund our operations. At September 30, 2000 we had total assets
of $515,200 of which $422,076 was cash. At March 31, 2000, we had total assets
of $171,919 of which $78,125 was cash. Our total liabilities at September 30,
2000 were $432,954 compared to $478,245 at March 31, 2000. Our stockholders'
equity at September 30, 2000 was $82,246 compared to a deficit in stockholders'
equity at March 31, 2000.

Cash provided by financing activities was approximately $648,832 for the
twelve months ended March 31, 2000, and $574,205 for the twelve months ended
March 31,1999. In each period, the cash provided by financing activities
resulted primarily from the issuance of capital stock. Cash provided by
financing activities was $1,083,765 for the six months ended September 30, 2000
compared to $360,872 for the six months ended September 30, 1999.

We have sustained losses of $933,116 and $1,220,681 for the years ended
March 31, 2000, and 1999, respectively. In addition, operating activities have
used cash of $595,943 and $629,096 for the years ended March 31, 2000, and 1999,
respectively. We have sustained losses of $1,184,210 and $329,863 for the six
months ended September 30, 2000, and 1999, respectively. In addition, operating
activities have used cash of $733,813 and $359,783 for the six months ended
September 30, 2000, and 1999, respectively.

Our ability to continue as a going concern is dependent upon our ability
to generate sufficient cash flows to meet our obligations on a timely basis, to
obtain additional financing, and ultimately to attain profitable operations.
Management plans include obtaining additional equity financing and our
management believes that profitability and cash flows from our operations will
improve and will provide the necessary capital to fund operations due to the
continued success of existing products and the introduction of new products.
There is no assurance, however, that these efforts will result in profitable
operations or in our Company's ability to meet obligations when due.

Our working capital requirements and other capital requirements for the
foreseeable future will be primarily funded through the issuance of equity
securities until we are able to meet our working capital needs with positive
cash flows provided from operations; after this point, we will likely increase
expenditures so as to accelerate our revenue and profitability growth. We
believe that proceeds from subsequent issuance of equity securities will enable
us to establish profitable operations and positive cash flows from operations.
However, there is no assurance that profitable operations or positive cash flows
from our operations will ever be realized.

There can be no assurance that we will be able to raise sufficient capital
necessary to allow us to continue with our operations on our current scale. If
additional funds are raised through the issuance of equity securities, the
percentage of our shares owned by existing stockholders will be reduced,
stockholders may experience additional dilution.

<PAGE>

Inflation

We do not expect the impact of inflation on operations to be
significant.

Year 2000 - Y2K ISSUES

We had developed plans to address the possible exposures related to the
impact on our computer systems for the Year 2000. Since entering the Year 2000,
we have not experienced any major disruptions to our business, nor are we aware
of any significant Year 2000 related disruptions impacting our customers and
suppliers. Furthermore, we did not experience any material impact on business at
calendar year end. We will continue to monitor our critical systems over the
next several months but do not anticipate any significant impacts due to Year
2000 exposures from our internal systems as well as from the activities of our
suppliers and customers.

Forward-looking Statements.

When used in this SB-2 and in other filings by e-automate with the
Securities and Exchange Commission ("SEC"), in our press releases or in other
public or stockholder communications or oral statements made with the approval
of any of our authorized executive officers, the words or phrases "would be,"
"will allow," "intends to," "believes," "plans," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on our beliefs and the assumptions we made using
information currently available to us. We caution readers not to place undue
reliance on any forward-looking statements, which speak only as of the date
made, are based on certain assumptions and expectations which may or may not be
valid or actually occur, and which involve risks of product demand, market
acceptance, economic conditions, competitive products and pricing, difficulties
in product development, commercialization, and technology, and other risks. In
addition, sales and other revenues may not commence and/or continue as
anticipated due to delays or otherwise. As a result, our actual results for
future periods could differ materially from those anticipated or projected.

We do not intend to update the forward looking statements contained in
this report, except as may occur as part of our ongoing periodic reports filed
with the Securities and Exchange Commission.

BUSINESS OF PCS EDVENTURES!.COM

General

We are a development stage company engaged in the business of developing
and marketing educational related technologies and programs directed to the
kindergarten through 12th grade market. Our products and technologies are
targeted to both the classroom and home market. Our products and technologies
are delivered to the classroom through an inventory of hardware, software,
books, video camera and internet access. Our technologies and products are
delivered to the home user through internet access to our subscription based
website. Our products and technologies allow students ages 7-18 to explore the
basic foundations of mechanical engineering, structures in architecture, and
math and science.

We have developed three innovative technology based educational programs.
Our "Academy of Engineering" product and our "Edventures! Labs" products are
site-license installations for

<PAGE>

classrooms and learning programs. Our "Edventures!.com" product is our
comprehensive internet delivered educational experience that supports our
Academy of Engineering and our Edventures! Labs site licenses products and also
serves as a stand-alone home usage program. Our Evdentures!.com program is
delivered to the home user over the internet on a monthly subscription basis.
Separately, and in combination, these three products present a platform for
delivering educational services and support to classroom, learning center and
home users, and create a virtual community of learners and parents on the web.
It is our business strategy that as this online community grows, it will become
an education portal through which additional PCS programs and services can be
marketed and delivered.

We have only commenced marketing efforts for our current products and
technologies during the last year. We are attempting to expand distribution and
marketing arrangements channels. To date, we have sold only a limited number of
products related to our current product line.

Background

PCS was incorporated in 1994 in the State of Idaho. In October 1994, we
acquired PCS Schools, Inc. ("PCS Schools") as a wholly owned subsidiary. PCS
Schools had created an educational enrichment program that was delivered in
owner-operated, free standing Learning Centers. This program offered a unique
atmosphere highly conducive to individual styles of learning and a system that
utilized computer technology to increase areas of inquiry and application.
Subsequently, we changed our business plan and business strategy and in
connection with this change, we divested the Learning Centers started by PCS
Schools and focused our efforts on creating web based educational systems
utilizing and improving PCS Schools legacy curriculum.

PCS Products

We have now developed and are currently marketing three innovative
technology based educational programs for the kindergarten through 12th grade
("K-12") school market, learning center market and home market. Separately, and
in combination, these three products present a platform for delivering
educational services and support, and create a virtual community of learners and
parents on the web. It is our intent that as this community grows, it becomes an
education portal through which additional PCS programs and services can be
deployed. The three technologies and products that we are currently marketing,
are as follows:

o Academy of Engineering. Our Academy of Engineering ("AOE") product is a
turnkey site license program designed for use within various K-12
environments. Using the AOE, students develop, design, and produce exciting
hands-on projects ranging from catapults to robots in response to engaging
challenges in a variety of topics. The current AOE product includes three
books for a mechanical engineering strand. Future topic strands for
expanding the program include structural, electrical and software
engineering. Each strand, when completed, includes courseware for over 272
hours of instruction. The AOE program includes a variety of LEGOS products
which are used as a mechanical engineering learning aid. An AOE site
license currently sells for between $15,000 and $19,500 and includes
materials, LEGOS and other manipulatives, and curriculum, a custom designed
storage and organization unit, a digital camera, web-based support by our
Edventures!.com

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product and various electronic assessment tools, and two days of
teacher training. We have sold 20 AOE licenses as of the date of
this Prospectus.

o Edventures!.com is an internet delivered program that provides a safe,
secure and exciting learning environment for students to interact within
from home and from school. Edventures!.com includes online curriculum and
assessment, filtered communication tools, forums and a variety of
additional online services. The program utilizes Internet based resources
and services as a stand-alone product and also serves as an extension
service to our school-based AOE product. Edventures.com can be viewed on
the web at edventures.com This program allow students to continue their
learning programs from home via the Internet, and to show parents their
digital portfolios from our AOE program. The environment also features over
200 do-at-home projects organized into a sophisticated learning model
(Merit System), an animated glossary, monitored chat rooms, live
interaction with online instructors, personal email accounts for all
students and more. The Edventures!.com at-home curriculum utilizes found
materials, LEGO products, software and other resources to teach concepts in
Physics, Electricity, Internet, Programming, Art, Architecture and
Engineering. Edventures!.com is included in the Academy of Engineering site
license as an on-line support tool and provides a framework within which
students can safely communicate, collaborate, and learn. Edventures!.com is
also available as a stand-alone, home based subscription product for $7.95
per month. We currently have 200 stand-alone users of Edventures!.com and
approximately 10,000 users related to our AOE and Edventures!Labs programs.

The AOE and Edventures! Labs have three main delivery models, which makes
these products suitable for use in various learning environments:

o School Resource Center. The AOE and Edventures! Labs are currently being
deployed as a school-wide resource center that allows K-12 teachers to
integrate hands-on project based learning activities into their daily
curriculum. As a resource center, these mobile Labs are rolled from
classroom to classroom throughout the course of a typical school week,
being used by the entire school. Examples of how the program is used
include: (1) a platform for gifted and talented programs; (2) to enhance
and extend a science curriculum; (3) to enhance and extend mathematics
activities; (4) to serve as a foundation for an after-school program; (5)
as a vo-tech or technology education program; (6) and to serve as a
"special ed" resource. This model makes the program an ideal resource for
schools around the country that are seeking innovative and organized
methods for integrating technology and hands-on learning in the classroom.

o Pre-Engineering Course. The Academy of Engineering and Edventures! Labs
provide a comprehensive engineering curriculum designed around the hands-on
LEGO manipulatives. This curriculum allows the program to serve as the
foundation

<PAGE>

for pre-engineering courses suitable for students in Jr./Sr. High. The
hands-on applications of technology, design and production techniques,
and the integration of the Internet based services, makes it a highly
attractive total classroom solution.

o After School Program. The Academy of Engineering and Edventures! Lab
programs were originally designed in an after-school environment and are
ideal to meet the expanding need for educational solutions for school-based
programs, Boys & Girls Clubs, YMCA, Community Learning Centers and similar
organizations. When used in this format, these programs become a hub for
educational activities out of the engineering curriculum, or from the
online Edventures! program. The complete support, assessment and curriculum
components provide a turnkey system for offering a flexible, effective
educational offering.

We believe that educations programs of our type are not currently
available from any other source and present a unique opportunity for sales and
marketing to specific segments of the education industry. We intend to attempt
to achieve significant penetration of the K-12 and other extended learning
markets with the Academy of Engineering and Edventures! Lab products through
strategic alliances with existing educational based companies such as Pitsco
LEGO Dacta, EDAcom Technoligia and ZapMe! We believe that PCS education programs
deliver a unique, proven learning experience that:

o provides students with exciting and relevant activities that brings
curriculum to life;

o develops essential critical thinking and problem-solving skills;

o prepares students for real-world career demands; and

o builds a strong foundation in technical literacy.

Market Overview

The educational market is a significant market in the United States but is
fragmented into various segments ranging from non-profit educational programs to
the public school system. We focus our sales and marketing efforts on specific
market segments in an integrated strategy that is intended to build brand name
awareness of our PCS products in schools, at home, and within the larger
educational marketplace.

We believe that a major shift of focus is taking place in education in our
public and private schools as educators and parents seek to maximize educational
experiences for children based upon advances in technology. We believe that this
shift necessitates sweeping changes in how schools are operated, programs are
taught, technology is integrated, students are assessed and classrooms are
managed. Over the past few years, the emergence of a for-profit education
industry has begun to evolve in response to parents' and society's demand for
more and better alternatives in education. Parents are giving their children's
schools low grades for teaching performance and at the same time there is an
increase in public support for school choice. In the recent presidential
political campaign, the issue of education, including the public funding of
private school vouchers, was a significant issue. These factors are driving the
growth of private and charter school alternatives.

Capitalizing on this atmosphere, private education based companies
specializing in after-school, tutoring and special skills programs various
educational companies are marketing programs, technologies and products catering
to teachers, students and parents. Parents support alternative education
programs and enrichment activities and actively seek them out for their
children, as well

<PAGE>

as exert more and more pressure on public schools to improve their performance.
We believe that with this change and unrest taking place within the education
industry, enormous opportunities are emerging for companies who understand the
problems and promise of technology and new educational methodologies. It is our
business strategy to, through our technologies and experience, develop and
market technology enhanced learning programs to address this education demand.

The Growth of the Extended Learning Market. Recent high-profile federal
programs indicate a growing opportunity within the extended learning market
which encompasses before, after and summer school programs on the campus of
public schools, or operated through the venue of organizations like the Boys &
Girls Clubs of America. A recently posted web site, "www.afterschool.gov,"
summarizes many of the federal funding sources now available for this growing
market segment. One significant driving force in this movement is the proven
impact after-school programs have for decreasing juvenile crime. Part of the
funding of the Boys & Girls Clubs of America is provided by the Department of
Justice. Other indicators in this market include the federal government's 21st
Century Community Learning Center program which has a budget of approximately
$1.2 billion for the budget year 2001.

PCS Designated Markets

Academy of Engineering and Edventures! Lab: Markets

We have identified as our initial primary market for the Academy of
Engineering traditional public and private schools and the after-school programs
that are growing quickly across the United States. Widespread financial support
for implementing school-based after-school programs is driving the growth of
public school programs in this segment. To illustrate this growing trend, $100
million was allocated in 1998 by the DOE for public school-based afterschool
programs. This number grew to $200 million 1999 and to an estimated $600 million
in 2000. In addition, the growth of programs such as those offered by the Boys &
Girls Clubs of America are further proof of the market need for this product.
The US Department of Justice allocated a $40 million grant to the Boys & Girls
Clubs of America in 1999 for the purpose of expanding and enhancing their
programs. As a niche market, after school programs, on and off the campus of
public schools (the Extended Learning Market) represent a potential market for
PCS products.

K-12 Market in International and US. We have entered into a sales agency
agreement and product alliance relationship with Pitsco LEGO Dacta, a Pittsburg,
Kansas based educational company that holds the non- exclusive distribution
rights to LEGO Dacta product sales in the United States. Pitsco, established in
1966, has established a market presence and reputation in the school market
place and now markets its own line of modular school labs as well as hundreds of
other hands-on type products. The Academy of Engineering product complements the
Pitsco existing product line. We are attempting to enter into a similar
agreement with LEGO EDAcom Technologia based in Brazil and Portugal, for
distribution of our AOE product in those countries. We are also working towards
alliances with LEGO counterparts in India, Hong Kong, Belgium and Germany.

K-12 Schools in the State of Idaho. The K-12 school market in Idaho is
unique marketing opportunity for PCS due to the funding of school purchases of
our products by the J.A. & Kathryn Albertson Foundation which is currently
funding a statewide technology initiative. PCS is a pre-approved vendor for this
initiative and is driving a direct sales effort in Idaho to establish a strong
reference network of AOE sites using the program. We anticipate that this
network of reference sites will serve as a strong source of market feedback for
continually improving the product, and is already serving as an excellent source
of testimonials from teachers and administrators using the program. We have sold
site licenses for 12 AOE centers in the State of Idaho.

<PAGE>

Boys & Girls Clubs. We are currently continuing our efforts to distribute
our AOE products into the Boys and Girls Clubs. We installed an Academy of
Engineering in the Ada County Boys & Girls Club in Garden City, Idaho . Funding
for the program was secured from a local foundation (The Idaho Community
Foundation). We have also installed an AOE at the Rainier Vista Boys & Girls
Club in Seattle, sponsored by the Microsoft Corporate Gifting Group. We are
using these sites as reference sites and we are currently attempting to contact
Boys and Girls Clubs nationwide. To date, clubs have evidenced a strong interest
in the program due to an organization-wide mandate to implement educational
programs like the AOE. The funding cycle access to funds for these programs are
a significant factor in our ability to market the AOE to Boys and Girls Clubs.

Extended Learning Market. In addition to the Boys & Girls Clubs of
America, additional non-school-based programs are increasing through such
institutions as the YMCA, Community Learning Centers, and other sites such as
Science Museums. PCS is currently working to establish reference sites in each
of these markets and will follow a strategy similar to the one it is pursuing
with the Boys & Girls Clubs of America. Progress to date in these market
segments include a site license program currently being deployed at the Oregon
Museum of Science and Industry in Portland (OMSI); a site license program to the
Boise Downtown YMCA which is seeking funding through grant sources and a site
license program to the Vista Neighborhood Community Center in Boise, also
currently seeking funding.

Edventures!.com. Markets

Edventures!.com is designed to provide a full-featured educational
extension via the Internet to all students participating in PCS programs such as
the Academy of Engineering. However, for families and students who do not have
access to the AOE program through a local site license, the program is available
on a subscription basis for $7.95 per month. PCS describes the primary market
for the current Edventures!.com product as families with children ages six to 13
who have a strong interest in education. Further, this market can be divided
into homeschool families and traditional families.

Traditional Families. There are an estimated 46 million students currently
attending K-12 schools across the U.S. The prime motivator for many of these
students initially attracted to Edventures! is the attachment to the LEGO name
and the integration of the LEGO based curriculum online. LEGO enjoys a large
brand name recognition across the country, and is a significant brand and
product to be identified with. We are attempting to market our products so as to
take advantage of the Lego name recognition.

The K-12 Partner Program. We have recently developed a marketing program
known as the "K-12 Partners Program". This program is a fund raiser model in
which participating schools promote the Edventures!.com product through
send-home materials, newsletter promotions and PCS demonstrations to groups such
as PTA/PTO's. Utilizing a database driven tracking process, PCS logs all
families enrolled through a partner program and shares back a portion of the
subscription revenue to the school at the end of the school year.

The PCS - ZapMe! Alliance Program. In addition to the K-12 Partner program,
PCS has entered into a strategic alliance with ZapMe! (www.zapme.net), a San
Ramon, CA, based company that is delivering complete computer lab and satellite
connectivity solutions to Middle-Senior High schools free in exchange for
permission to promote their partner programs and online teen- community. PCS has
been chosen to be a content partner in which ZapMe! promotes Edventures!.com in
exchange for revenue sharing and the providing of certain amounts of free PCS
content for their ZapMe! Netspace. PCS is expanding the Edventures!.com product
to provide

<PAGE>

additional content and services to appeal to the older ZapMe! students with
a focus on technical and engineering education.

ZapMe! will also be promoting the PCS name and the Academy of Engineering
program in the schools in which it is present. ZapMe! has over 8,000 US schools
currently signed up for its programs. PCS expects this alliance to build
PCSEdventures!.com, and Academy of Engineering name recognition through
quarterly take-home CD distributions, display through the ZapMe! Netspace and
other ZapMe! promotions done through e-mail and other venues.

Crosswalk.com and Homeschool Families. PCS is in the final stage of
creating an alliance with Crosswalk.com similar to the ZapMe arrangement, which
will give Edventures!.com exposure to all of Crosswalks HomeSchool subscribers.
In addition to the more traditional families, research and current use of the
program indicates that Edventures!.com is an ideal product for the growing
homeschool market, and provides an excellent segue between students in
traditional and non-traditional environments.

Other Alliances. PCS is also currently in various stages of creating
revenue sharing strategic alliances with such firms as the PowerSchool, Co-Nect,
HomeSchool Zone, Voyager, SmarterKids, ChildU, Children's Technology Group and
several others. PowerSchool, Co-Nect and HomeSchool Zone are in the final
agreement review stage. In addition, the Company is currently in discussions
with corporate Radio Shack and corporate Target Stores for the purpose of
distributing an Edventures.com cd through those retailers at the point of sale
cash registers. PCS is also currently considering the creation of a "private
label" cd for both of these large retailers and a decision is expected to be
reached during the 4th Quarter. The Radio Shack discussions also involve a new
package which would include a LEGO kit and the Company is in discussions with
LEGO USA to create this new retail pack.

Edventures!.com has been approved for state level funding for homeschool
students in the states of California and Alaska. PCS is currently developing a
promotional effort that will take advantage of this funding availability to
promote the Edventures! program to the thousands of homeschool families in these
states. In addition, Pitsco has been developing a sales channel into the
homeschool market for several years now that can serve as a conduit for the
Edventures!.com product.

Marketing and Other Agreements

Direct Sales Force. Currently, we have a direct sales force consisting
four employees and thirty-two independent agents. This direct sales force
markets are products and programs in a variety of methods to various users,
providers and others.

Lego Dacta and Pitsco Agreement. We have entered into a Marketing
Agreement with Lego Dacta and Pitsco, LLC ("Pitsco") for the sale of our "The
Academy of Engineering product. Pitsco is an educational company that holds the
non-exclusive distribution rights to LEGO Dacta product sales in the United
States. Pitsco, established in 1966, has established significant market presence
and reputation in the school market place and now markets its own line of
modular school labs as well as hundreds of other hands-on type products. We
believe that the existing sales and marketing force of Pitsco, will greatly
increase the opportunity for introduction of our "The Academy of Engineering"
product across the country. As of the date of this Prospectus, Pitsco has sold
four units of our The Academy of Engineering product.

<PAGE>

Burge Agreement. We have entered into an agreement with Cathy Burge, an
independent contractor, on a non-exclusive basis, develop business relationships
between PCS and potential customers and vendors and to seek out suitable
acquisitions. Ms. Burge is paid a weekly fee of $1,250 for her services which
has included locating and negotiating the acquisition of Senior Driver, a
company that offers the senior market a driving improvement course delivered
over the web.

Research and Development.

We are actively working to expand our product line and to expand the
educational programs and topics offered in our existing products. Currently, we
have five persons working on developing new products and topics.

Intellectual Property Protection; Licensing and Proprietary Rights

We seek to protect our technology, documentation and other written
materials under trade secret and copyright laws, which afford only limited
protection. Generally, we enter into confidentiality and non-disclosure
agreements with our employees and with key vendors and suppliers. Currently we
use the following trade names: "PCS" (TM)"; "Academy of Learning"; "business";
and "Edventures". We intend to evaluate continually the appropriateness of
seeking registration of additional product names and trademarks as they evolve.

At the present time, we have not applied for any patents, nor do we have
any patents pending. We anticipate that our products will not be the type for
which patent protection will be sought. However, we may file for patent
protection on certain aspects of our proprietary technology in the future.

Our present or future products may be found to infringe upon the
intellectual property rights of others. If our products were found to infringe
on intellectual property rights of others, our development and sale of such
products could be severely restricted or prohibited. In such eventuality we
would be required to obtain licenses to utilize such patents or proprietary
rights of others, for which acceptable terms may be unavailable. If we were not
able to obtain such licenses, the development or sale of products requiring such
licenses could be materially and adversely affected. In addition, we could incur
substantial costs in defending against challenges to our patents or infringement
claims made by third parties or in enforcing any patents we may obtain.

Competition

Both the education marketplace and the Internet are highly competitive and
rapidly evolving fields, and are expected to continue to undergo significant and
rapid technological change. Other companies may develop products and services
and technologies superior to our products which may result in our products and
services becoming less competitive. We are aware of several development stage
and established enterprises, including major telecommunications and computer
software and technology companies, which are exploring the fields of online
educational products and services or are actively engaged in research and
development of products and services targeted at these fields. Many of these
companies have substantially greater financial, manufacturing, marketing and
technical resources than we have and represent significant long-term
competition. To the extent that these companies offer comparable products and
services at lower prices, or higher quality and more cost effective, our
business could be adversely affected.

Edventures!.com competes with Junior Net, Apollo, Zif Davis, MultiActive
Education and Disney Daily Blast as subscription models ranging from $5.95 per
month to $9.95 per month. However, none have the combination of program depth,
interactivity, assessment of student project

<PAGE>

progress, portfolio building, monitored chat and safe communication environments
that are standard features on Edventures!.com at $7.95 per month.

Cisco Systems sells a product called Networking Academy which is a Vo-Tech
IT engineering program. Autodesk is partnered with a program called Project Lead
the Way that is a Cad/Engineering product as well. Other competitors include
Graphics Academy and the Academy of Multi-Media, as well as educational
manipulative distributors such as Fisher-Technic, Lasy and K'Nex.

We believe that the hands-on project based learning market is growing both
in terms of users and companies offering products and services in this field.
Additional competitors of PCS include, but are not limited to, Aero Racers, AK
Peters, DEPCO, Inc., General Robotics, Lab Volt Systems, Paxton-Patterson, OWI,
Inc., Valiant Technology and Voyager. All of these firms offer some form of
hands-on technical curriculum, some including deliverables, to the K-12 market.

Potential Competitive Advantages

We believe that we potentially have certain competitive advantages which
we will attempt to maximize in developing and effecting our business strategy.
These potential advantages include the following:

o High barriers exist to entry. PCS' educational programs are unique
and sophisticated. PCS educational programs are innovative, unique
and based on ten years of experience and product development.
Barriers to entry for competitive products that are time tested are
extremely high. Early and significant market penetration will
guarantee a "first and best" name recognition for the types of
educational services that PCS will deliver.

o Utilize the Internet as a delivery and support mechanism for the
programs. By leveraging our extensive expertise in Internet
technology, PCS achieves the following significant advantages: (1) a
high level of program control; (2) the building of a significant
data model regarding program usage; and (3) a direct channel to
enrolled students who access the program at home. Each of these
advantages provides tangible long-term benefits to the Company.

o Expand program offerings and distribute them via established program
licensees. After implementing and proving a successful program
model, PCS will utilize its established network of licensees to
distribute additional programs designed to integrate seamlessly into
the already deployed sites. This creates a long-term growth strategy
that includes new and residual sales to an ever-growing list of
existing licensees on an annual basis.

o Proliferate licensing of PCS programs by continuing to expand other
educational market segments. PCS recognizes that the public schools
and community organizations offering educational programs are the
best choice for rapid expansion and capturing market share and
visibility. Additional market segments will be attacked
individually as PCS demonstrates program viability, market by
market. By taking a long term strategic approach to market
penetration, and maintaining a policy of solid strategic
alliances for distribution, each PCS educational program will
be an asset that will continue to generate growth and sales.

<PAGE>

Employees

We employ approximately 20 full-time employees of which four are in sales,
12 are in design and project management, one in accounting and three are in
administration and clerical. We will hire part-time and additional full-time
employees on an "as-needed" basis. None of our employees are represented by a
labor union. We believe that our relationship with our employees is good.

Facilities

The Company leases its principal executive offices, at 1655 Fairview
Avenue Suite #100, Boise, Idaho 83702. These offices consist of approximately
6,000 square feet of Class B office space. Rent obligations are $5,500/month in
year one; $6,000/month in year two and an option to renew for one additional
year (year 3) for $6,500 per month. This lease commenced on March 1, 2000 and
expires on February 28, 2002, unless extended by PCS.

MANAGEMENT

The following table sets forth the name, address, age and position of each
officer and director of the Company:

Name Age Position
-------------------------------------------------------------------------------
Anthony A. Maher 52 Chairman of the Board, President, and
Chief Executive Officer

Robert O. Grover 38 Executive Vice President

H. Kent Christensen 42 Vice President, Sales & Marketing

Richard F. Schmidt 39 Chief Financial Officer

Donald J. Farley 50 Secretary, Director

Roy M. Svee 74 Treasurer, Director

Cecil D. Andrus 73 Director

Background information concerning the Company's officers and directors is
as follows:

Anthony A. Maher, Chairman, President & CEO. Anthony A. Maher was
recruited to PCS at its inception as Chairman of the Board, President and Chief
Executive Officer and structured the purchase of PCS Schools. Since then, Mr.
Maher has overseen the development of the curriculum from four core areas to
over 60; the development of its distance developer database; and the creation of
its web based publishing expertise. From 1982 to 1989 he was founder and
Chairman of the Board of National Manufacturing Company, Inc. and its
subsidiary, National Medical Industries, Inc. From 1979 to 1982, Mr. Maher was
Executive Vice President for Littletree Inns, a hotel company based in Boise,
Idaho with properties throughout the Northwest. Mr. Maher graduated from Boise
State University in 1970 with a Bachelor of Arts degree in Political Science.

<PAGE>

Robert O. Grover. Robert O. Grover joined PCS at its inception and became
Executive Vice President in May 1996. Mr. Grover's current focus is on the
development of PCS distance education applications including the web-based
support and delivery systems that are integral to Edventures!.com, Edventures
Labs, and the Academy of Engineering. In 1992, he developed the PCS Merit System
that has become the foundation of the Edventures!.com learning systems online.
Mr. Grover graduated from Boise State University in 1987 with a Bachelor of Arts
degree in English.

H. Kent Christensen. Mr. Christensen joined PCS in September 1999. From
1998 to1999, he was employed by Franklin Covey where he was responsible for
sales of organizational skills and time management programs to the K-12 market
in Idaho and Montana. From 1995 to 1998, he was employed in the insurance
industry first by Sedgwick James and later by First Security Insurance. From
1980 to 1995, Mr. Christensen owned and operated a national plumbing franchise
in Western Idaho and Eastern Oregon.

Richard F. Schmidt. Rick Schmidt has been employed as the Chief Financial
Officer of PCS since September 2000. Since 1998, Mr. Schmidt has been the CFO of
Cybertel Communications Corporation, a publicly held, San Diego-based,
integrated telecommunications provider from 1998 to 2000. Prior to his
employment at Cybertel, Mr. Schmidt, worked from 1994 to 1998 first as Chief
Financial Officer of Iseki, Inc., and later as Senior Vice President. Mr.
Schmidt served as manager and multinational tax and business consultant for
Coopers & Lybrand where he worked from 1987 to 1994. He is a 1984 graduate of
Gonzaga University with a B.B.A. in Accounting and is a Certified Public
Accountant.

Donald J. Farley. Mr. Farley is a director and the Secretary of the Company
and has acted as the Company's legal counsel since 1994. Mr. Farley is a
founding partner of the law firm of Hall, Farley, Oberrecht & Blanton, P.A. His
legal practice emphasizes litigation and representation of closely held
businesses. He has been in private practice since 1975, after serving a two year
judicial clerkship with former United States District Judge J. Blaine Anderson.
Mr. Farley is admitted to practice before all state and federal courts in Idaho
and has also been admitted to practice before the United States Supreme Court.
He is a member of the American Bar Association, the International Association of
Defense Counsel, Defense Research Institute, the Idaho State Bar Association and
the Association of Trial lawyers of America. Mr. Farley graduated from the
University of Idaho in 1970 with a Bachelor of Arts degree in Economics and from
the University of Idaho College of Law in 1973.

Roy M. Svee . Mr. Svee is, and has been since 1996, a director and the
Treasurer of the Company. Mr. Svee has served with distinction throughout his
business career on the Board of Directors of such organizations as Southgate
Bank; First National Bank; Colonial Savings; Eastern Heights Bank; TFC Bank and
its parent; Hansen Engine and Hansen Air Systems, Inc.; Genius Technologies and
JF Goodhouse, Inc., all in Minnesota and Michigan. During his working career, he
served as Regional Manager of Montgomery Ward and after that as Senior Vice
President- Strategic Planning for Target Stores. He retired from JB Goodhouse,
Inc. as President & CEO in 1991. Mr. Svee has a Bachelor of Business
Administration degree from the University of Minnesota and served as a pilot in
the Navy Air Corps.

Cecil D. Andrus. Former Idaho State Governor Andrus joined the PCS Board
of Directors in November 1995. Following his retirement from public service in
January 1995, Governor Andrus founded and now directs the Andrus Center for
Public Policy at Boise State University. Governor Andrus is the first person in
the history of Idaho to be elected Governor four different times (1970, 1974,
1986 and 1990). When he retired from public office, he was the senior governor
in the United

<PAGE>

States in length of service. Mr. Andrus resigned as governor in 1977 to become
the Secretary of the Interior in the Carter Administration, the first Idahoan to
serve in a Presidential Cabinet. Governor Andrus is also a director of
Albertsons, KeyCorp and The Gallatin Group.

MANAGEMENT COMPENSATION

The following table sets forth the aggregate cash compensation paid by the
Company for services rendered during the last three years to the Company's Chief
Executive Officer and to the Company's most highly compensated executive
officers other than the CEO, whose annual salary and bonus exceeded $100,000:

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

Long Term Compensation

Annual Compensation Awards Payouts
--------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)) (i)

Other All
Name and Year Annual Restrict Options/ LTIP Other
Principal Ended ($) ($) Compen- Stock SAR's Payouts Compensation
Position 3/31 Salary(1) Bonus sation($) Awards($) (#) ($) ($)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Anthony 2000 $120,000 -0- -0- $125,000 $ -0- $ -0- $ -0-
Maher (1) 1999 $100,000 -0- -0- -0- -0- -0- -0-
President 1998 $ 84,000 -0- -0- -0- -0- -0- -0-
-------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Maher was the only executive officer of PCS whose cash
compensation exceeded $100,000 during the last three fiscal years. On December
17, 1999, Mr. Maher was issued 300,000 shares of PCS' common stock for services
rendered. On December 20, 1999, Mr. Maher was issued 200,000 shares of PCS'
common stock for services rendered. On October 16, 2000, Mr. Maher was issued
500,000 shares of PCS' common stock for services rendered.

Options Grants in Last Fiscal Year

There were no grants of stock options made during the fiscal year ended
March 31, 2000 to our executive officers. PCS did grant options to officer,
directors, employees and others after March 31, 2000. These options are
described below on Page 29.

Stock Options Held at End of Fiscal 2000

No stock options or stock appreciation rights were owned by PCS' officers
and directors at March 31, 2000, the end of our last fiscal year.

Compensation of Directors

PCS does not currently compensate its directors for director services to
PCS. We anticipate that more formal compensation arrangements with our directors
will be finalized within the next fiscal year.

<PAGE>

Employment Agreements

We have no written employment agreements with our management. Currently,
we are paying our officers the following annual salaries: Anthony A. Maher -
$120,000; Robert O. Grover - $84,000; H. Kent Christensen - $50,000; and Richard
F. Schmidt - $24,000 (part time). We anticipate that more formal compensation
arrangements with our management will be finalized during the second quarter of
this year. The Company also provides medical and dental insurance for its
officers and other employees.

Stock Option Plans and Other Incentive Compensation Plans

PCS has not adopted any formal option plans or other incentive
compensation plans as of the date of this Prospectus. We anticipate that our
Board of Directors will, in the near future, adopt incentive compensation plans
to provide reward and incentives to employees, directors and agents of PCS. PCS
has granted the following options to officers, directors, employees and
consultants:

Number Date of Exercise Expiration
Option Holder Shares Grant Price Date
--------------------------------------------------------------------------
Anthony M. Maher 200,000 04/20/00 $.75 04/20/03
Roy M. Svee 200,000 04/20/00 $.75 04/20/03
Donald Farley 200,000 04/20/00 $.75 04/20/03
Robert O. Grover 200,000 10/01/00 $.75 10/01/03
Christy Vaughn 75,000 09/01/00 $.75 09/01/03
David Chase 50,000 09/01/00 $.75 09/01/03
Lee Parish 50,000 02/05/00 $.75 02/05/03
Richard Wright 50,000 09/01/00 $.75 09/01/03
Laura Holsie 45,000 06/01/00 $.75 06/01/03
Anita Ashcraft-Drake 25,000 09/01/00 $.75 09/01/03

PRINCIPAL STOCKHOLDERS

The following table sets forth information concerning the beneficial
ownership of PCS common stock as of December 14, 2000, by each director and
executive officer, all directors and officers as a group, and each person known
to PCS to beneficially own 5% or more of its outstanding common stock.

Name and Address Percentage
of Beneficial Owner Shares Owned(1) Owned
-------------------------------------------------------------------------------

Anthony A. Maher 1,324,000(3) 10.94%
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

Robert O. Grover 515,000(4) 4.26%
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

H. Kent Christensen 76,667 (2)
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

<PAGE>

Richard F. Schmidt 50,000 (2)
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

Roy M. Svee
1655 Fairview Avenue, Suite 100, 800,000(5) 6.61%
Boise, Idaho 83702

Donald J. Farley 919,000(6) 7.59%
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

Cecil D. Andrus 123,333 (2)
1655 Fairview Avenue, Suite 100,
Boise, Idaho 83702

Thomas E. Zemlicka 687,000 5.77%
4863 Lakemont Court
Boise, Idaho 83703

All officers and Directors as a group 3,808,000 29.98%
(7 persons)

(1) Based upon 11,901,964 shares of common stock issued and outstanding as
of December 14, 2000, calculated in accordance with Rule 13d-3 promulgated under
the Exchange Act. It also includes shares owned by (i) a spouse, minor children
or by relatives sharing the same home, (ii) entities owned or controlled by the
named person and (iii) other persons if the named person has the right to
acquire such shares within 60 days by the exercise of any right or option.
Unless otherwise noted, shares are owned of record and beneficially by the named
person.

(2) Less than one percent.

(3) These shares include (i) 1,100,000 shares owned of record by Mr.
Maher, (ii) 9,500 shares which are beneficially owned by a family limited
liability named Sullivan Maher for which Mr. Maher acts as a manager (iii)
10,000 shares owned by the Nick Maher foundation of which Mr. Maher is a
trustee, (iv) 4,500 shares owned by E.L. Sullivan which are voted by Mr. Maher
pursuant to an irrevocable proxy and (v) 200,000 shares which may be issued upon
the exercise of currently exercisable stock options. These options are
exercisable at $.75 per share and are exercisable through April 2003.

(4) These shares include (i) 315,000 shares owned of record by Mr. Grover
and (ii) 200,000 shares which may be issued upon the exercise of currently
exercisable stock options. These options are exercisable at $.75 per share and
are exercisable through October 2003.

(5) These shares include (i) 600,000 shares owned of record by Mr. Svee
and (ii) 200,000 shares which may be issued upon the exercise of currently
exercisable stock options. These options are exercisable at $.75 per share and
are exercisable through April 2003.

(6) These shares include (i) 719,000 shares owned of record by Mr. Farley
and (ii) 200,000 shares which may be issued upon the exercise of currently
exercisable stock options. These options are exercisable at $.75 per share and
are exercisable through April 2003.

<PAGE>

DESCRIPTION OF SECURITIES

Common Stock

We are authorized to issue up to 50,000,000 shares of common stock, no par
value, of which 11,901,964 shares were issued and outstanding as of December 14,
2000. All outstanding shares of our common stock are fully paid and
nonassessable and the shares of our common stock offered by this prospectus will
be, upon issuance, fully paid and nonassessable. The following is a summary of
the material rights and privileges of our common stock.

Voting Rights

Holders of our common stock are entitled to cast one vote for each share
held at all shareholder meetings for all purposes, including the election of
directors. The holders of more than 50% of the voting power of our common stock
issued and outstanding and entitled to vote and present in person or by proxy,
constitute a quorum at all meetings of our shareholders. The vote of the holders
of a majority of our common stock present and entitled to vote at a meeting,
together with any preferred stock present and entitled to vote at a meeting,
will decide any question brought before the meeting, except when Idaho law, our
Articles of Incorporation, or our bylaws require a greater vote. Holders of our
common stock do not have cumulative voting rights for the election of directors.

Dividends

Holders of our common stock are entitled to dividends when, as and if
declared by the Board of Directors out of funds available for distribution. The
payment of any dividends may be limited or prohibited by loan agreement
provisions or priority dividends for preferred stock that may be outstanding.

Preemptive Rights

The holders of our common stock have no preemptive rights to subscribe for
any additional shares of any class of our capital stock or for any issue of
bonds, notes or other securities convertible into any class of our capital
stock.

Liquidation

If we liquidate or dissolve, the holders of each outstanding share of our
common stock will be entitled to share equally in our assets legally available
for distribution to our shareholders.

Warrants

PCS has issued Series B Common Stock Purchase warrants. The total number
of shares of common stock which may be issued upon the exercise of the Series B
Warrants is 69,835. The Series B Warrants are exercisable at $.01 per share. The
Series B Warrants expire in July 2003. The Series B Warrants may be exercised
upon surrender of the certificate(s) thereof on or prior to the expiration or
the redemption date at the offices of PCS with the subscription form on the
reverse side of the certificate(s) completed and executed as indicated,
accompanied by payment (in the form of a certified or cashier's check payable to
our order) of the full exercise price for the number of Series B Warrants being
exercised.

PCS has issued Series A Common Stock Purchase warrants. The total number of
shares of

<PAGE>

common stock which may be issued upon the exercise of the Series A Warrants is
22,222. The Series A Warrants are exercisable at $..675 per share. The Series A
Warrants expire in July 2003. The Series A Warrants may be exercised upon
surrender of the certificate(s) thereof on or prior to the expiration or the
redemption date at the offices of PCS with the subscription form on the reverse
side of the certificate(s) completed and executed as indicated, accompanied by
payment (in the form of a certified or cashier's check payable to our order) of
the full exercise price for the number of Series B Warrants being exercised.

The Warrant Certificate provides that the Series B and Series A
Warrantholders may exercise by paying for the underlying shares of Common Stock
in cash or by means of a cashless exercise, whereby, if applicable, the
requisite number of shares of Common Stock to be issued on such exercise would
be reduced as if they had been sold and the excess proceeds applied to cover the
exercise price of the remaining shares of Common Stock.

The Series B and Series A Warrant Certificates contains provisions that
protect the holders thereof against dilution by adjustment of the exercise price
per share and the number of shares issuable upon exercise thereof upon the
occurrence of certain events including issuances of Common Stock (or options or
securities convertible, exchangeable or exercisable into Common Stock) at less
than market value, stock dividends, stock splits, mergers, sale of substantially
all our assets, and for other extraordinary events; provided, however, that no
such adjustment shall be made upon, among other things (i) the issuance or
exercise of options or other securities under employee benefit plans (ii) the
sale or exercise of outstanding Series B and Series A Warrants.

The holder of Series B or Series A Warrants will not possess any right as
one of our shareholders unless or until the holder exercises their Warrants. We
have reserved shares of our common stock in the event the holder of the Series B
Warrants elects to exercise the same and thereby to purchase Common Stock.

Transfer Agent

Our transfer agent is Interwest Transfer Company, 1981 East
Murray-Holladay Road, Salt Lake City, UT 84117, telephone (801)272-9294.

Indemnification

PCS has not entered into any written indemnification agreements with its
officers, directors or employees. However, PCS's bylaws provide for
indemnification in certain situations. Article V of PCS's bylaws reads as
follows:

To the fullest extent permitted by law, this corporation shall indemnify
any person and to advance expenses incurred or to be incurred by such
person in defending a civil, criminal, administrative or investigative
action, suit or proceeding threatened or commenced by reason of the fact
said person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. Any such indemnification or
advancement of expenses shall not be deemed exclusive of any other rights
to which such person may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another capacity while
holding such office. Any indemnification or

<PAGE>

advancement of expenses so granted or paid by the corporation shall,
unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs and personal representative of
such a person.

PLAN OF DISTRIBUTION

The Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange market or trading facility on which our
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares.

o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

o an exchange distribution in accordance with the rules of the applicable
exchange;

o privately negotiated transactions;

o short sales;

o broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell shares under Rule 144 promulgated
under the Securities Act, if available, rather than under this Prospectus. The
Selling Stockholders may also engage in short sales against the box, puts and
calls and other transactions in our securities or derivatives of our securities
and may sell or deliver shares in connection with these trades.

The Selling Stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling stockholder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares. Broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.

The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.

<PAGE>

We have agreed to pay all fees and expenses incident to the registration
of the shares, including certain fees and disbursements of counsel to the
Selling Stockholders. We have agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. The Selling Stockholders have also agreed to indemnify
us, our directors, officers, agents and representatives against certain
liabilities, including certain liabilities under the Securities Act. The Selling
Stockholders and other persons participating in the distribution of the shares
offered hereby are subject to the applicable requirements of Regulation M
promulgated under the Securities Exchange Act of 1934 in connection with the
sales of the shares

SELLING SHAREHOLDERS

The following table details the name of each selling stockholder, the
number of shares owned by the selling stockholder, and the number of shares that
may be offered for resale under this prospectus. Because each selling
stockholder may offer all, some or none of the shares it holds, and because
there are currently no agreements, arrangements, or understandings with respect
to the sale of any of the shares, no definitive estimate as to the number of
shares that will be held by each selling stockholder after the offering can be
provided. The following table has been prepared on the assumption that all
shares offered under this prospectus will be sold to parties unaffiliated with
the selling stockholders. Except as indicated, none of the selling stockholders
has had a significant relationship with us within the past three years, other
than as a result of the ownership of our shares or other securities. Unless
otherwise indicated, the selling stockholders have sole voting and investment
power with their respective shares.

Number of Common
Shares Beneficially Common Shares
Name of Selling Stockholder Owned Prior to Offering Offered Hereby (1)
---------------------------- ----------------------------- -------------------

Gayle Anderson, Trustee 37,037 37,037
Scott and Michelle LaBear 22,222 22,222
Joseph R. Smith, IRA 100,000 100,000
Equity Advisors International 50,000 50,000
James R. Chapman 97,778 97,778
Technology Literacy Group, Inc. 74,075 74,075
James R. Gaul 74,074 74,074
Stewart I. Perim 21,111 21,111
Peter S. Richards 37,500 37,500
Trent G. Rencher 100,000 100,000
John E. Richards 37,500 37,500
David and Jama Fox 37,037 37,037
Loretta I. Cook 1,000 1,000
Douglas W. Miller 8,000 8,000
Mark E. Stutzman 1,000 1,000
Thomas M. Tice 1,000 1,000
Symbion, Ltd. 9,000 9,000
Equity Advisors International 6,666 6,666
International Capital Group Ltd. 50,000 50,000
Douglas W. Miller 7,000 7,000
Dan Sevier 1,000 1,000
Allan J. Kupczak 66,667 66,667
Ryan Canning 8,000 8,000

<PAGE>

Whitlow Family Trust, Gene R.
and Sara A. Whitlow, Trustees 12,000 12,000
Robert F. and Betty C. Mitchell 53,333 53,333
Kevin Denison 12,000 12,000
Mark E. Urness 33,333 33,333
Dwayne J. Denison 13,000 13,000
Evan Hathaway 72,000 72,000
Reed J. Bowen, Jr. 72,000 72,000
Kirk J. Moser 23,267 23,267
International Capital Group Ltd. 5,000 5,000
Joseph R. Smith, IRA 50,000 50,000
Jerry H. Canning 8,000 8,000
Andrew Aeling fbo - First Trust Corp 6,667 6,667
Thoms K. and Liesbeth L. Benedict 12,000 12,000
Mark S. Boland 12,000 12,000
Charles L. Bradley 16,000 16,000
Thomas S. Brower 4,000 4,000
Trevor Brown, Inc. Pension Plan 12,000 12,000
Trevor Brown, Inc. Pension Plan 6,667 6,667
John C. Bult Trust 6,000 6,000
Judy Conger Calder 2,000 2,000
Coghlan Family Corporation,
John R. Coghlan, President 30,000 30,000
Coogan Family Ltd. Partnership,
John S. Coogan, Jr., General Partner 12,000 12,000
Carl S. Derwig 10,000 10,000
John Duda 50,000 50,000
Daniel T. Gluch 8,400 8,400
Thomas R. and Anita L. Gluch 4,000 4,000
Greeley Orthodonitic Ctr. Prof. Sh 12,000 12,000
Walter Hinckfoot, Jr. Living Trust 14,000 14,000
Walter Hinckfoot, Jr. Living Trust 10,000 10,000
Donald Ingalls, Ttee 6,667 6,667
Jensen Orthodontic Ctr. Prof. Share 15,000 15,000
Jeffrey E. and Miriam M. Joyce 12,000 12,000
Kimball Family Trust 60,000 60,000
Geoffrey Kopecky 12,000 12,000
Armand LaSorsa fbo-First Trust Corp. 8,000 8,000
Leon and Elba Manfredi 6,000 6,000
Mechling Family Trust 12,000 12,000
John Montfort 26,667 26,667
Norman R. Morris Living Trust 10,000 10,000
Robert G. Niederkorn Irrevocable Trust 20,000 20,000
Diana Nichols 13,333 13,333
Clifford Nichols fbo-Frist Trust Co. 16,000 16,000
Dennis R. Shinn and Karen Brilland 12,000 12,000
Henry Stuit and Nellie M. Stuit
Revocable Trust 12,000 12,000
Diane Stump 6,000 6,000
Mike Vander Plaats fbo-First Trust Co. 4,000 4,000
Robert Wegner fbo - First Trust Co. 16,000 16,000
Michael H. Yokoyama and Jaye S. Venturi 12,000 12,000

<PAGE>

Douglas W. Miller 4,948 4,948
Dan Sevier 1,057 1,057
Tom Donovan 4,000 4,000
Thomas E. Thompson 2,316 2,316
Symbion, Ltd. 5,133 5,133
Loretta I. Cook 500 500
Thomas M. Tice 567 567
Ryan Cravens 942 942
James Boston 537 537
John G. Ariko, Jr. Revocable Living Trust 20,000 20,000
Richard K. Ball and Polly L. Ball,
Co-Trustees of Ball Family Trust 6,000 6,000
Marcella D. Barnhorst, Trustee of the
Marcella D. Barnhorst Trust 12,000 12,000
Barr Asset Family Ltd. Partnership 3,000 3,000
Ron C. Berg 2,000 2,000
Alan and Leslie Berlinberg, Trustees
of the Berlinberg Family Trust 6,667 6,667
Jeffrey T. Canning 4,000 4,000
Joseph L. Draskovich fbo-First Trust Corp. 10,000 10,000
Robert L. and Connie T. Dye 12,000 12,000
Robert D. and Rita Y. Ervin, Co-Trustees
of Ervin Living Trust 12,000 12,000
David R. and Alice M. Evers 16,000 16,000
Todd Gluch 1,334 1,334
Josie Gluch 1,334 1,334
Tyra Gluch 1,334 1,334
D. Hall Investments, LLC 8,000 8,000
Ronald and Valerie Halverson,
Co-Trustees 35,000 35,000
Frederick Z. Herr 30,000 30,000
Robert E. Hinman 3,000 3,000
Vance L. Kalcic 8,000 8,000
Charles Kovaleski fbo-First Trust Corp. 10,000 10,000
Chuck Leal 7,000 7,000
Steven Levy 8,000 8,000
R.C. Luker, Construction Defined Benefit 12,000 12,000
Leon and Elba Manfredi 4,000 4,000
Mechling Family Trust 4,000 4,000
Richard T. Press fbo-First Trust Corp. 13,096 13,096
Ratliff Investments 10,000 10,000
Karen G. Reardon 5,000 5,000
Robert E. Rigert 5,000 5,000
Hazen A. and Joseph Sandwick Revocable
Living Trust 12,000 12,000
Annette, Sullivan and Mark Simons 4,000 4,000
Stephen G. Smith 10,000 10,000
Swiss American, Inc. 67,000 67,000
Thomas E. Thompson 43,333 43,333
Bruce Unsworth fbo-First Trust Corp. 12,000 12,000
John R. Ureel 12,000 12,000

<PAGE>

Jerome T. Usalis fbo-First Trust Cor 33,392 33,392
Mike Vander Plaats fbo-First Trust Co. 2,667 2,667
Robert and Sally Veazey 4,000 4,000
Johnny Warren 4,000 4,000
Gary R. Weber, Trustee of Gary R.
Weber Trust 6,000 6,000
Steve Womack 10,000 10,000
Daniel Andrzejek fbo-FirstTrust Corp. 5,334 5,334
Don M. Barnes 6,000 6,000
Trace G. Barnes 6,000 6,000
Brian Dusseault fbo-First Trust Corp 3,600 3,600
Ralph M. and Rita J. Eisenmann, Trustees
of Eisenmann Trust 4,000 4,000
George R. Jarkesy, Jr. 6,700 6,700
Armand LaSorsa fbo-First Trust Corp. 8,000 8,000
Fred L. Prevost 20,000 20,000
Allen Reuben, M.D., P.A. 6,000 6,000
Dan Sevier 4,000 4,000
Ilene Canning 4,000 4,000
Nathan Pugmire 20,000 20,000
Richard F. Schmidt 50,000 50,000
James Ritter 12,000 12,000
Ritter Family Trust 8,000 8,000
Loretta I. Cook 10,000 10,000
Steve Cook 505 505
Ryan Cravens 6,089 6,089
Lois C. Hull 1,405 1,405
Nerese S. Crayton 1,405 1,405
Randy P. Masciarelli 703 703
Douglas W. Miller 29,869 29,869
Mark Miller 3,000 3,000
Dan Sevier 35,670 35,670
Frank S. Mascari 500 500
Richard D. Simpson 2,810 2,810
Eric M. Tice 400 400
Lauren M. Tice 400 400
Thomas M. Tice 10,019 10,019
Symbion, Ltd. 56,670 56,670
Thomas E. Thompson 16,653 16,653
Debbie A. Tice 703 703
Tammy Deboe 703 703
Mary DeMarco 703 703
George R. Jarkesy, Jr. 100,000 100,000
Nathan and Kristen Pugmire 37,037 37,037
Russell B. Geyser 175,000 175,000
Cliff Papik 10,000 10,000
Elaine Montemarano 10,000 10,000
Jeff Block 5,000 5,000
Art Beroff 100,000 100,000
Art Beroff, Custodian for David Beroff,
Uniform Gift to Minor 12,500 12,500
Art Beroff, Custodian for Ilana Beroff,

<PAGE>

Uniform Gift to Minor 12,500 12,500
Frank S. Mascari 6,448 6,448
James Boston 3,015 3,015
George R. Jarkesy, Jr. 8,291 8,291
International Capital Group Ltd. 7,200 7,200
Brent Fox 22,222 (2) 22,222
Darlene Zuniga 2,810 (2) 2,810
Equity Advisors International 60,000 (2) 60,000
Mark E. Stutzman 7,025 (2) 7,025

(1) The Selling Stockholders may, but are not required to, sell shares in
connection with this offering.

(2) These shares are issuable upon the exercise of outstanding warrants,

CERTAIN TRANSACTIONS

Reverse Split

In December 1999, the Board of Directors and the shareholders of the
Company voted to complete a 5:1 reverse split of the then outstanding shares of
the Company's common stock of 38,000,000 shares to 7,600,000 shares.

Name Change

In December 1999, the shareholders of PCS Education Systems, Inc. resolved
to change the name of the corporation to "PCS Edventures!.com, Inc".

Management Transactions

During the last three years, we have from time to time granted stock
options and issued shares of our common stock to officers and directors. These
transactions are described elsewhere in this prospectus.

Members of management have, from time to time made loans to PCS.
Currently, we owe approximately $13,000 to Anthony Maher, the President of the
Company.

LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

SHARES ELIGIBLE FOR FUTURE SALE

As of the date of this Prospectus, we have 11,901,964 shares of common
stock issued and outstanding. Approximately 11,000,000 of these shares of common
stock are either eligible for sale pursuant to Rule 144 or have been registered
under the Securities Act for resale by the holders. We are unable to estimate
the amount, timing or nature of future sales of outstanding common stock. Sales
of substantial amounts of the common stock in the public market may hurt the
stock's market price.

<PAGE>

In general, under Rule 144, if a period of at least one year has elapsed
since the later of the date the "restricted securities" were acquired from us or
the date they were acquired from an Affiliate (as that term is defined in Rule
144), then the holder of such restricted securities is entitled to sell a number
of shares of common stock equal to 1% of the issued and outstanding shares of
common stock (approximately 14,000,000 shares immediately after this offering)
or the average weekly reported volume of trading of the common stock on The
Nasdaq SmallCap Market during the four calendar weeks preceding such sale. The
holder may only sell such shares through unsolicited brokers' transactions or
directly to market makers. Sales under Rule 144 are also subject to certain
requirements pertaining to the manner of such sales, notices of such sales and
the availability of current public information about us. Affiliates may sell
shares not constituting restricted shares in accordance with the foregoing
volume limitations and other requirements but without regard to the one-year
holding period.

Under Rule 144(k), if a period of at least two years has elapsed between
the later of the date restricted shares were acquired from us or the date they
were acquired from an Affiliate, as applicable, a holder of such restricted
shares who is not an Affiliate at the time of the sale and has not been an
Affiliate for at least three months prior to the sale would be entitled to sell
the shares immediately without regard to the volume limitations and other
conditions described below. We cannot make any predictions as to the effect, if
any, that sales of shares or the availability of shares for sale will have on
the market price prevailing from time to time. Nevertheless, sales of
significant amounts of the common stock in the public market, or the perception
that such sales may occur, could adversely affect prevailing market prices.

EXPERTS

Our financial statements and schedule included in this prospectus and in
the registration statement have been audited by HJ & Associates, LLC, CPA's,
independent certified public accountants, to the extent and for the periods
detailed in their reports, which contain an explanatory paragraph regarding our
ability to continue as a going concern, and which appear in this prospectus and
in the registration statement, and are included in reliance upon those reports
given as a result of the authority of that firm as experts in accounting and
auditing.

LEGAL OPINION

Cohne, Rappaport & Segal, attorneys at law, 525 East 100 South, Fifth
Floor, Salt Lake City, UT, 84102, is giving an opinion regarding the validity of
the offered shares. Certain legal matters in connection with this Proxy
Statement/Prospectus will be passed upon for us by Leonard W.
Burningham, Esq., Salt Lake City, UT.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus forms part of a Registration Statement on Form SB-2 that
we filed with the SEC under the Securities Act with respect to the shares and
contains all the information which we believe is significant to you in
considering whether to make an investment in our common stock. We refer you to
the Registration Statement for further information about us, our common stock
and this offering, including the full texts of exhibits, some of which have been
summarized in this prospectus. At your request, we will provide you, without
charge, a copy of any exhibits to the Registration Statement incorporated by
reference in this prospectus.

<PAGE>

If you want more information, write or call us at: 1655 Fairview Avenue,
Suite 100, Boise, Idaho 83702, and our telephone number is (208) 343-3110. Attn:
Anthony Maher.

Upon the effectiveness of the Registration Statement of which this
prospectus forms a part, we will become subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and will
file reports and other information with the SEC as required under the Exchange
Act. Such reports and other information filed by the Hugo are available for
inspection and copying at the public reference facilities of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20459, and at the SEC's Regional Offices located
at 7 World Trade Center, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material may be obtained by mail from the Public Reference Section of the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call
the SEC at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. The SEC also maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, that file electronically with the SEC.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY BE USED ONLY WHERE IT IS LEGAL
TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE
ON THE DATE OF THIS DOCUMENT

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets

ASSETS

September 30, March 31,
2000 2000
------------ ------------
(Unaudited)

CURRENT ASSETS

Cash $ 422,076 $ 78,125
Inventory 525 525
Accounts receivable 33,604 1,318
Note receivable 500 4,100
Prepaid expenses 1,543 -
------------ ------------

Total Current Assets 458,248 84,068
------------ ------------

FIXED ASSETS (NET) (Note 3) 49,952 80,851
------------ ------------

OTHER ASSETS

Deposits 7,000 7,000
------------ ------------

Total Other Assets 7,000 7,000
------------ ------------

TOTAL ASSETS $ 515,200 $ 171,919
============ ============

F-1

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Balance Sheets (Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

September 30, March 31,
2000 2000
------------ ------------
(Unaudited)
CURRENT LIABILITIES

Accounts payable $ 137,809 $ 200,882
Notes payable - related parties (Note 5) 29,116 39,116
Notes payable (Note 6) 42,174 78,734
Bank overdraft 42,904 50,252
Wages payable 23,478 11,079
Payroll taxes payable 50,196 39,423
Accrued interest 3,681 8,657
Accrued contingencies (Note 7) 43,096 50,102
------------ ------------

Total Current Liabilities 372,454 478,245
------------ ------------

LONG-TERM DEBT

Notes payable (Note 6) 60,500 -
------------ ------------

Total Long-Term Debt 60,500 -
------------ ------------

Total Liabilities 432,954 478,245
------------ ------------

STOCKHOLDERS' EQUITY (DEFICIT)

Common stock, no par value, authorized 50,000,000 shares;
11,901,964 and 8,247,714 shares issued and outstanding,
respectively 20,126,044 18,528,262
Subscription receivable (25,000) -
Accumulated deficit (20,018,798) (18,834,588)
------------ ------------

Total Stockholders' Equity (Deficit) 82,246 (306,326)
------------ ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 515,200 $ 171,919
============ ============

F-2

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the For the April 1, 2000
Six Months Ended Three Months Ended Through
September 30, September 30, September 30,
2000 1999 2000 1999 2000
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE $ 149,287 $ 132,533 $ 62,353 $ 98,410 $ 149,287

COST OF GOODS SOLD 58,281 - 37,107 - 58,281
--------------------------------------------------------------------------

GROSS PROFIT 91,006 132,533 25,246 98,410 91,006
--------------------------------------------------------------------------

OPERATING INCOME AND EXPENSES

Research and development costs 68,850 33,850 37,132 18,963 68,850
Amortization and depreciation
expense 36,900 36,900 18,450 18,504 36,900
General and administrative 1,156,978 379,762 568,783 263,927 1,156,978
--------------------------------------------------------------------------

Total Operating Expenses 1,262,728 450,512 624,365 301,394 1,262,728
--------------------------------------------------------------------------

OPERATING LOSS (1,171,722) (317,979) (599,119) (202,984) (1,171,722)
--------------------------------------------------------------------------

OTHER INCOME AND EXPENSES

Interest expense (12,907) (12,037) (6,718) (7,444) (12,907)
Interest income 409 153 409 153 409
Other income 10 - 10 - 10
--------------------------------------------------------------------------

Total Other Income and Expenses (12,488) (11,884) (6,299) (7,291) (12,488)
--------------------------------------------------------------------------

LOSS FROM CONTINUING OPERATIONS
BEFORE LOSS FROM DISCONTINUED
OPERATIONS (1,184,210) (329,863) (605,418) (210,275) (1,184,210)
--------------------------------------------------------------------------

LOSS FROM DISCONTINUED
OPERATIONS (Note 9) - (92,292) - (73,754) -
--------------------------------------------------------------------------

NET LOSS $(1,184,210) $ (422,155) $(605,418) $(284,029) $(1,184,210)
===================================================================

BASIC LOSS PER SHARE (Note 1)

Loss from continuing operations $ (0.13) $ (0.05) $ (0.06) $ (0.03)
Loss from discontinued operations 0.00 (0.01) 0.00 (0.01)
---------- ---------- ---------- -----------

Basic Loss Per Share $ (0.13) $ (0.06) $ (0.06) $ (0.04)
========== =========== ========== ===========

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 9,251,827 6,626,085 10,176,640 6,269,333
=========== =========== =========== ===========
</TABLE>

F-3

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
Common Shares Subscription Accumulated
Shares Amount Receivable Deficit
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, March 31, 1998 4,468,802 $ 16,584,362 $ - $(16,680,791)

Stock issued for cash at
$1.28 per share 305,620 391,450 - -

Stock issued for services at
$2.50 per share 136,390 340,975 - -

Stock issued for conversion of
debt at $2.50 per share 26,000 65,000 - -

Net loss for the year ended
March 31, 1999 - - - (1,220,681)
-----------------------------------------------------------------

Balance, March 31, 1999 4,936,812 17,381,787 - (17,901,472)

Stock issued for cash at
$0.35 per share 2,014,518 707,375 - -

Stock issued for conversion
of debt at $0.43 per share 551,778 236,500 - -

Stock issued for services at
$0.25 per share 746,628 186,656 - -

Contribution of interest to capital - 16,449 - -

Fractional shares (2,022) (505) - -

Net loss for the year ended
March 31, 2000 - - - (933,116)
-----------------------------------------------------------------

Balance, March 31, 2000 8,247,714 $ 18,528,262 $ - $(18,834,588)
-----------------------------------------------------------------

</TABLE>

F-4

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Continued)

<TABLE>
<CAPTION>
Common Shares Subscription Accumulated
Shares Amount Receivable Deficit
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, March 31, 2000 8,247,714 $ 18,528,262 $ - $(18,834,588)

April 20, 2000, common stock
issued for services at $0.25 per
share (unaudited) 100,000 25,000 - -

June 7, 2000, common stock
issued for services at $0.25 per
share (unaudited) 26,666 6,667 - -

September 15, 2000, common
stock issued for cash at $0.01
per share (unaudited) 272,996 2,730 - -

September 15, 2000, warrants
issued below market value
(Note 10) (unaudited) - 65,519 - -

September 22, 2000, common
stock issued for services at
$0.25 per share (unaudited) 100,000 25,000 (25,000) -

September 22, 2000, common
stock issued to board members
for services at $0.25 per share
(unaudited) 1,500,000 375,000 - -

June 20, 2000 through
September 29, 2000, common
stock issued for cash at $0.75
per share (unaudited) 1,654,588 1,240,941 - -

Stock offering costs (unaudited) - (143,075) - -

Net loss for the six months ended
September 30, 2000 (unaudited) - - - (1,184,210)
--------------------------------------------------------------

Balance, September 30, 2000
(unaudited) 11,901,964 $ 20,126,044 $ (25,000) $(20,018,798)
==============================================================

</TABLE>

F-5

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)

<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the April 1, 2000
Six Months Ended Through
September 30, September 30,
2000 1999 2000
------------ ------------ ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Loss from operations $ (1,184,210) $ (422,155) $ (1,184,210)
Adjustments to reconcile net (loss) to net cash used by
operating activities:
Depreciation and amortization 36,900 36,900 36,900
Loss on disposition of assets
Common stock issued for services and equity discounts 472,186 101,550 472,186
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (32,286) (38,334) (32,286)
(Increase) decrease in prepaid expenses (1,543) (1,621) (1,543)
(Increase) decrease in notes receivable 3,600 - 3,600
Increase (decrease) in accounts payable and
accrued liabilities (9,130) (35,756) (9,130)
Increase (decrease) in interest payable (4,976) - (4,976)
Increase (decrease) in cash overdraft (7,348) (367) (7,348)
Increase (decrease) in commitments and contingencies (7,006) - (7,006)
------------ ------------ ------------

Net Cash (Used) by Operating Activities (733,813) (359,783) (733,813)
------------ ------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures (6,001) - (6,001)
Disposal of fixed assets - 300 -
------------ ------------ ------------

Net Cash Provided (Used) by Investing Activities (6,001) 300 (6,001)
------------ ------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES

Payments of stock offering costs (143,075) - (143,075)
Net payments on long-term debt (66,853) (17,715) (66,853)
Proceeds from long-term debt 50,022 40,837 50,022
Proceeds from common stock 1,243,671 337,750 1,243,671
Proceeds from line of credit - - -
------------- ------------ ------------

Net Cash Provided by Financing Activities 1,083,765 360,872 1,083,765
------------- ------------ ------------

INCREASE IN CASH AND CASH EQUIVALENTS 343,951 1,389 343,951

CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 78,125 19,636 78,125
------------- ------------ ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 422,076 $ 21,025 $ 422,076
============== ============ ============
</TABLE>

F-6

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)

<TABLE>
<CAPTION>
From
Inception of
Development
Stage on
For the April 1, 2000
Six Months Ended Through
September 30, September 30,
2000 1999 2000
--------------- -------------- ---------------
<S> <C> <C> <C>
NON-CASH FINANCING ACTIVITIES:

Issuance of stock for payment on notes
payable and interest $ - $ 83,018 $ -
Common stock issued for services $ 472,186 $ 101,550 $ 472,186

Cash Paid For:

Interest $ 9,226 $ 3,380 $ 9,226
Income taxes $ - $ - $ -

</TABLE>

F-7

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

The consolidated financial statements presented are those of PCS
Edventures!.com, Inc. (formerly PCS Education Systems, Inc.) (the
Company), an Idaho Corporation and its wholly-owned subsidiary, PCS
Schools, Inc., an Idaho corporation. On August 3, 1994, the Company was
incorporated under the laws of Idaho to engage in web-based and site-
licensable educational products.

On March 1, 1995, an agreement was authorized allowing the Company to
exchange, on a one-to-one basis, common stock for stock of PCS Schools,
Inc. This agreement made PCS Schools, Inc. a wholly-owned subsidiary of
the Company.

On March 27, 2000, the Company changed its name from PCS Education
Systems, Inc. to PCS Edventures!.com, Inc.

On April 1, 2000, the Company entered into the development stage due to
the discontinued operations with the VR Quest product and the Education
Centers. The Company has refocused its efforts on the development and
marketing of technology based educational programs delivered through
software programs and through the internet.

The Company has authorized 50,000,000 shares of no par value common
stock.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The Company's consolidated financial statements are prepared using the
accrual method of accounting. The Company has elected a March 31 year
end.

b. Cash Equivalents

The Company considers all highly liquid investment with a maturity of
three months or less when purchased to be cash equivalents.

c. 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 revenues
and expenses during the reporting period. Actual results could differ
from those estimates.

d. Income Taxes

No provision for federal income taxes has been made at September 30,
2000 due to accumulated operating losses. The minimum state franchise
tax has been accrued.

F-8

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

The Company has accumulated approximately $12,251,000 of net operating
losses as of September 30, 2000, which may be used to reduce taxable
income and income taxes in future years through 2020. The use of these
losses to reduce future income taxes will depend on the generation of
sufficient taxable income prior to the expiration of the net operating
loss carryforwards.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In the event of certain changes in control of the Company, there will
be an annual limitation on the amount of net operating loss
carryforwards which can be used. The potential tax benefits of the net
operating loss carryforwards have been offset by a valuation allowance
of the same amount.

e. Revenue Recognition

The Company recognizes revenues on product sales upon placement of
purchase orders by larger customers as well as upon receipt of cash
payments from smaller customers.

f. Concentrations of Risk

Accounts Receivable

The accounts receivable are from a diverse customer base. The Company
provides credit in the normal course of business to customers. Accounts
deemed uncollectible have been charged against the allowance. The
Company does not obtain collateral with which to secure its accounts
receivable.

g. Basic Loss Per Share

Basic loss per share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.

For the For the
Six Months Ended Three Months Ended
September 30, September 30,
------------------------------------------------
2000 1999 2000 1999
------------------------------------------------
Basic loss per share from
continuing operations:
Numerator - loss $(1,184,210) $(329,863) $(605,418) $(210,275)
Denominator - weighted
average number of shares
outstanding 9,251,827 6,626,085 10,176,640 6,269,333
------------------------------------------------

Loss per share $ (0.13) $ (0.05) $ (0.06) $ (0.03)
================================================

F-9

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

Basic loss per
share from discontinued
operations:
Numerator - loss $ - $ (92,292) $ - $ (73,754)
Denominator - weighted
average number
of shares outstanding 9,251,827 6,626,085 10,176,640 6,269,333
----------------------------------------------------

Loss per share $ 0.00 $ (0.01) $ 0.00 $ (0.01)
====================================================

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

h. Research and Development

All amounts expended for research and development are charged to
expense as incurred. The Company expensed $68,850 and $3,850 as
research and development for the six months ended September 30, 2000
and 1999, respectively.

NOTE 3 - FIXED ASSETS

Automobile, computer equipment, education assets software have 5-year
lives. Office equipment has a 7-year life. Depreciation is computed
using the straight-line method.
Assets and depreciation for the period are as follows:

September 30, March 31,
2000 2000
-----------------------------
(Unaudited)

Computer equipment $ 344,808 $ 338,596
Office equipment 54,638 55,452
Education assets and software 128,885 128,282
Accumulated depreciation (478,379) (441,479)
-----------------------------

Total $ 49,952 $ 80,851
=============================

Depreciation expense for the six months ended September 30, 2000 and
1999 was $36,900 and $36,900, respectively.

NOTE 4 - COMMON STOCK TRANSACTIONS

On March 27, 2000, the Company implemented a 1-to-5 reverse stock
split. The financial statements reflect the effects of the reverse
split.

On June 20, 2000, the Company issued a private placement memorandum
whereby 1,500,000 shares of the Company's common stock would be sold
at $0.75 per share. At the closing of the private placement, the
Company had issued 1,654,588 shares at $0.75 per share.

F-10

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 5 - NOTES PAYABLE - RELATED PARTIES

Notes payable - related parties consisted of the following at
September 30, 2000 and March 31, 2000:

September 30, March 31,
2000 2000
----------------------------
(Unaudited)

Note payable to a shareholder bearing interest
at 10% per annum, all unpaid principal and
interest due August 31, 1999. Note is i$ default $18,854 $ 19,116

Note payable to a shareholder bearing interest
at 10% per annum, all unpaid principal and
interest due October 25, 1997. Note is in default 10,262 20,000
29,116 39,116

Less: current maturities (29,116) (39,116)
----------------------------

Long Term Portion - Notes Payable - Relate$ Parties $ - $ -
============================

Annual maturities of long-term debt are as follows:
Years Ending
March 31, Amount
--------------- -------------
2001 $ 29,116
2002 -
2003 -
2004 -
2005 -
-------------
$ 29,116
=============
NOTE 6 - NOTES PAYABLE

Notes payable consisted of the following at September 30, 2000:
2000
------------
(Unaudited)
Note payable to a bank bearing interest at 12% per
annum, with monthly payments of $1,321 due on the 5th
of each month, unsecured. $ 48,980

Note payable to a bank bearing interest at 10.25%
with payments due on demand, unsecured. 25,440

Note payable to a Company bearing interest at 18.5%
per annum, with payment of $1,468 due on the 10th of
each month for 24 months, unsecured. 28,254
------------
Total notes payable 102,674

Less: current maturities (42,174)
------------
Long Term - Notes Payable $ 60,500
============

F-11

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 6 - NOTES PAYABLE (Continued)

Annual maturities of long-term debt are as follows:

Years Ending
March 31, Total
------------- ------------
2001 $ 42,174
2002 33,468
2003 17,682
2004 9,350
2005 -
------------
Total $ 102,674
============

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Litigation

In March of 1999, the Company became involved with four lawsuits. The
first was made against the Company by an independent contractor on or
about March 1, 1999 in the amount of $23,908 including interest. On
March 30, 1999 the claim was settled whereby the Company was to pay
$2,500 as a down payment with the remaining balance paid monthly in the
amount of $1,000, carrying 12% interest. As of September 30, 2000, the
Company owed approximately $7,622.

The second claim against the Company occurred on or about March 15 by
an other independent contractor, in the amount of $6,392. Settlement
was reached on March 31, 1999 whereby the Company must pay $1,000 as a
down payment with the remaining balance paid monthly in the amount of
$300, carrying 12% interest. The company owes approximately $1,474 as
of September 30, 2000.

On March 10, 2000, a consultant made a claim against the Company in the
amount of $13,000. The Company is presently defending the claim in
Idaho State District Court.

As of March 31, 2000, the Company is also being sued for rent due
following closure of the Company's school located at 2675 West Main
Street in Boise, Idaho. The claim is in the approximate amount of
$15,000. The Company reached settlement prior to the trial date in
October of 2000 for $21,000.

F-12

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 7 - COMMITMENTS AND CONTINGENCIES (Continued)

Operating Lease Obligation

The Company leases its office under a non-cancelable lease agreement
accounted for as an operating lease expiring through December 2003.

Minimum rental payments under the non-cancelable operating lease is as
follows:

Years ending
March 31, Amount
--------------- -------------
2001 $ 67,000
2002 70,000
2003 48,000
2004 -
All other years -
-------------
Total $ 185,000
=============

Rent expenses were approximately $34,500 and $20,500 for the six months
ended September 30, 2000 and 1999, respectively.

NOTE 8 - GOING CONCERN

The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to increase sales through various marketing joint ventures. In
the interim, the Company plans to continue offerings of its common
stock to raise the capital it needs to pay its operating costs.

NOTE 9 - DISCONTINUED OPERATIONS

During the fiscal year end 1999, the Company ceased all operations
associated with its' education centers as well as the product VR Quest.
The following is a summary of the loss from discontinued operations
resulting from the elimination of these operations. The financial
statements have been retroactively restated to reflect these events. No
tax benefit has been attributed to the discontinued operations.

F-13

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

For the For the
Six Months Ended Three Months Ended
September 30, September 30,
-------------------------------------------
2000 1999 2000 1999
-------------------------------------------
NET SALES $ - $ 30,996 $ - $ 13,990
-------------------------------------------

OPERATING EXPENSES

Cost of sales - 28,102 - 27,245
General and administrative - 95,186 - 60,499
-------------------------------------------

Total Operating Expenses - 123,288 - 87,744
-------------------------------------------

LOSS FROM DISCONTINUED
OPERATIONS $ - $(92,292) $ - $(73,754)
-------------------------------------------

NOTE 10 - DILUTIVE INSTRUMENTS

a. Stock Options

The Company applied Accounting Principles Board ("APB") Option 25,
"Accounting for Stock Issued to Employees," and related
interpretations in accounting for all stock option plans. Under APB
Option 25, compensation cost is recognized for stock options granted
to employees when the option price is less than the market price of
the underlying common stock on the date of grant.

FASB Statement 123, "Accounting for stock-Based Compensation" (SFAS
No. 123"), requires the Company to provide proforma information
regarding net income and net income per share as if compensation costs
for the Company's stock option plans and other stock awards had been
determined in accordance with the fair value based method prescribed
in SFAS No. 123. The Company estimates the fair value of each stock
award at the grant date by using the Black-Scholes option pricing
model with the following weighted average assumptions used for grants,
respectively; dividend yield of zero percent for all years; expected
volatility of 32 percent for all years; risk-free interest rates of
10.0 percent and expected lives of 4.5 years.

F-14

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 10 - DILUTIVE INSTRUMENTS (Continued)

For the For the
Six Months Ended Three Months Ended
----------------------------------------------------
2000 1999 2000 1999
----------------------------------------------------
Net loss:
As reported $(1,184,210) $(329,863) $(605,418) $ (210,275)
Pro Forma (1,184,210) (329,863) (605,418) (210,275)

Net loss per share:
As reported $ (0.13) $ (0.05) $ (0.06) $ (0.03)
Pro Forma (0.13) (0.05) (0.06) (0.03)

During the initial phase-in period of SFAS No. 123, the effect of pro
forma results are not likely to be representative of the effects on pro
forma results in future years since options vest over several years and
additional options could be granted each year.

The Company has granted the following options as of September 30, 2000:

Date of Exercise Exercise Amount Expiration
Description Grant Number Price Exercised Date
-------------------------------------------------------------------------------
Board members 3-12-97 200,000 $ 1.50 - Expired
Board member or
key management 1-19-00 800,000 $ 0.75 - 1-19-03
Board members 4-20-00 200,000 $ 0.75 - 5-01-03
Key management 4-20-00 200,000 $ 0.75 - 5-01-03
Key management 9-22-00 250,000 $ 0.75 - 9-22-05
Independent consultant 9-22-00 200,000 $ 0.50 - 9-22-03
-------------------------------------------------------------------------------
1,850,000
===========

On March 12, 1997, the Company authorized five 40,000 post-split share
stock options to five different shareholders for common stock at a
purchase price of $1.50 per share. The options are valid for a three
year period. No additional compensation expense was recorded as the
grant price equaled the fair value for the stock on the date of grant.

On January 19, 2000, the Company issued options to any individual
board member or key management personnel to purchase 800,000 shares of
the Company's common stock at a price of $0.75 per share. No
compensation expense was recorded as the market value was $0.05 at the
date of issuance.

On April 20, 2000, the Company issued options to three board members
with an agreement to purchase 200,000 shares of the Company's common
stock at a price of $0.75 per share. The Company issued more options
on the same day to key management personnel with an agreement to
purchase 200,000 shares of the Company's common stock at a price of
$0.75 per share. No compensation expense was recorded as the grant
price exceeded the market price of $0.25 per share.

F-15

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

NOTE 10 - DILUTIVE INSTRUMENTS (Continued)

On April 27, 2000, three individuals were granted a total of 56,750
warrants which were converted into 31,750 shares of common stock. The
conversion rate was $0.675 per share and as such, no compensation
expense was recorded because the grant price exceeded the market
value.

b. Warrants

November 1, 1999 - March 27, 2000, the Company issued 733,518
detachable warrants allowing the holder to purchase a certain number
of shares. The total warrants granted amounted to 733,518 shares at an
exercise price of $0.675 per share for 12 months from the issue date
or 30 days after any reverse stock split. The Company did not
recognize any compensation expense due to the grant price exceeding
the market price on the date of issuance.

On September 29, 2000, the Company issued detachable warrants allowing
the holders to purchase 272,996 shares of the Company's common stock.
The warrants are exercisable at a price of $0.01 per share for two
years. The total warrants exercised amounted to 272,996 at an exercise
price of $0.01 per share. The Company recognized compensation expense
of $65,519 due to the market value exceeding the grant price on the
date of issuance.

NOTE 10 - DILUTIVE INSTRUMENTS

b. Warrants (Continued)

A summary of the Company's outstanding warrants as of September 30,
2000 is presented below:

Date of Exercise Amount Expiration
Description Grant Price Number Exercised Balance Date
-------------------------------------------------------------------------------
Individual 11/1/99 $ 0.675 100,000 100,000 -
Individual 11/15/99 0.675 10,000 10,000 -
Company 11/19/99 0.675 74,074 74,074 -
Individual 1/31/99 0.675 97,778 97,778 -
Individual 2/7/00 0.675 22,222 - 22,222 3/1/01
Individual 2/8/00 0.675 74,074 74,074 -
Individual 2/15/00 0.675 21,111 21,111 -
Individual 2/23/00 0.675 37,037 37,037 -
Individuals 3/14/00 0.675 22,222 22,222 -
Consultant 3/15/00 0.675 50,000 50,000 -
Individual 3/23/00 0.675 100,000 100,000 -
Individual 3/24/00 0.675 37,500 37,500 -
Individual 3/27/00 0.675 37,500 37,500 -
Consultant 3/27/00 0.675 50,000 50,000 -
Individual 4/27/00 0.675 37,037 - 37,037 3/1/01
Individual 4/27/00 0.675 37,037 37,037 -
Individual 4/27/00 0.675 10,000 10,000 -
Individual 9/15/00 0.01 10,000 10,000 -
Individual 9/15/00 0.01 505 505 -

F-16

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

Individual 9/15/00 0.01 6,089 6,089 -
Individual 9/15/00 0.01 1,405 1,405 -
Individual 9/15/00 0.01 1,405 1,405 -
Individual 9/15/00 0.01 703 703 -
Individual 9/15/00 0.01 29,869 29,869 -
Individual 9/15/00 0.01 3,000 3,000 -
Individual 9/15/00 0.01 35,670 35,670 -
Individual 9/15/00 0.01 500 500 -
Individual 9/15/00 0.01 2,810 2,810 -
Individual 9/15/00 0.01 400 400 -
Individual 9/15/00 0.01 400 400 -
Individual 9/15/00 0.01 10,019 10,019 -
Company 9/15/00 0.01 56,670 56,670 -
Individual 9/15/00 0.01 2,810 2,810 -
Individual 9/15/00 0.01 16,653 16,653 -
Individual 9/15/00 0.01 703 703 -
Individual 9/15/00 0.01 703 703 -
Individual 9/15/00 0.01 703 703 -
Individual 9/15/00 0.01 3,015 3,015 -
Individual 9/15/00 0.01 8,291 8,291 -
Individual 9/15/00 0.01 6,448 6,448 -
Individual 9/15/00 0.01 7,025 7,025 -
Consultant 9/15/00 0.01 60,000 60,000 -
Company 9/15/00 0.01 7,200 7,200 -
--------- --------- ----------

1,090,588 1,031,329 59,259
========= ========= ==========

NOTE 11 - RELATED PARTY TRANSACTIONS

On November 29, 1998, the President of the Company was issued 495,000
shares of common stock for services valued at $247,500.

On August 19, 1999, the President of the Company was issued 200,000
shares of common stock for services valued at $10,000.

On December 17, 1999, the President of the Company was issued 300,000
shares of common stock for services valued at $15,000.

On December 20, 1999, the President of the Company was issued 500,000
shares of common stock for services valued at $25,000.

On September 22, 2000, the President of the Company was issued 500,000
shares of common stock for services valued at $125,000.

NOTE 12 - SUBSEQUENT EVENTS

On October 16, 2000, the Company issued 200,000 shares of restricted
common stock in exchange for assets known as Senior Driver of Simple
Training, LLC, a company that created instructional content by which
senior citizens can take driving courses online to decrease their
insurance costs. It is the Company's intent to develop further the
assets purchased.

F-17

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
September 30, 2000 and March 31, 2000

On October 31, 2000, the Company issued 125,000 common shares for
prepaid consulting services to a consultant whose purpose is to market
the company's products in the New York City, Washington D.C., and
Florida school districts. Said consulting agreement shall be for a
period of at least two years.

The Company paid off the $10,262 note payable to a shareholder in
October 2000.

On November 17, 2000, the Company extended warrants to two individuals
allowing them to buy 59,259 shares at $0.675 per share. Of these
warrants, 22,222 have been converted to stock for $15,000 in cash.

F-18

<PAGE>

(Letterhead of HJ & Associates, L.L.C.)

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
PCS Edventures!.com, Inc.
(A Development Stage Company)
(Formerly PCS Education Systems, Inc.)
Boise, Idaho

We have audited the accompanying consolidated balance sheet of PCS
Edventures!.com, Inc. (formerly PCS Education Systems, Inc.) (a development
stage company) as of March 31, 2000 and the related consolidated statements of
operations, stockholders equity (deficit) and cash flows for the years ended
March 31, 2000 and 1999. These consolidated financial statements are the
responsibility of the Company management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall consolidated financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of PCS
Edventures!.com, Inc. (formerly PCS Education Systems, Inc.) (a development
stage company) as of March 31, 2000, and the consolidated results of their
operations and their cash flows for the years ended March 31, 2000 and 1999 in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 8 to the
consolidated financial statements, the Company has accumulated significant
losses, which raises substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 8. The consolidated financial statements do not include any adjustments
that might result from the outcome of the uncertainty.

HJ & Associates, LLC
Salt Lake City, Utah
September 25, 2000

F-19

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Balance Sheet

ASSETS

March 31,
2000
--------------
CURRENT ASSETS

Cash $ 78,125
Inventory 525
Accounts receivable 1,318
Note receivable 4,100
--------------

Total Current Assets 84,068
--------------

FIXED ASSETS (NET) (Note 3) 80,851
--------------

OTHER ASSETS

Deposits 7,000
--------------
Total Other Assets 7,000
--------------
TOTAL ASSETS $ 171,919
==============

The accompanying notes are an integral part of these consolidated financial
statements.

F-20

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Balance Sheet (Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

March 31,
2000
--------------

CURRENT LIABILITIES

Accounts payable $ 200,882
Notes payable - related parties (Note 5) 39,116
Notes payable (Note 6) 78,734
Bank overdraft 50,252
Wages payable 11,079
Payroll taxes payable 39,423
Accrued interest 8,657
Accrued contingencies (Note 7) 50,102
--------------

Total Current Liabilities 478,245
--------------
Total Liabilities 478,245
--------------
STOCKHOLDERS' EQUITY (DEFICIT)

Common stock, no par value, authorized 50,000,000 shares;
8,247,714 shares issued and outstanding 18,528,262
Accumulated deficit (18,834,588)
--------------
Total Stockholders' Equity (Deficit) (306,326)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 171,919
==============

The accompanying notes are an integral part of these consolidated financial
statements.

F-21

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Operations (Deficit)

For the Years Ended
March 31,
-------------- -------------
2000 1999
-------------- -------------
REVENUE $ 160,444 $ 285,295

COST OF GOODS SOLD 64,246 -
-------------- -------------

GROSS PROFIT 96,198 285,295
-------------- -------------

OPERATING EXPENSES

Research and development costs 150,000 100,000
Amortization and depreciation expense 55,063 25,311
General and administrative 795,894 1,169,135
-------------- -------------

Total Operating Expenses 1,000,957 1,294,446
-------------- -------------

OPERATING LOSS (904,759) (1,009,151)
-------------- -------------

OTHER INCOME AND EXPENSES

Interest expense (21,700) (55,604)
Interest income 153 271
Other income - 34,113
Realized loss on investment - (2,603)
Realized gain on sale of asset 3,900 -
Unrealized loss on disposition of asset (15,165) -
-------------- -------------

Total Other Income and Expenses (32,812) (23,823)
-------------- -------------

LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME (LOSS) FROM DISCONTINUED OPERATIONS (937,571) (1,032,974)

INCOME (LOSS) FROM DISCONTINUED
OPERATIONS (Note 9) 4,455 (187,707)
------------ ------------

NET LOSS $ (933,116) $ (1,220,681)
============ ============

BASIC LOSS PER SHARE (Note 1)

Loss from continuing operations $ (0.14) $ (0.23)
Income (loss) from discontinued operations 0.00 (0.04)
------------ ------------

Basic Loss Per Share $ (0.14) $ (0.27)
============ ============

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 6,547,462 4,507,444
============ ============

The accompanying notes are an integral part of these consolidated financial
statements.

F-22

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
Common Shares Accumulated
Shares Amount Deficit
-----------------------------------------------
<S> <C> <C> <C>
Balance, March 31, 1998 4,468,802 $ 16,584,362 $(16,680,791)

Stock issued for cash at $1.28 per share 305,620 391,450 -

Stock issued for services at $2.50 per share 136,390 340,975 -

Stock issued for conversion of debt
at $2.50 per share 26,000 65,000 -

Net loss for the year ended
March 31, 1999 - - (1,220,681)
-----------------------------------------------

Balance, March 31, 1999 4,936,812 17,381,787 (17,901,472)

Stock issued for cash at $0.35 per share 2,014,518 707,375 -

Stock issued for conversion of debt
at $0.43 per share 551,778 236,500 -

Stock issued for services at $0.25
per share 746,628 186,656 -

Contribution of interest to capital - 16,449 -

Fractional shares (2,022) (505) -

Net loss for the year ended
March 31, 2000 - - (933,116)
-----------------------------------------------

Balance, March 31, 2000 8,247,714 $ 18,528,262 $(18,834,588)
===============================================
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-23

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows

For the Years Ended
March 31,
------------------------
2000 1999
------------------------
CASH FLOWS FROM OPERATING ACTIVITIES

(Loss) from operations $ (933,116) $ (1,220,681)
Adjustments to reconcile net (loss) to
net cash used by operating activities:
Depreciation and amortization 60,709 25,311
Loss on disposition of assets 11,265 -
Common stock issued for services 186,656 340,975
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 8,608 (9,603)
(Increase) decrease in prepaid expenses (160) (882)
(Increase) decrease in inventories - 476
(Increase) decrease in other assets - 6,280
(Increase) decrease in notes receivable (4,100) -
Increase (decrease) in accounts payable and accrued
liabilities 67,977 140,750
Increase (decrease) in interest payable 5,551 8,099
Increase (decrease) in cash overdraft (367) 31,112
Increase (decrease) in commitments and contingencies 1,034 49,067
------------------------

Net Cash (Used) by Operating Activities (595,943) (629,096)
------------------------

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of fixed assets 5,600 66,617
------------------------

Net Cash Provided (Used) by Investing Activities 5,600 66,617
------------------------

CASH FLOWS FROM FINANCING ACTIVITIES

Net payments on long-term debt (58,714) -
Proceeds from long-term debt 171 165,104
Proceeds from common stock 707,375 391,450
Proceeds from line of credit - 17,651
------------------------

Net Cash Provided by Financing Activities 648,832 574,205
------------------------

INCREASE IN CASH AND CASH EQUIVALENTS 58,489 11,726

CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 19,636 7,910
------------------------

CASH AND CASH EQUIVALENTS AT END OF YEAR $ 78,125 $ 19,636
========================

The accompanying notes are an integral part of these consolidated financial
statements.

F-24

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)

For the Years Ended
March 31,
----------------------------
2000 1999
----------------------------
NON-CASH FINANCING ACTIVITIES:

Issuance of stock for payment on notes payable
and interest $ 236,500 $ 65,000
Common stock issued for services $ 186,656 $ 340,975

Cash Paid For:

Interest $ 2,145 $ 36,462
Income taxes $ - $ 43

The accompanying notes are an integral part of these consolidated financial
statements.

F-25

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

The consolidated financial statements presented are those of PSC
Edventures!.com, Inc. (formerly PCS Education Systems, Inc.) (the
Company), an Idaho Corporation and its wholly-owned subsidiary, PCS
Schools, Inc., an Idaho corporation. On August 3, 1994, the Company was
incorporated under the laws of Idaho to engage in web-based and site-
licensable educational products.

On March 27, 2000, the Company changed its name from PCS Education
Systems, Inc. to PCS Edventures!.com, Inc.

The Company has authorized 50,000,000 shares of no par value common
stock.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The Company's consolidated financial statements are prepared using the
accrual method of accounting. The Company has elected a March 31 year
end.

b. Cash Equivalents

The Company considers all highly liquid investment with a maturity of
three months or less when purchased to be cash equivalents.

c. Estimates

d. Income Taxes

No provision for federal income taxes has been made at March 31, 2000
due to accumulated operating losses. The minimum state franchise tax
has been accrued.

The Company has accumulated approximately $11,500,000 of net operating
losses as of March 31, 2000, which may be used to reduce taxable income
and income taxes in future years through 2020. The use of these losses
to reduce future income taxes will depend on the generation of
sufficient taxable income prior to the expiration of the net operating
loss carryforwards.

F-26

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d. Income Taxes (Continued)

e. Revenue Recognition

The Company recognized revenues on product sales upon placement of
orders by customers.

f. Concentrations of Risk

Accounts Receivable

g. Basic Loss Per Share

Basic loss per share has been calculated based on the weighted average
number of shares of common stock outstanding during the period.

March 31,
----------------------------
2000 1999
----------------------------
Basic loss per share from continuing operations:
Numerator - loss $ (937,571) $(1,032,974)
Denominator - weighted average number
of shares outstanding 6,547,462 4,507,444
----------------------------

Loss per share $ (0.14) $ (0.23)
============================

Basic income (loss) per share from
discontinued operations:
Numerator - income (loss) $ 4,455 $ (187,707)
Denominator - weighted average number
of shares outstanding 6,547,462 4,507,444
----------------------------

Income (loss) per share $ 0.00 $ (0.04)
============================

F-27

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

h. Research and Development

All amounts expended for research and development are charged to
expense as incurred. The Company expensed $150,000 and $100,000 as
research and development for the years ending March 31, 2000 and 1999,
respectively.

NOTE 3 - FIXED ASSETS

Computer equipment, education assets and software have 5-year lives.
Office equipment has a 7-year life. Depreciation is computed using the
straight-line method.
Assets and depreciation for the period are as follows:
March 31,
2000
------------
Computer equipment $ 338,596
Office equipment 55,452
Education assets and software 128,282
Accumulated depreciation (441,479)
------------

Total $ 80,851
============

Depreciation expense for the years ended March 31, 2000 and 1999 was
$60,709 and $25,311, respectively.

NOTE 4 - COMMON STOCK TRANSACTIONS

On March 27, 2000, the Company implemented a 1-to-5 reverse stock
split. The consolidated financial statements have retroactively
reflected the effects of the reverse split.

NOTE 5 - NOTES PAYABLE - RELATED PARTIES

Notes payable - related parties consisted of the following at March
31, 2000:

Note payable to a shareholder bearing interest
at 10% per annum, unpaid principal and interest
due August 31, 1999. Note is in default. $ 19,116

Note payable to a shareholder bearing interest
at 10% per annum, unpaid principal and interest
due October 25, 1997. Note is in default. 20,000
------------
39,116

F-28

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

Less: current maturities (39,116)

Long Term Portion - Notes Payable - Related Parties $ -
============

NOTE 5 - NOTES PAYABLE - RELATED PARTIES (Continued)

Annual maturities of long-term debt are as follows:

Years Ending
March 31, Amount
------------------- -------------
2001 $ 39,116
2002 -
2003 -
2004 -
2005 -
------------

$ 39,116
============
NOTE 6 - NOTES PAYABLE

Notes payable consisted of the following at March 31, 2000:

Note payable to a bank bearing interest at 12% per
annum, with monthly payments of $1,321 due on the 5th
of each month, unsecured. $ 53,294

Note payable to a bank bearing interest at 10.25%
with payments due on demand, unsecured. 25,440
------------

Total notes payable 78,734

Less: current maturities (78,734)

Long Term - Notes Payable $ -
============

Annual maturities of long-term debt are as follows:

Years Ending
March 31, Total
---------------- ------------
2001 $ 78,734
2002 -
2003 -
2004 -
2005 -
------------

Total $ 78,734
============

F-29

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Litigation

In March of 1999, the Company became involved with four lawsuits. The
first was made against the Company by an independent contractor on or
about March 1, 1999 in the amount of $23,908 including interest. On
March 30, 1999, the claim was settled whereby the Company was to pay
$2,500 as a down payment with the remaining balance paid monthly in the
amount of $1,000, carrying 12% interest. As of March 31, 2000, the
Company owed approximately $12,900.

The second claim against the Company occurred on or about March 15,
1999 by an other independent contractor, in the amount of $6,392.
Settlement was reached on March 31, 1999 whereby the Company must pay
$1,000 as a down payment with the remaining balance paid monthly in the
amount of $300, carrying 12% interest. The Company owed approximately
$3,000 as of March 31, 2000.

On March 10, 2000, a consultant made a claim against the Company in the
amount of $13,000. The Company is presently defending the claim in
Idaho State District Court.

Operating Lease Obligation

The Company leases its office under a non-cancelable lease agreement
accounted for as an operating lease expiring through December 2003.

Minimum rental payments under the non-cancelable operating lease is as
follows:

Years ending
March 31, Amount
---------------- --------------

2001 $ 67,000
2002 70,000
2003 48,000
2004 -
All other years -
---------------- --------------
Total $ 185,000
==============

Rent expenses were approximately $57,000 and $170,205 for the years
ended March 31, 2000 and 1999, respectively.

F-30

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 8 - GOING CONCERN

The Company's consolidated financial statements are prepared using
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. However, the Company does
not have significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to increase sales through various marketing joint ventures. In
the interim, the Company plans to continue offerings of its common
stock to raise the capital it needs to pay its operating costs.

NOTE 9 - DISCONTINUED OPERATIONS

During the fiscal year end 2000, the Company ceased all operations
associated with its' education centers as well as the product VR Quest.
The following is a summary of the loss from discontinued operations
resulting from the elimination of these operations. The consolidated
financial statements have been retroactively restated to reflect these
events. No tax benefit has been attributed to the discontinued
operations.

March 31,
2000 1999
------------ ------------
NET SALES $ 99,745 $ 823,008
------------ ------------

OPERATING EXPENSES

Cost of sales - 107,205
General and administrative 89,644 903,097
Depreciation 5,646 -
------------ ------------

Total Operating Expenses 95,290 1,010,302
------------ ------------

INCOME (LOSS) FROM OPERATIONS 4,455 (187,294)
------------ ------------

OTHER INCOME (EXPENSE)

Interest expense - (413)
------------ ------------

Total Other Income (Expenses) - (413)
------------ ------------

INCOME (LOSS) FROM DISCONTINUED
OPERATIONS $ 4,455 $ (187,707)
============ ============

F-31

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 10 - DILUTIVE INSTRUMENTS

a. Stock Options

For the Year Ended
March 31,
----------------------------
2000 1999
----------------------------
Net loss:
As reported $ (937,571) $ (1,032,974)
Pro Forma (937,571) (1,032,974)

Net loss per share:
As reported $ (0.14) $ (0.23)
Pro Forma (0.14) (0.23)

During the initial phase-in period of SFAS No. 123, the effect of pro
forma results are not likely to be representative of the effects on
pro forma results in future years since options vest over several
years and additional options could be granted each year.

The Company has granted the following options as of March 31, 2000:

Date of Exercise Exercise Amount Expiration
Description Grant Number Price Exercised Date
---------------------------------------------------------------------
Board members 3-12-97 200,000 $ 1.50 - Expired
Board member or
key management 1-19-00 800,000 $ 0.75 - 1-19-03
---------

1,000,000
===========

F-32

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 10 - DILUTIVE INSTRUMENTS (Continued)

b. Warrants

A summary of the Company's outstanding warrants as of March 31, 2000
is presented below:

Date of Exercise Exercise Amount Expiration
Description Grant Number Price Exercised Date
------------------------------------------------------------------------------
Trent Rencher 11/1/99 100,000 $ 0.675 100,000 4/27/00
Robert Ritter 11/15/99 10,000 0.675 10,000 4/27/00
Pitsco Lego Dacta 11/19/99 74,074 0.675 74,074 4/27/00
James Chapman 1/31/99 97,778 0.675 97,778 4/27/00
Brent Fox 2/7/00 22,222 0.675 - 4/27/00
James Gaul 2/8/00 74,074 0.675 74,074 4/27/00
Steward Perim 2/15/00 21,111 0.675 21,111 4/27/00
Gayle Anderson 2/23/00 37,037 0.675 37,037 4/27/00
Scott & Michelle
LaBaer 3/14/00 22,222 0.675 22,222 4/27/00
International
Capital 3/15/00 50,000 0.675 50,000 4/27/00
Joseph Smith 3/23/00 100,000 0.675 100,000 4/27/00
Peter Richards 3/24/00 37,500 0.675 37,500 4/27/00
John Richards 3/27/00 37,500 0.675 37,500 4/27/00
Equity Advisors
International 3/27/00 50,000 0.675 50,000 4/27/00
--------- ----------
733,518 711,296
========= ==========

November 1, 1999 - March 27, 2000, the Company issued 733,518
detachable warrants allowing the holder to purchase a certain number
of shares for 12 months from the issue date or 30 days after any
reverse stock split. The total warrants exercised amounted to 711,296
shares at an exercise price of $0.675 per share. The Company did not
recognize any compensation expense due to the grant price exceeding
the market price on the date of issuance.

F-33

<PAGE>

PCS EDVENTURES!.COM, INC.
(Formerly PCS Education Systems, Inc.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2000

NOTE 11 - RELATED PARTY TRANSACTIONS

On November 29, 1998, the President of the Company was issued 495,000
shares of common stock for services valued at $247,500.

On August 19, 1999, the President of the Company was issued 200,000
shares of common stock for services valued at $10,000.

On December 17, 1999, the President of the Company was issued 300,000
shares of common stock for services valued at $15,000.

On December 20, 1999, the President of the Company was issued 500,000
shares of common stock for services valued at $25,000.

NOTE 12 - SUBSEQUENT EVENTS

On April 1, 2000, the Company entered into the development stage due
to the discontinued operations associated with the VR Quest product
and the Education Centers. The Company has refocused its efforts on
the development and marketing of technology based educational programs
delivered through software programs and through the internet.

On April 20, 2000, the Company issued 100,000 shares to a board member
for services.

In May 2000, three individuals were granted a total of 56,750 warrants
which were converted into 31,750 shares of common stock. The
conversion rate was $0.675 per share.

On September 22, 2000, the Company issued options to key management
personnel with an agreement to purchase 250,000 shares at a price of
$0.75 per share.

On September 22, 2000, the Company issued 1,500,000 shares of common
stock to three board members for services rendered.

On September 29, 2000, the Company issued warrants allowing the
holders to purchase 262,781 shares of the Company's common stock. The
warrants are exercisable at a price of $0.01 per share for two years.

On October 2, 2000, the Company issued warrants allowing the holder to
purchase 3,015 shares of the Company's common stock. The warrants are
exercisable at a price of $0.01 per share for two years.

F-34

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

Article V of PCS' Bylaws provide as follows:

PCS has obtained a Directors and Officers Liability Insurance for its
officers and directors.

The effect of the foregoing is to require PCS Edventures!.com to the
extent permitted by law to indemnify the officers, directors, employees and
agents of PCS Edventures!.com for any claim arising against such persons in
their official capacities if such person acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interests of PCS
Edventures!.com, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.

As to indemnification for liabilities arising under the Securities Act of
1933 for directors, officers or persons controlling PCS, we have been informed
that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy and unenforceable. See section entitled
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities".

Item 25. Other Expenses of Issuance and Distribution

We estimate that our expenses in connection with this registration
statement will be as follows:

Securities and Exchange Commission registration fee $ 1,000
Legal fees and expenses 55,000
Accounting fees and expenses 3,000
Printing 3,000
Miscellaneous 3,000
----------
Total $65,000
==========

Item 26. Recent Sales of Unregistered Securities

During the last three years, PCS Edventures!.com, Inc. sold the securities
listed below in unregistered transactions. Each of the sale was sold in reliance
on the exemption provided for in Section 4(2) of the Securities Act of 1933, as
amended. No underwriting fee or other compensation was paid in

II-1

<PAGE>

connection with the issuance of shares except as described in Footnote 1. All of
the shares listed as issued are calculated on a post split basis.

<TABLE>
<CAPTION>
Consideration
Name Date Shares Issued Paid
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
James B. Blair Pension Trust 12/17/97 20,000 100,000
Howell Trumbo 12/17/97 2,000 10,000
Gretchen Klein 12/17/97 3,000 (1)
Thomas E. Zemlicka 12/17/97 22,000 (2)
James D. Holladay 12/17/97 8,000 40,000
Dawn Graves 12/17/97 1,000 5,000
Robert O. Grover 12/17/97 20,000 (1)
Heidi Grover 12/17/97 500 (1)
Sarah Kelly-Chase 12/17/97 2,000 (1)
Steve Napolitano 12/17/97 1,000 (1)
Saliesh Smith 12/17/97 5,000 (1)
Suzanne Hass 12/17/97 200 (1)
Janet Gibson 12/17/97 2,000 (1)
Renee Slonaker 12/17/97 2,000 (1)
David Chase 12/17/97 5,000 (1)
David T. Zemlicka 12/17/97 1,000 (1)
Larry Chariton 12/17/97 5,000 (1)
David Englund 12/17/97 3,000 (1)
J.B. Evans 12/17/97 1,000 (1)
Erica A. Compton 12/17/97 5,000 (1)
Patrick Mitchell 12/17/97 2,000 (1)
Jeffrey D. Craig 12/17/97 5,000 (1)
James D. Baratta 12/17/97 1,000 (1)
Michael K.D. Borella 12/17/97 500 (1)
Felipe James Dunn 12/17/97 200 (1)
Charlotte Hahn 12/17/97 1,000 (1)
Jason J. Paruta 12/17/97 2,000 (1)
Gina L. Radtke 12/17/97 500 (1)
Jennifer L. Urquhart 12/17/97 100 (1)
Sheryl Tolonen 12/17/97 200 (1)
Allyson Tyrian 12/17/97 500 (1)
Sean or Amy Adams 12/17/97 2,000 10,000
John W. Pannell 12/17/97 3,000 (1)
Richard A. Alva 12/17/97 3,000 (1)
Adam H. Dixon 12/17/97 20 (1)
Justin R. Mayfield 12/17/97 300 (1)
Tom M. Medes 12/17/97 20 (1)
Warren Black 12/17/97 5,000 (1)
Andy Agar 12/17/97 2,000 10,000
Jason Eddy 12/17/97 1,000 (1)
Richard Wright 12/17/97 1,000 (1)
Kelly Shepard 12/17/97 500 (1)
Nathan Chen 12/17/97 500 (1)
Kyle Albert 12/17/97 550 (1)
Jon Claybaugh 12/17/97 20 (1)
Andrew Hamblin 12/17/97 20 (1)
Seth Duesman 12/17/97 50 (1)
James Massey 12/17/97 20 (1)

</TABLE>

II-2

<PAGE>

<TABLE>
<S> <C> <C> <C>
Len Anderson 12/17/97 100 (1)
David Habben 12/17/97 50 (1)
Robert A. Prindiville 1/29/98 20,000 100,000
Saliesh Smith 1/29/98 5,000 (1)
Brent Fox 3/9/98 6,667 50,000
MSC Corporation 3/9/98 4,000 10,000
Saliesh Smith 3/9/98 2,000 (1)
DJ Farley, fbo Profit Sharing - FSB 5/4/98 3,334 (2)
Robert or Jean Ritter, Trustee 9/1/98 2,000 5,000
Jim Ritter 9/1/98 2,000 5,000
Frederick W. Stohr 9/1/98 2,000 5,500
Keith D. Stein 9/1/98 10,000 25,000
Lorentzen Family Trust 9/1/98 1,000 2,500
Sean or Amy Adams 9/1/98 120 300
David Englund 9/1/98 1,730 (1)
Cliff Davenport 9/1/98 26,000 65,000
Robert A. Prindiville 9/1/98 10,000 25,000
Saliesh Smith 9/1/98 5,000 (1)
Anthony A. Maher 9/1/98 660 (1)
Anthony A. Maher 12/7/98 99,000 64,000
DJ Farley fbo Profit Sharing - FSB 12/7/98 40,000 20,000
Brent Fox 12/15/98 20,000 10,000
Wayne F. DeMeester 12/15/98 15,000 7,500
Ritter Family Trust 12/15/98 10,000 5,000
Jim Ritter 12/15/98 10,000 5,000
Sam and Marilyn Trozzo, Trustees 12/15/98 20,000 10,000
David and Jama Fox 12/15/98 20,000 10,000
Kit B. Svee 12/15/98 20,000 10,000
Jill M. Svee 12/15/98 20,000 10,000
Kerry Svee-Reif 12/15/98 20,000 10,000
LJHS Company 12/15/98 20,000 10,000
James V. Hawkins 12/22/98 20,000 10,000
Chris LaRocco 4/7/99 5,000 (4)
David Chase 4/7/99 20,000 (1)
Sam and Marilyn Trozzo, Trustees 5/19/99 140,000 35,000
Trozzo Charitable Remainder 5/19/99 100,000 25,000
William A. Coolidge 5/19/99 60,000 15,000
Gayle F. Anderson (FBO) 5/19/99 40,000 10,000
Jack and Barbara Monroe, Trustee 5/19/99 40,000 10,000
Gary Flack 5/19/99 20,000 5,000
James D. Holladay 5/19/99 50,000 12,500
Robert E. Ritter 5/19/99 10,000 2,500
Terry and Sally Hanson 5/19/99 10,000 2,500
David and Jama Fox 5/19/99 10,000 2,500
James V. Hawkins 6/3/99 40,000 10,000
Donald J. Farley 6/3/99 13,667 (2)
Richard E. Bean 6/22/99 100,000 25,000
D.J. Farley Profit Sharing - FSB 6/23/99 60,000 15,000
Malcolm Davenport 6/23/99 20,000 5,000
Anthony A. Maher 6/23/99 60,000 15,000
Roy M. & Marian G. Svee, Trustees of 6/23/99 40,000 10,000
the Roy M. and Marian G. Svee
Family Trust
Thomas E. Zemlicka 6/23/99 72,000 (2)
</TABLE>

II-3

<PAGE>

<TABLE>
<S> <C> <C> <C>
Sam and Marilyn Trozzo, Trustees 6/23/99 43,000 (4)
Ronald T. Davis, Trustee, R.T.D. 7/14/99 40,000 10,000
Brent Fox 7/22/99 80,000 20,000
Richard Wright 7/22/99 20,000 (1)
James R. or Norma J. Nugent, Trustees 7/22/99 80,000 20,000
Robert O. Grover 7/22/99 79,480.2 (1)
Anthony A. Maher 8/18/99 40,000 (1)
Donald J. Farley 8/18/99 40,000 (2)
Roy M. Svee 8/18/99 40,000 (2)
Cliff Davenport 8/18/99 40,000 (2)
Thomas E. Zemlicka 8/18/99 40,126 (2)
Richard E. Bean 9/1/99 100,000 25,000
Pat Mitchell 9/1/99 15,000 (1)
Lorentzen Family Trust 9/1/99 6,000 1,500
Roy and Rose Borone, Trustee 9/1/99 100,000 25,000
Ranae Wenger 9/1/99 5,000 (1)
Jennifer Dixon 9/1/99 5,000 (1)
Bankers Investment Group, Ltd. 9/15/99 400,000 100,000
Roy and Marian Svee, Trustees 11/8/99 50,000 10,000
Ronald Everson 11/8/99 92,000 23,000
Kent Christensen 12/7/99 13,334 (1)
Robert O. Grover 12/17/99 15,000 (1)
Kent Christensen 12/17/99 10,000 (1)
David Chase 12/17/99 10,000 (1)
Patrick Mitchell 12/17/99 10,000 (1)
Richard Wright 12/17/99 10,000 (1)
Ranae Wenger 12/17/99 3,000 (1)
Jennifer Dixon 1/17/99 3,000 (1)
Andrew Hamblin 12/17/99 2,000 (1)
Justin R. Mayfield 12/17/99 4,000 (1)
International Capital Group, Ltd. 12/17/99 10,000 (4)
Roy and Marian Svee, Trustees 12/17/99 90,000 (2)
Donald J. Farley, FSB fbo 12/17/99 60,000 (2)
Anthony A. Maher 12/17/99 60,000 (2)
Anthony A. Maher 12/20/99 40,000 (2)
Gayle Anderson, Trustee 4/17/00 37,037 27,777.75
Scott and Michelle LaBear, Jt Wros 4/17/00 22,222 16,666.50
Joseph R. Smith, IRA - First Union Sec.4/17/00 100,000 75,000
Equity Advisors International 4/17/00 50,000 37,500
James R. Chapman 4/17/00 97,778 73,333.50
Technology Literacy Group, Inc. 4/17/00 74,075 55,556.25
Cecil D. Andrus 4/17/00 123,333.40 (2)
James R. Gaul 4/28/00 74,074 50,000
Stewart I. Perim 4/28/00 21,111 14,250
Peter S. Richards 4/28/00 37,500 25,312.50
Shannon Soulsby 5/5/00 100,000 (1)
Trent G. Rencher 5/5/00 100,000 67,500
John E. Richards 5/5/00 37,500 25,312
Ritter Family Trust 6/2/00 10,000 6,750
Loretta I. Cook 6/12/00 1,000 (3)
Mark E. Stutzman 6/12/00 1,000 (3)
Thomas M. Tice 6/12/00 1,000 (3)
Symbion, Ltd. 6/12/00 9,000 (3)
Equity Advisors International 6/12/00 6,666 (3)
</TABLE>

II-4

<PAGE>

<TABLE>
<S> <C> <C> <C>
Halverson, Ronald and Valerie, Co- 6/12/00 40,000 30,000
Trustees
International Capital Group Ltd. 8/4/00 50,000 (4)
Douglas W. Miller 8/4/00 7,000 (3)
Dan Sevier 8/4/00 1,000 (3)
Allan J. Kupczak 9/15/00 66,667 50,000.25
Ryan Canning 9/15/00 8,000 6,000
Gene R. & Sara A. Whitlow Family Trust 9/15/00 12,000 9,000
Robert F. and Betty C. Mitchell 9/15/00 53,333 39,999.75
Kevin Denison 9/15/00 12,000 9,000
Mark E. Urness 9/15/00 33,333 24,999.75
Dwayne J. Denison 9/15/00 13,000 9,750
Evan Hathaway 9/15/00 72,000 54,000
Reed J. Bowen, Jr. 9/15/00 72,000 54,000
Kirk J. Moser 9/15/00 23,266 17,449.50
International Capital Group Ltd. 9/15/00 5,000 (4)
Joseph R. Smith IRA - First Union Sec.9/15/00 50,000 37,500
Jerry H. Canning 9/15/00 8,000 6,000
Andrew Aeling fbo-First Trust Corp. 9/15/00 6,667 5,000.25
Thomas K. and Liesbeth L. Benedict 9/15/00 12,000 9,000
Mark S. Boland 9/15/00 12,000 9,000
Charles L. Bradley 9/15/00 16,000 12,000
Thomas S. Brower 9/15/00 4,000 3,000
Trevor Brown, Inc. Pension Plan 9/15/00 12,000 9,000
Trevor Brown, Inc. Pension Plan 9/15/00 6,667 5,000.25
John C. Bult Trust 9/15/00 6,000 4,500
Judy Conger Calder 9/15/00 2,000 1,500
Coghlan Family Corporation, John R. 9/15/00 30,000 22,500
Coghlan, President
Coogan Family Ltd. P/S, John S. Coogan 9/15/00 12,000 9,000
Jr., Gen.
Carl S. Derwig 9/15/00 10,000 7,500
John Duda 9/15/00 50,000 37,500
Daniel T. Gluch 9/15/00 8,400 6,300
Thomas R. and Anita L. Gluch 9/15/00 4,000 3,000
Greeley Orthodontic Center Profit 9/15/00 12,000 9,000
Sharing
Walter Hinckfoot, Jr. Living Trust 9/15/00 14,000 10,500
Walter Hinckford, Jr. Living Trust 9/15/00 10,000 7,500
Donald Ingalls, Trustee 9/15/00 6,667 5,000.25
Jensen Orthodontic Center - Profit 9/15/00 15,000 11,250
Sharing
Jeffrey E. and Miriam M. Joyce 9/15/00 12,000 9,000
Kimball Family Trust 9/15/00 60,000 45,000
Geoffrey Kopecky 9/15/00 12,000 9,000
Armand LaSorsa fbo - First Trust Corp. 9/15/00 8,000 6,000
Leon and Elba Manfredi 9/15/00 6,000 4,500
Mechling Family Trust 9/15/00 12,000 9,000
John Montfort 9/15/00 26,667 20,000.25
Norman R. Morris Living Trust 9/15/00 10,000 7,500
Robert G. Niederkom Irrevocable Trust 9/15/00 20,000 15,000
Diana Nichols 9/15/00 13,333 9,999.75
Clifford Nichols fbo - First Trust Co. 9/15/00 16,000 12,000
Dennis R. Shinn and Karen Brilland 9/15/00 12,000 9,000
</TABLE>

II-5

<PAGE>

<TABLE>
<S> <C> <C> <C>
Henry and Nellie M. Stuit Revocable 9/15/00 12,000 9,000
Trust
Diane Stump 9/15/00 6,000 4,500
Mike Vander Plaats fbo-First Trust Co. 9/15/00 4,000 3,000
Robert Wegner fbo - First Trust Co. 9/15/00 16,000 12,000
Michael H. Yokoyama and Jaye S. 9/15/00 12,000 9,000
Venturi
Douglas W. Miller 10/16/00 4,948 (3)
Dan Sevier 10/16/00 1,057 (3)
Tom Donovan 10/16/00 4,000 (3)
Thomas E. Thompson 10/16/00 2,316 (3)
Symbion, Ltd. 10/16/00 5,133 (3)
Loretta I. Cook 10/16/00 500 (3)
Thomas M. Tice 10/16/00 567 (3)
Ryan Cravens 10/16/00 942 (3)
James Boston 10/16/00 537 (3)
John G. Ariko, Jr. Revocable Living 10/16/00 20,000 15,000
Trust
Richard K. and Polly L. Ball, Co- 10/16/00 6,000 4,500
Trustees
Marcella D. Barnhort, Trustee 10/16/00 12,000 9,000
Barr Asset Family Ltd. Partnership 10/16/00 3,000 2,250
Ron C. Berg 10/16/00 2,000 1,500
Alan and Leslie Berlinberg, Trustees 10/16/00 6,667 5,000.25
Jeffrey T. Canning 10/16/00 4,000 3,000
Joseph L. Draskovich, First Trust 10/16/00 10,000 7,500
Corp. fbo
Robert L. and Connie T. Dye 10/16/00 12,000 9,000
Robert D. and Rita Y. Ervin, Co- 10/16/00 12,000 9,000
Trustees
David R. and Alice M. Evers 10/16/00 16,000 12,000
Todd Gluch 10/16/00 1,333.33 1,000
Josie Gluch 10/16/00 1,333.33 1,000
Tyra Gluch 10/16/00 1,333.33 1,000
D. Hall Investments, L.L.C. 10/16/00 8,000 6,000
Ronald and Valerie Halverson, Co- 10/16/00 35,000 26,250
Trustees
Frederick Z. Herr 10/16/00 30,000 22,500
Robert E. Hinman 10/16/00 3,000 2,250
Vance L. Kalcic 10/16/00 8,000 6,000
Charles Kovaleski, First Trust Corp. 10/16/00 10,000 7,500
Chuck Leal 10/16/00 7,000 5,250
Steven Levy 10/16/00 8,000 6,000
R.C. Luker Construction Defined 10/16/00 12,000 9,000
Benefit fbo
Leon and Elba Manfredi 10/16/00 4,000 3,000
Mechling Family Trust 10/16/00 4,000 3,000
Richard T. Press, First Trust Corp. 10/16/00 13,096 9,822
Ratliff Investments 10/16/00 10,000 7,500
Karen G. Reardon 10/16/00 5,000 3,750
Robert E. Rigert 10/16/00 5,000 3,750
Hazen A. and Joseph Sandwick 10/16/00 12,000 9,000
Revocable Trust
Annette Simons and Mark Sullivan 10/16/00 4,000 3,000
</TABLE>

II-6

<PAGE>

<TABLE>
<S> <C> <C> <C>
Stephen G. Smith 10/16/00 10,000 7,500
Swiss American, Inc. 10/16/00 67,000 50,250
Thomas E. Thompson 10/16/00 43,333 32,499.75
Bruce Unsworth, First Trust Corp. fbo 10/16/00 12,000 9,000
John R. Ureel 10/16/00 12,000 9,000
Jerome T. Usails, First Trust Corp. 10/16/00 33,392 25,044
Mike Vander Plaats fbo - First Trust 10/16/00 2,666.67 2,000
Robert and Sally Veazey 10/16/00 4,000 3,000
Johnny Warren 10/16/00 4,000 3,000
Gary R. Weber, Trustee 10/16/00 6,000 4,500
Steve Womack 10/16/00 10,000 7,500
Daniel Andrzejek, First Trust Corp. 10/16/00 5,333.33 4,000
Don M. Barnes 10/16/00 6,000 4,500
Trace G. Barnes 10/16/00 6,000 4,500
Brian Dusseault, First Trust Corp. 10/16/00 3,600 2,700
Ralph M. and Rita J. Eisenmann, 10/16/00 4,000 3,000
Trustees
George R. Jarkesy, Jr. 10/16/00 6,700 5,025
Armand LaSorsa fbo - First Trust Corp.10/16/00 8,000 6,000
Fred L. Prevost 10/16/00 20,000 15,000
Allen Reuben, M.D. P.A. 10/16/00 6,000 4,500
Dan Sevier 10/16/00 4,000 3,000
Ilene Canning 10/16/00 4,000 3,000
Nathan Pugmire 10/16/00 20,000 15,000
Richard F. Schmidt 10/16/00 50,000 (4)
Loretta I. Cook 10/16/00 10,000 100
Steve Cook 10/16/00 505 5.05
Ryan Cravens 10/16/00 6,089 60.89
Lois C. Hull 10/16/00 1,405 14.05
Nerese S. Crayton 10/16/00 1,405 14.05
Randy P. Masciarelli 10/16/00 703 7.03
Douglas W. Miller 10/16/00 29,869 298.69
Mark Miller 10/16/00 3,000 30.00
Dan Sevier 10/16/00 35,670 356.70
Frank S. Mascari 10/16/00 500 5.00
Richard D. Simpson 10/16/00 2,810 28.10
Eric M. Tice 10/16/00 400 4.00
Lauren M. Tice 10/16/00 400 4.00
Thomas M. Tice 10/16/00 10,019 100.19
Symbion Ltd. 10/16/00 56,670 566.70
Thomas E. Thompson 10/16/00 16,653 166.53
Debbie A. Tice 10/16/00 703 7.03
Tammy Deboe 10/16/00 703 7.03
Mary DeMarco 10/16/00 703 7.03
Roy and Marian Svee, Co-Trustees 10/16/00 500,000 (5)
Anthony A. Maher 10/16/00 500,000 (5)
Donald J. Farley 10/16/00 500,000 (5)
George R. Jarkesy, Jr. 10/16/00 100,000 (4)
Nathan and Kristen Pugmire 11/2/00 37,037 27,777.75
Russell B. Geyser 11/2/00 50,000 (6)
Russell B. Geyser 11/2/00 50,000 (6)
Russell B. Geyser 11/2/00 30,000 (6)
Russell B. Geyser 11/2/00 30,000 (6)
Russell B. Geyer 11/2/00 15,000 (6)
</TABLE>

II-7

<PAGE>

<TABLE>
<S> <C> <C> <C>
Cliff Papik 11/2/00 10,000 (6)
Elaine Montemarano 11/2/00 10,000 (6)
Jeff Block 11/2/00 5,000 (6)
Art Beroff 11/2/00 100,000 (4)
Art Beroff, Custodian for David Beroff 11/2/00 12,500 (4)
Art Beroff, Custodian for Ilana Beroff 11/2/00 12,500 (4)
Frank S. Mascari 11/2/00 6,448 64.48
James Boston 11/8/00 3,015 30.15
George R. Jarkesy, Jr. 11/8/00 8,291 82.91
International Capital Group Ltd. 11/8/00 7,200 72.00
Brent Fox 12/20/00 22,222 15,000
</TABLE>

(1) These shares of common stock were issued to employees for services at the
rate of $5.00 per share.

(2) These shares of common stock were issued to members of the Board of
Directors at the rate of $0.25 per share.

(3) These shares of common stock were issued to employees of Capital Growth for
commissions at the rate of $0.75 per share.

(4) These shares of common stock were issued as a result of a consulting
agreement at the rate of $0.25 per share.

(5) These shares of common stock were issued to members of the Board of
Directors for services at the rate of $0.25 per share.

(6) These shares of common stock were issued for the purchase of the assets of
Senior Driver at the rate of $0.25 per share.

Item 27. Exhibits.

The following exhibits are filed as part of this registration statement.
Exhibit numbers correspond to the exhibit requirements of Regulation S-B.

Exhibit
Number Description

3.1 Articles of Incorporation of PCS Edventures!.com, Inc.
3.2 Amendment to Articles of Incorporation
3.3 Amendment to Articles of Incorporation - Forward Split
3.4 Bylaws of PCS Edventures!.com, Inc.
4.1 Specimen common stock certificate.
5.1 Opinion Regarding Legality and Consent - Cohne, Rappaport & Segal
10.1 Office Lease
10.2 ZAPME! Agreement
23.1 Consent of HJ & Associates, L.L.C.
24.1 Power of Attorney (Included on Signature Page)
-----------

Item 28. Undertakings.

1. To file, during any period in which offers or sales are being made, a
post-effective amendment

II-8

<PAGE>

to this Registration Statement to:

(i) include any prospectus required by Section 10 (a) (3) of the
Securities Act; (ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the Registration Statement, and

(iii) include any additional or changed material information with
respect to the plan of distribution.

2. That for the purpose of determining any liability under the Securities
Act, each post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

4. That for the purpose of determining any liability under the Securities
Act, to treat the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant under Rule 424(b)(1) or (4), or
497(h) under the Securities Act as part of this Registration Statement as of the
time the Commission declared it effective.

Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in a successful defense of any action, suit or proceeding) is asserted by a
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issuer.

II-9

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in the City of Boise,
State of Idaho on December 29, 2000.

PCS EDVENTURES!.COM, INC.

By /s/ Anthony A. Maher
-----------------------------
Anthony A. Maher
Chief Executive Officer
Principal Executive Officer

By /s/ Richard F. Schmidt
------------------------------
Richard F. Schmidt
Chief Financial Officer
Principal Financial Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Anthony A. Maher and Robert F. Schmidt, and
either of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Date Title Signature
------- ----------------- ---------------------------------

December 29, 2000 CEO and /s/ Anthony A. Maher
Director Anthony A. Maher

December 29, 2000 Secretary and /s/ Donald J. Farley
Director Donald J. Farley

December 29, 2000 Treasurer and /s/ Roy M. Svee
Director Roy M. Svee

December 29, 2000 Director /s/ Cecil D. Andrus
Cecil D. Andrus

II-10

<PAGE>

EXHIBIT INDEX

Exhibit
Number Description
--------- --------------
3.1 Articles of Incorporation of PCS Edventures!.com, Inc.
3.2 Amendment to Articles of Incorporation
3.3 Amendment to Articles of Incorporation - Forward Split
3.4 Bylaws of PCS Edventures!.com, Inc.
4.1 Specimen common stock certificate.
5.1 Opinion Regarding Legality and Consent - Cohne, Rappaport &
Segal
10.1 Office Lease
10.2 ZAPME! Agreement
23.1 Consent of HJ & Associates, L.L.C.
24.1 Power of Attorney (Included on Signature Page)

II-11