SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549    FORM
10-Q   [X] QUARTERLY REPORT
UNDER SECTION 13 OR 15 ( d ) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended December
31, 2008  [ ] TRANSITION REPORT
UNDER SECTION 13 OR 15 ( d ) OF THE EXCHANGE ACT  For the transition period from
____________ to____________  Commission File No. 000-49990   PCS
EDVENTURES!.COM, INC. (Exact name of Registrant as specified in
its charter)  Idaho
82-0475383(State or Other Jurisdiction of
(I.R.S. Employer Identification No.)incorporation or organization)  345 Bobwhite Court, Suite 200 Boise, Idaho 83706 (Address of Principal Executive Offices)  (208) 343-3110 (Registrants telephone number, including
area code)  N/A (Former name, former address and former
fiscal year, if changed since last report)  Indicate by check mark whether the
Registrant has (1) filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 (the Exchange Act) during the preceding
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [  ]  Indicate by check mark whether the
Registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company.  See definition of large
accelerated filer, accelerated filer and smaller reporting company in Rule
12b-2 of the Exchange Act.  (Check one):  Large accelerated filer [  ]
     Accelerated filer [  ]
      Non-accelerated filer [  ]
     Smaller reporting company [X]  Indicate by check mark whether the
Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]   1     APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS  Indicate by check mark whether the
Registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.  Not applicable.  APPLICABLE ONLY TO CORPORATE ISSUERS  Indicate the number of shares outstanding of each of the
Registrants classes of common stock, as of the latest practicable date:  January 28, 2009 37,636,033 Shares of Common Stock.  PART I   Item 1.  Financial Statements  The Financial Statements of the
Registrant required to be filed with this 10-Q Quarterly Report were prepared by
management and commence below, together with related notes. In the opinion of
management, the Financial Statements fairly present the financial condition of
the Registrant.   2      INDEXPART I
-
              FINANCIAL
INFORMATIONPageConsolidated Balance Sheets
(Unaudited).
4Consolidated Statements of Operations
(Unaudited)
5Consolidated Statements of Cash Flows
(Undaudited).
6-7Consolidated Statement of Stockholders Equity
(Unaudited)..
8Notes to Consolidated Financial Statements
(Unaudited).
9-12Managements Discussion and Analysis of Financial
Conditions and Results of Operations
13Controls and
Procedures
14PART II
-
               OTHER
INFORMATION.
15SIGNATURES...
17EXHIBIT
INDEX..
18-19                           3    PCS
EDVENTURES!.COM, INC. Consolidated Balance Sheets ASSETSDecember 31, 2008
March 31,
2008(unaudited)CURRENT ASSETSCash
$986,818
$1,082,622Accounts receivable, net of allowance for
doubtfulaccounts of $10,240 and $6,617, respectively
164,719
707,030Interest receivable
7,206
-Prepaid expenses
24,604
15,534Deferred costs
597
52,502Finished goods inventory
344,006
257,210Other receivable
-
13,829Total Current Assets
1,527,950
2,128,727FIXED
ASSETS, net of accumulated depreciation of $111,124 and $103,561,
respectively
110,244
33,517EDUCATIONAL
SOFTWARE net, of accumulated amortization of $161,561 and $180,459,
respectively
116,603
67,163INTELLECTUAL
PROPERTY, net of accumulated amortization of $447,635 and $391,386,
respectively
56,250
112,500GOODWILL
485,238
485,238OTHER ASSETSMold cost
32,696
-Deposits
7,371
7,371Total Other Assets
40,067
7,371TOTAL ASSETS
$2,336,352
$2,834,516LIABILITIES & STOCKHOLDERS
EQUITYCURRENT LIABILITIESAccounts payable and other current
liabilities
$87,217
$198,705Accrued compensation
5,641
78,820Payroll liabilities payable
10,078
10,269Accrued expenses
97,357
48,485Deferred revenue
157,216
288,703Notes payable
10,205
26,438Total Current Liabilities
367,714
651,420Total
Liabilities
367,714
651,420STOCKHOLDERS EQUITYPreferred stock, no par value, 20,000,000
-
-authorized
shares, no shares issued and outstandingCommon stock, no par value, 60,000,000
31,535,509
30,698,000authorized
shares, 37,631,697 and 36,976,446 shares  issued and
    outstanding, respectivelyStock Payable
4,145
-Accumulated comprehensive loss
(31,785)
(259)Accumulated deficit
(29,539,231)
(28,514,645)Total Stockholders Equity
1,968,638
2,183,096TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
$2,336,352
$2,834,516 The
accompanying notes are an integral part of these financial statements  4    PCS
EDVENTURES!.COM, INC. Consolidated Statements of Operations (Unaudited)  For the Three Months Ended

For the Nine Months EndedDecember 31,

December 31,2008

2007

2008

2007REVENUESLab revenue
$266,754

$1,359,455

$2,160,367

$2,602,817License revenue
51,166

65,081

155,380

128,511Total Revenues
317,920

1,424,536

2,315,747

2,731,328COST OF SALES
155,123

627,185

1,087,337

1,241,575GROSS PROFIT
162,797

797,351

1,228,410

1,489,753OPERATING EXPENSESSalaries and wages
361,086

230,070

904,389

670,586Bad debt expense
(21,261)

5,029

3,667

15,943Depreciation and amortization
expense
23,388

43,881

98,788

131,119General and administrative
expenses
375,856

359,852

1,265,268

1,089,567Total Operating Expenses
739,069

638,832

2,272,112

1,907,215OPERATING INCOME (LOSS)
(576,272)

158,519

(1,043,702)

(417,462)OTHER INCOME AND EXPENSESInterest income
8,494

8,411

18,802

14,833Interest expense
-

(201)

-

(4,016)Other income
-

-

314

-Other expense
-

(471)

-

(8,229)Gain on extinguishment of
debt
-

2,500

-

11,917Total Other Income and
Expenses
8,494

10,239

19,117

14,505NET INCOME (LOSS)
(567,778)

168,758

(1,024,586)

(402,957)Foreign currency
translation
(47,725)

(5,490)

(31,526)

(8,993)NET COMPREHENSIVE INCOME (LOSS)
($615,503)

$163,268

($1,056,112)

($411,950)Earnings (Loss) per Share, Basic and Fully
Diluted
($0.02)

$0.01

($0.03)

($0.01)Weighted Average Number of Shares
Outstanding
37,619,538

28,126,754

37,477,884

31,847,835  The accompanying notes are an integral part
of these financial statements      5    PCS
EDVENTURES!.COM, INC. Consolidated Statements of Cash Flows (Unaudited) For the Nine Months EndedDecember 31,2008

2007CASH FLOWS FROM OPERATING ACTIVITIESNet Loss
($1,024,586)

($402,957)Adjustments to reconcile net loss to net cash used
by operating activities:Depreciation and
amortization
98,788

108,037Common stock issued for
services
46,489

5,666Amortization of fair value of
stock options issued and vesting
397,865

366,656Amortization of costs related to
repricing of warrants
-

20,342Changes in operating assets and liabilities:(Increase) decrease in accounts
receivable
535,103

(1,246,714)(Increase) decrease in prepaid
expenses
(9,070)

-(Increase) decrease in other
receivables
13,829

-(Increase) decrease in
inventories
(150,900)

6,063(Increase) decrease in deferred
costs
51,905

(54,621)(Increase) decrease in accounts
payable and accrued liabilities
(135,986)

15,381Increase (decrease) in unearned
revenue
(131,486)

68,046(Increase) decrease in other
assets
-

115,188Net Cash Used by Operating
Activities
(308,049)

(998,913)CASH FLOWS FROM INVESTING ACTIVITIESCash Outflow from Fixed Asset
Purchase
(19,600)

-Cash Outflow from Software Asset
Purchase
(85,000)

-Cash Outflow from Other Asset
 Purchase
(32,696)

-Net Cash Provided (Used) by
Investing Activities
(137,296)

-CASH FLOWS FROM FINANCING ACTIVITIESPayments on notes payable
(16,233)

(86,472)Proceeds from notes
payable
-

(139,697)Proceeds from exercise of
warrants and stock options
397,300

1,353,515Net Cash Provided by Financing
Activities
381,067

1,127,346Foreign currency translation
(31,526)

25,900Net Increase (Decrease) in Cash
(95,804)

154,333Cash at Beginning of Period
1,082,622

47,764Cash at End of Period
$
         986,818

$
         202,097   The accompanying notes are an integral part
of these financial statements        6    PCS
EDVENTURES!.COM, INC. Consolidated Statements of Cash Flows
(continued) (Unaudited)   For the Nine Months EndedDecember 31,2008

2007CASH PAID FOR:Interest
$
                           -

$
             4,016Income taxes
$
                           -

$
                     -                                         The accompanying notes are an integral part
of these financial statements  7    PCS
EDVENTURES!.COM, INC. Consolidated Statement of Stockholders
Equity (Unaudited)   Other
TotalCommon Stock
Stock
Accumulated
Comprehensive
Stockholders(shares/amount)
Payable
Deficit
Income
EquityBalance at April
1, 2008
36,976,446
$ 30,698,000
$
               -
$ (28,514,645)
$
             (259)
$    2,183,096Stock for
Exercise of Warrants
570,000
378,800
-
-
-
378,800Stock for
Exercise of Options
35,000
18,500
-
-
-
18,500Stock for
Services
50,251
42,344
4,145
-
-
46,489Option
Expense
-
397,865
-
-
-
397,865Foreign Currency
Translation
-
-
-
-
(31,526)
(31,526)Net Loss for the nine months ended December 31,
2008
-
-
-
(1,024,586)
-
(1,024,586)Balance at
December 31, 2008
37,631,697
$ 31,535,509
$        4,145
$ (29,539,231)
$
        (31,785)
$    1,968,638                                The accompanying notes are an integral part
of these financial statements  8     PCS EDVENTURES!.COM, INC Notes to the Consolidated Financial
Statements December 31, 2008 (unaudited)  NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS  On August 3, 1994, PCS
Edventures!.com, Inc., was incorporated under the laws of Idaho to engage in
web-based and site-licensable educational products.  In October 1994, an agreement was
authorized allowing the Company to exchange, on a one-for-one basis, common
stock for stock of PCS Schools, Inc. As a result of this agreement, PCS Schools,
Inc. became a wholly-owned subsidiary of the Company.  In the late 1990s,
the Company divested the stand-alone learning labs to focus more on a hands-on
module coupled with web-based technology for use in the classroom.  On March 27, 2000, the Company changed
its name from PCS Education Systems, Inc. to PCS Edventures!.com, Inc.  On November 30, 2005, the Company
entered into an agreement with 511092 N.B. LTD. dba LabMentors to exchange PCS
stock for stock of 511092 N.B. LTD. as disclosed in the 8-K as filed with the
Securities and Exchange Commission (SEC) on December 9, 2005, and amended on
February 15, 2006.  As a result of the Share Exchange Agreement, 511092
N.B. LTD. became a wholly owned subsidiary of the Company.  In December
2005, the name of this subsidiary was formally changed to PCS LabMentors, LTD.
It remained a Canadian corporation.  NOTE 2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  The December 31, 2008, consolidated
financial statements presented herein are unaudited, and in the opinion of
management, include all adjustments (consisting of only normal recurring
accruals) necessary for a fair presentation of financial position, results of
operations and cash flows. Such financial statements do not include all of the
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principals generally accepted in the
United States of America. This Quarterly Report on Form 10-Q should be read in
conjunction with the Annual Report on Form 10-KSB for PCS Edventures!.com (PCS
or the Company) for the year ended March 31, 2008. The March 31, 2008,
consolidated balance sheet is derived from the audited balance sheet included
therein.  The operating results for the
nine-month period ended December 31, 2008, are not necessarily indicative of the
results that may be expected for the year ending March 31, 2009.  NOTE 3 - GOING CONCERN  The Companys consolidated financial
statements are prepared using Generally Accepted Accounting Principals
applicable to a going concern that contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company has a
strong cash position as well as other material assets. This
position was enhanced through the conversion of debt. The established
source of revenues is not sufficient to cover its operating cost. Although the
Company has positive working capital, it has accumulated significant
losses. The combination of these items raises substantial doubt about its
ability to continue as a going concern. Managements plans with respect to
alleviating this adverse position are as follows:   During the fiscal quarter ended
December 31, 2008, the Company continued discussion with several target
companies for possible merger and acquisition activities. The Company continued
to strengthen its strategic alliances with KNEX, Science Demo, fischertechnik,
MR Block, Integrating Technology, Minds-i, Follette, Whole School, Trudy
Corporation and Eduwise for further product development and enhancement. The
Company has also introduced the PCS Digital Media Labs, which saw strong sales
of approximately $327,600 in fiscal year ended March 31, 2008. With the addition
of a Marketing Director, the Company has developed clearly defined plans to
align product development and marketing efforts to further penetrate the
educational market. The marketing campaigns will be focused at distinct segments
within the education market to more clearly communicate the products competitive
positioning in both the Domestic and International markets. Additionally, the
Company is actively developing branding, product identity, and messaging that is
specifically aligned to target market segments.  9     NOTE 3 - GOING CONCERN (continued)  The ability of the Company to continue
as a going concern is dependent upon its ability to successfully accomplish the
plans described in the preceding paragraphs and eventually attain profitable
operations. The accompanying consolidated financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern.  NOTE 4 - FIXED ASSETS  Assets and depreciation for the
periods are as follows: December 31, 2008
March 31,
2008Computer/office equipment
$19,756
$21,116Server equipment
116,612
115,962Software
85,000
-Accumulated depreciation
(111,124)
(103,561)Total Fixed Assets
$110,244
$33,517  NOTE 5 - EDUCATIONAL SOFTWARE  The Companys inventory consists of
internally developed educational computer programs and exercises to be accessed
on the Internet. In accordance with Statement of Financial Accounting Standards
(FAS) No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased,
or Otherwise Marketed, the costs associated with research and initial
feasibility of the programs and exercises are expensed as incurred. Once
economic feasibility has been determined, the costs to develop the programs and
exercises are capitalized until they are ready for sale and access and are
reported at the lower of unamortized cost or net realizable value. Capitalized
program and exercise inventory are amortized on a straight-line basis over the
estimated useful life of the program or exercise, generally 36 to 48 months.  NOTE 6 - INTELLECTUAL PROPERTY  The Companys intellectual property
consists of capitalized costs associated with the development of the Internet
software and delivery platform developed by the Company to enable access to the
various educational programs and exercises developed by the Company. In
accordance with FAS 86 as discussed previously regarding inventory, the initial
costs associated with researching the delivery platform and methods were
expensed until economic feasibility and acceptance were determined. Thereafter,
costs incurred to develop the Internet delivery platform and related
environments were capitalized until ready for use and able to deliver and access
the Companys educational programs and exercises. Costs incurred thereafter to
maintain the delivery and access platform are expensed as incurred. These
capitalized costs are being amortized on a straight-line basis over the
estimated useful life of the delivery and access platform, which has been
determined to be 36 to 60 months.  NOTE 7 - GOODWILL  The goodwill balance of $485,238 at
December 31, 2008, is related to the Companys acquisition of PCS LabMentors in
December 2005. Included within this amount of goodwill is $135,658 of costs
associated with the acquisition. The capitalized costs are for accounting,
consulting, and legal fees associated with the transaction. With the acquisition of PCS LabMentors, the Company gained
LabMentors significant interest in the technical college market and increased
the products available to educational outlets. The Company also obtained the
information technology and programming expertise of LabMentors' workforce,
additional cost optimization, and greater market flexibility in optimizing
market information and access to collegiate level sales.  The provisions of Statement of
Financial Accounting Standards (FAS) No. 142, Goodwill and Other Intangible Assets, require that a two-step impairment
test be performed annually or whenever events or changes in circumstances
indicate that the carrying value of an asset may not be recoverable. The first
step of the test for impairment compares the book value of the Company to its
estimated fair value.   10    We
undertook an impairment review at the end of the fiscal year ended March 31,
2008.  After reviewing current operating losses and future growth potential of
the subsidiary, the Company determined that no impairment was created. The basis for this determination included
the growth of existing clients since the end of the fiscal year, conversations
with potential customers for the upcoming year, the proven record since a bank
account was established for the company to sustain operations for the
foreseeable future, as well as the added economies of scale the subsidiary has
added to the Company as a whole, including several technical performance
enhancements supplied by LabMentors to supplement the core capabilities of PCS,
such as creation of added internet service bandwidth and associated signal
routing capabilities not known to the technical people at PCS; locating and
managing a demonstration server on their system for a wide variety of PCS
products; and assisting technical people from PCS and E2S in the creation and
management of a server to host the PCS STEPS® product. In conclusion, the
Company felt and still feels that LabMentors brought a cutting edge product to
PCS, as well as vertical integration and technology not previously known by PCS.  NOTE 8 - ACCRUED EXPENSES  Accrued expenses for the
periods are as follows:  December 31
March 31,2008
2008Credit card debt
$6,019
$43,758Workers compensation
-
500CG-VAK
-
4,227Director fees
77,207
-Legal fees
8,000
-Consulting fees
6,000
-Telephone expenses
121
-Sales tax payable
10
-Total Accrued Expenses
$97,357
$48,485  NOTE 9 - COMMITMENTS AND CONTINGENCIES  The Company is currently in a lawsuit
that is pending in the United States District Court of Idaho, Case No.
CV08-00089. This lawsuit has been brought about by a former employee who is
asserting breach of contract and breach of implied covenant of good faith and
fair dealings with respect to an agreement entered into on or about April 1,
2004. The plaintiff is seeking specific performance on the issuance of an
additional 146,858 shares of common stock or damages in excess of $75,000. The
Company has retained the services of Hawley Troxell Ennis & Hawley, LLP
Attorneys at Law. As of this filing, the Company believes we have a meritorious
defense and will prevail in all litigations surrounding this matter.  On September 10, 2008, the Company
filed a lawsuit (the Action) in Idaho Federal District Court (Case
1:08-cv-00379-BLW) against Jackie Deluna and Infusing Technology K12, LLC
(Defendants), alleging trademark infringement of certain of the Companys
logos; cyberpiracy under the federal Anticybersquatting Consumer Protection Act;
copyright infringement with respect to certain of the Companys proprietary
curriculum materials; breach of contract with respect to certain agreements
between the Company and the Defendants; and trade secrets misappropriation.
 The Company has asked for a constructive trust, an accounting, injunctive
relief, money damages and attorneys fees.  On November 10, 2008, the
Defendants answered and filed a counterclaim against the Company alleging
trademark infringement; trade secrets misappropriation; copyright infringement;
breach of contract; and breach of the implied covenant of good faith and fair
dealing, and asked for a constructive trust, an accounting, money damages,
injunctive relief and attorneys fees. On December 1, 2008, the Company answered
the counterclaim and denied all of the Defendants allegations. The Action is
proceeding, and the Company intends to vigorously defend the counterclaims and
pursue its complaint against the Defendants.  It is not possible at this
time to estimate the likelihood of either a favorable or unfavorable outcome of
the Action.        11    NOTE 10 - STOCKHOLDERS
EQUITY  During the nine-month period ended
December 31, 2008, the Company issued 570,000 shares of common stock for the
exercise of warrants, and received cash proceeds of  $378,800.  During the nine-month period ended
December 31, 2008, the Company issued 35,000 shares of common stock for the
exercise of employee stock options, and received cash proceeds of
 $18,500.  During the nine-month period ended
December 31, 2008, the Company issued 50,251 shares of common stock for
services, valued at $42,344.  During the nine-month period ended
December 31, 2008, the Company granted 195,000 stock options to employees,
valued at $176,090. $22,011 has been expensed to date in accordance with
Statement of Financial Accounting Standards (FAS) 123(R), Share Based
Payment.  During the nine-month period ended
December 31, 2008, the Company granted 100,000 warrants for consulting services,
valued at $129,699. $97,274 has been expensed to date in accordance with FAS
123(R).  During the nine-month ended December
31, 2008, the Company expensed amounts related to stock options granted in prior
periods in accordance with FAS 123(R), valued at $278,580.  The Company accounts for stock-based
employee compensation in accordance with FAS 123(R).  FAS 123(R) requires
employee stock-based compensation to be measured based on the fair value as of
the grant-date of the awards and the cost to be recognized over the period
during which an employee is required to provide services in exchange for the
award.  Historically, the company used the intrinsic method of valuation as
specified in Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees, and related interpretations, and, accordingly, no compensation cost had been
recognized for stock options in prior years.  FAS 123(R) eliminates the
alternative use of APB 25.  As a result of adopting the fair value method
for stock compensation, all future awards and current awards vesting in future
periods will be expensed over the stock options vesting period as defined in
its contract award.  The Company adopted this provision during the fiscal
year ended March 31, 2007.  NOTE 11-BASIC AND DILUTED NET LOSS PER COMMON SHARE  Basic and diluted net loss per common
share for the nine-month periods ended December 31, 2008 and 2007, are based on
37,477,884 and 31,847,835, respectively, of weighted average common shares
outstanding. The same figures for the three-month periods then ended are based
on 37,619,538 and 28,126,754, respectively, of weighted average common shares
outstanding. No adjustment has been made for any common stock equivalents
outstanding because their effects would be antidilutive.  NOTE 12 - SUBSEQUENT EVENTS  On January 9, 2009, the Company issued
4,274 shares of common stock for the satisfaction of the stock payable liability
at December 31, 2008, valued at $4,145.  On January 22, 2009, the Company
issued 62 shares of common stock for services, valued at $84.  On February 2, 2009, the Company
entered into a Letter of Intent for substantially all of the assets of Trudy
Corporation, a publicly held Delaware Corporation (OTCBB: TRDY). The share
exchange acquisition will be contingent upon the satisfaction of a number of
various conditions including, but not limited to, the completion of a due
diligence audit and  compliance with all state and federal securities laws.          12        Item 2. Managements Discussions and
Analysis of Financial Condition and Results of Operations.  Cautionary Statements
for Purposes of Safe Harbor Provisions of the Private Securities Litigation
Reform  Act of 1995:  Except
for historical facts, all matters discussed in this report, which are
forward-looking, involve a high degree of risk and uncertainty. Certain
statements in this report set forth managements intentions, plans, beliefs,
expectations, or predictions of the future based on current facts and analyses.
When we use the words believe, expect, anticipate, estimate, intend,
or similar expressions, we intend to identify forward-looking statements. You
should not place undue reliance on these forward-looking statements. Actual
results may differ materially from those indicated in such statement, due to a
variety of factors, risks and uncertainties. Potential risks and uncertainties
include, but are not limited to, competitive pressures from other companies
within the Educational Industries, economic conditions in the Companys primary
markets, exchange rate fluctuation, reduced product demand, increased
competition, inability to produce required capacity, unavailability of
financing, government action, weather conditions and other uncertainties,
including those detailed in the Companys Securities and Exchange Commission
filings. The company assumes no duty to update forward-looking statements to
reflect events or circumstances after the date of such statements.  The
following discussion should be read in conjunction with our unaudited
consolidated interim financial statements and related notes thereto included in
this quarterly report and in our audited consolidated financial statements and
Managements Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contained in our Form 10-KSB for the year ended March 31,
2008.   Plan of
Operation  PCS
intends to continue to operate in the same manner as prior years, conducting
on-going research into the needs of the education market in order to identify
viable business opportunities. The Company continues to develop product lines
and investigate acquisition candidates in order to meet the need of the
education market.  PCS LabMentors will continue to expand into the
collegiate market, as well as undertake new projects with existing customers for
an increased revenue base. The fiscal year 2008 ended with a strong cash in hand
position of $1,082,622.  PCS as a whole intends to continue to fund
operations based on lab sales to existing and new customers to provide cash for
operations throughout the coming fiscal year. There are not expected to be any
significant changes in the number of employees.   Results of
Operations  The
quarter ended December 31, 2008, resulted in a net loss of ($567,778) as
compared to the net income during the quarter ended December 31, 2007, of
$168,758.  The Company has increased its losses from the prior fiscal year,
same three-month period by $736,536, or approximately four hundred thirty-six
percent (436%).  The Basic Loss per Share for the quarter ended December
31, 2008, is ($0.02), which is a ($0.03) decrease in value per share from the
three-month period ended December 31, 2007, of $0.01 per share.  The
nine-month period ended December 31, 2008, resulted in a net loss of
($1,024,585) as compared to the net loss during the nine-month period ended
December 31, 2007, of ($402,957).  The Company has increased its losses
from the prior fiscal year, same nine-month period by $621,628, or approximately
one hundred fifty-four percent (154%).  The Basic Loss per Share for the
nine-month period ended December 31, 2008, is ($0.03), which is a ($0.02)
decrease in value per share from the nine-month period ended December 31, 2007,
of ($0.01) per share.  The
non-GAAP financial measure of Earnings Before Interest, Taxes, and Depreciation
(EBITDA) for the nine-month period ended December 31, 2008, was a loss of
approximately ($944,599), as compared to the EBITDA income for the nine-month
period ended December 31, 2007, of approximately $76,428.  The
non-GAAP financial measure of Earnings Before Interest, Taxes, Depreciation,
FAS123(R) Option/Warrant Expense, and Stock Compensation for the nine-month
period ended December 31, 2008, was a loss of ($513,034) as compared to the
Earnings Before Interest, Taxes, Depreciation, FAS123(R) Option/Warrant Expense,
and Stock Compensation income for the nine-month period ended December 31, 2007,
of approximately $470,876.  13     Three-month period ended
December 31, 2008, compared to three-month period ended December 31,
2007  Revenues
for the three-month period ended December 31, 2008, decreased to $317,920 or by
approximately $1,106,616, or seventy-eight percent (78%) as compared to revenues
of $1,424,536 for the three-month period ended December 31, 2007.  This
decrease is attributable to the hesitation surrounding the general economy, a
change in federal and state funding schedules, as well as a decrease in the
expenditure of grant monies by some school districts. We do not believe these
circumstances are recurring.  Operating
expenses for the three-month period ended December 31, 2008, increased by
approximately $100,237 or fifteen percent (15%) to $739,069 as compared to
operating expenses of $638,832 for the three-month period ended December 31,
2007.  This increase was due to the addition of a Director of Marketing and
four staff members over the comparative three-month period.  Nine-month period ended
December 31, 2008, compared to nine-month period ended December 31, 2007  Revenues
for the nine-month period ended December 31, 2008, decreased to $2,315,747, or
by approximately $415,581, or fifteen percent (15%) as compared to revenues of
$2,731,328 for the nine-month period ended December 31, 2007. This decrease is
attributable to the hesitation surrounding the general economy, a change in
federal and state funding schedules, as well as a decrease in the expenditure of
grant monies by some school districts. We do not believe these circumstances are
recurring.  Operating
expenses for the nine-month period ended December 31, 2008, increased by
approximately $364,897, or nineteen percent (19%) to $2,272,112 as compared to
operating expenses of $1,907,215 for the nine-month period ended December 31,
2007. This increase was due to the addition of a Director of Marketing and four
staff members over the comparative nine-month period.   Liquidity  As of
December 31, 2008, we had $986,818 in cash, with total current assets of
$1,527,950 and total current liabilities of $367,714. We have an accumulated
deficit of ($29,539,231) and stockholders equity of $1,968,638.  The
Company has a current ratio of 4.15. The ratio indicates that we have
effectively managed debt and have available resources to help continue company
growth through internal and external means. We have utilized the current ratio
over a quick ratio due to the fact that most items in inventory are easily
saleable should the need to liquidate arise.  The
Company has working capital of $1,160,236 at December 31, 2008. The working
capital indicates that our ability to pay current debt obligations through our
current assets is favorable.    Item 3.
 Quantitative and Qualitative Disclosures About Market Risk.  The
Company is a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934, as amended (the Exchange Act) and is not
required to provide the information required under this item.  Item 4T.  Controls
and Procedures.  Our
management, with the participation of our chief executive officer, evaluated the
effectiveness of our disclosure controls and procedures as defined in Rule
13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period
covered by this Quarterly Report on Form 10-Q.  In designing and evaluating
the disclosure controls and procedures, our management recognized that any
controls and procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives.  In
addition, the design of disclosure controls and procedures must reflect the fact
that there are resource constraints and that management is required to apply its
judgment in evaluating the benefits of possible controls and procedures relative
to their costs. The design of any disclosure controls and procedures also is
based in part upon certain assumptions about the likelihood of future events
and there can be no assurance that any design will succeed in achieving its
stated goals  14     Item 4T.  Controls
and Procedures (cont)  under all potential future
conditions.  Based on
that evaluation, Tony Maher, the chief executive officer and acting CFO,
concluded that, as of December 31, 2008, our disclosure controls and procedures
were, subject to the limitations noted above, effective to provide reasonable
assurance that information we are required to disclose in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules,
regulations and forms, and that such information is accumulated and communicated
to our management, including our chief executive officer, as appropriate, to
allow timely decisions regarding required disclosure.  Changes in internal
control over financial reporting  Our management, with the participation of the chief executive
officer, has concluded there were no significant changes in our internal control
over financial reporting that occurred during our most recent fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.    PART II - OTHER
INFORMATION   Item 1. Legal
Proceedings.   The
Company is currently in a lawsuit that is pending in the United States District
Court of Idaho, Case No. CV08-00089. This lawsuit has been brought about by a
former employee who is asserting breach of contract and breach of implied
covenant of good faith and fair dealings with respect to an agreement entered
into on or about April 1, 2004. The plaintiff is seeking specific performance on
the issuance of an additional 146,858 shares of common stock or damages in
excess of $75,000. The Company has retained the services of Hawley Troxell Ennis
& Hawley, LLP Attorneys at Law. As of this filing, The Company believes we
have a meritorious defense and will prevail in all litigations surrounding this
matter.  On
September 10, 2008, the Company filed a lawsuit (the Action) in Idaho Federal
District Court (Case 1:08-cv-00379-BLW) against Jackie DeLuna and Infusing
Technology K12, LLC, (Defendants) alleging trademark infringement of certain
of the Companys logos; cyberpiracy under the federal Anticybersquatting
Consumer Protection Act; copyright infringement with respect to certain of the
Companys proprietary curriculum materials; breach of contract with respect to
certain agreements between the Company and the Defendants; and trade secrets
misappropriation.  The Company has asked for a constructive trust, an
accounting, injunctive relief, money damages and attorneys fees.  On
November 10, 2008, the Defendants answered and filed a counterclaim against the
Company alleging trademark infringement; trade secrets misappropriation;
copyright infringement; breach of contract; and breach of the implied covenant
of good faith and fair dealing, and asked for a constructive trust, an
accounting, money damages, injunctive relief and attorneys fees. On December 1,
2008, the Company answered the counterclaim and denied all of the Defendants
allegations. The Action is proceeding, and the Company intends to vigorously
defend the counterclaims and pursue its complaint against the Defendants.
 It is not possible at this time to estimate the likelihood of either a
favorable or unfavorable outcome of the Action.  Item 1A.  Risk
Factors.  The
Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange
Act and is not required to provide the information required under this item.           15    Item
2. Recent Sale of Unregistered Securities.  Sales
of Unregistered Securities During the Last Quarter. Common
PreferredDescription
Shares
Amount
Shares
AmountInvestor    (1)
10,000
6,000
-
-Employee
 (2)
30,210
27,295
-
-Employee
 (3)
20,000
15,000
-
-             (1)These
shares were issued for the exercise of Warrants. (2)These
shares issued in exchange for services. (3)These
shares were issued as a bonus to a corporate officer.   We
issued all of these securities to persons who were accredited investors as
those terms are defined in Rule 501 of Regulation D of the Securities and
Exchange Commission; and each such person had prior access to all material
information about us. We believe that the offer and sale of these securities
were exempt from the registration requirements of the Securities Act, pursuant
to Sections 4(2) and 4(6) thereof, and Rule 506 of Regulation D of the
Securities and Exchange Commission.  Registration of sales to accredited
investors are preempted from state regulation, though states may require the
filing of notices, a fee and other administrative documentation like consents to
service of process and the like.  Item 3. Defaults Upon
Senior Securities.  None;
not applicable.   Item 4. Submission of
Matters to a Vote of Security Holders.  On
August 19, 2008, the Company held its Annual Meeting of Shareholders at its
principal location in Boise, Idaho.  A quorum was represented at the
meeting in person and via proxy.  Of the 37,062,568 shares outstanding at
the record date, 19,525,617 proxies had been received by the Company.  At the
Annual Meeting, one proposal was brought forth for vote by the shareholders.
This item of business was to re-elect the Board of Directors until the next
annual meeting.  Of the total number of proxies received, each member of
the Board of Directors standing for election had received in excess of
19,300,000 votes in favor. The Board of Directors was re-elected as follows:   Board of
Directors
For
Against
AbstainAnthony A.
Maher
19,396,500
129,117
0Donald J.
Farley
19,337,976
137,541
100Cecil D.
Andrus
19,457,140
68,377
100Dehryl A.
Dennis
19,498,140
27,377
100Michael K.
McMurray
19,449,253
68,617
100          **Item 5. Other Information.**           None;
not applicable.          16    Item
6. Exhibits.   Exhibit No.  Identification of
Exhibit  31


32
Rule 13a-14(a) or
15d-14(a) Certification of the Registrants principal executive officer.
Filed herewith.

Rule 13a-14(b) or
15d-14(b) Certification of the Registrants principal executive officer
pursuant to 18 U.S.C Section 1350 as adopted pursuant to Rule 906 of the
Sarbanes-Oxley Act of 2002. Filed herewith.     SIGNATURES  Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.  PCS
EDVENTURES!.COM, INC.  Dated:
February 05,
2009

By:
/s/ Anthony A.
MaherAnthony A.
MaherCEO, President,
Chairman of the Board of Directors, and acting CFO
(principal executive
officer)   In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.   Dated:
February 05,
2009

By:
/s/ Donald J.
FarleyDonald J.
FarleySecretary and
Director  Dated:
February 05,
2009

By:
/s/ Cecil D
AndrusCecil D.
AndrusDirector  Dated:
February 05,
2009

By:
/s/ Dehyrl A
DennisDehryl A.
DennisDirector  Dated:
February 05,
2009

By:
/s/ Michael K.
McMurrayMichael K.
McMurrayDirector    17