UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~September 3130, 2024

☐¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-15113

VERITEC, INC.

(Exact name of registrant as specified in its charter)

Nevada		95-3954373
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

2445 Winnetka Avenue N.

Golden Valley, MN 55427

(Address of principal executive offices) (zip code)

(763) 253-2670

(Registrant’s telephone number, including area code)

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	VRTC	OTC Pink

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 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 ¨

~~Yes~~Indicate by check mark whether the registrant has ☒ submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ☐¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐¨ Accelerated filer ☐¨ Non-accelerated filer ☐¨ Smaller reporting company ☒x (Do not check if a smaller reporting company) Emerging growth company ☐¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

~~If an~~The ~~emerging~~number ~~growth~~of ~~company,~~shares ~~indicate~~of ~~by check mark if the~~ registrant’s ~~has elected not to use the extended transition period for complying~~common ~~with~~stock ~~any~~outstanding ~~new~~as orof ~~revised~~December ~~financial~~23, ~~accounting~~2024, ~~standards~~was ~~provided pursuant to Section 13 (a) of the Exchange Act~~39,988,007. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares of registrant’s common stock outstanding as of May 15, 2024, was 39,988,007.

VERITEC, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION F-1 Item 1. Condensed Financial Statements F-1 Condensed Consolidated Balance Sheets – ~~March~~September 3130, 2024 (Unaudited) and June 30, ~~2023~~2024 F-1 Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~March~~September 3130, 2024 and 2023 (Unaudited) F-2 Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three ~~and nine~~ months ended ~~March~~September 3130, 2024 and 2023 (Unaudited) F-3 Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~March~~September 3130, 2024 and 2023 (Unaudited) F-45 Notes to Condensed Consolidated Financial Statements three ~~and nine~~ months ended ~~March~~September 3130, 2024 and 2023 (Unaudited) F-56 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 1 Item 3. Quantitative and Qualitative Disclosures About Market Risk 76 Item 4. Controls and Procedures 76 PART II – OTHER INFORMATION 87 Item 1. Legal Proceedings 87 Item 1A. Risk Factors 87 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 87 Item 3. Defaults Upon Senior Securities 87 Item 4. Mine Safety Disclosures 87 Item 5. Other Information 87 Item 6. Exhibits 87

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this report include forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "proposed," "intended," or "continue" or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully because they discuss our expectations about our future operating results or our future financial condition or state other "forward-looking" information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline, and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, and levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERITEC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2024			June 30, 2023
	September 30, 2024			June 30, 2024
		(Unaudited)
Assets
Current Assets:
Cash	$	~~153~~64,000		$	61118,000
Accounts receivable		106,000			78,000
Prepaid expenses and other current assets		5,000			6,000
Total Assets	$	~~168~~75,000		$	74132,000
Liabilities and Stockholders' Deficit
Current Liabilities:
Accounts payable	$	~~310~~325,000		$	~~289~~268,000
Accounts payable, related party		119,000			~~119~~109,000
Accrued expenses		6675,000			60,000
Customer deposits		3834,000			29,000
Convertible notes and notes payable ($539,000 and $525,000 in default)		586,000			570,000
Convertible notes and notes payable ($549,000 and $543,000 in default)		596,000			591,000
Convertible notes and notes payable, related parties ($249,000 and $242,000 in default)		8,213,000			7,322,000
Convertible notes and notes payable, related parties ($253,000 and $251,000 in default)		8,646,000			8,405,000
Total Current Liabilities		9,~~332~~795,000			89,~~389~~462,000
Deferred revenues		200,000			200,000
Deferred revenue		243,000			243,000
Contingent earnout liability		155,000			155,000
Total Liabilities		910,~~687~~193,000			89,~~744~~860,000
Commitments and contingencies		—			—
Stockholders' Deficit:
Convertible Preferred stock, par value $1.00; 10,000,000 shares authorized; 276,000 shares of Series H authorized; 1,000 shares issued and outstanding		1,000			1,000
Common Stock, par value $.01; 150,000,000 shares authorized; 39,988,007 and 39,988,007 shares issued and outstanding, respectively		400,000			400,000
Common Stock, par value $0.01; 150,000,000 shares authorized; 39,938,007 and 39,938,007 shares issued and outstanding, respectively		400,000			400,000
Common stock to be issued, 145,000 shares		12,000			12,000
Additional paid in capital		18,143,000			18,143,000
Accumulated deficit		(28,~~075~~674,000	)		(2728,~~226~~284,000	)
Total Stockholders' Deficit		(910,~~519~~118,000	)		(89,~~670~~728,000	)
Total Liabilities and Stockholders' Deficit	$	~~168~~75,000		$	74132,000
The accompanying notes are an integral part of these condensed consolidated financial statements.

~~F-1~~The accompanying notes are an integral part of these condensed consolidated financial statements.

~~VERITEC, INC. AND SUBSIDIARIES~~F-1

~~CONDENSED CONSOLIDATED~~VERITEC, ~~STATEMENTS~~ INC. OFAND ~~OPERATIONS~~SUBSIDIARIES

~~For~~CONDENSED ~~the~~CONSOLIDATED ~~THREE~~STATEMENTS ~~AND~~OF ~~NINE MONTHS~~OPERATIONS ~~ENDED MARCH 31, 2024 AND 2023~~(UNAUDITED)

(Unaudited)


	Three Months Ended
	September 30,
	2024			2023
Revenue:
Mobile banking technology revenue	$	21,000		$	21,000
Other revenue, management fee - related party		18,000			37,000
Total revenue		39,000			58,000

Costs and operating expenses:
Cost of revenue		57,000			42,000
Selling, general and administrative expenses (1)		223,000			191,000
Total costs and operating expenses		280,000			233,000

Loss from operations		(241,000	)		(175,000	)

Other expenses:
Interest expense (2)		(149,000	)		(131,000	)
Total other expenses		(149,000	)		(131,000	)

Net loss	$	(390,000	)	$	(306,000	)

Net loss per common share - basic and diluted		(0.01	)		(0.01	)

Weighted average number of common shares outstanding - basic and diluted		39,938,007			39,988,007

Expenses to related party:
(1) Includes expenses to related party	$	13,000		$	13,000
(2) Includes interest expense to related parties	$	140,000		$	126,000

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2024			2023			2024			2023
Revenue:
Mobile banking technology revenue	$	44,000		$	33,000		$	118,000		$	123,000
Other revenue, management fee - related party		92,000			54,000			183,000			172,000
Total revenue		136,000			87,000			301,000			295,000
Costs and operating expenses:
Cost of revenue		61,000			72,000			134,000			170,000
Selling, general and administrative expenses(1)		240,000			236,000			605,000			687,000
Total costs and operating expenses		301,000			308,000			739,000			857,000
Loss from operations		(165,000	)		(221,000	)		(438,000	)		(562,000	)
Other expenses:
Interest expense(2)		(143,000	)		(125,000	)		(411,000	)		(367,000	)
Total other expenses		(143,000	)		(125,000	)		(411,000	)		(367,000	)
Net loss	$	(308,000	)	$	(346,000	)	$	(849,000	)	$	(929,000	)
Net loss per common share - basic and diluted		(0.01	)		(0.01	)		(0.02	)		(0.02	)
Weighted average number of common shares outstanding - basic and diluted		39,988,007			39,988,007			39,988,007			39,988,007
Supplement
(1) Includes expenses to related party	$	13,000		$	12,000		$	39,000		$	38,000
(2) Includes interest expense to related parties	$	140,000		$	120,000		$	396,000		$	352,000

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

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~F-2

~~F-2~~VERITEC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (UNAUDITED)

VERITEC, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY


									Common		Additional
	Preferred Stock				Common Stock				Stock to		Paid-In		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Be Issued		Capital		Deficit			Deficit

Balance, June 30, 2024		1,000	$	1,000		39,938,007	$	400,000	$	12,000	$	18,143,000	$	(28,284,000	)	$	(9,728,000	)

Net loss		—		—		—		—		—		—		(390,000	)		(390,000	)

Balance, September 30, 2024 (unaudited)		1,000	$	1,000		39,938,007	$	400,000	$	12,000	$	18,143,000	$	(28,674,000	)	$	(10,118,000	)


Balance, June 30, 2023		1,000	$	1,000		39,938,007	$	400,000	$	12,000	$	18,143,000	$	(27,226,000	)	$	(8,670,000	)

Net loss		—		—		—		—		—		—		(306,000	)		(306,000	)

Balance, September 30, 2023 (unaudited)		1,000	$	1,000		39,938,007	$	400,000	$	12,000	$	18,143,000	$	(27,532,000	)	$	(8,976,000	)

	Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Common Stock to Be Issued		Additional Paid-In Capital		Accumulated Deficit			Stockholders’ Deficit
Balance, December 31, 2023 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(27,767,000	)	$	(9,211,000	)
Net loss for the period		—		—		—		—		—		—		(308,000	)		(308,000	)
Balance, March 31, 2024 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(28,075,000	)	$	(9,519,000	)
Balance, June 30, 2023		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(27,226,000	)	$	(8,670,000	)
Net loss for the period		—		—		—		—		—		—		(849,000	)		(849,000	)
Balance, March 31, 2024 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(28,075,000	)	$	(9,519,000	)
Balance, March 31, 2023 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(26,575,000	)	$	(8,019,000	)
Net loss for the period		—		—		—		—		—		—		(346,000	)		(346,000	)
Balance, March 31, 2023 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(26,921,000	)	$	(8,365,000	)
Balance, June 30, 2022		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(25,992,000	)	$	(7,436,000	)
Net loss for the period		—		—		—		—		—		—		(929,000	)		(929,000	)
Balance, March 31, 2023 (unaudited)		1,000	$	1,000		39,988,007	$	400,000	$	12,000	$	18,143,000	$	(26,921,000	)	$	(8,365,000	)

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

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~F-3

~~F-3~~VERITEC, INC. AND SUBSIDIARIES

~~VERITEC,~~CONDENSED ~~INC.~~CONSOLIDATED ~~AND~~STATEMENTS ~~SUBSIDIARIES~~OF CASH FLOWS (UNAUDITED)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended
	September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(390,000	)	$	(306,000	)
Adjustments to reconcile net loss to cash used in operating activities:
Interest accrued on notes payable		147,000			132,000
Changes in operating assets and liabilities:
Accounts receivable		2,000			1,000
Prepaid expenses and other current assets		1,000			2,000
Customer deposits		5,000			—
Accounts payable		58,000			14,000
Accounts payable - related party		10,000			13,000
Accrued expenses		15,000			7,000
Net cash used in operating activities		(152,000	)		(137,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party		98,000			129,000
Net cash provided by financing activities		98,000			129,000

NET DECREASE IN CASH		(54,000	)		(8,000	)
CASH AT BEGINNING OF PERIOD		118,000			61,000
CASH AT END OF PERIOD	$	64,000		$	53,000

Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	—		$	—

	Nine Months Ended
	March 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(849,000	)	$	(929,000	)
Adjustments to reconcile net loss to cash used in operating activities:
Interest accrued on notes payable		412,000			367,000
Changes in operating assets and liabilities:
Accounts receivable		(3,000	)		—
Prepaid expenses		1,000			2,000
Customer deposits		9,000			29,000
Deferred revenue		—			189,000
Accounts payable		21,000			29,000
Accounts payable - related party		—			7,000
Accrued expenses		6,000			13,000
Net cash used in operating activities		(403,000	)		(293,000	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - related party		528,000			355,000
Repayment of notes payable - related party		(33,000	)		—
Net cash provided by financing activities		495,000			355,000
NET INCREASE IN CASH		92,000			62,000
CASH AT BEGINNING OF PERIOD		61,000			66,000
CASH AT END OF PERIOD	$	153,000		$	128,000
Supplemental disclosures of cash flow information:
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	—		$	—

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

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~F-4

~~F-4~~VERITEC, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (Unaudited)

~~VERITEC, INC.~~NOTE ~~AND~~1 ~~SUBSIDIARIES~~– ~~NOTES~~OPERATIONS ~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE~~ AND ~~NINE~~SUMMARY ~~MONTHS~~OF ~~ENDED MARCH 31, 2024 AND 2023~~SIGNIFICANT ~~(Unaudited)~~ACCOUNTING POLICIES

~~NOTE 1~~The ~~– OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~Company

~~The~~ Veritec, Inc. (Veritec or the Company) was formed in the State of Nevada on September 8, 1982. Veritec is primarily engaged in the development, sales, and licensing of products and providing services related to its mobile banking solutions.

~~Veritec~~As a Cardholder Independent Sales Organization, Veritec ~~Inc~~is able to promote and sell Visa-branded card programs. ~~(Veritec~~As ora ~~the~~Third-Party ~~Company)~~Servicer, ~~was~~Veritec ~~formed~~provides inback-end ~~the~~cardholder ~~State~~transaction ofprocessing services ~~Nevada~~for Visa-branded card programs on ~~September~~behalf 8,of ~~1982~~its sponsoring bank. Veritec ishas ~~primarily~~a ~~engaged~~portfolio inof ~~the~~five ~~development,~~United States and eight ~~sales~~foreign patents. In addition, we have seven U.S. and ~~licensing~~twenty-eight offoreign ~~products~~pending patent applications. Veritec has had agreements with various banks in the past and ~~providing~~is ~~services~~currently ~~related~~seeking a bank to sponsor its ~~mobile~~Prepaid ~~banking~~Card ~~solutions~~programs.

~~As a~~On ~~Cardholder~~December ~~Independent~~31, ~~Sales Organization~~2015, ~~Veritec~~the isCompany ~~able~~sold toall ~~promote~~of ~~and~~its assets ~~sell~~of ~~Visa-branded~~its ~~card~~barcode ~~programs.~~technology, Aswhich awas ~~Third-Party~~comprised ~~Servicer, Veritec~~solely ~~provides~~of ~~back-end~~its ~~cardholder~~intellectual ~~transaction~~property, ~~processing~~to ~~services~~The ~~for~~Matthews ~~Visa-branded~~Group, ~~card~~a ~~programs~~related onparty ~~behalf~~(see Note of6). ~~its~~The ~~sponsoring~~Company ~~bank. Veritec~~subsequently ~~has~~entered into a ~~portfolio~~management ofservices ~~five~~agreement ~~United~~with ~~States and~~The ~~eight~~Matthews ~~foreign~~Group ~~patents.~~to Inmanage ~~addition,~~all wefacets ~~have~~of ~~seven~~the ~~U.S. and~~barcode technology ~~twenty-eight~~operations ~~foreign pending~~through ~~patent~~June ~~applications~~30, 2025. ~~Veritec~~The ~~has~~Company ~~had~~earned ~~agreements~~a ~~with~~fee ~~various~~of ~~banks~~35% inof ~~the~~all ~~past~~revenues ~~and~~billed isup ~~currently~~to ~~seeking~~September a30, ~~bank~~2024, toand ~~sponsor its~~recognizes ~~Prepaid~~management ~~Card~~fee ~~programs~~revenue as services are performed.

~~On December~~Basis ~~31, 2015, the Company sold all~~ of its assets of its barcode technology, which was comprised solely of its intellectual property, to The Matthews Group, a related party (see Note 6). The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through June 30, 2024. The Company earns a fee of 35% of all revenues billed up to March 31, 2024, and recognizes management fee revenue as services are performed. Presentation

~~Basis~~The unaudited condensed consolidated financial statements of ~~Presentation~~the Company for the three months ended September 30, 2024 and 2023 have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of June 30, 2024 was derived from the audited financial statements included in the Company’s financial statements as of and for the years ended June 30, 2024 and 2023 contained elsewhere in this filing. These financial statements should be read in conjunction with those financial statements.

The accompanying ~~unaudited~~ condensed consolidated financial statements ~~have~~include ~~been~~the ~~prepared~~accounts inof ~~accordance~~Veritec ~~with~~and ~~United~~its ~~States~~wholly ofowned ~~America~~subsidiaries, ~~generally~~Veritec ~~accepted accounting principles (“GAAP”)~~Financial ~~for~~Systems, ~~interim~~Inc., ~~financial~~Tangible ~~information~~Payment ~~and~~Systems, ~~with the instructions to Form 10-Q~~Inc. ~~Accordingly~~, ~~the~~and ~~condensed~~Public ~~consolidated~~Bell, ~~financial~~Inc. ~~statements do~~Inter-company ~~not~~transactions ~~include all of the information~~ and ~~footnotes~~balances ~~required~~were ~~for~~eliminated ~~complete~~in ~~financial statements~~consolidation.

~~In the opinion of management,~~Going all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending June 30, 2024. The balances as of June 30, 2023 are derived from the Company’s audited consolidated financial statements as of and for the year ended June 30, 2023, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 13, 2023. These financial statements should be read in conjunction with that report.Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which ~~include~~contemplates the ~~accounts~~realization of ~~Veritec~~assets and ~~its~~satisfaction ~~wholly-owned~~of ~~subsidiaries~~liabilities in the normal course of business. During the three months ended September 30, ~~Veritec~~2024, ~~Financial~~the ~~Systems~~Company incurred a net loss of $390,000 ~~Inc.~~and used cash in operating activities of $152,000, ~~Tangible~~and ~~Payment~~on ~~Systems~~September 30, 2024, ~~Inc~~the Company had a stockholders’ deficit of $10,118,000. In addition, ~~and~~as of September 30, 2024, the Company is delinquent ~~Public~~in ~~Bell~~payment of $802,000 ~~Inc.~~of ~~Inter-company~~its ~~transactions~~convertible notes and ~~balances~~notes ~~were~~payable. ~~eliminated~~These infactors, ~~consolidation~~among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued.

~~Going Concern~~F-5

~~The accompanying~~In ~~condensed~~addition, ~~consolidated financial statements have been prepared assuming~~ the Company’s independent ~~will~~registered ~~continue~~public asaccounting ~~a going concern~~firm, ~~which contemplates the realization of assets and satisfaction of liabilities~~ in ~~the~~its ~~normal~~report ~~course~~on ~~of business. During~~ the ~~nine~~Company’s ~~months~~June ~~ended March 31~~30, 2024, ~~the~~financial ~~Company incurred a net loss of $849~~statements,~~000 and~~ ~~used~~has ~~cash~~raised ~~in operating activities of $403,000,~~substantial ~~and~~doubt onabout ~~March 31, 2024,~~ the Company ~~had a stockholders~~’s ~~deficit~~ability ofto ~~$9,519,000. In~~continue ~~addition,~~ as ofa ~~March~~going ~~31,~~concern. ~~2024,~~The ~~the~~ Company’s isfinancial ~~delinquent~~statements indo ~~payment~~not ofinclude ~~$788,000 of~~any ~~its convertible notes and notes payable. These~~adjustments ~~factors,~~that ~~among~~might ~~others,~~be ~~raise~~necessary ~~substantial~~if ~~doubt~~the ~~about~~Company ~~our~~is ~~ability~~unable to continue as a going concern ~~within one year of the date that the financial statements are issued~~.

InThe ~~addition,~~Company ~~the~~believes ~~Company’s~~it ~~independent~~will ~~registered~~require ~~public~~additional ~~accounting~~funds ~~firm,~~to incontinue its ~~report~~operations onthrough ~~the~~fiscal ~~Company’s~~2024 ~~June~~and ~~30,~~to ~~2023~~continue ~~financial statements,~~to ~~has~~develop ~~raised~~its ~~substantial~~existing projects ~~doubt~~and ~~about~~plans ~~the~~to ~~Company’s~~raise ~~ability~~such tofunds ~~continue~~by asfinding aadditional ~~going~~investors ~~concern.~~to ~~The~~purchase the Company’s ~~financial~~securities, generating sufficient ~~statements~~sales dorevenue, ~~not~~implementing ~~include~~dramatic cost reductions or any ~~adjustments~~combination thereof. There is no assurance that ~~might~~the Company can be successful in raising such funds, generating the necessary sales, or reducing major costs. Further, if the Company is ~~unable~~successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to ~~continue~~existing asholders aof ~~going~~common ~~concern~~stock. The condensed consolidated financial statements do not include any adjustments that may result from this uncertainty.

~~F-5~~Use of Estimates

The ~~Company~~preparation ~~believes~~of itcondensed ~~will~~consolidated ~~require~~financial ~~additional~~statements ~~funds~~in toconformity ~~continue~~with ~~its~~accounting ~~operations~~principles ~~through~~generally ~~fiscal~~accepted ~~2024~~in ~~and~~the toUnited ~~continue~~States of toAmerica ~~develop~~requires ~~its~~management ~~existing projects~~to ~~and~~make ~~plans~~estimates toand ~~raise~~assumptions ~~such~~that ~~funds~~may byaffect ~~finding~~the ~~additional~~reported ~~investors~~amounts toof ~~purchase~~assets ~~the~~and ~~Company’s~~liabilities ~~securities,~~and ~~generating sufficient~~disclosure ~~sales~~of ~~revenue,~~contingent ~~implementing~~assets ~~dramatic~~and ~~cost~~liabilities ~~reductions~~at orthe ~~any~~date ~~combination~~of ~~thereof.~~the ~~There~~consolidated isfinancial nostatements ~~assurance~~and ~~that~~reported ~~the~~amounts ~~Company~~of ~~can~~revenues beand ~~successful~~expenses induring ~~raising such funds, generating~~ the ~~necessary~~reporting ~~sales, or reducing major costs~~period. ~~Further,~~Those ifestimates ~~the~~and ~~Company~~assumptions isinclude ~~successful~~estimates infor ~~raising~~reserves ~~such funds from sales~~ of ~~equity~~uncollectible ~~securities~~accounts, ~~the~~accruals ~~terms~~for ofpotential liabilities, ~~these~~assumptions ~~sales~~made ~~may~~in ~~cause~~valuing ~~significant dilution to existing holders of common~~ stock. ~~The condensed~~instruments ~~consolidated~~issued ~~financial~~for ~~statements~~services, doand ~~not~~valuation ~~include~~of ~~any~~deferred ~~adjustments~~tax ~~that~~assets. ~~may~~Actual ~~result~~results could differ from ~~this~~those ~~uncertainty~~estimates.

~~Use~~Revenue ~~of Estimates~~Recognition

~~The preparation of condensed consolidated financial statements~~Revenues infor ~~conformity with accounting principles generally accepted in~~ the ~~United~~Company ~~States~~are ofclassified ~~America~~into ~~requires~~ management tofee ~~make~~revenue ~~estimates~~ and ~~assumptions~~ ~~that~~mobile ~~may~~banking affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting periodtechnology. Those estimates and assumptions include estimates for reserves of uncollectible accounts, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and valuation of deferred tax assets. Actual results could differ from those estimates.

The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606"). The underlying principle ~~Recognition~~of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying the Company’s performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

~~Revenues for~~Mobile ~~the~~Banking ~~Company~~Technology ~~are classified into management fee revenue and mobile banking technology.~~Revenue

The Company, ~~recognizes~~as ~~revenue~~a inmerchant ~~accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards~~payment ~~Update~~processor ~~(“ASU”)~~and ~~No.~~a ~~2014-09~~distributor, ~~Revenue~~recognizes revenue from ~~Contracts~~transaction ~~with~~fees ~~Customers~~charged ~~(Topic 606) (“ASC 606"). The underlying principle of ASC 606 is~~ to ~~recognize~~cardholders ~~revenue~~for ~~to depict~~ the ~~transfer~~use of ~~goods~~its orissued ~~services~~mobile todebit ~~customers at the amount expected to be collected~~cards. ~~ASC~~ ~~606~~The ~~creates~~fees aare ~~five-step~~recognized ~~model~~on ~~that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with~~ a ~~customer,~~monthly ~~(2)~~basis ~~identifying~~after ~~the~~all ~~Company’s~~cardholder ~~performance~~transactions ~~obligations~~have inbeen ~~the~~summarized ~~contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations,~~ and ~~(5)~~ ~~recognizing~~reconciled ~~revenue~~with asthird ~~each~~party ~~performance obligation is satisfied~~processors. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.

FOther Revenue, Management Fee -6 Related Party

~~Mobile~~On September 30, 2015, the Company ~~Banking~~sold all of its assets of its Barcode Technology, ~~Revenue~~which was comprised solely of its intellectual property, to The Matthews Group (a related party, see Note 6). The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through September 30, 2024. The Company earned a fee of 35% of all revenues billed up to September 30, 2024. The Company recognizes management fee revenue as services are performed.

The Company, as a merchant payment processor and a distributor, recognizes revenue from transaction fees charged to cardholders for the use of its issued mobile debit cards. The fees are recognized on a monthly basis after all cardholder transactions have been summarized and reconciled with third party processors.F-6

~~Other Revenue,~~Disaggregation ~~Management~~of ~~Fee – Related Party~~Net Sales

~~On September 30, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property, to~~ The ~~Matthews~~following ~~Group~~table (ashows ~~related party, see Note 6). The~~ the Company’s ~~subsequently~~disaggregated ~~entered~~net ~~into~~sales aby ~~management~~customer ~~services~~type ~~agreement~~for ~~with The Matthews Group to manage all facets of~~ the ~~barcode~~three ~~technology~~months ~~operations~~ended ~~through~~September ~~June~~ 30, 2024. ~~The~~and ~~Company earned a fee of 35% of all revenues billed up to March 31, 2024. The Company recognizes management fee revenue as services are performed.~~2023:

Disaggregation of Net Sales


	Three months Ended
	2024		2023

Medical	$	9,000	$	16,000
Banking		6,000		—
Associations		3,000		3,000
Education		3,000		2,000
Other revenue, management fee related party		18,000		37,000
Total revenue	$	39,000	$	58,000

~~The~~During ~~following~~the ~~table~~three ~~shows~~months ~~the Company’s~~ended ~~disaggregated~~September ~~net~~30, ~~sales~~2024 byand ~~customer~~2023, ~~type~~all ~~for~~of the ~~three~~Company’s ~~and~~Mobile ~~nine~~banking ~~months~~technology ~~ended~~revenues ~~March~~were ~~31,~~earned ~~2024~~in ~~and~~the ~~2023:~~United States of America.

Disaggregate Net Sales
	Three Months Ended				Nine Months Ended
	2024		2023		2024		2023
Medical	$	35,000	$	12,000	$	89,000	$	34,000
Banking		3,000	`	15,000		11,000		71,000
Associations		3,000		3,000		9,000		9,000
Education		3,000		3,000		9,000		9,000
Other revenue, management fee related party		92,000		54,000		183,000		172,000
Total revenue	$	136,000	$	87,000	$	301,000	$	295,000

Other revenue, management fee - related party revenue was $18,000 and $37,000 for the three months ended September 30, 2024 and 2023, respectively, and realized from our management services agreement with The Matthews Group, a related party, which requires us to manage The Matthews Group’s barcode technology operations. The Matthews Group’s barcode technology customers are primarily manufacturing companies located in China.

~~During~~Fair ~~the~~Value ~~nine months ended March 31, 2024 and 2023, all~~ of ~~the~~ ~~Company’s~~Financial ~~Mobile banking technology revenues were earned in the United States of America.~~ Instruments

~~Other~~The ~~revenue,~~Company ~~management~~determines ~~fee~~the -fair ~~related~~value ~~party~~of ~~revenue~~its ~~was $92,000~~assets and ~~$183,000,~~liabilities ~~and~~based ~~$54,000 and~~on ~~$172,000,~~the exchange price in U.S. dollars that would be received for ~~the~~an ~~three~~asset ~~and~~or paid to transfer a liability (an exit ~~nine~~price) ~~months~~in ~~ended~~the ~~March~~principal ~~31,~~or ~~2024~~most ~~and~~advantageous ~~2023,~~market ~~respectively,~~for ~~and~~the ~~realized~~asset ~~from~~or ~~our~~liability ~~management~~in ~~services~~an ~~agreement~~orderly ~~with~~transaction ~~The~~between ~~Matthews~~market ~~Group,~~participants on athe ~~related~~measurement ~~party,~~date. ~~which~~Valuation ~~requires~~techniques usused to ~~manage~~measure ~~The~~fair ~~Matthews~~value ~~Group’s~~maximize ~~barcode~~the ~~technology~~use ~~operations~~of observable inputs and minimize the use of unobservable inputs. The ~~Matthews~~Company ~~Group’s~~uses ~~barcode technology~~a ~~customers~~fair value hierarchy with three levels of inputs, of which the first two are ~~primarily~~considered ~~manufacturing~~observable ~~companies~~and ~~located~~the last inunobservable, ~~China.~~to measure fair value:

~~F-7~~• Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

~~Fair~~The carrying amounts of financial instruments such ~~Value~~as cash, accounts receivable, and accounts payable and accrued expenses, approximate the related fair values due to the short-term maturities of ~~Financial~~these ~~Instruments~~instruments. The carrying values of convertible notes and notes payable approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates.

~~The Company~~Net ~~determines~~Loss ~~the~~per ~~fair~~Common value of its assets and liabilities based on the exchange price in U.S. dollars that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company uses a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value:Share

•Basic ~~Level~~earnings (loss) 1per —share ~~Quoted~~are ~~prices~~computed inby ~~active~~dividing ~~markets~~the ~~for~~net ~~identical~~income ~~assets~~(loss) orapplicable ~~liabilities~~to common stockholders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive.

• Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.F-7

•For ~~Level~~the 3periods ended —September ~~Unobservable~~30, ~~inputs~~2024 ~~that~~and ~~are~~2023, ~~supported~~the bycalculations ~~little~~of orbasic noand ~~market~~diluted ~~activity~~loss ~~and~~per ~~that~~share are ~~significant~~the tosame ~~the~~because ~~fair~~potential ~~value~~dilutive ofsecurities would ~~the~~have ~~assets~~an oranti-dilutive ~~liabilities~~effect.

~~The carrying~~For ~~amounts~~the ofperiods ~~financial~~ended ~~instruments~~September ~~such~~30, ~~as cash~~2024, ~~accounts~~and ~~receivable~~2023, the ~~and~~Company ~~accounts~~excluded ~~payable~~the ~~and~~outstanding ~~accrued~~securities ~~expenses~~summarized below, ~~approximate~~which entitle the ~~related~~ ~~fair~~holders ~~values~~thereof ~~due~~ to ~~the~~acquire ~~short-term~~shares ~~maturities~~ of ~~these~~common ~~instruments.~~stock, from ~~The~~our ~~carrying~~calculation ~~values~~ of ~~convertible~~earnings ~~notes~~per ~~and~~share, ~~notes~~as ~~payable approximate~~ their ~~fair~~effect ~~values~~would ~~due~~have tobeen ~~the fact that the interest rates on these obligations are based on prevailing market interest rates~~anti-dilutive.

Net Loss per Common Share

Schedule of anti-dilutive shares
	As of September 30,
	2024		2023
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		34,549,607		29,342,140
Options		550,000		900,000
Total		35,109,607		30,252,140

Basic earnings (loss) per share are computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year. Diluted earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation as their effect is antidilutive. Concentrations

~~For~~ During the ~~periods~~three months ended ~~March~~September 3130, 2024 ~~and 2023~~, the ~~calculations~~Company ofhad ~~basic~~one ~~and~~customer ~~diluted~~that ~~loss~~represented 46% ~~per~~(related ~~share~~party) ~~are~~of ~~the~~our ~~same~~revenues, ~~because~~and ~~potential~~one ~~dilutive~~customer ~~securities~~that ~~would~~represented 23% ~~have~~of anour ~~anti-dilutive effect~~revenues.

~~F-8~~During the three months ended September 30, 2023, the Company had one customer that represented 64% (related party) of our revenues. No other customer represented more than 10% of our revenues.

~~For~~At ~~the periods ended March 31~~September 30, 2024, ~~and 2023,~~ the ~~Company excluded~~company ~~the~~had ~~outstanding~~three ~~securities~~customers ~~summarized~~that ~~below~~represented 48%, ~~which~~16% ~~entitle~~and ~~the~~16% ~~holders~~of ~~thereof~~accounts toreceivable ~~acquire~~balance. ~~shares~~At ofJune 30, ~~common stock~~2024, ~~from~~the ~~our~~Company ~~calculation of~~had ~~earnings~~three ~~per~~customers ~~share~~that represented 52%, 15% asand 15% ~~their~~of ~~effect~~accounts ~~would have been anti-dilutive~~receivable.

Summary of securities excluded from EPS calculation
	As of March 31,
	2024		2023
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		32,061,338		26,827,207
Options		550,000		900,000
Total		32,621,388		27,737,207

Segments

~~Concentrations~~The Company operates in one segment, the mobile financial banking industry. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying condensed consolidated financial statements.

~~During~~Recently ~~the~~Issued ~~three~~Accounting months ended March 31, 2024, the Company had one customer that represented 68% (related party) of our revenues, and one customer that represented 26% of our revenues. During the three months ended March 31, 2023, the Company had three major customers, one that represented 14% of our revenue, one that represented 12% of our revenue, and one, a related party, that represented 62% of our revenue.Standards

NoIn ~~other~~November ~~customer~~2023, ~~represented~~the ~~more~~Financial Accounting ~~than~~Standards ~~10%~~Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a ~~our~~segment’s ~~revenues~~profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. The Company adopted ASU 2023-07 beginning July 1, 2024. The Company does not believe the impact of the new guidance and related codification improvements had a material impact to its financial position, results of operations and cash flows.

~~During~~Other ~~the~~recent ~~nine~~accounting ~~months~~pronouncements issued ~~ended~~by ~~March~~the 31FASB, ~~2024,~~including ~~the~~its ~~Company~~Emerging ~~had one~~Issues ~~customer~~Task ~~that represented 61% (related party) of our revenues~~Force, ~~and~~the ~~one~~American ~~customer~~Institute ~~that represented 30%~~ of ~~our~~Certified ~~revenues.~~Public ~~During the six months ended March 31~~Accountants, ~~2023,~~and the ~~Company had three major customers,~~Securities ~~one~~and ~~that~~Exchange ~~represented 24% of~~Commission ~~our~~did ~~revenue,~~not ~~one~~or ~~that~~are ~~represented 13% of~~not ~~our~~believed ~~revenue,~~by ~~and~~management ~~one,~~to have a ~~related~~material ~~party,~~impact ~~that~~on ~~represented 57% of~~the ~~our~~Company’s ~~revenues.~~present Noor ~~other~~future ~~customer represented more than 10% of our revenues~~financial statements.

~~At March 31, 2024 and June 30, 2023, one customer represented substantially all of the Company’s accounts receivable balance as of that date.~~F-8

~~Segments~~NOTE 2 – CONTINGENT EARNOUT LIABILITY

~~The Company~~On ~~operates~~December in31, ~~one segment~~2014, the ~~mobile~~Company ~~financial~~acquired ~~banking~~certain assets ~~industry.~~and Inliabilities ~~accordance~~of ~~with~~Tangible ~~the~~Payments ~~“Segment~~LLC. ~~Reporting”~~A ~~Topic~~ portion of the ~~ASC,~~purchase ~~the~~price ~~Company’s~~for ~~chief~~Tangible ~~operating~~Payments ~~decision~~LLC ~~maker~~was ~~has~~an ~~been~~earnout ~~identified~~payment asof ~~the Chief Executive Officer and President~~$155, ~~who~~000. ~~reviews~~The ~~operating~~earnout ~~results~~payment ~~to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which~~ is ~~based~~payable on a ~~management~~monthly ~~approach~~basis tofrom ~~segment~~the ~~reporting,~~net ~~establishes~~profits ~~requirements~~derived tofrom ~~report~~the ~~selected~~acquired ~~segment~~assets ~~information~~commencing ~~quarterly and~~three tomonths ~~report~~after the ~~annually~~closing. ~~entity-wide~~The ~~disclosures~~earnout ~~about~~payment ~~products~~is ~~and~~accelerated ~~services, major customers,~~ and the ~~countries~~balance inof ~~which~~ the ~~entity~~earnout ~~holds material~~payment ~~assets~~shall ~~and~~be ~~reports~~due ~~revenue.~~in ~~All~~full ~~material~~at ~~operating~~such ~~units~~time ~~qualify~~as ~~for~~the ~~aggregation~~Company receives ~~under~~equity ~~“Segment~~investments ~~Reporting”~~aggregating ~~due~~$1,300,000. ~~to their~~As ~~similar~~of ~~customer~~September ~~base~~30, ~~and~~2024, ~~similarities~~there ~~in:~~was ~~economic~~no ~~characteristics;~~net ~~nature~~profit ofderived ~~products~~from ~~and~~the ~~services;~~acquired ~~and procurement~~assets, ~~manufacturing~~ and ~~distribution processes. Since~~ the Company ~~operates~~had innot ~~one~~yet ~~segment,~~received ~~all~~the ~~financial~~required ~~information~~equity ~~required~~investments. byAccordingly, ~~“Segment~~no ~~Reporting” can~~payments bewere ~~found~~made inon the ~~accompanying condensed consolidated financial statements~~earnout.

~~Recently Issued~~NOTE ~~Accounting~~3 ~~Standards~~– CONVERTIBLE NOTES AND NOTES PAYABLE

InConvertible ~~November~~notes 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and ~~included in each reported measure of a segment’s profit or loss. The update~~ ~~also~~notes requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. The Company adopted ASU 2023-07 beginning January 1, 2024. The Company does not believe the impact of the new guidance and related codification improvements had a material impact to its financial position, results of operations and cash flows.payable

~~Other recent~~Convertible ~~accounting~~notes ~~pronouncements~~and ~~issued~~notes payable byinclude ~~the~~principal ~~FASB,~~and ~~including~~accrued ~~its~~interest ~~Emerging~~and ~~Issues~~consist ~~Task~~of ~~Force,~~ the ~~American~~following ~~Institute~~at ofSeptember ~~Certified Public Accountants~~30, ~~and~~2024 ~~the Securities~~ and ~~Exchange~~June ~~Commission~~30, ~~did not or are not believed by management to have a material impact on the Company’s present or future financial statements.~~2024:

F-9


	September 30, 2024		June 30, 2024
(a) Unsecured convertible notes ($22,000 and $21,000 in default)	$	69,000	$	69,000
(b) Notes payable (in default)		497,000		492,000
(c) Notes payable (in default)		30,000		30,000
Total notes payable - third parties	$	596,000	$	591,000

~~NOTE~~ (a) 2The –notes ~~CONTINGENT~~are ~~EARNOUT~~unsecured, ~~LIABILITY~~convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand.

~~On December~~At 31June 30, ~~2014~~2024, ~~the~~convertible notes ~~Company~~totaled ~~acquired certain assets and liabilities of the Tangible Payments LLC~~$69,000. ADuring ~~portion of~~ the ~~purchase~~three ~~price for~~months ~~Tangible~~ended ~~Payments~~September ~~LLC~~30, ~~was~~2024, aninterest ~~earnout~~of ~~payment~~less ofthan $~~155~~1,000~~. The~~ ~~earnout~~was ~~payment~~added isto ~~payable on a monthly basis from~~ the ~~net~~principal ~~profits~~resulting in ~~derived~~a ~~from~~balance ~~the~~owed ~~acquired~~of ~~assets~~$69,000 ~~commencing~~at ~~three~~September ~~months~~30, ~~after the closing~~2024. ~~The~~On ~~earnout~~September ~~payment~~30, is2024, ~~accelerated~~$22,000 ~~and the balance~~ of the ~~earnout~~convertible ~~payment~~notes ~~shall~~were ~~be due~~ in ~~full~~default atand ~~such time as the Company~~convertible ~~receives~~at ~~equity~~a ~~investments~~conversion ~~aggregating~~price of $~~1,300,000~~0. As30 ofper ~~March~~share ~~31,~~into ~~2024~~71,872 ~~there~~shares ~~was~~of nothe ~~net~~Company’s ~~profit~~common ~~derived~~stock. ~~from~~The ~~the~~balance ~~acquired~~of ~~assets~~$47,000 ~~and~~is ~~the~~due ~~Company~~on ~~had~~demand and ~~not~~convertible ~~yet~~at ~~received~~a ~~the~~conversion ~~required~~price ~~equity investments~~of $0.08 ~~Accordingly,~~per noshare ~~payments~~into ~~were~~590,005 ~~made~~shares onof the ~~earnout~~Company’s common stock.

~~NOTE~~(b) The notes are either secured 3by –the ~~CONVERTIBLE~~Company’s ~~NOTES~~intellectual ~~AND~~property ~~NOTES~~or ~~PAYABLE~~unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default.

~~Convertible~~At June 30, 2024, the notes totaled $492,000. During the three months ended September 30, 2024, interest of $5,000 was added to principal resulting in a balance owed of $497,000 at September 30, 2024. At September 30, 2024, $447,000 of notes are secured by the Company’s intellectual property and $50,000 of notes ~~payable~~are unsecured.

~~Convertible notes~~(c) ~~and~~The notes ~~payable~~are ~~includes principal~~ unsecured and ~~accrued~~bear interest ~~and~~of ~~consist~~4% ofper ~~the~~annum ~~following~~and atwere due on March 3117, ~~2024~~2020 and ~~June~~are ~~30,~~in ~~2023:~~default.

Convertible notes and notes payable - in default
	March 31, 2024		June 30, 2023
(a) Unsecured convertible notes ($21,000 and $21,000 in default)	$	68,000	$	66,000
(b) Notes payable (in default)		488,000		475,000
(c) Notes payable (in default)		30,000		29,000
Total notes payable - third parties	$	586,000	$	570,000

At June 30, 2024 the notes totaled $30,000. During the three months ended September 30, 2024, interest of less than $1,000 was added to the principal resulting in a balance owed of $30,000 at September 30, 2024.

F-109

~~(a) The~~Convertible notes ~~are unsecured, convertible into common stock at amounts ranging from $0.08~~and tonotes ~~$0.30 per~~payable-related ~~share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand.~~parties

~~At June~~Convertible ~~30,~~and ~~2023, convertible~~ notes ~~totaled $66,000.~~payable-related ~~During~~parties ~~the~~include ~~nine~~principal ~~months~~and ~~ended~~accrued ~~March~~interest ~~31,~~and ~~2024,~~consist ~~interest~~ of ~~$2,000 was added to~~ the ~~principal~~following ~~resulting in a balance owed of $68,000~~ at ~~March~~September 3130, 2024. ~~On March 31, 2024, $21,000 of the convertible notes were in default~~ and ~~convertible~~ atJune ~~a conversion price of $0.~~30 ~~per share into 71~~,~~286 shares~~ ~~of the Company’s common stock. The balance of $47,000 is due on demand and convertible at a conversion price of $0.08 per share into 580,875 shares of the Company’s common stock.~~ 2024:

(b) The notes are either secured by the Company’s intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default.


	September 30, 2024		June 30, 2024
(a) Convertible notes-The Matthews Group	$	2,113,000	$	2,084,000
(b) Notes payable-The Matthews Group		5,963,000		5,821,000
(c) Convertible notes-other related parties ($253,000 and $251,000 in default)		569,000		500,000
Total notes-related parties	$	8,645,000	$	8,405,000

~~At June~~(a) ~~30,~~The ~~2023, the~~ notes ~~totaled~~are ~~$475~~unsecured,~~000.~~ ~~During~~convertible ~~the~~into ~~nine~~common ~~months~~stock ~~ended~~at ~~March~~$0.08 ~~31,~~per ~~2024~~share, bear interest ~~of $13,000 was added to principal resulting in a balance owed of $488,000~~ at ~~March~~rates ~~31,~~ranging ~~2024.~~from At8% ~~March~~to ~~31,~~10% ~~2024,~~per ~~$439,000 of~~annum ~~notes~~and are ~~secured~~due byon ~~the Company’s intellectual property and $49,000 of notes are unsecured~~demand.

The Matthews Group is a related party (csee Note 6) ~~The~~ ~~notes~~and ~~are~~is ~~unsecured~~owned 50% by Ms. Van Tran, the Company’s CEO, and ~~bear~~50% ~~interest~~by Larry Johanns, a significant shareholder of 4%the ~~per~~Company. ~~annum~~At ~~and~~June ~~were~~30, 2024, convertible notes due onto ~~March~~The 17Matthews Group totaled $2,084,000. During ~~2020~~the ~~and~~three ~~are~~months ended September 30, 2024, $29,000 of interest was added to principal, resulting in ~~default~~a balance payable at September 30, 2024 of $2,113,000. At September 30, 2024, the notes are convertible at a conversion price of $0.08 per share into 26,411,730 shares of the Company’s common stock.

~~At June~~(b) ~~30,~~The ~~2023, the~~ notes ~~totaled~~are ~~$29~~unsecured,~~000.~~ ~~During~~accrue ~~the~~interest ~~nine~~at ~~months~~10% ~~ended~~per ~~March 31~~annum, ~~2024,~~and ~~interest~~are ofdue ~~$1,000 was~~on ~~added~~demand. toThe ~~the~~notes ~~principal~~were ~~resulting~~issued inrelating to a ~~balance owed~~management ofservices ~~$30,000~~agreement atwith The Matthews ~~March~~Group 31(see Note 6) dated September 30, ~~2024~~2015.

~~Convertible~~ At June 30, 2024, notes ~~and~~due to The Matthews Group totaled $5,821,000. During the three months ended September 30, 2024, $38,000 of notes payable~~-related~~ ~~parties~~were issued and interest of $104,000 was added to principal, resulting in a balance owed of $5,963,000 at September 30, 2024.

~~Convertible and~~(c) The notes ~~payable-related~~are ~~parties~~due ~~include~~to ~~principal~~a current and ~~accrued~~a ~~interest~~former ~~and~~director, ~~consist~~are ofunsecured, ~~the~~convertible ~~following~~into common stock at ~~March~~per ~~31,~~share ~~2024~~amounts ~~and~~ranging ~~June~~from $0.04 to $0.30, and bear interest ~~2023:~~at rates ranging from 8% to 10% per annum.

Convertible notes and notes payable- related party
	March 31, 2024		June 30, 2023
(a) Convertible notes - The Matthews Group	$	2,055,000	$	1,970,000
(b) Notes payable - The Matthews Group		5,664,000		4,988,000
(c) Convertible notes-other related parties ($249,000 and $242,000 in default)		494,000		364,000
Total notes-related parties	$	8,213,000	$	7,322,000

At June 30, 2024, convertible notes due to other related parties totaled $500,000. During the three months ended September 30, 2024, $60,000 of notes payable were issued and interest of $9,000 was added to principal, resulting in a balance owed of $569,000 at September 30, 2024. At September 30, 2024, $253,000 of the notes were due in 2010 and are in default, and $316,000 is due on demand. At September 30, 2024, the total principal and accrued interest balance due to other related parties of $569,000 are convertible into approximately 7,476,000 shares of the company's common stock based on conversion prices ranging from $0.04 to $0.30 per share.

~~(a) The~~NOTE ~~notes~~4 ~~are~~- ~~unsecured,~~STOCKHOLDERS’ ~~convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum and are due on demand.~~DEFICIT

~~The Matthews~~Common ~~Group~~Stock ~~is a related party (see Note 6) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a significant shareholder of the Company. At June 30, 2023, convertible notes due~~ to ~~The~~be Matthews Group totaled $1,970,000. During the nine months ended March 31, 2024, $85,000 of interest was added to principal, resulting in a balance payable at March 31, 2024 of $2,055,000. At March 31, 2024, the notes are convertible at a conversion price of $0.08 per share into 25,695,768 shares of the Company’s common stock.Issued

~~(b) The~~At ~~notes~~September ~~are unsecured~~30, ~~accrue~~2024 ~~interest~~and atJune ~~10% per~~30, ~~annum~~2024, ~~and~~145,000 ~~are~~shares of ~~due~~common onstock ~~demand.~~with ~~The~~an ~~notes~~aggregate ~~were~~value of $12,000 have not been issued ~~relating~~and toare areflected ~~management~~as ~~services~~common ~~agreement~~stock ~~with~~to ~~The~~be ~~Matthews~~issued ~~Group~~in ~~(see~~the ~~Note~~accompanying 6)condensed ~~dated~~consolidated ~~September~~financial ~~30, 2015~~statements.

At June 30, 2023, notes due to The Matthews Group totaled $4,988,000. During the nine months ended March 31, 2024, $384,000 of notes payable were issued and interest of $292,000 was added to principal, resulting in a balance owed of $5,664,000 at March 31, 2024.F-10

~~(c) The~~ NOTE ~~notes~~5 ~~are~~– ~~due~~STOCK toOPTIONS ~~a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.04 to $0.30, and bear interest at rates ranging from 8% to 10% per annum.~~

AtA ~~June~~summary ~~30, 2023, convertible notes due to other related parties totaled $364,000. During the nine months ended March 31, 2024, $145,000~~ of ~~notes~~stock ~~payable~~options ~~were~~as ~~issued, $33,000~~ of ~~notes~~ ~~were~~September ~~repaid~~30, ~~and interest of $18,000 was added to principal, resulting in a balance owed of $494,000 at March 31,~~ 2024~~. At March 31, 2024, $249,000~~ ~~of the notes were due in 2010 and are in default, and $245,000~~ is ~~due~~as on demand. At March 31, 2024, $249,000 of the notes are convertible at a conversion price of $0.30 per share into 829,581 shares of the Company’s common stock, $95,000 of the notes are convertible at a conversion price of $0.09 per share into 1,111,597 shares of the Company’s common stock, and $150,000 of the notes are convertible at a conversion price of $0.04 per share into 3,772,281 shares of the Company’s common stock.follows:

F-11

Schedule of stock options
		Number of Shares		Weighted - Average Exercise Price
	Outstanding at June 30, 2024		550,000	$	0.03
	Granted		—		—
	Forfeited		—		—
	Outstanding at September 30, 2024		550,000		0.03
	Exercisable at September 30, 2024		550,000	$	0.03

~~NOTE~~As of September 30, 2024, the 4Company -had ~~STOCKHOLDERS’~~no ~~DEFICIT~~outstanding unvested options with future compensation costs. The outstanding and exercisable stock options had no intrinsic value on September 30, 2024.

~~Common~~Additional information regarding ~~Stock~~options tooutstanding beas ~~Issued~~of September 30, 2024, is as follows:

At March 31, 2024 and June 30, 2023, 145,000 shares of common stock with an aggregate value of $12,000 have not been issued and are reflected as common stock to be issued in the accompanying condensed consolidated financial statements.


Options Outstanding and Exercisable at September 30, 2024
Range of Exercise Price		Number of Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	0.03		550,000		0.25	$	0.03

NOTE 5 6 – RELATED ~~STOCK~~PARTY ~~OPTIONS~~TRANSACTIONS

AThe Matthews Group is owned ~~summary~~50% ofby ~~stock~~Ms. ~~options~~Tran, asthe ofCompany’s ~~March~~CEO/Executive 31Chair and a director, ~~2024~~and is50% asby ~~follows:~~Larry Johanns, a significant stockholder of the Company. The Company has relied on The Matthews Group for funding (see Note 3).

Summary of Stock Options
	Number of Shares			Weighted Average Exercise Price
Outstanding at June 30, 2023		900,000		$	0.03
Granted		—			—
Forfeited		(350,000	)	$	(0.03	)
Outstanding at March 31, 2024		550,000		$	0.03
Exercisable at March 31, 2024		550,000		$	0.03

Management Services Agreement and Related Notes Payable with Related Party

AsThe Company’s Barcode Technology was invented by the founders of ~~March~~Veritec 31as a product identification system for identification and tracking of parts, ~~2024~~components and products mostly in the liquid crystal display (LCD) markets and for secure identification documents, financial cards, medical records, and other high-security applications. On September 30, 2015, the Company ~~had~~sold ~~no outstanding~~all ~~unvested~~of ~~options~~its ~~with~~assets ~~future~~of ~~compensation~~its Barcode Technology comprised solely ~~costs~~of its intellectual property to The Matthews Group. The ~~outstanding~~Company ~~and~~then ~~exercisable~~entered ~~stock~~into ~~options~~a ~~had~~management noservices agreement with The Matthews Group ~~intrinsic~~to ~~value~~manage all facets of the barcode technology operations, on ~~March~~behalf 31of The Matthews Group, through September 30, 2024. The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations.

~~Additional~~In consideration of the services ~~information~~provided ~~regarding~~by ~~options~~the ~~outstanding~~Company asto The Matthews Group, the Company earned a fee of ~~March~~35% 31of all revenues up to September 30, 2024, isfrom asthe ~~follows:~~barcode technology operations. During the three months ended September 30, 2024 and 2023, the Company recorded management fee revenue related to this agreement of $18,000 and $37,000, respectively,

Additional information regarding outstanding options
Options Outstanding and Exercisable at March 31, 2024
Range of Exercise Price		Number of Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	0.03		550,000		0.73	$	0.03

Additionally, pursuant to the management services agreement, all cash flow (all revenues collected less direct costs paid) of the barcode technology operations is retained by the Company and reflected as proceeds from unsecured notes payable due The Matthews Group. During the three months ended September 30, 2024, net cash flow loans of $38,000 were made to the Company at 10% interest per annum and due on demand. At September 30, 2024, cash flow loans of $5,963,000 are due to The Matthews Group (see Note 3).

~~NOTE 6 – RELATED PARTY TRANSACTIONS~~F-11

~~The Matthews~~Advances ~~Group~~from ~~is owned 50%~~Related byParties ~~Ms. Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant stockholder of the Company. The Company has relied on The Matthews Group for funding (see Note 3).~~

~~Management~~From time to time, Ms. Tran, ~~Services~~the ~~Agreement~~Company’s CEO/Executive Chair, provides advances to finance the Company’s working capital requirements. As of September 30, 2024 and ~~Related~~June ~~Notes~~30, ~~Payable~~2024, ~~with~~total ~~Related~~advances ~~Party~~to Ms. Tran amounted to $119,000 and $109,000, respectively, and have been presented as accounts payable, related party on the accompanying consolidated Balance Sheets. The advances are unsecured, non-interest bearing, and due on demand.

~~The Company’s~~Other ~~Barcode~~Transactions Technology was invented by the founders of Veritec as a product identification system for identification and tracking of parts, components and products mostly in the liquid crystal display (LCD) markets and for secure identification documents, financial cards, medical records, and other high-security applications. On September 30, 2015, the Company sold all of its assets of its Barcode Technology comprised solely of its intellectual property to The Matthews Group. The Company then entered into a management services agreement with ~~The Matthews Group to manage all facets of the barcode technology operations, on behalf of The Matthews Group,~~ ~~through~~Related ~~June~~Parties ~~30, 2024. The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations.~~

~~F-12~~The Company leases its office facilities from Ms. Tran, the Company’s CEO/Executive Chair. For the three months ended September 30, 2024 and 2023, lease payments to Ms. Tran totaled $13,000, respectively.

~~In consideration~~NOTE of7 ~~the services provided by the Company to The Matthews Group, the Company earned a fee of 35%~~– AGREEMENTS ofWITH all revenues up to June 30, 2024, from the barcode technology operations. During the three and nine months ended March 31, 2024 and 2023, the Company recorded management fee revenue related to this agreement of $92,000 and $183,000 and $54,000 and $175,000, respectively.NUGEN

~~Additionally,~~On ~~pursuant~~July to4, 2022, the ~~management~~Company ~~services~~entered ~~agreement,~~a ~~all~~Memorandum ~~cash~~of ~~flow~~Understanding (~~all~~the ~~revenues collected less direct costs paid~~“MOU”) offor the ~~barcode~~purpose ~~technology operations~~of isforming ~~retained~~a bystrategic partnership between the Company and ~~reflected~~Nugen asUniverse, ~~proceeds~~LLC ~~from~~(“Nugen”), ~~unsecured~~a ~~notes~~corporation ~~payable~~located ~~due~~in ~~The~~Wrightsville ~~Matthews~~Beach, ~~Group~~North Carolina. Nugen seeks ~~During~~ the ~~nine months~~Company ~~ended~~to ~~March~~modify, 31create, ~~2024~~or ~~and~~build ~~2023,~~a ~~cash~~“private ~~flow~~label” ~~loans~~system offor ~~$383~~Nugen,~~000~~ with an initial interest in the Company’s blinxPay technology and ~~$255,000, respectively,~~Bio-ID ~~were~~verification ~~made~~system. Nugen topaid the Company $50,000 at ~~10% interest~~the ~~per~~date ~~annum~~of ~~and~~the ~~due~~MOU onsigning ~~demand.~~and Atduring the ~~March~~period ended December 31, ~~2024~~2022, ~~cash~~the ~~flow~~Company ~~loans~~completed ofits performance obligations, and recorded the $550,~~664,~~000 payment as Mobile ~~are~~banking ~~due~~technology revenue during the period then ended. Nugen further agreed to ~~The~~pay ~~Matthews~~the ~~Group~~Company ~~(see~~a 5% ~~Note~~ongoing 3)royalty for licensing the Company’s blinxPay technology and Bio-ID verification system. As of September 30, 2024, no royalties have been realized under the MOU.

~~Advances~~On October 10, 2022, the Company entered into a License and Distributor Agreement (“License Agreement”) with Nugen. The License Agreement became effective on receipt of $200,000 in December 2022 and extends through August 31, 2027. The License Agreement grants Nugen a Worldwide license and distribution for the Company’s blinxPay Close-Loop Virtual Wallet and blinxPay Open-Loop Visa Debit and all hardware products of the Company. Per the terms of the License Agreement, Nugen agrees to pay the Company a one-time license payment of $1,000,000 for the right to market the Company’s products noted above, of which $200,000 was received by the Company in December 2022. The initial $200,000 has been recorded as deferred revenue in the Consolidated Balance Sheet. The deferred revenue balance of $200,000 at September 30, 2024, will begin being amortized to Mobile banking technology revenue starting once the Company has met its performance obligations under the License Agreement through the remaining term of the License Agreement, which expires on August 31, 2027. The remaining balance of $800,000 is scheduled to be paid as follows: $100,000 when the Company’s identifies a domestic sponsor bank, $350,000 to integrate the Company’s blinxPay software platform, and interface blinxPay with a sponsor foreign bank, and $350,000 on the completion of the final stage of testing, installation, and launch. In addition to the one-time license payment, Nugen agrees to pay a minimum monthly support fee plus 5% royalty from ~~Related~~all ~~Parties~~sales of products noted above. As of September 30, 2024, no royalty related revenues have been realized under the License Agreement.

~~From time~~NOTE to8 ~~time,~~– LICENSE ~~Ms.~~AGREEMENT ~~Tran,~~WITH the Company’s CEO/Executive Chair, provides advances to finance the Company’s working capital requirements. As of March 31, 2024 and June 30, 2023, total advances from Ms. Tran amounted to $119,000 and $119,000, respectively, and have been presented as accounts payable, related party on the accompanying Consolidated Balance Sheets. The advances are unsecured, non-interest bearing, and due on demand.ENCORE

~~Other~~On May 1, 2024, the Company ~~Transactions~~entered into an exclusive distribution agreement with ~~Related~~Encore ~~Parties~~Sales and Marketing LLC (“Encore”) under which the Company granted Encore exclusive rights to sell and market the Company’s products to the gaming industry (as defined in the agreement) and on a non-exclusive basis to all other industries, through April 2029. In return, the Company will receive $200,000 from the customer, a payment of $150,000 and an additional $50,000 within the first 120 days of the agreement. Per the agreement, the Company will also receive a minimum payment of $60,000 per month in the first year of the agreement, commencing after 120 days, $120,000 per month in the second year and $180,000 per month in the third year. All subsequent years payments will have a minimum of 10% per year growth.

~~The Company~~As ~~leases~~of ~~its~~June ~~office~~30, ~~facilities from Ms. Tran~~2024, the Company’s had ~~CEO/Executive~~received ~~Chair.~~a ~~For~~$150,000 payment from the ~~Three~~customer and ~~Nine~~recognized ~~months~~it as revenue during the year ended ~~March 31~~June 30, 2024,. ~~lease~~No other payments have tobeen ~~Ms.~~received ~~Tran~~by ~~totaled~~the ~~$13,000 and $39,000, respectively~~Company.

~~NOTE 7 – AGREEMENTS WITH NUGEN~~F-12

OnNOTE ~~July~~9 4,– ~~2022,~~LEGAL the Company entered a Memorandum of Understanding (the “MOU”) for the purpose of forming a strategic partnership between the Company and Nugen Universe, LLC (“Nugen”), a corporation located in Wrightsville Beach, North Carolina. Nugen seeks the Company to modify, create, or build a “private label” system for Nugen, with an initial interest in the Company’s blinxPay technology and Bio-ID verification system. Nugen paid the Company $50,000 at the date of the MOU signing and during the period ended March 31, 2023, the Company completed its performance obligations, and recorded the $50,000 payment as Mobile banking technology revenue during the period then ended. Nugen further agreed to pay the Company a 5% ongoing royalty for licensing the Company’s blinxPay technology and Bio-ID verification system. As of March 31, 2024, no royalties have been realized under the MOU.PROCEEDINGS

On ~~October~~September 1021, ~~2022~~2016, the Company ~~entered~~ entered into a ~~License~~settlement ~~and~~agreement ~~Distributor Agreement (“License Agreement”)~~ with ~~Nugen.~~an ~~The~~individual ~~License~~who ~~Agreement~~was ~~became~~a ~~effective~~former onofficer ~~receipt~~ of ~~$200,000~~the Company. inThe ~~December~~individual ~~2022~~in ~~and~~prior ~~extends~~years was ~~through~~also ~~August 31~~issued 500, ~~2027.~~000 ~~The~~shares ~~License~~of ~~Agreement~~common ~~grants~~stock ~~Nugen~~for aservices. The ~~Worldwide~~Company ~~license~~alleged ~~and~~that ~~distribution~~the ~~for~~individual used the Company’'s ~~blinxPay~~intellectual ~~Close-Loop~~property ~~Virtual~~without ~~Wallet~~approval. ~~and~~Under ~~blinxPay Open-Loop Visa Debit and all hardware products of~~ the ~~Company. Per the~~ terms of the ~~License Agreement~~settlement agreement, ~~Nugen~~the ~~agrees~~individual agreed to ~~pay~~relinquish ~~the Company~~ a ~~one-time~~convertible ~~license~~note ~~payment of $1,000,000 for the right to market the Company’s~~payable ~~products~~and ~~noted~~unpaid ~~above,~~interest ofaggregating ~~which~~ $~~200~~365,000 ~~was received~~and ~~by the Company in December 2022. The initial $200~~return 500,000 ~~has been~~shares ~~recorded~~of ascommon ~~deferred~~stock ~~revenue~~previously inissued ~~the~~to ~~Consolidated Balance Sheet~~him. In ~~The deferred revenue balance of $200~~turn,~~000~~ atthe ~~March~~Company ~~31,~~agreed ~~2024, will begin being amortized~~ to ~~Mobile~~release ~~banking~~and ~~technology~~discharge ~~revenue starting once~~ the ~~Company~~individual ~~has~~against ~~met~~all ~~its~~claims ~~performance obligations~~arising ~~under~~on ~~the~~or ~~License~~prior ~~Agreement~~to ~~through~~ the ~~remaining~~date ~~term~~ of the ~~License~~settlement ~~Agreement, which expires on August 31, 2027~~agreement. ~~The remaining~~ ~~balance~~As of ~~$800~~September 30,~~000 is~~ ~~scheduled to be paid as follows: $100~~2024,~~000 when~~ the ~~Company’s identifies a domestic sponsor bank~~ 500, ~~$350,~~000 toshares ~~integrate~~have ~~the~~not ~~Company’s~~been ~~blinxPay~~relinquished. ~~software~~When ~~platform, and interface blinxPay with a sponsor foreign bank, and $350,000 on~~ the ~~completion~~Company ofreceives the ~~final stage of testing~~shares, ~~installation,~~it ~~and~~will ~~launch. In addition to the one-time license payment, Nugen agrees to~~record ~~pay~~ a ~~minimum~~cancellation ~~monthly support fee plus 5% royalty from all sales~~ of ~~products noted above~~shares. ~~As of March 31, 2024, no royalty related revenues have been realized under the License Agreement.~~

NOTE 8 10 – ~~LEGAL~~COMMITMENTS ~~PROCEEDINGS~~AND CONTINGENCIES

On ~~September~~March 2126, ~~2016~~2022, ~~the~~as ~~Company~~amended ~~entered~~on ~~into~~May a10, ~~settlement~~2022, ~~agreement~~the ~~with~~Company anand ~~individual~~Es ~~who~~Solo ~~was~~Holdings aLtd ~~former~~(“Es ~~officer~~Solo”), ofan ~~the~~England ~~Company. The~~& ~~individual~~Wales inlimited liability ~~prior~~company, ~~years~~entered ~~was~~into ~~also~~a ~~issued~~Prepaid ~~500,000~~Card ~~shares~~Client ofProgram ~~common~~Management ~~stock~~Agreement ~~for~~(“Management ~~services~~Agreement”). ~~The~~Es ~~Company~~Solo develops, ~~alleged~~markets, ~~that~~and ~~the~~operates ~~individual used~~prepaid ~~the~~card ~~Company’s~~programs ~~intellectual~~through ~~property~~its ~~without~~affiliations ~~approval. Under~~with ~~the~~issuing ~~terms~~banks, ofand the ~~settlement~~Company ~~agreement,~~desires ~~the~~to ~~individual~~have ~~agreed~~Es toSolo ~~relinquish~~develop a ~~convertible~~prepaid ~~note~~card ~~payable~~program ~~and~~to ~~unpaid~~be ~~interest~~marketed ~~aggregating~~by ~~$365,000 and~~the ~~return~~Company ~~500,000 shares~~for ofcard ~~common~~issuing ~~stock~~purposes, ~~previously~~pursuant ~~issued~~ to ~~him. In~~the ~~turn,~~terms of the ~~Company~~Management Agreement. Es Solo agreed to ~~release~~pay ~~and~~the ~~discharge~~Company ~~the~~$10,000 as ~~individual~~a ~~against~~program ~~all~~setup ~~claims~~fee. The ~~arising~~Company onand orEs ~~prior~~Solo agreed to ~~the~~a ~~date~~50%/50% ofrevenue ~~the settlement~~share ~~agreement. As~~arrangement ofbased ~~March~~on ~~31,~~fees ~~2024,~~collected ~~the~~from ~~500,000~~customers ~~shares~~using ~~have~~the ~~not~~Company’s ~~been~~prepaid, ~~relinquished.~~Bio-ID, ~~When~~and ~~the~~debit ~~Company~~card ~~receives~~products. As ~~the~~of ~~shares~~September 30, it2024, no revenues ~~will~~have ~~record a~~been ~~cancellation~~realized ofunder ~~shares~~the Management Agreement.

~~NOTE~~On 9November –1, ~~COMMITMENTS~~2021, ~~AND~~the ~~CONTINGENCIES~~Company and Elite Web Technology Inc. (“Marketer”) entered into a Sales and Marketing Agreement (“Agreement”). The Company agreed that Marketer can market and sale certain Company products as defined in the Agreement. The Company agreed to pay Marketer a sales commission of 15% of gross revenues, and to set aside 500,000 shares of Company common stock, as a bonus, once Marketer achieves $2 million in gross revenues within the first year of the Agreement. In addition, the Company will issue 25,000 stock options for each additional $1.0 million of gross revenues. As of September 30, 2024, the Marketer had not met any of its revenue targets and no commissions or equity compensation was due.

On ~~March 26~~December 5, ~~2022~~2008, ~~as amended on May 10, 2022,~~ the Company ~~and~~adopted ~~Es Solo Holdings Ltd (“Es Solo”),~~ an ~~England~~incentive &compensation ~~Wales~~bonus ~~limited liability~~plan ~~company,~~to ~~entered~~provide ~~into~~payments ato ~~Prepaid~~key ~~Card~~employees ~~Client~~in ~~Program~~the ~~Management Agreement (“Management Agreement”). Es Solo~~aggregated ~~develops,~~amount ~~markets,~~of 10% ~~and~~of ~~operates~~pre-tax ~~prepaid~~earnings ~~card~~in ~~programs~~excess ~~through~~of ~~its affiliations with issuing banks~~$3,000,000 after ~~and~~ the ~~Company~~end ~~desires~~of toeach ~~have~~fiscal ~~Es Solo~~year ~~develop a prepaid card program~~ to be ~~marketed~~distributed byannually ~~the Company for card issuing purposes, pursuant~~ to ~~the~~employees. As ~~terms~~ of ~~the~~September ~~Management Agreement.~~30, Es2024, ~~Solo agreed to pay~~ the Company ~~$10,000 as~~had not aachieved ~~program~~annual ~~setup fee. The Company and Es Solo agreed to a 50%/50% revenue share arrangement based on fees collected from customers using the Company’s prepaid, Bio~~pre-~~ID,~~tax ~~and~~earnings ~~debit card~~in ~~products. As~~excess of ~~March 31~~$3, ~~2024~~000, ~~no revenues have been realized under the Management Agreement~~000.

On ~~November~~ 1,December ~~2021~~5, 2008, the Company ~~and~~entered ~~Elite~~into ~~Web~~an ~~Technology~~employment ~~Inc.~~agreement ~~(“Marketer”)~~with ~~entered~~Van ~~into~~Thuy aTran, ~~Sales~~its ~~and~~Chief ~~Marketing~~Executive ~~Agreement~~Officer, ~~(“Agreement”). The~~providing ~~Company~~for ~~agreed~~an ~~that~~annual ~~Marketer~~base ~~can~~salary of ~~market~~ $150,000 and ~~sale~~customary ~~certain~~medical ~~Company~~and ~~products~~other asbenefits. ~~defined~~The inagreement ~~the~~may ~~Agreement.~~be ~~The~~terminated ~~Company~~by ~~agreed~~either toparty ~~pay Marketer~~upon a30 ~~sales~~days’ ~~commission~~notice. In ofthe ~~15% of~~event ~~gross~~the ~~revenues,~~Company ~~and~~terminates tothe ~~set~~agreement ~~aside~~without ~~500~~cause,~~000 shares~~ ofMs. ~~Company~~Tran ~~common~~will ~~stock,~~be asentitled ato ~~bonus~~$1,000,000 payable ~~once~~upon termination, ~~Marketer~~and ~~achieves~~she ~~$2 million~~will inbe ~~gross~~entitled ~~revenues~~to ~~within~~severance ~~the~~equal ~~first~~to ~~year of~~12 ~~the~~months’ ~~Agreement.~~compensation Inand ~~addition,~~benefits. ~~the~~The Company ~~will~~has ~~issue~~also ~~25,000~~agreed to indemnify Ms. ~~stock~~Tran ~~options~~against ~~for~~any ~~each~~liability ~~additional~~or ~~$1.0 million~~damages ofincurred ~~gross~~within ~~revenues.~~the Asscope of ~~March~~her ~~31,~~employment. ~~2024,~~ During the ~~Marketer~~three ~~had~~months ~~not~~ended ~~met~~September ~~any~~30, of2024 ~~its~~and 2023, ~~revenue~~salaries ~~targets~~paid ~~and~~to noVan ~~commissions~~Thuy orTran ~~equity~~under ~~compensation~~this ~~was~~agreement ~~due~~totaled $38,000 and $38,000.

F-13

~~On December 5,~~ITEM ~~2008,~~2 ~~the~~– ~~Company~~MANAGEMENT’S ~~adopted an incentive compensation bonus plan to provide payments to key employees in the aggregated~~DISCUSSION ~~amount~~AND ofANALYSIS ~~10% of~~OF ~~pre-tax~~FINANCIAL ~~earnings~~CONDITION inAND ~~excess~~RESULTS ofOF ~~$3,000,000 after the end of each fiscal year to be distributed annually to employees. As of March 31, 2024, the Company had not achieved annual pre-tax earnings in excess of $3,000,000.~~OPERATIONS

~~On December~~The 5,following ~~2008, the Company entered into an employment agreement with Van Thuy Tran, its Chief Executive Officer, providing for an~~discussion ~~annual~~and ~~base~~analysis ~~salary~~ of ~~$150,000 and~~financial ~~customary~~condition ~~medical~~ and ~~other~~results ~~benefits.~~of ~~The agreement~~operations ~~may~~should be ~~terminated~~read byin ~~either~~conjunction ~~party~~with ~~upon~~our 30consolidated ~~days’~~financial ~~notice.~~statements and Inrelated ~~the~~notes ~~event~~included ~~the~~elsewhere ~~Company~~in ~~terminates~~this ~~the agreement without cause, Ms~~report. ~~Tran~~This ~~will~~discussion becontains ~~entitled~~forward-looking tostatements ~~$1,000,000~~that ~~payable upon~~involve ~~termination~~risks, uncertainties, and ~~she will be entitled to severance equal to 12 months’ compensation and benefits~~assumptions. ~~The~~See ~~Company~~“Note ~~has~~Regarding ~~also~~Forward-Looking ~~agreed to indemnify Ms~~Statements.” ~~Tran~~Our ~~against~~actual ~~any~~results ~~liability~~could ordiffer ~~damages~~materially ~~incurred~~from ~~within~~those ~~the~~anticipated in ~~scope of her employment. During~~ the ~~nine~~forward-looking ~~months~~statements ~~ended~~as ~~March 31,~~a ~~2024~~result ~~and~~of ~~2023,~~certain ~~salaries~~factors ~~paid~~discussed toelsewhere ~~Van~~in ~~Thuy Tran under~~ this ~~agreement totaled $75,000 and $75,000~~report.

~~NOTE~~The following discussion and 10analysis –of ~~SUBSEQUENT~~the ~~EVENTS~~Company’s financial condition and results of operations is based on the preparation of our financial statements in accordance with U.S. generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

On May 1, 2024, the Company entered into an exclusive distribution agreement with Encore Sales and Marketing LLC (“Encore”) under which the Company granted Encore exclusive rights to sell and market the Company’s products to the gaming industry (as defined in the agreement) and on a non-exclusive basis to all other industries, through April 2029. In return, the Company received an advance payment of $150,000 and will receive an additional $50,000 within the first 120 days of the agreement. The Company will also receive a minimum payment of $60,000 per month in the first year of the agreement, commencing after 120 days, $120,000 per month in the second year and $180,000 per month in the third year. All subsequent years will have a minimum of 10% per year growth.Inflation

~~F-14~~Global inflation increased during 2021 and in 2022. The Russia Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and operating results could decrease, and our financial condition and results of operations could be adversely affected.

~~ITEM~~Recent ~~2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Events

~~The~~On July 4, 2022, the Company entered a Memorandum ~~following~~of ~~discussion~~Understanding ~~and~~(the ~~analysis~~“MOU”) for the purpose of ~~financial~~forming ~~condition~~a strategic partnership between the Company and ~~results~~Nugen ofUniverse, ~~operations~~LLC (“Nugen”), ~~should~~a becorporation ~~read~~located in ~~conjunction~~Wrightsville ~~with~~Beach, ~~our~~North ~~consolidated~~Carolina. Nugen seeks us to modify, create, or build a “private ~~financial~~label” ~~statements~~system ~~and~~for ~~related~~Nugen, ~~notes~~with ~~included~~an ~~elsewhere~~initial interest in ~~this~~our ~~report.~~blinxPay ~~This~~technology ~~discussion~~and ~~contains forward~~Bio-~~looking~~ID ~~statements~~verification ~~that~~system. ~~involve~~Nugen paid us $50,000 at ~~risks~~the date of the MOU signing and during the period ended December 31, ~~uncertainties~~2022, we completed our performance obligations, and ~~assumptions.~~recorded ~~See~~the $50,000 ~~“Note~~payment ~~Regarding~~as ~~Forward-Looking~~Mobile ~~Statements~~banking technology revenue during the period then ended.” ~~Our~~Nugen ~~actual~~further ~~results~~agreed ~~could~~to ~~differ~~pay ~~materially from~~the ~~those~~us ~~anticipated~~a in5% ongoing royalty for licensing the ~~forward-looking~~Company’s ~~statements~~blinxPay astechnology aand ~~result~~Bio-ID verification system. As of ~~certain~~June ~~factors~~30, ~~discussed~~2024, no royalties ~~elsewhere~~have been inrealized ~~this~~under ~~report~~the MOU.

On October 10, 2022, the Company entered into a License and Distributor Agreement (“License Agreement”) with Nugen. The License Agreement became effective on receipt of $200,000 ~~following~~in ~~discussion~~December 31, 2022 and ~~analysis~~extends ofthrough August 31, 2027. The License Agreement grants Nugen a Worldwide license and distribution for the Company’s ~~financial~~blinxPay ~~condition~~Close-Loop Virtual Wallet and ~~results~~blinxPay Open-Loop Visa Debit and all hardware products of ~~operations~~the isCompany. ~~based~~Per the onterms of the ~~preparation~~License Agreement, Nugen agrees to pay the Company a one-time license payment of $1,000,000 for the right to market the ~~our~~Company’s ~~financial~~products ~~statements~~noted above, of which $200,000 was received by the Company in ~~accordance~~December ~~with~~2022. UThe initial $200,000 has been recorded as deferred revenue in the Consolidated Balance Sheet.S. ~~generally~~The ~~accepted~~deferred ~~accounting~~revenue ~~principles~~balance of $200,000 at June 30, 2023, will begin being amortized to Mobile banking technology revenue starting once the Company has met its performance obligations under the License Agreement through the remaining term of the License Agreement, which expires on August 31, 2027. ~~You~~The ~~should~~remaining ~~read~~balance ~~this~~of ~~discussion~~$800,000 ~~and~~is ~~analysis~~scheduled to be paid ~~together~~as follows: $100,000 when the Company’s identifies a domestic sponsor bank, $350,000 to integrate the Company’s blinxPay software platform, and interface blinxPay with ~~such~~a ~~financial~~sponsor ~~statements~~foreign bank, and $350,000 on the completion of the final stage of testing, installation, and launch. In addition to the one-time license payment, Nugen agrees to pay a minimum monthly support fee plus 5% royalty from all sales of products noted above. As of June 30, 2024, no royalty related ~~notes~~revenues ~~thereto~~have been realized under the License Agreement.

~~Inflation~~1

~~Global inflation~~On ~~increased~~May ~~during~~1, ~~2021 and in 2022. The Russia Ukraine conflict and other geopolitical conflicts~~2024, asthe ~~well as related international~~Company ~~response,~~entered ~~have~~into ~~exacerbated~~an ~~inflationary~~exclusive ~~pressures,~~distribution ~~including~~agreement ~~causing~~with ~~increases~~Encore inSales ~~the~~and ~~price~~Marketing ~~for~~LLC ~~goods~~(“Encore”) ~~and~~under ~~services~~which ~~and~~the ~~global~~Company ~~supply~~granted ~~chain~~Encore ~~disruptions,~~exclusive ~~which~~rights ~~have~~to ~~resulted~~sell and ~~may~~market ~~continue~~the toCompany’s ~~result~~products into ~~shortages~~the ingaming ~~food~~industry ~~products,~~(as ~~materials~~defined ~~and~~in ~~services.~~the ~~Such~~agreement) ~~shortages have resulted~~ and ~~may~~on ~~continue~~a non-exclusive basis to ~~result~~all inother ~~inflationary~~industries ~~cost~~through ~~increases~~April ~~for~~2029. ~~labor,~~In ~~fuel~~return, ~~food~~the ~~products,~~Company ~~materials~~received ~~and~~a ~~services~~payment of $150,000 and ~~could~~will receive ~~continue~~an toadditional ~~cause~~$50,000 ~~costs~~within tothe ~~increase~~first as120 ~~well~~days asof ~~result~~the inagreement. ~~the~~The ~~scarcity~~Company ofwill ~~certain~~also ~~materials.~~receive Wea ~~cannot~~minimum ~~predict~~payment ~~any~~of ~~future~~$60,000 ~~trends~~per month in the ~~rate~~ first year of ~~inflation~~the oragreement, ~~other~~commencing ~~negative~~after ~~economic~~120 ~~factors~~days, or$120,000 ~~associated~~per ~~increases~~month in ~~our~~the ~~operating~~second ~~costs~~year and ~~how~~$180,000 ~~that~~per ~~may~~month ~~impact~~in ~~our~~the ~~business.~~third Toyear. ~~the~~All ~~extent~~subsequent weyears ~~are~~will ~~unable~~have toa ~~recover~~minimum ~~higher~~of ~~operating~~10% ~~costs~~per ~~resulting~~year ~~from~~growth. ~~inflation~~As ~~or otherwise mitigate the impact~~ of ~~such~~September ~~costs on~~30, ~~our and their business~~2024, ~~our~~the ~~revenues~~Company ~~and~~had ~~operating~~only ~~results~~received ~~could~~the ~~decrease~~$150,000 payment. ~~and~~No ~~our~~other ~~financial~~payments ~~condition~~have ~~and~~been ~~results of operations could be adversely affected~~received.

~~Recent~~Results of Operations - Three months ended September ~~Events~~30, 2024, compared to three months ended September 30, 2023

On July 4, 2022, we entered a Memorandum of Understanding (the “MOU”) for the purpose of forming a strategic partnership between the Company and Nugen Universe, LLC (“Nugen”), a corporation located in Wrightsville Beach, North Carolina. Nugen seeks us to modify, create, or build a “private label” system for Nugen, with an initial interest in our blinxPay technology and Bio-ID verification system. Nugen paid us $50,000 at the date of the MOU signing and during the period ended December 31, 2022, we completed our performance obligations, and recorded the $50,000 payment as Mobile banking technology revenue during the period then ended. Nugen further agreed to pay the us a 5% ongoing royalty for licensing the Company’s blinxPay technology and Bio-ID verification system. As of March 31, 2024, no royalties have been realized under the MOU.Revenues

~~On October~~Details ~~10, 2022, the Company entered into a License and Distributor Agreement (“License Agreement”) with Nugen. The License Agreement became effective on receipt~~ of ~~$200,000~~revenues inare December 31, 2022 and extends through August 31, 2027. The License Agreement grants Nugen a Worldwide license and distribution for the Company’s blinxPay Close-Loop Virtual Wallet and blinxPay Open-Loop Visa Debit and all hardware products of the Company. Per the terms of the License Agreement, Nugen agrees to pay the Company a one-time license payment of $1,000,000 for the right to market the Company’s products noted above, of which $200,000 was received by the Company in December 2022. The initial $200,000 has been recorded as deferred revenue in the Consolidated Balance Sheet. The deferred revenue balance of $200,000 at June 30, 2023, will begin being amortized to Mobile banking technology revenue starting once the Company has met its performance obligations under the License Agreement through the remaining term of the License Agreement, which expires on August 31, 2027. The remaining balance of $800,000 is scheduled to be paid as follows: $100,000 when the Company’s identifies a domestic sponsor bank, $350,000 to integrate the Company’s blinxPay software platform, and interface blinxPay with a sponsor foreign bank, and $350,000 on the completion of the final stage of testing, installation, and launch. In addition to the one-time license payment, Nugen agrees to pay a minimum monthly support fee plus 5% royalty from all sales of products noted above. As of March 31, 2024, no royalty related revenues have been realized under the License Agreement.

	Three Months Ended September 30,				Increase (Decrease)
	2024		2023		$			%
Mobile banking technology	$	21,000	$	21,000	$	—			—
Other revenue, management fee - related party		18,000		37,000		(19,000	)		(51.4	)
Total Revenues	$	39,000	$	58,000	$	(19,000	)		(32.8	)

~~On May~~• 1,Mobile ~~2024,~~banking the Company entered into an exclusive distribution agreement with Encore Sales and Marketing LLC (“Encore”) under which the Company granted Encore exclusive rights to sell and market the Company’s products to the gaming industry (as defined in the agreement) and on a non-exclusive basis to all other industries through April 2029. In return, the Company received an advance payment of $150,000 and will received an additional $50,000 within the first 120 days of the agreement. The Company will also receive a minimum payment of $60,000 per month in the first year of the agreement, commencing after 120 days, $120,000 per month in the second year and $180,000 per month in the third year. All subsequent years will have a minimum of 10% per year growth.technology

~~Results~~Mobile ofBanking ~~Operations~~Technology revenues include products such as the Company’s Blinx On-Off™ ~~Three~~prepaid ~~months~~toggle ~~ended~~Card ~~March~~and 31its Open Loop/Close Loop System and Bio ID Card Platform. Mobile Banking Technology uses web-based mobile technology to offer financial cardholders the very best technology in conducting secure financial transactions in real time, ~~2024~~protecting personal identity, ~~compared~~and tofinancial account security. Mobile Banking Technology revenues for the three months ended ~~March~~September 3130, 2024 and 2023 were $21,000 and $21,000, respectively.

~~Revenues~~ • Other revenue, management fee - related party

~~Details~~On December 31, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property, to The Matthews Group, a related party. The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through June 30, 2024. The Company earns a fee of 35% of all revenues ~~are~~billed up to September 30, 2024, and recognizes management fee revenue as ~~follows:~~services are performed. For the three months ended September 30, 2024 and 2023, revenue earned from the management services agreement was $18,000 and $37,000, respectively.

	Three Months Ended March 31,				Increase (Decrease)
	2024		2023		$		%
Mobile banking technology	$	44,000	$	33,000	$	11,000		33.3
Other revenue, management fee - related party		92,000		54,000		38,000		70.4
Total Revenues	$	136,000	$	87,000	$	49,000		56.3

Cost of Revenue

•Cost of revenue for the three ~~Mobile~~months ~~banking~~ended ~~technology~~September 30, 2024 and 2023 totaled $57,000 and $42,000, respectively.

Mobile Banking Technology revenues include products such as the Company’s Blinx On-Off™ prepaid toggle Card and its Open Loop/Close Loop System and Bio ID Card Platform. Mobile Banking Technology uses web-based mobile technology to offer financial cardholders the very best technology in conducting secure financial transactions in real timeSelling, ~~protecting~~General ~~personal identity,~~ and ~~financial account security.~~Administrative ~~Mobile Banking Technology revenues for the three months ended March 31, 2024 and 2023 were $44,000 and $33,000, respectively.~~Expenses

•Selling, general and administrative ~~Other~~expenses ~~revenue~~for the three months ended September 30, ~~management~~2024 ~~fee~~and -2023 ~~related~~totaled ~~party~~$223,000 and $191,000, respectively. The increase in selling, general and administrative expenses was primarily due to increased legal and professional fees as compared to the same period of the prior year.

On December 31, 2015, the Company sold all of its assets of its Barcode Technology, which was comprised solely of its intellectual property, to The Matthews Group, a related party. The Company subsequently entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations through June 30, 2024. The Company earns a fee of 35% of all revenues billed up to June 30, 2024, and recognizes management fee revenue as services are performed. For the three months ended March 31, 2024 and 2023, revenue earned from the management services agreement was $92,000 and $54,000, respectively.2

~~Cost of~~Interest ~~Revenue~~Expense

~~Cost of~~Interest ~~revenue~~expense for the three months ended ~~March~~September 3130, 2024 and 2023, ~~totaled~~was $61149,000 and $72131,000, respectively. The increase was due to the increase in our notes payable balance.

~~Selling, General~~Net ~~and Administrative Expenses~~Loss

~~Selling, general~~We ~~and~~had ~~administrative~~a ~~expenses~~net loss of $390,000 for the three months ended ~~March~~September 3130, 2024, ~~and~~compared ~~2023~~to ~~totaled~~a ~~$240,000~~net ~~and~~loss of $~~236~~306,000, ~~respectively.~~for ~~The decrease in selling, general and administrative expenses was primarily due to decreased legal and professional fees as compared to~~ the ~~same~~ ~~period~~three ofmonths ~~the~~ended ~~prior~~September ~~year~~30, 2023.

~~Other~~Liquidity and Capital ~~Expense~~Resources

~~Interest~~Our ~~expense~~cash ~~for~~balance on September 30, 2024 decreased to $64,000 as compared to $118,000 on June 30, 2024. The decrease was the result of the net $98,000 cash provided by financing activities, offset by $152,000 cash used in operating activities. Net cash used in operations during the three months ended ~~March~~September 3130, 2024, ~~and~~was ~~2023~~$152,000, ~~was~~compared with $~~143~~137,000 ~~and~~of net cash used in operations during the same period of the prior year. Cash used in operations during the period ended September 30, 2024, was primarily from our net loss of $~~125~~390,000, ~~respectively~~offset by increased interest accrued on convertible notes and notes payable of $147,000. ~~The~~Net ~~increase~~cash provided by financing activities of $98,000 was ~~due~~from toproceeds received from notes payable - related party during the ~~increase~~period ended September 30, 2024. During the same period of the inprior ~~our~~year, net cash provided by financing activities of $129,000 was from proceeds received from notes payable ~~balance~~– related party.

2The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During the three months ended September 30, 2024, the Company incurred a net loss of $390,000 and used cash in operating activities of $152,000, and on September 30, 2024, the Company had a stockholders’ deficit of $10,118,000. In addition, as of September 30, 2024, the Company is delinquent in payment of $824,000 of its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s June 30, 2024 financial statements, has raised substantial doubt about the Company’s ability to continue as a going concern. The Company’s financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

~~Net~~The ~~Loss~~Company believes its cash and forecasted cash flow from operations will not be sufficient to continue operations through fiscal 2025 without continued external investment. The Company believes it will require additional funds to continue its operations through fiscal 2025 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock.

WeThe ~~had~~Company ahas ~~net~~traditionally ~~loss~~been ofdependent ~~$308,000~~on ~~for~~The ~~the~~Matthews ~~three~~Group, ~~months~~LLC, ~~ended~~a ~~March~~related 31party, ~~2024,~~for ~~compared~~its tofinancial asupport. ~~net~~The ~~loss~~Matthews ofGroup ~~$346~~is owned 50% by Ms Tran,~~000~~ ~~for~~and ~~the~~50% ~~three~~by ~~months~~Lawrence ~~ended~~J. ~~March 31~~Johanns, ~~2023~~a significant Company stockholder.

~~Results of Operations - Nine months ended March 31, 2024, compared to nine months ended March 31, 2023~~3

~~Revenues~~Convertible notes and notes payable

~~Details~~Convertible notes and notes payable includes principal and accrued interest and consist of ~~revenues~~the ~~are~~following asat ~~follows~~September 30, 2024 and June 30, 2024:

	Nine Months Ended March 31,				Increase (Decrease)
	September 30, 2024		June 30, 2024
	2024		2023		$			%
(a) Unsecured convertible notes ($22,000 and $21,000 in default)	$	69,000	$	69,000
Mobile banking technology	$	118,000	$	123,000	$	(5,000	)		(4.1	)
(b) Notes payable (in default)		497,000		492,000
Other revenue, management fee - related party		183,000		172,000		11,000			6.4
(c) Notes payable (in default)		30,000		30,000
Total Revenues	$	301,000	$	295,000	$	6,000			2.0
Total notes payable - third parties	$	596,000	$	591,000

•(a) The notes are unsecured, ~~Mobile~~convertible ~~banking~~into ~~technology~~common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand.

~~Mobile Banking~~At ~~Technology~~June ~~revenues~~30, ~~include~~2024, ~~products~~convertible notes ~~such~~totaled as$69,000. During the ~~Company’s~~three ~~Blinx~~months ~~On-Off™~~ended ~~prepaid~~September ~~toggle~~30, ~~Card~~2024, ~~and~~interest ~~its~~of ~~Open~~less ~~Loop/Close Loop~~than ~~System~~$1,000 ~~and~~was ~~Bio~~added IDto ~~Card~~the ~~Platform.~~principal ~~Mobile~~resulting in ~~Banking~~a ~~Technology~~balance ~~uses~~owed ~~web-based~~of ~~mobile~~$69,000 ~~technology~~at toSeptember ~~offer~~30, ~~financial~~2024. ~~cardholders~~On ~~the~~September ~~very best~~30, ~~technology~~2024, in$22,000 ~~conducting~~of ~~secure~~the ~~financial~~convertible ~~transactions~~notes were in ~~real~~default ~~time,~~and ~~protecting~~convertible at ~~personal~~a ~~identity,~~conversion ~~and~~price ~~financial~~of ~~account security~~$0. ~~Mobile~~30 ~~Banking~~per ~~Technology~~share ~~revenues~~into ~~for~~71,872 ~~the~~shares ~~nine~~of ~~months~~the ~~ended~~Company’s ~~March~~common ~~31,~~stock. ~~2024~~The ~~and~~balance ~~2023~~of ~~were~~ $~~118~~47,000 is due on demand and convertible at a conversion price of $~~123~~0.08 per share into 590,~~000,~~005 ~~respectively~~shares of the Company’s common stock.

•(b) The notes are either secured ~~Other~~by ~~revenue~~the Company’s intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, ~~management~~were ~~fee~~due -in ~~related~~2012, ~~party~~and are in default.

~~On December~~At 31June 30, ~~2015~~2024, the ~~Company~~notes totaled ~~sold~~$492,000. ~~all~~During ofthe ~~its~~three ~~assets~~months ofended ~~its~~September ~~Barcode~~30, ~~Technology~~2024, ~~which~~interest ~~was comprised solely~~ of ~~its intellectual property~~$5, to000 ~~The~~was ~~Matthews~~added ~~Group,~~to aprincipal ~~related~~resulting ~~party.~~in ~~The Company subsequently entered into~~ a ~~management~~balance ~~services agreement with The Matthews Group~~owed ~~to manage all facets~~ of ~~the~~$497,000 ~~barcode~~at ~~technology~~September ~~operations through June~~ 30, 2024. ~~The~~At ~~Company~~September ~~earns a fee of 35% of all revenues billed up to June~~ 30, 2024, ~~and~~$447,000 ~~recognizes~~of ~~management~~notes ~~fee revenue as services~~ are ~~performed.~~secured ~~For~~by the ~~nine~~Company’s ~~months~~intellectual ~~ended~~property ~~March 31, 2024~~ and ~~2023,~~ ~~revenue earned from the management services agreement was~~ $~~183~~50,000 ~~and~~of ~~$172,000,~~notes ~~respectively~~are unsecured.

~~Cost~~(c) The notes are unsecured and bear interest of ~~Revenue~~4% per annum and were due on March 17, 2020 and are in default.

~~Cost of~~At ~~revenue~~June ~~for~~30, 2024 the ~~nine~~notes totaled $30,000. During the three months ended ~~March~~September 3130, 2024, ~~and~~interest ~~2023~~of ~~totaled~~less than $~~134~~1,000 ~~and~~was added to the principal resulting in a balance owed of $~~170~~30,000 at September 30, ~~respectively~~2024.

~~Selling, General~~Convertible notes and notes ~~Administrative~~payable-related ~~Expenses~~parties

~~Selling, general~~Convertible and ~~administrative~~notes ~~expenses~~payable-related parties ~~for~~include ~~the~~principal ~~nine~~and ~~months~~accrued ~~ended~~interest ~~March 31, 2024~~ and ~~2023~~consist ~~totaled~~of ~~$605,000~~the ~~and~~following ~~$687,000,~~at ~~respectively.~~September ~~The decrease in selling~~30, ~~general~~2024 and ~~administrative~~June ~~expenses~~30, ~~was primarily due to decreased legal and professional fees as compared to the same period of the prior year.~~2024:

Other Expense

	September 30, 2024		June 30, 2024
(a) Convertible notes-The Matthews Group	$	2,113,000	$	2,084,000
(b) Notes payable-The Matthews Group		5,963,000		5,821,000
(c) Convertible notes-other related parties ($249,000 and $242,000 in default)		569,000		500,000
Total notes-related parties	$	8,645,000	$	8,405,000

~~Interest expense~~(a) ~~for~~The ~~the~~notes ~~nine~~are ~~months ended March 31~~unsecured, convertible ~~2024~~into ~~and~~common ~~2023,~~stock ~~was~~at $~~411,000~~0.08 ~~and~~per ~~$367~~share,~~000,~~ ~~respectively.~~bear ~~The~~interest ~~increase~~at ~~was~~rates ~~due~~ranging from 8% to ~~the~~10% ~~increase in~~per ~~our~~annum ~~notes~~and ~~payable~~are ~~balance~~due on demand.

3The Matthews Group is a related party (see Note 6) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a significant shareholder of the Company. At June 30, 2024, convertible notes due to The Matthews Group totaled $2,084,000. During the three months ended September 30, 2024, $29,000 of interest was added to principal, resulting in a balance payable at September 30, 2024 of $2,113,000. At September 30, 2024, the notes are convertible at a conversion price of $0.08 per share into 26,411,730 shares of the Company’s common stock.

~~Net Loss~~4

We(b) The notes are unsecured, ~~had~~accrue ainterest ~~net~~at ~~loss~~10% ofper ~~$849~~annum,~~000~~ ~~for~~and ~~the~~are ~~nine~~due ~~months~~on ~~ended~~demand. ~~March~~The ~~31,~~notes ~~2024,~~were ~~compared~~issued relating to a ~~net~~management ~~loss~~services ofagreement ~~$929,000~~with ~~for~~The ~~the~~Matthews Group ~~nine~~(see ~~months~~Note ~~ended~~6) ~~March 31~~dated September 30, ~~2023~~2015.

~~Liquidity~~At June 30, 2024, notes due to The Matthews Group totaled $5,821,000. During the three months ended September 30, 2024, $38,000 of notes payable were issued and ~~Capital~~interest ~~Resources~~of $104,000 was added to principal, resulting in a balance owed of $5,963,000 at September 30, 2024.

~~Our cash~~(c) ~~balance~~The onnotes ~~March~~are ~~31,~~due ~~2024 increased~~ to ~~$153,000~~a ascurrent and ~~compared~~a toformer ~~$61~~director,~~000~~ onare ~~June 30~~unsecured, ~~2023.~~convertible ~~The~~into ~~increase~~common ~~was~~stock ~~the~~at ~~result~~per ofshare ~~the~~amounts ~~net $495,000~~ranging ~~cash~~from ~~provided by financing activities, offset by~~ $~~403,000 cash used in operating activities~~0.04 ~~Net~~to ~~cash used in operations during the nine months ended March 31, 2024, was~~ $~~403,000, compared with $293,000 of net cash used in operations during the same period of the prior year~~0. ~~Cash used in operations during the period ended March 31~~30, ~~2024, was primarily from our net loss of $849,000, offset by increased interest accrued on convertible notes~~ and ~~notes~~bear ~~payable of $412,000. Net cash provided by financing activities of $495,000 was from proceeds~~interest ~~received~~at ~~from~~rates ~~notes~~ranging ~~payable - related party during the period ended March 31, 2024. During the same period of the prior year, net cash provided by financing activities of $355,000 was~~ from ~~proceeds~~8% ~~received~~to ~~from~~10% ~~notes~~per ~~payable – related party~~annum.

~~The accompanying~~At ~~condensed~~June ~~consolidated~~30, ~~financial statements have been prepared assuming the Company will continue as a going concern~~2024, ~~which~~convertible ~~contemplates~~notes ~~the~~due ~~realization~~to ofother ~~assets~~related ~~and~~parties ~~satisfaction~~totaled ~~of liabilities in the normal course of business~~$500,000. During the ~~period~~three months ended ~~March 31~~September 30, 2024, ~~the Company incurred a net loss of~~ $~~849~~60,000 ~~and~~of ~~used~~notes ~~cash~~payable inwere issued ~~operating~~and ~~activities~~interest of $~~403~~9,000, ~~and~~was onadded ~~March~~to 31principal, ~~2024,~~resulting ~~the~~in ~~Company had~~ a ~~stockholders’~~balance ~~deficit~~owed of $9569,~~519,~~000. Inat ~~addition~~September 30, as2024. ofAt ~~March~~September 3130, 2024, ~~the Company is delinquent in payment of~~ $~~809~~253,000 of ~~its notes payable. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year~~ of the ~~date~~notes ~~that~~were ~~the~~due ~~financial~~in ~~statements~~2010 and are ~~issued.~~in ~~In addition~~default, ~~the~~and ~~Company’s independent registered public accounting firm~~$316,000 inis ~~its~~due ~~report~~ on ~~the~~demand. ~~Company’s~~At ~~June~~September 30, ~~2023 financial statements~~2024, ~~has~~the ~~raised~~total ~~substantial~~principal and ~~doubt~~accrued ~~about~~interest ~~the~~balance ~~Company’s ability~~due to ~~continue~~other asrelated aparties ~~going~~of ~~concern.~~$569,000 ~~The~~are ~~Company’s~~convertible ~~financial~~into ~~statements~~approximately do7,476,000 ~~not~~shares ~~include~~of ~~any~~the ~~adjustments~~company's common ~~that~~stock ~~might~~based beon ~~necessary if~~conversion ~~the~~prices ~~Company~~ranging isfrom ~~unable~~$0.04 to ~~continue~~$0.30 asper ~~a going concern~~share.

~~The Company~~Commitments ~~believes its cash~~ and ~~forecasted~~Contractual cash flow from operations will not be sufficient to continue operations through fiscal 2024 without continued external investment. The Company believes it will require additional funds to continue its operations through fiscal 2024 and to continue to develop its existing projects and plans to raise such funds by finding additional investors to purchase the Company’s securities, generating sufficient sales revenue, implementing dramatic cost reductions or any combination thereof. There is no assurance that the Company can be successful in raising such funds, generating the necessary sales or reducing major costs. Further, if the Company is successful in raising such funds from sales of equity securities, the terms of these sales may cause significant dilution to existing holders of common stock.Obligations

The Company ~~has~~leases ~~traditionally~~its ~~been~~corporate ~~dependent~~office onbuilding ~~The~~from Ms. ~~Matthews Group~~Tran, ~~LLC~~our chief executive officer, on a ~~related~~month-to-month ~~party~~basis, for ~~its~~$4,000 ~~financial~~per ~~support~~month. The ~~Matthews~~corporate ~~Group~~office is ~~owned~~ ~~50%~~located byat Ms2445 ~~Tran~~Winnetka Avenue North, ~~and~~Golden ~~50% by Lawrence J. Johanns~~Valley, ~~a significant Company stockholder~~Minnesota.

~~Convertible notes~~Off-Balance ~~and~~Sheet ~~notes payable~~Arrangements

~~Convertible notes~~We ~~and~~do ~~notes~~not ~~payable~~have ~~includes~~any ~~principal~~off-balance ~~and~~sheet ~~accrued interest and consist of the following at March 31, 2024 and June 30, 2023:~~arrangements.

	March 31, 2024		June 30, 2023
(a) Unsecured convertible notes ($21,000 and $21,000 in default)	$	68,000	$	66,000
(b) Notes payable (in default)		488,000		475,000
(c) Notes payable (in default)		30,000		29,000
Total notes-third parties	$	586,000	$	570,000

Critical Accounting Policies and Estimates

~~(a)~~Management’s discussion ~~The~~and ~~notes~~analysis of our financial condition and results of operations are ~~unsecured~~based on our financial statements, ~~convertible~~which ~~into~~have ~~common~~been ~~stock~~prepared atin ~~amounts~~accordance with ~~ranging~~accounting ~~from~~principles $0generally accepted in the United States.08 The preparation of these financial statements requires management to $0make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.30 ~~per~~On ~~share~~an ongoing basis, ~~bear~~management ~~interest~~evaluates atits ~~rates~~estimates, ~~ranging~~including those related to impairment of ~~from~~long-lived 5%assets, including finite lived intangible assets, accrued liabilities, fair value of warrant derivatives and certain expenses. We base our estimates on historical experience and on various other assumptions that we believe to 8%be ~~per~~reasonable ~~annum~~under the circumstances, the ~~were~~results ~~due~~of ~~through~~which ~~2011~~form the basis for making judgments about the carrying values of assets and liabilities that are innot ~~default~~readily orapparent from ~~due~~other onsources. ~~demand~~Actual results may differ materially from these estimates under different assumptions or conditions.

4Our significant accounting policies are more fully described in Note 1 to our financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions.

~~At June~~Revenue 30, 2023, convertible notes totaled $66,000. During the nine months ended March 31, 2024, interest of $2,000 was added to the principal resulting in a balance owed of $68,000 at March 31, 2024. On March 31, 2024, $21,000 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 71,286 shares of the Company’s common stock. The balance of $47,000 is due on demand and convertible at a conversion price of $0.08 per share into 580,875 shares of the Company’s common stock. Recognition

~~(b) The~~Revenues ~~notes~~for ~~are either secured by~~ the Company’s ~~intellectual~~are ~~property~~classified orinto ~~unsecured and bear interest ranging from 6.5% to 10% per~~mobile ~~annum,~~banking ~~were~~technology ~~due in 2012,~~ and ~~are~~management infee ~~default~~revenue.

At June 30, 2023, the notes totaled $475,000. During the nine months ended March 31, 2024, interest of $13,000 was added to principal resulting in a balance owed of $488,000 at March 31, 2024. At March 31, 2024, $439,000 of notes are secured by the Company’s intellectual property and $49,000 of notes are unsecured.5

~~(c) The~~a. ~~notes~~Mobile ~~are~~Banking ~~unsecured and bear interest of 4% per annum and were due on March 17, 2020 and are in default.~~Revenue

~~At June~~The 30Company, ~~2023~~as ~~the~~a ~~notes~~merchant ~~totaled~~payment ~~$29~~processor and a distributor,~~000.~~ ~~During~~recognizes ~~the~~revenue ~~nine~~from ~~months~~transaction ~~ended~~fees ~~March~~charged ~~31,~~to ~~2024,~~cardholders ~~interest~~for the use of ~~$1,000~~its ~~was~~issued ~~added~~mobile todebit ~~the~~cards. ~~principal~~The ~~resulting~~fees are inrecognized on a ~~balance~~monthly ~~owed~~basis ofafter ~~$30,000~~all atcardholder ~~March~~transactions ~~31,~~have ~~2024~~been summarized and reconciled with third party processors.

~~Convertible notes~~b. ~~and~~Other ~~notes~~revenue, ~~payable~~management fee - related ~~parties~~party

~~Convertible~~On December 31, 2015, the Company sold all of its ~~and~~assets ~~notes~~of ~~payable-related~~its ~~parties~~Barcode ~~include~~Technology ~~principal~~comprised ~~and~~solely ~~accrued~~of ~~interest~~its intellectual property to The Matthews Group and ~~consist~~entered into a management services agreement with The Matthews Group to manage all facets of the ~~following~~barcode attechnology ~~March~~operations, 31on behalf of The Matthews Group, through June 30, 2024. ~~and~~The ~~June~~Company earned a fee of 35% of all revenues billed up to September 30, ~~2023:~~ 2024.

	March 31, 2024		June 30, 2023
(a) Convertible notes-The Matthews Group	$	2,055,000	$	1,970,000
(b) Notes payable-The Matthews Group		5,664,000		4,988,000
(c) Convertible notes-other related parties ($249,000 and $242,000 in default)		494,000		364,000
Total notes-related parties	$	8,213,000	$	7,322,000

Recently Issued Accounting Standards

~~(a) The~~See ~~notes~~Footnote ~~are~~1 ~~unsecured,~~of ~~convertible~~consolidated ~~into~~financial ~~common~~statements for ~~stock~~a atdiscussion ~~$0.08~~of ~~per~~recently ~~share,~~issued ~~bear~~accounting ~~interest at rates ranging from 8% to 10% per annum and are due on demand~~standards.

~~The Matthews~~ITEM ~~Group~~3 is-- aQUANTITATIVE ~~related~~AND ~~party~~QUALITATIVE ~~(see Note 6) and is owned 50% by Ms. Van Tran, the Company’s CEO, and 50% by Larry Johanns, a~~DISCLOSURES ~~significant~~ABOUT ~~shareholder~~MARKET ofRISK the Company. At June 30, 2023, convertible notes due to The Matthews Group totaled $1,970,000. During the nine months ended March 31, 2024, $85,000 of interest was added to principal, resulting in a balance payable at March 31, 2024 of $2,055,000. At March 31, 2024, the notes are convertible at a conversion price of $0.08 per share into 25,695,768 shares of the Company’s common stock.

~~(b) The~~A ~~notes~~smaller ~~are~~reporting ~~unsecured,~~company ~~accrue~~is ~~interest~~not atrequired ~~10% per annum, and are due on demand. The notes were issued relating~~ to aprovide ~~management~~the ~~services~~information ~~agreement~~required ~~with~~by ~~The~~this ~~Matthews~~Item ~~Group (see Note 6) dated September 30, 2015~~3.

~~At June~~ITEM ~~30, 2023, notes due to The Matthews Group totaled $~~4~~,988,000. During~~ ~~the~~-- ~~nine~~CONTROLS ~~months~~AND ~~ended~~PROCEDURES ~~March 31, 2024, $384,000 of notes payable were issued and interest of $292,000 was added to principal, resulting in a balance owed of $5,664,000 at March 31, 2024.~~

~~(c) The~~Evaluation ~~notes~~of ~~are~~Disclosure ~~due~~Controls ~~to a current~~ and ~~a former director, are unsecured, convertible into common stock at per share amounts ranging from $0~~Procedures.~~04 to $0.30, and bear interest at rates ranging from 8% to 10% per annum.~~

~~At June~~Our 30management, ~~2023,~~with ~~convertible~~the ~~notes~~participation ~~due~~of toour ~~other~~chief executive ~~related~~officer ~~parties~~and ~~totaled~~our ~~$364~~chief financial officer,~~000.~~ ~~During~~carried ~~the~~out ~~nine~~an ~~months~~evaluation ~~ended~~of ~~March~~the ~~31,~~effectiveness ~~2024,~~of ~~$145,000~~our “disclosure controls and ofprocedures” ~~notes~~(as ~~payable~~defined ~~were~~in ~~issued,~~the ~~$33,000~~Securities Exchange Act of ~~notes~~1934 ~~payable~~(the ~~were~~“Exchange ~~repaid,~~Act”) Rules 13a-15(e) and ~~interest~~15-d-15(e)) as of ~~$18,000~~the ~~was~~end ~~added~~of tothe ~~principal,~~period ~~resulting~~covered inby athis ~~balance owed~~report of(the ~~$494,000~~“Evaluation atDate”). Based ~~March~~upon 31that evaluation, ~~2024.~~our Atchief executive ~~March~~officer ~~31,~~and ~~2024,~~our ~~$249~~chief financial officer concluded that,~~000~~ as of the ~~notes~~Evaluation ~~were~~Date, ~~due~~our indisclosure ~~2010~~controls and ~~are~~procedures inwere not ~~default,~~effective ~~and~~to ~~$245,000~~ensure isthat ~~due on~~information ~~demand.~~required Atto ~~March~~be ~~31,~~disclosed ~~2024,~~by ~~$249,000~~us ofin the ~~notes~~reports ~~are~~that ~~convertible~~we atfile aor ~~conversion~~submit ~~price~~under ofthe ~~$0.30~~Exchange ~~per~~Act ~~share~~(i) is ~~into~~recorded, ~~829~~processed,~~581~~ ~~shares~~summarized ofand reported, within the ~~Company~~ time periods specified in the SEC’s ~~common~~rules ~~stock,~~and ~~$95,000~~forms ofand ~~the~~(ii) ~~notes~~is ~~are~~accumulated and ~~convertible~~communicated atto aour ~~conversion~~management, ~~price~~including ofour ~~$0.09~~chief ~~per~~executive ~~share~~officer ~~into~~and 1our chief financial officer,~~111,597~~ ~~shares~~as ofappropriate to allow timely ~~the~~decisions ~~Company’s~~regarding ~~common~~required ~~stock~~disclosure. As of September 30, 2024, our disclosure controls and ~~$150,000~~procedures ofwere not effective at the ~~notes~~reasonable ~~are~~assurance ~~convertible~~level atdue ato ~~conversion~~the ~~price~~material ofweaknesses ~~$0.04~~in ~~per~~our ~~share~~internal ~~into~~control ~~3,772,281~~over ~~shares~~financial reporting described in our Form of10-K ~~the~~on ~~Company’s~~June ~~common~~30, ~~stock~~2024.

5Changes in Internal Control over Financial Reporting.

~~Commitments~~In our Form 10-K on June 30, 2024, we identified certain matters that constitute material weaknesses (as defined under the Public Company Accounting Oversight Board Auditing Standard No. 2) in our internal control over financial reporting as discussed on Management’s Report on Internal Control Over Financial Reporting. We are undergoing ongoing evaluation and ~~Contractual~~improvements ~~Obligations~~in our internal control over financial reporting. Regarding our identified weaknesses, we have performed the following remediation efforts:

~~The Company~~• ~~leases~~We ~~its~~have ~~corporate~~assigned ~~office building from Ms. Tran,~~ our ~~chief~~audit ~~executive~~committee ~~officer,~~with onoversight ~~a month-to-month basis, for $4,000 per month~~responsibilities. ~~The corporate office is located at 2445 Winnetka Avenue North, Golden Valley, Minnesota.~~

~~Off-Balance Sheet~~• ~~Arrangements~~Our financial statements, periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended, our monthly bank statements and imaged checks are now continuously reviewed by our chief financial officer and chief executive officer.

~~We do~~• ~~not~~All ~~have~~significant ~~any~~contracts ~~off-balance~~are ~~sheet~~now ~~arrangements~~being reviewed and approved by our board of directors in conjunction with the chief executive officer.

~~Critical~~There was no other change in our internal control ~~Accounting~~over ~~Policies~~financial ~~and~~reporting ~~Estimates~~that occurred during the period covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to impairment of long-lived assets, including finite lived intangible assets, accrued liabilities, fair value of warrant derivatives and certain expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.6

~~Our significant~~PART ~~accounting~~II policies are more fully described in Note 1 to our financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosures of contingent assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions.

~~Revenue Recognition~~ITEM 1 – LEGAL PROCEEDINGS

~~Revenues~~On September 21, 2016, the Company entered into a settlement agreement with an individual who was a former officer of the Company. The individual in prior years was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's ~~are~~intellectual property ~~classified~~without ~~into~~approval. ~~mobile~~Under ~~banking~~the ~~technology~~terms of the settlement agreement, the individual agreed to relinquish a convertible note payable and ~~management~~unpaid ~~fee~~interest ~~revenue~~aggregating $365,000 and return 500,000 shares of common stock previously issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. As of September 30, 2024, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

~~a. Mobile~~ITEM ~~Banking~~1A ~~Revenue~~- RISK FACTORS

~~The Company,~~A assmaller areporting ~~merchant~~company ~~payment~~is ~~processor~~not ~~and~~required ~~a distributor, recognizes revenue from transaction fees charged~~ to ~~cardholders~~provide ~~for~~ the ~~use~~information ofrequired ~~its~~by ~~issued~~this ~~mobile debit cards~~Item. ~~The fees are recognized on a monthly basis after all cardholder transactions have been summarized and reconciled with third party processors.~~

~~b. Other~~ITEM ~~revenue,~~2 ~~management~~- ~~fee~~UNREGISTERED -SALE ~~related~~OF ~~party~~EQUITY SECURITIES AND USE OF PROCEEDS

On December 31, 2015, the Company sold all of its assets of its Barcode Technology comprised solely of its intellectual property to The Matthews Group and entered into a management services agreement with The Matthews Group to manage all facets of the barcode technology operations, on behalf of The Matthews Group, through June 30, 2024None. ~~The Company earned a fee of 35% of all revenues billed up to March 31, 2024.~~

~~Recently Issued~~ITEM ~~Accounting~~3 ~~Standards~~- DEFAULTS UPON SENIOR SECURITIES

~~See Footnote~~The 1Company ofis ~~consolidated~~in ~~financial~~default ~~statements~~on ~~for~~its avarious ~~discussion~~notes ofpayable totaling ~~recently~~$802,000 ~~issued~~representing ~~accounting~~principal ~~standards~~and accrued interest as of September 30, 2024.

6ITEM 4 - MINE SAFETY DISCLOSURES

~~ITEM 3~~Not ~~-- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~ applicable.

AITEM ~~smaller reporting~~5 ~~company~~- isOTHER ~~not required to provide the information required by this Item 3.~~INFORMATION

~~ITEM 4~~During the Company’s fourth quarter, no director or officer adopted or terminated a Rule 10b5--1 ~~CONTROLS~~trading ~~AND~~arrangement ~~PROCEDURES~~or a non-Rule 10b5-1 trading arrangement.

~~Evaluation of~~ITEM ~~Disclosure~~6 ~~Controls~~- ~~and Procedures.~~EXHIBITS

Our management, with the participation of our chief executive officer and our chief financial officer, carried out an evaluation of the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by this report (the “Evaluation Date”). Based upon that evaluation, our chief executive officer and our chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure. As of March 31, 2024, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses in our internal control over financial reporting described in our Form 10-K on June 30, 2023.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	The following financial information from Veritec, Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2024, formatted in XBRL: (i) Condensed Consolidated Balance Sheets at September 30, 2024 and June 30, 2024; (ii) Condensed Consolidated Statements of Operations for the three months ended September 30, 2024 and 2022; (iii) Condensed Consolidated Statement of Stockholders’ Deficit as at September 30, 2024 and 2022; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2024 and 2022; (v) Notes to the Condensed Consolidated Financial Statements.

~~Changes in Internal Control over Financial Reporting.~~7

In our Form 10-K on June 30, 2023, we identified certain matters that constitute material weaknesses (as defined under the Public Company Accounting Oversight Board Auditing Standard No. 2) in our internal control over financial reporting as discussed on Management’s Report on Internal Control Over Financial Reporting. We are undergoing ongoing evaluation and improvements in our internal control over financial reporting. Regarding our identified weaknesses, we have performed the following remediation efforts:SIGNATURES

•Pursuant Weto ~~have~~the ~~assigned~~requirements ~~our~~of ~~audit~~the ~~committee~~Securities ~~with~~Exchange Act ~~oversight~~of ~~responsibilities~~1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

• Our financial statements, periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended, our monthly bank statements and imaged checks are now continuously reviewed by our chief financial officer and chief executive officer.

		VERITEC, INC.

December 13, 2024	By:	/s/ Van Tran
		Van Tran
		Chief Executive Officer
		(Principal Executive Officer)

~~• All significant contracts are now being reviewed and approved by our board of directors in conjunction with the chief executive officer.~~8

There was no other change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1 – LEGAL PROCEEDINGS

On September 21, 2016, the Company entered into a settlement agreement with an individual who was a former officer of the Company. The individual in prior years was also issued 500,000 shares of common stock for services. The Company alleged that the individual used the Company's intellectual property without approval. Under the terms of the settlement agreement, the individual agreed to relinquish a convertible note payable and unpaid interest aggregating $365,000 and return 500,000 shares of common stock previously issued to him. In turn, the Company agreed to release and discharge the individual against all claims arising on or prior to the date of the settlement agreement. As of March 31, 2024, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

ITEM 1A - RISK FACTORS

A smaller reporting company is not required to provide the information required by this Item.

ITEM 2 - UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

The Company is in default on its various notes payable totaling $809,000 representing principal and accrued interest as of March 31, 2024.

ITEM 4 - MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 - OTHER INFORMATION

Not applicable.

ITEM 6 - EXHIBITS

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	The following financial information from Veritec, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2024, formatted in XBRL: (i) Condensed Consolidated Balance Sheets at March 31, 2024 and June 30, 2023; (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2022; (iii) Condensed Consolidated Statement of Stockholders’ Deficit as at March 31, 2024 and 2022; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2022; (v) Notes to the Condensed Consolidated Financial Statements.

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.

		VERITEC, INC.
May 20, 2024	By:	/s/ Van Tran
		Van Tran
		Chief Executive Officer
		(Principal Executive Officer)

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