RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Jun. 30, 2026 | |
| RELATED PARTY TRANSACTIONS | |
| RELATED PARTY TRANSACTIONS | 10.RELATED PARTY TRANSACTIONS Nature of Relationships Milton C. Ault, III, the Company’s Executive Vice Chairman and a director, is the Executive Chairman of Hyperscale Data, an issuer listed on the New York Stock Exchange American (“NYSE”). Henry Nisser, a director of the Company, is the President and General Counsel of Hyperscale Data and the President and Chief Executive Officer of Ault DAO. Ault DAO is a Wyoming limited liability company that serves as the steward for the decentralized autonomous organization, which operates the Ault Blockchain network. Ault DAO is an indirect, wholly owned subsidiary of Hyperscale Data. As of June 30, 2026, Hyperscale Data beneficially owned 1,045,252 shares of the Company’s common stock, held through Ault Lending, LLC (“Ault Lending”) and Alpha Structured Finance LP. Mr. Ault is deemed to beneficially own those shares, together with shares held directly and by Ault & Company, Inc. Accordingly, Hyperscale Data, Ault DAO, Ault Capital Group, Ault Lending, Alpha Structured Finance LP, Ault & Company, Inc. and their respective affiliates are considered related parties of the Company. Accounting for the Agreements The Node Licenses and the AULT Tokens received are not traded on any active market and do not have a readily determinable or observable fair value. Accordingly, the Company recorded no asset in respect of the Node Licenses, the validator right or the AULT Tokens received, and recognized no revenue related to token emissions, transaction fees, priority tips or staking rewards during the three months ended June 30, 2026. Because the Revenue Share is payable solely out of net proceeds actually received from the sale of tokens and rewards, and no such proceeds were received during the period, no Revenue Share liability was recorded at June 30, 2026, and no Revenue Share expense was recognized for the three months then ended. The Company will reassess these conclusions in each reporting period. If an active market for AULT Tokens develops such that the tokens have a measurable fair value, the Company would begin recognizing revenue from tokens earned, and the associated Revenue Share obligation, at that time. Validator Hosting and Managed Services The day-to-day operation, maintenance and hosting of Universal DeFi’s validator, including the cost of the dedicated server, are currently performed and borne by Ault Capital Group on Universal DeFi’s behalf at no charge to the Company. The Company estimates the value of these services to be immaterial for the three months ended June 30, 2026, and has therefore not recorded a corresponding expense and capital contribution. Universal DeFi expects to enter into a managed services agreement with Ault Capital Group or an affiliate of Ault Capital Group to formalize these services, under which the related costs would be charged to Universal DeFi. No such agreement was executed as of June 30, 2026, and the terms on which the services would be provided, including cost and duration, are not fixed. Officer Credit Card Arrangements During the three months ended June 30, 2026 and 2025, inventory purchases and other company expenses of approximately $11,000 and $83,000 respectively, were charged to credit card accounts of Harvey B. Grossblatt, the Company’s Chief Executive Officer and certain of his immediate family members. The Company subsequently reimbursed these charges in full. Mr. Grossblatt receives credit card benefits from these charges and the payment thereof. The maximum amount outstanding and due to Mr. Grossblatt at any point during the three months ended June 30, 2026 and 2025 may include amounts submitted for personal expense reimbursement and amounts paid by Mr. Grossblatt for inventory purchases or other company expenses and amounted to approximately $3,000 and $13,000, respectively. There were no amounts due to Mr. Grossblatt as of June 30, 2026, and $13,298 was due at June 30, 2025. |