BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2026 | |
| BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | |
| Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods presented. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Universal Electric and Universal DeFi. All significant intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet as of March 31, 2026 was derived from the Company’s audited consolidated financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the Securities and Exchange Commission on July 2, 2026 (the “2026 Annual Report”). Results of operations for the three months ended June 30, 2026 are not necessarily indicative of the results to be expected for future interim periods or for the full fiscal year ending March 31, 2027. |
| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Significant estimates include the valuation of the derivative component of the Company’s convertible notes, the provision for credit losses, the allowance for excess and obsolete inventory, and the realizability of deferred tax assets. Actual results may differ materially from those estimates. |
| Reclassifications | Reclassifications Certain amounts in the condensed consolidated statement of cash flows for the three months ended June 30, 2025 have been reclassified to conform to the current period presentation. Specifically, the $1,681,937 decrease in inventories and intangible assets held for sale has been reclassified from investing activities to operating activities. The reclassification decreased net cash provided by operating activities from $2,752,110 to $1,070,173 and increased net cash provided by investing activities from $2,820,668 to $4,502,605 for the three months ended June 30, 2025. The reclassification had no effect on the net increase in cash for the period, previously reported net income, or any balance sheet amount. This classification is consistent with the presentation in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026. |
| Node Licenses, Digital Assets and Related Revenue | Node Licenses, Digital Assets and Related Revenue The Node Licenses, the validator right and the AULT Tokens received by Universal DeFi are not traded on any active market and do not have a readily determinable or observable fair value. Because the Node Licenses, the validator right and the AULT Tokens received cannot be reliably measured, the Company has recorded no asset, and has recognized no revenue related to token emissions, transaction fees, priority tips or staking rewards. The Company reassesses this conclusion 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. |
| Revenue Share - Ault Capital Group, Inc. | Revenue Share - Ault Capital Group, Inc. On June 30, 2026, Universal DeFi entered into the Revenue Share with Ault Capital Group, in its capacity as authorized agent for Ault DAO. Ault Capital Group is a wholly owned subsidiary of Hyperscale Data, Inc. (“Hyperscale Data”). The Revenue Sharing Agreement acknowledges the April 6, 2026 transfer to Universal DeFi of the 125,000 Node Licenses, the right to operate one validator, and the wallet holding the related reward tokens. In consideration of that transfer, Universal DeFi will pay Ault Capital Group a revenue share equal to 25% of net proceeds, defined as the net cash, cryptocurrency, stablecoin and other proceeds actually received by Universal DeFi from the sale of tokens and rewards generated by the Node Licenses, less applicable transaction fees and will retain the remaining 75% (the “Revenue Share”). The Revenue Share is payable solely from, and only to the extent of, net proceeds actually received by Universal DeFi. In no event is Universal DeFi required to make any payment to Ault Capital Group other than out of such net proceeds. Ault Capital Group’s right to receive the Revenue Share, and Universal DeFi’s obligation to pay it, terminate once Ault Capital Group has received cumulative Revenue Share payments totaling $93,750,000. 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. |
| Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company continually assesses any new accounting standards to determine their applicability. When management determines that a new accounting pronouncement may affect the Company’s financial reporting, the Company undertakes an analysis to determine whether any required changes should be made to its condensed consolidated financial statements. In January 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2025-01”), to clarify the effective date of ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new standard is effective for the Company for its annual periods beginning April 1, 2027 (the fiscal year ending March 31, 2028) and for interim reporting periods beginning April 1, 2028 (beginning with the quarter ending June 30, 2028), with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-01; however, because the standard primarily affects disclosure requirements, the Company does not expect adoption to have a material impact on its consolidated financial position, results of operations, or cash flows. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. The Company adopted this guidance effective April 1, 2025. Adoption did not have a material impact on the consolidated financial statements. There have been no other changes to the Company’s significant accounting policies disclosed in the 2026 Annual Report. |