| BASIS OF PRESENTATION, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 2 – BASIS OF PRESENTATION, SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.
GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) and pursuant to the accounting and disclosure
rules and regulations of the SEC. In the opinion of management, these financial statements contain all adjustments, consisting of only
normal recurring adjustments, necessary for a fair statement of the results of the interim periods presented. Certain information or
footnote disclosure normally included in condensed consolidated financial statements prepared in accordance with U.S. GAAP have been
condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, these unaudited
condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes
thereto included in Item 8. “ Financial Statements and Supplementary Data The Company’s reporting currency is the
U.S. Dollar. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries. All significant intercompany balances and transactions have been eliminated. Results for interim periods are not necessarily
indicative of results to be expected for a full year or any future period. Use of Estimates The preparation of financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, as well as the reported
amounts of expenses during the reporting period. The most significant estimates inherent in the preparation of the Company’s unaudited
condensed consolidated financial statements include, but are not limited to, estimates of interest payable on the token sale liability,
among others. These estimates and assumptions are based on the Company’s historical experience, and on various other factors that
management believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions. To the extent there are material differences between the estimates and
actual results, the Company’s future results of operations will be affected. Fair Value of Financial Instruments The following tables present the Company’s
fair value hierarchy for its money market securities measured at fair value on a recurring basis (in thousands):
June 30, 2024 (unaudited)
Level 1 Level 2 Level 3 Fair Value
Assets included in:
Cash and cash equivalents
Money market fund $ 78 $ - $ - $ 78
$ 78 $ - $ - $ 78
September 30, 2023
Level 1 Level 2 Level 3 Fair Value
Assets included in:
Cash and cash equivalents
Money market fund $ 4,012 $ - $ - $ 4,012
$ 4,012 $ - $ - $ 4,012 The carrying values reported in the Company’s
unaudited condensed consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring
basis), accounts payable and accrued expenses are reasonable estimates of their fair values due to the short-term nature of these items. Token Sale Liability The Company sold BLT in a token sale that raised
approximately $32.3 million of capital to develop the VC technology and Platform. Management of the Company evaluated the terms of the
BLT sold and concluded that the amounts raised represent a liability; specifically, a demand loan, due to the lack of a stated maturity
date and stated interest rate related to the outstanding liability. The Company has reflected the amounts raised as a short-term obligation
on its condensed consolidated balance sheets as of June 30, 2024 (unaudited), and as of September 30, 2023. Pursuant to the SEC Order, the Company has undertaken
steps to register the BLT with the SEC and has completed a claims process to compensate purchasers of BLT who purchased them directly
from the Company. To satisfy the SEC’s recovery requirement, through the claims process, purchasers of BLT that still owned the
securities were entitled to submit a claim for their consideration paid plus interest and less any income received, while any BLT purchasers
that no longer owned BLT were able to submit a claim for damages. A notice about the SEC Order along with a claim form was distributed
to potential claimants by electronic means within 60 calendar days after the filing of the Company’s 1934 Act Registration (“Effective
Date”), meaning by August 4, 2023. The claim form included a link to the Company’s filing page on EDGAR, informing all persons
and entities that purchased tokens from the Company before and including January 2, 2018, of their potential claims under Section 12(a)
of the Securities Act upon the tender of such security, or for damages if the purchaser no longer owns the security. Claimants will have
until the earlier of three months from the date the SEC Division of Corporation Finance notifies the Company that their review of the
Form 10 has been concluded or six months from the Effective Date, meaning February 4, 2024, to submit a claim of their rights under Section
12(a) of the Securities Act (the “Claim Form Deadline”). As of June 30, 2024, we believe that all potential
claim liabilities underlying the validated claims, including associated interest payments, have been settled in cash, except for one payment
that was not accepted by the claimant’s bank financial institution for reasons outside the Company’s control, for which the
Company is working with the claimant to identify a solution to remit the payment. Prior to resolution of the claim liabilities, the Company
estimated and recorded accrued interest payable of approximately $5.3 million as of June 30, 2024 (unaudited) and $4.8 million as of September
30, 2023. The Company calculated the estimated interest for the total outstanding liability using the applicable federal rates published
by the Internal Revenue Service (“IRS”) of 4.68% and 4.11% per annum for June 30, 2024 and September 30, 2023, respectively.
No claims were paid prior to the Claim Form Deadline.
Subsequent to the Claim Form Deadline, the Company began to pay all valid refund claims. With the exception of one payment returned by
the claimant’s financial institution for reasons outside the Company’s control, all valid refund claims were paid in full.
As amounts are claimed by BLT purchasers and repaid by the Company,
the amounts paid will reduce the balances of the token sale liability and accrued interest on the Company’s unaudited condensed
consolidated balance sheet, with no gain or loss recognized at repayment. After completion of the claims process, the Company expects
to extinguish the amounts of the token sale liability that were not claimed and remove them from the unaudited condensed consolidated
balance sheet. As part of the SEC Order, the Company had certain
reporting obligations to the Staff. These obligations are described below. On May 4, 2024, the Company initiated payments
it deemed to be due and adequately substantiated to claimants who submitted the claim form by the Claim Form Deadline. The Company required
a claimant to submit additional documentation supporting that the claimant is entitled to receive payment under Section 12(a) of the
Securities Act or through the claim process. Upon receiving such a request from the Company, claimants had thirty (30) days to provide
the requested documentation in writing to the address provided by the Company. Beginning thirty (30) days after the Claim Form
Deadline, meaning March 5, 2024, the Company submitted to the Staff a monthly report of the claims received and the claims paid, including
(a) identifying information about each claimant; (b) the amount of each claim; (c) the resolution of each claim, including the amount
of each payment; (d) identification of all claims not paid and the reasons for all non-payment of claims; and (e) a list of all complaints
received (if any) and the manner in which the Company addressed each complaint. The Company provided the Staff with any related additional
information or documentation reasonably requested by the Staff, such as documentation submitted by the claimant and documentation supporting
the Company’s decision regarding the claim. Within four (4) months of the Claim Form Deadline,
meaning by June 4, 2024, the Company was required to submit to the Staff a final report of its handling of all claims, including all information
required in the monthly reports (the “Final Report”). This submission was completed on June 4, 2024.
On August 6, 2024, the Company certified in writing to the Division
of Enforcement of the SEC with the undertakings set forth in the SEC Order. Other than with respect to the Company’s
settlements with the SEC, the Company is not aware of any pending or threatened claims that it violated any federal or state securities
laws. However, the Company cannot assure you that any such claim will not be asserted in the future or that the claimant in any such
action will not prevail. The Company believes that it has strong defenses to such claim, including without limitation the expiration
of the applicable federal and state statutes of limitations. If the payment of claims in the claims process or fines is significant,
it could have a material adverse effect on the Company’s cash flow, financial condition or prospects and the value of the BLT. Segments Operating segments are defined as components
of an entity for which discrete financial information is available that is regularly reviewed by the chief operating decision maker,
or decision-making group, in deciding how to allocate resources to an individual segment and in assessing performance. The chief operating
decision maker, or decision-making group, reviews financial information for the purposes of making operating decisions, allocating resources,
and evaluating financial performance of the business of the reportable operating segments, based on discrete financial information. For
the periods ended June 30, 2024 and 2023, the Company views its operations and manages its business as one segment and, accordingly,
no further segment disclosures have been presented herein. Net
Income (Loss) Per Membership Share Basic net income (loss) per membership share is computed
by dividing net loss allocated to members by the weighted average number of membership shares outstanding during the period. Diluted
net income (loss) per membership share reflects the potential dilution that could occur if securities or other contracts to issue membership shares
were exercised or converted into membership shares or resulted in the issuance of membership shares that then shared in the earnings
of the entity. Dilutive potential membership shares include the Company’s unvested RSUs and unvested PSUs. As mentioned in Note
5, the RSUs and PSUs have a second vesting condition that is contingent upon a liquidity event that did not occur during the reported
periods and as such, the unvested RSUs and PSUs must be excluded from the computation of diluted net income (loss) per share because inclusion
of the options in the calculation would be antidilutive. There was a total of 609 and 609 unvested RSUs and PSUs as of June 30,
2024 and 2023, respectively, that were excluded from the computation of diluted net income (loss) per membership share. Recently Issued Accounting Pronouncements The Company reviewed all recently issued accounting
pronouncements and concluded that they were either not applicable or not expected to have a significant impact on its unaudited condensed
consolidated financial statements. The Company is evaluating, but has not yet adopted, ASU 2023-08, effective for entities with fiscal
years beginning after December 15, 2024, which addresses the accounting and disclosure requirements for crypto assets but does not believe
it will have material impact on the company. The Company also evaluated ASU 2023-07 and determined that it did not apply to the Company
as we have only one operating segment. |
