Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

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

For the quarterly period ended June 30, 2023

☐ 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.)

12445 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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securitiees 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 ☒ 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 (§229.405 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 ☒

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 ☒

The aggregate market value of the voting common equity held by non-affiliates as of December 31, 2022, based on the closing sales price of the common stock as quoted on the OTC Markets was $305,000. For purposes of this computation, all officers, directors, and 5 percent beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed an admission that such directors, officers, or 5 percent beneficial owners are, in fact, affiliates of the registrant.

As of October 4, 2023, there were 39,988,007 shares of registrant’s common stock outstanding.

VERITEC, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
FORWARD-LOOKING STATEMENTS	3
PART I	4
ITEM 1. DESCRIPTION OF BUSINESS	4
ITEM 1A. RISK FACTORS	6
ITEM 2. DESCRIPTION OF PROPERTY	6
ITEM 3. LEGAL PROCEEDINGS	6
ITEM 4. MINE SAFETY DISCLOSURE	6
PART II	7
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES	7
ITEM 6. SELECTED FINANCIAL DATA	8
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION	8
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA	14
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	32
ITEM 9A. CONTROLS AND PROCEDURES	32
ITEM 9B. OTHER INFORMATION	32
PART III	33
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT	33
ITEM 11. EXECUTIVE COMPENSATION	34
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	35
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	36
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	36
ITEM 15. EXHIBITS	37
ITEM 16. FORM 10-K SUMMARY	37
SIGNATURES	38

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (“Annual Report”), the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission (“SEC”) and public announcements that we have previously made or may subsequently make include, may include, incorporate by reference or may incorporate by reference certain statements that may be deemed to be forward-looking statements. The forward-looking statements included or incorporated by reference in this Annual Report and those reports, statements, information and announcements address activities, events or developments that Veritec, Inc. (together with its subsidiaries hereinafter referred to as “we,” “us,” “our”, the "Company" or “Veritec”) expects or anticipates will or may occur in the future. Any statements in this document about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions. Accordingly, these statements involve estimates, assumptions, and uncertainties, which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document. All forward-looking statements concerning economic conditions, rates of growth, rates of income or values as may be included in this document are based on information available to us on the dates noted, and we assume no obligation to update any such forward-looking statements.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Summary

Veritec, Inc. (the “Company”) is primarily engaged in the development, sales, and licensing of products and providing services related to its mobile banking solutions.

As a Cardholder Independent Sales Organization, Veritec is able to promote and sell Visa-branded card programs. As a Third-Party Servicer, Veritec provides back-end cardholder transaction processing services for Visa-branded card programs on behalf of its sponsoring bank. Veritec has a portfolio of five United States and eight foreign patents. In addition, we have seven U.S. and twenty-eight foreign pending patent applications. Veritec has had agreements with various banks in the past and is currently seeking a bank to sponsor its Prepaid Card programs.

The Company was also previously engaged in its proprietary two-dimensional matrix symbology technology (also commonly referred to as “two-dimensional barcodes”, “2D barcodes”, or “Barcode Technology”) which it sold on September 30, 2015 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 Matthews Group’s Barcode Technology operations through June 30, 2024.

In this Form 10-K, the Company’s mobile software banking technology will hereafter be referred to as its “Mobile Banking Technology”. The Mobile Banking Technology is used to offer Prepaid Card Programs to sponsor banks and approved applicants/cardholders. These programs may also be referred to as the MTC™ card or the Blinx ON-OFF™ Prepaid Card programs.

Company History

Our Products and Solutions

The Company believes that its Mobile Banking Technology platform and its blinx On-Off™ debit card and blinxPay™ mobile wallet programs are a significant advance in mobile banking and close loop/open loop debit technology and is capable of bringing significant value to card issuing and sponsoring organizations, whether they be commercial or government.

(a) MTC™ Debit Card - Visa® Prepaid Card Programs

In fiscal year 2009, the Company announced the release of its Mobile Toggle Card (MTC™) Program on the Company’s mobile banking software platform under a sponsoring bank. Veritec’s mobile banking software platform is a debit based, pre-paid and gift card solution that is licensed by Veritec’s wholly owned subsidiary, Veritec Financial Systems, Inc., to debit card issuers and sponsoring organizations. Under the MTC™ Program, card issuers and sponsors may provide the MTC™ branded debit or gift cards to individuals with and without demand deposit accounts (e.g., the latter the “under-banked”). The MTC™ card may be part of a Visa® branded program and, as such, the cards are accepted anywhere in the world that Visa cards are accepted.

With an MTC™ card, the cardholders are empowered to combat unpermitted and fraudulent use of their debit cards by “toggling” their cards “on” and “off” with their mobile phones. Cardholders no longer have to completely rely on their card issuers to monitor possible fraudulent activity on their accounts. Cardholders can now de-activate their cards themselves, in real-time, any time they choose to do so. In addition to this toggling feature, cardholders may apply for their cards online, arrange for direct deposits to be made to their cards, and transfer money to their card from another account. Cardholders may also elect to receive various alerts on their mobile phones about activity on their card. In the fiscal year 2010, the Company began accepting applications for the MTC™ card from individual applicants and issuing live Visa® branded debit cards under the MTC Mobile Toggle Card Program.

(b) blinx ON-OFF Debit Card - Visa® Prepaid Card Programs

In fiscal year 2011, Veritec began marketing the blinx ON-OFF™ branded card under a bank sponsorship. The blinx ON-OFF™ card is based on the Mobile Banking Technology platform and offers the same features and functions as the MTC™ branded card but with different pricing for bank-sponsored cards.

In addition to the MTC™ and blinx ON-OFF™ branded program, the Company enables card issuers and sponsors to issue debit, pre-paid and gift cards under their own branded programs through licensed use of the mobile banking platform and the Company’s provision of related professional services.

(d) blinxPay™ Mobile Wallet App

The Company released its blinxPay™ mobile wallet application during fiscal year 2016. blinxPay™ is a secure payment processing system and mobile app that enables customers to make purchases at participating merchants using funds loaded into their blinxPay™ virtual account. The blinxPay™ mobile app is available for download for free at both Google Pay and Apple iTunes stores.

Veritec’s mobile banking solution also enables member card programs to be processed and settled member rewards to its members in either an open or closed loop processing environment. In addition to its front-end licensing and professional services, the Company also provides back-end card processing services to the card issuing institutions for all cardholder transactions on the licensed platform. The Company’s Mobile Banking Technology resides within a Payment Card Industry (PCI) compliant data processing center.

Intellectual Property Rights

The Company was founded upon its intellectual property on its belief that its intellectual property will give the Company a commercial advantage in the global marketplace. The Company relies on patent, trade secret, copyright and trademark law, as well as the company’s contractual terms with its customers, to define, maintain and enforce the Company’s intellectual property rights in its Mobile Banking Technology and other technologies and relationships.

The Company has a portfolio of seven United States and eight foreign patents. In addition, we have three U.S. and eight foreign pending patent applications.

A significant amount of the Company’s intellectual property takes the form of trade secrets and copyrighted works of authorship. The Company treats the source code to its Mobile Banking Technology as trade secrets, and its licensed software applications are copyrightable subject matter.

We have a portfolio of registered and pending trademarks in the U.S. and foreign jurisdictions, including registrations for the marks “VSCode®” and “VeriCode®.” The Company uses “Veritec” as a trademark and service mark, as well as serving as the Company’s trade name.

Major Customers

During the year ended June 30, 2023, we had three customers, that represented 61% (a related party) 14% and 13% of our revenues, respectively. During the year ended June 30, 2022, we had two customers, that represented 75% (a related party) and 15% of our revenues, respectively. No other customer represented more than 10% of our revenues.

Competition

Our Mobile Banking Technology competes with other independent sales organizations and third party services of Visa-branded card programs, including TransCash Corporation, Ready Debit Card by MetaBank, Millenium Advantage Card by New Millenium Bank, and Wired Plastic by Bancorp Bank. The Company believes, however, that there are very few companies that have the Company’s collective attributes of (1) being an independent sales organization of Visa-branded and non-branded prepaid card programs, (2) being a third party servicer (e.g., back end processor) for banks issuing Visa-branded and non-branded prepaid card programs, (3) being the developer, marketer and licensor of the mobile banking platform on which Visa-branded and non-branded card program cardholder transactions take place, and (4) having a mobile banking platform that enables real-time transaction processing and enabling cardholders to manage their accounts by enabling cardholders to toggle their cards and their website accounts on and off via their mobile phones.

Employees

As of June 30, 2023, the Company employed seven employees and six independent contractor consultants.

Financial Information about Geographic Areas

For the years ended June 30, 2023, and 2022, United States customers accounted for 100% of the Company’s total revenue.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. DESCRIPTION OF PROPERTY

We lease approximately 4,200 square feet of office and laboratory space at 2445 Winnetka Avenue North, Golden Valley, Minnesota, which serves as our primary place of business. This lease is with Van Thuy Tran, the Chairman of the Board and the Chief Executive Officer of the Company. Our lease is currently on a month-to-month term and requires monthly payments of $4,000.

ITEM 3. 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 $364,686 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 June 30, 2023, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is quoted on the OTCPink marketplace under the symbol VRTC. Prior to that, our common stock was quoted on the OTC Bulletin Board. Prior to September 4, 2009, our common stock was traded in the over the counter markets and quoted on the OTC Pink Sheets. The following table sets forth the range of high and low bid quotes of our common stock per quarter as provided by the National Quotation Bureau (which reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily represent actual transactions).

Market Price Range of Common Stock	Fiscal 2023				Fiscal 2022
Quarter Ended	High		Low		High		Low
September 30	$	0.04	$	0.03	$	0.10	$	0.03
December 31	$	0.03	$	0.02	$	0.05	$	0.04
March 31	$	0.02	$	0.02	$	0.05	$	0.03
June 30	$	0.03	$	0.02	$	0.04	$	0.03

Shareholders

As of June 30, 2023, there were approximately 797 shareholders of record, inclusive of those brokerage firms and/or clearinghouses holding our common shares for their clientele.

Dividend Information

We have not declared any cash dividends since inception and do not anticipate paying any dividends in the foreseeable future. The payment of dividends is within the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Registrant’s ability to pay dividends on its Common Stock other than those generally imposed by applicable state law.

Unregistered Sales of Equity Securities

No unregistered sales of equity securities occurred during the years ended June 30, 2023, and 2022.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information with respect to shares of common stock issuable under outstanding awards granted pursuant to our equity compensation plan.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders		—		—		—
Equity compensation plans not approved by security holders⁽¹⁾		900,000	$	0.03		—
Total		900,000	$	0.03		—

(1) The Board of Directors authorized the Chief Executive Officer to issue up to 1,000,000 shares of the Company’s common stock in the form of options or stock bonuses to employees and consultants. The Company has agreements with certain employees that provide for five years of annual grants of options, on each employment anniversary date, to purchase shares of the Company’s common stock. The option price is determined based on the market price on the date of grant, the options vest one year from the date of grant, and the options expire five years after vesting. The Board of Directors granted 1,150,000 stock options to directors and employees under this arrangement in 2019. The Company granted no stock options or stock bonuses to employees and consultants under this arrangement in 2023 and 2022.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. See “Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed elsewhere in this report.

The following discussion and analysis of the 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.

Inflation

Global inflation increased during 2022 and in 2023. 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.

Recent Events

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 year ended June 30, 2023, we completed our performance obligations, and recorded the $50,000 payment as Mobile banking technology revenue during the year ended June 30, 2023. 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 June 30, 2023, no royalties have been realized under 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 in 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 June 30, 2023, no royalty related revenues have been realized under the License Agreement.

Results of Operations – June 30, 2023 compared to June 30, 2022

Revenues

Details of revenues are as follows:

	Year Ended June 30,				Increase (Decrease)
	2023		2022		$			%
Mobile banking technology	$	140,000	$	90,000	$	50,000			55.6
Other revenue, management fee - related party		216,000		263,000		(47,000	)		(17.9	)
Total Revenues	$	356,000	$	353,000	$	3,000			0.1

• Mobile banking technology

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 time, protecting personal identity, and financial account security. Mobile Banking Technology revenues for the years ended June 30, 2023, and 2022 were $140,000 and $90,000, respectively. The increase in Mobile Banking Technology revenues was related to a development contract of the Company’s blinxPay product that concluded during the period ended June 30, 2023. No similar sale occurred during the same period of the prior year.

• Other revenue, management fee - related party

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 years ended June 30, 2023 and 2022, revenue earned from the management services agreement was $216,000 and $263,000, respectively.

Cost of Revenue

Cost of revenue for the years ended June 30, 2023 and 2022 totaled $211,000 and $199,000, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the years ended June 30, 2023 and 2022 totaled $883,000 and $728,000, respectively. The increase in general and administrative expenses was primarily due to increased legal and professional fees as compared to the same period of the prior year.

Other Income (Expenses)

During the year ended June 30, 2022, the Company identified certain vendor related accounts payable balances that exceeded the status of limitations for collections. The Company engaged legal counsel to review the matter and received a legal letter supporting a write off of dated accounts payable balances totaling $397,000. No similar activity occurred in the current year period.

On October 22, 2022, the Company was notified that its PPP loan forgiveness applications totaling $118,000 were approved. No similar activity occurred in the current year period.

Interest expense for the years ended June 30, 2023 and 2022, was $496,000 and $447,000, respectively. The increase was due to the increase in our notes payable balance.

Net Loss

Our net loss for the years ended June 30, 2023 and 2022, was $1,234,000 and $506,000, respectively.

Liquidity and Capital Resources

Our cash balance on June 30, 2023 decreased to $61,000 as compared to $66,000 on June 30, 2022. The decrease was the result of the $494,000 cash provided by financing activities offset by $499,000 cash used in operating activities. Net cash used in operations during the period ended June 30, 2023, was $499,000, compared with $675,000 of net cash used in operations during the same period of the prior year. Cash used in operations during the period ended June 30, 2023, was primarily from our net loss of $1,234,000, offset by a general net increase to our working capital accounts of $240,000, and increased interest accrued on notes payable of $495,000. Net cash provided by financing activities of $494,000 was from proceeds received from notes payable during the period ended June 30, 2023. During the same period of the prior year, net cash provided by financing activities of $503,000 was from proceeds received from notes payable.

The accompanying 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 year ended June 30, 2023, the Company incurred a net loss of $1,234,000 and used cash in operating activities of $499,000, and at June 30, 2023, the Company had a stockholders’ deficiency of $8,670,000. In addition, as of June 30, 2023, the Company is in default on $767,000 of its convertible notes and 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 our June 30, 2023 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 result from the outcome of this uncertainty be necessary should we be unable to continue as a going concern.

The Company believes its cash and forecasted cash flow from operations will not be sufficient to continue operations through fiscal 2024 without continued external investment. Subsequent to June 30, 2023, the Company issued a $22,000 convertible promissory note to Van Tran, the Company’s CEO/Executive Chair and a director, as additional working capital. 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.

The Company has traditionally been dependent on The Matthews Group, LLC, a related party, for its financial support. The Matthews Group is owned 50% by Ms Tran, and 50% by Lawrence J. Johanns, a significant Company stockholder.

Convertible notes and notes payable

Convertible and notes payable includes principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:

	June 30, 2023		June 30, 2022
(a) Unsecured convertible notes ($21,000 and $20,000 in default)	$	66,000	$	64,000
(b) Notes payable (in default)		475,000		458,000
(c) Notes payable (in default)		29,000		28,000
Total notes-third parties	$	570,000	$	550,000

(a) The notes are unsecured, 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.

At June 30, 2021, convertible notes totaled $62,000. During the year ended June 30, 2022, interest of $2,000 was added to the principal resulting in a balance owed of $64,000 at June 30, 2022. During the year ended June 30, 2023, interest of $2,000 was added to the principal resulting in a balance owed of $66,000 at June 30, 2023. On June 30, 2023, $21,000 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 69,286 shares of the Company’s common stock. The balance of $45,000 is due on demand and convertible at a conversion price of $0.08 per share into 567,180 shares of the Company’s common stock.

(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.

At June 30, 2021, the notes totaled $440,000. During the year ended June 30, 2022, interest of $18,000 was added to principal resulting in a balance owed of $458,000 at June 30, 2022. During the year ended June 30, 2023, interest of $17,000 was added to principal resulting in a balance owed of $475,000 at June 30, 2023. At June 30, 2023, $427,000 of notes are secured by the Company’s intellectual property and $48,000 of notes are unsecured.

At June 30, 2021 the notes totaled $27,000. During the year ended June 30, 2022, interest of $1,000 was added to the principal resulting in a balance owed of $28,000 at June 30, 2022. During the year ended June 30, 2023, interest of $1,000 was added to the principal resulting in a balance owed of $29,000 at June 30, 2023.

Convertible notes and notes payable-related parties

Convertible and notes payable-related parties include principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:

	June 30, 2023		June 30, 2022
(a) Convertible notes-The Matthews Group	$	1,970,000	$	1,855,000
(b) Notes payable-The Matthews Group		4,988,000		4,177,000
(c) Convertible notes-other related parties ($242,000 and $233,000 in default)		364,000		321,000
Total notes-related parties	$	7,322,000	$	6,353,000

(a) The notes are unsecured, 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.

The Matthews Group is a related party (see Note 8) 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, 2021, convertible notes due to The Matthews Group totaled $1,741,000. During the year ended June 30, 2022, $114,000 of interest was added to principal, resulting in a balance payable of $1,855,000 at June 30, 2022. During the year ended June 30, 2023, $115,000 of interest was added to principal, resulting in a balance payable of $1,970,000 at June 30, 2023. At June 30, 2023, the notes are convertible at a conversion price of $0.08 per share into 24,621,824 shares of the Company’s common stock.

(b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 8) dated September 30, 2015.

At June 30, 2021, notes due to The Matthews Group totaled $3,375,000. During the year ended June 30, 2022, $503,000 of notes payable were issued and interest of $299,000 was added to principal, resulting in a balance owed of $4,177,000 at June 30, 2022. During the year ended June 30, 2023, $464,000 of notes payable were issued and interest of $347,000 was added to principal, resulting in a balance owed of $4,988,000 at June 30, 2023.

(c) The notes are due to 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.

At June 30, 2021, convertible notes due to other related parties totaled $308,000. During the year ended June 30, 2022, interest of $13,000 was added to principal resulting in a balance owed of $321,000 at June 30, 2022. During the year ended June 30, 2023, $30,000 of notes payable were issued and interest of $13,000 was added to principal, resulting in a balance owed of $364,000 at June 30, 2023. During the year ended June 30, 2023, $30,000 of notes payable were issued and interest of $13,000 was added to principal, resulting in a balance owed of $364,000 at June 30, 2023. At June 30, 2023, $242,000 of the notes were due in 2010 and are in default, and $122,000 is due on demand. At June 30, 2023, $242,000 of the notes are convertible at a conversion price of $0.30 per share into 807,081 shares of the Company’s common stock, $92,000 of the notes are convertible at a conversion price of $0.09 per share into 1,076,347 shares of the Company’s common stock, and $30,000 of the notes are convertible at a conversion price of $0.04 per share into 759,863 shares of the Company’s common stock .

Commitments and Contractual Obligations

The Company leases its corporate office building from Ms. Tran, our chief executive officer, on a month-to-month basis, for $4,000 per month. The corporate office is located at 2445 Winnetka Avenue North, Golden Valley, Minnesota.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

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.

Our 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.

Revenue Recognition

Revenues for the Company are classified into mobile banking technology and management fee revenue.

a. Mobile Banking Revenue

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.

b. Other revenue, management fee - related party

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 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, 2024. The Company earned a fee of 35% of all revenues billed up to June 30, 2024.

Recently Issued Accounting Standards

See Footnote 1 of consolidated financial statements for a discussion of recently issued accounting standards.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

	Page
PART I - FINANCIAL INFORMATION
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of June 30, 2023 and 2022	F-3
Consolidated Statements of Operations for the Years Ended June 30, 2023 and 2022	F-4
Consolidated Statements of Stockholders’ Deficiency for the Years Ended June 30, 2023 and 2022	F-5
Consolidated Statements of Cash Flows for the Years Ended June 30, 2023 and 2022	F-6
Notes to Consolidated Financial Statements	F-7 to F-17

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Veritec, Inc.

Golden Valley, Minnesota

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Veritec, Inc. (the “Company”) and subsidiaries as of June 30, 2023 and 2022, the related consolidated statements of operations, stockholders’ deficiency, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its subsidiary as of June 30, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has had recurring losses from operations and had a stockholders’ deficiency as of June 30, 2023. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

F-1

Revenue recognition – Revenue from Related Party

As described in Notes 4 and 8 to the consolidated financial statements, the Company has entered into a management services agreement (the “Agreement”) with The Matthews Group (TMG), to manage all facets of their barcode technology operations through June 30, 2024. TMG is owned 50% by Ms. Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant stockholder of the Company. Pursuant to the Agreement, the Company earns a fee of 35% of all revenues billed by TMG to its customers. The Company recognizes management fee revenue as services are performed by TMG. In addition, all net cash flow from the barcode technology operations is retained by the Company and reflected as proceeds from notes payable to TMG. Management fee revenue from the Agreement represented approximately 61% of the Company’s total revenue for the fiscal year ended June 30, 2023.

We identified the Company’s recording of revenue as a critical audit matter because of the complexity involved in the recognition of such revenue, in particular given its related party nature. In turn, the auditing of revenue from related party required a high degree of auditor judgment, subjectivity and effort in performing audit procedures and evaluating the results of those procedures to ensure revenue has been properly recorded.

The primary procedures we performed to address this critical audit matter included:

•

We obtained and evaluated documentation prepared by management which outlines the Company’s revenue recognition policies and their processes to determine the revenue to be recognized from TMG sales pursuant to the underlying agreements and current accounting guidelines.

•

We evaluated whether the Company’s conclusion in such documentation was consistent with relevant accounting standards.

•

We obtained a schedule of all revenue recognized by TMG and reconciled the recorded revenue to the underlying accounting records.

•

We selected a sample of revenue transactions recorded by TMG and performed detail testing including the following for each selection:

† Obtained evidence of a contract with the customer;

† Compared the amounts recognized and timing of revenue recognition to underlying source documents such as invoices, form of payments, and executed contracts and related modifications, if any;

† Evaluated the Company’s application of their accounting policies to determine the timing and amount recognized; and

† For each sample tested, we recalculated the Company’s share of revenue based upon the terms of the agreement and reconciled to the Company’s accounting records.

•

We obtained and tested a schedule of net receipts retained by the Company and reflected as a note payable to TMG.

•

We confirmed the balance of the note to TMG as of June 30, 2023.

•

We read and evaluated management’s disclosure of the nature of the transaction and identification as related party transaction.

/s/ Weinberg & Company, P.A.

Los Angeles, California
October 13, 2023

ID#572

We have served as the Company’s auditor since 2008

F-2

VERITEC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	June 30, 2023			June 30, 2022
ASSETS
Current Assets:
Cash	$	61,000		$	66,000
Accounts receivable		7,000			7,000
Prepaid expenses		6,000			6,000
Total Assets	$	74,000		$	79,000

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities:
Accounts payable	$	289,000		$	271,000
Accounts payable, related party		119,000			102,000
Accrued expenses		60,000			59,000
Customer deposits		29,000			25,000
Convertible notes and notes payable ($525,000 and $506,000 in default)		570,000			550,000
Convertible notes and notes payable, related parties ($242,000 and $233,000 in default)		7,322,000			6,353,000
Total Current Liabilities		8,389,000			7,360,000
Deferred revenues		200,000			—
Contingent earnout liability		155,000			155,000
Total Liabilities		8,744,000			7,515,000

Commitments and Contingencies		—			—
Stockholders' Deficiency:
Convertible preferred stock, par value $1.00; authorized 10,000,000 shares, 276,000 shares of Series H authorized, 1,000 shares issued and outstanding		1,000			1,000
Common stock, par value $.01; authorized 150,000,000 shares; 39,988,007 and 39,988,007 shares issued and outstanding, respectively		400,000			400,000
Common stock to be issued, 145,000 shares to be issued		12,000			12,000
Additional paid-in capital		18,143,000			18,143,000
Accumulated deficit		(27,226,000	)		(25,992,000	)
Total Stockholders' Deficiency		(8,670,000	)		(7,436,000	)
Total Liabilities and Stockholders’ Deficiency	$	74,000		$	79,000

See accompanying notes.

F-3

VERITEC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS


	Fiscal Years Ended June 30,
	2023			2022
Revenue:
Mobile banking technology revenue	$	140,000		$	90,000
Other revenue, management fee - related party		216,000			263,000
Total revenue		356,000			353,000

Cost and Expense:
Cost of revenue		211,000			199,000
Selling, general and administrative expenses (including $51,000 and $51,000, respectively, to a related party)		883,000			728,000
Total operating expenses		1,094,000			927,000
Loss from operations		(738,000	)		(574,000	)

Other Income (Expense):
Gain on extinguishment of accounts payable		—			397,000
Gain on forgiveness of SBA PPP loans		—			118,000
Interest expense (including $475,000 and $426,000, respectively, to related parties)		(496,000	)		(447,000	)
Total other income (expense), net		(496,000	)		68,000

Net Loss	$	(1,234,000	)	$	(506,000	)
Net Loss Per Common Share - Basic and Diluted	$	(0.03	)	$	(0.01	)
Weighted Average Number of Shares Outstanding - Basic and Diluted		39,988,007			39,988,007

See accompanying notes.

F-4

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


	Preferred Stock			Common Stock
	Shares		Amount	Shares		Amount		Common Stock to be Issued		Additional Paid-in Capital		Accumulated Deficit			Stockholders’ Deficiency
Balance, June 30, 2021	1,000	$	1,000	39,998,007	$	400,000	$	12,000	$	18,143,000	$	(25,486,000	)	$	(6,930,000	)
Net Loss	—		—	—		—		—		—		(506,000	)		(506,000	)
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	—		—	—		—		—		—		(1,234,000	)		(1,234,000	)
Balance, June 30, 2023	1,000	$	1,000	39,988,007	$	400,000	$	12,000	$	18,143,000	$	(27,226,000	)	$	(8,670,000	)

See accompanying notes.

F-5

VERITEC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Fiscal Years Ended June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,234,000	)	$	(506,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest accrued on notes payable		495,000			447,000
Gain on extinguishment of accounts payable		—			(397,000	)
Gain on forgiveness of SBA PPP loan		—			(118,000	)
Changes in operating assets and liabilities:
Accounts receivable		—			1,000
Prepaid expenses		—			(1,000	)
Customer deposits		4,000			(72,000	)
Deferred revenue		200,000			—
Accounts payable		18,000			(23,000	)
Accounts payable, related party		17,000			6,000
Accrued expenses		1,000			(12,000	)
Net cash used in operating activities		(499,000	)		(675,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable-related party		494,000			503,000
Net cash provided by financing activities		494,000			503,000

NET DECREASE IN CASH		(5,000	)		(172,000	)
CASH AT BEGINNING OF PERIOD		66,000			238,000
CASH AT END OF PERIOD	$	61,000		$	66,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	—		$	—

See accompanying notes.

F-6

VERITEC, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FISCAL YEARS ENDED JUNE 30, 2023 AND 2022

NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Veritec, Inc. (Veritec) 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.

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 (see Note 8). 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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Veritec Financial Systems, Inc., Tangible Payment Systems, Inc., and Public Bell, Inc. (collectively the “Company”). Intercompany transactions and balances were eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may 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 period. Those estimates and assumptions include estimates for reserves of uncollectible accounts, analysis of impairments of long-lived assets, 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.

Cash and cash equivalents

Investments with original maturities of three months or less are considered to be cash equivalents. The Company held no cash equivalents as of June 30, 2023 and 2022.

Accounts Receivable

The Company grants uncollateralized credit to customers but requires deposits on unique orders. Management periodically reviews its accounts receivable and provides an allowance for doubtful accounts after analyzing the age of the receivable, payment history and prior experience with the customer. The estimated loss that management believes is probable is included in the allowance for doubtful accounts. While the ultimate loss may differ, management believes that any additional loss will not have a material impact on the Company's financial position. Due to uncertainties in the settlement process, however, it is at least reasonably possible that management's estimate will change during the near term. Based on management’s assessment, no allowance for doubtful accounts was considered necessary at June 30, 2023, or 2022.

F-7

Revenue Recognition

Revenues for the Company are classified into management fee revenue and mobile banking technology.

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 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.

Mobile Banking Technology Revenue

Other Revenue, Management Fee - Related Party

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 Group (a related party, see Note 8). 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 earned a fee of 35% of all revenues billed up to June 30, 2023. The Company recognizes management fee revenue as services are performed.

Disaggregation of Net Sales

The following table shows the Company’s disaggregated net sales by product type:

Schedule of disaggregated net sales
	Fiscal years ended June 30,
	2023		2022
Mobile banking technology revenue	$	140,000	$	90,000
Other revenue, management fee - related party		216,000		263,000
Total revenue	$	356,000	$	353,000

The following table shows the Company’s disaggregated net sales by customer type:

	Fiscal years ended June 30,
	2023		2022
Medical	$	46,000	$	53,000
Associations		12,000		12,000
Education		12,000		12,000
Banking		50,000		—
Other		20,000		13,000
Other revenue, management fee related party		216,000		263,000
Total revenue	$	356,000	$	353,000

F-8

Mobile banking technology revenues during the year ended June 30, 2023 included the aggregate fees of $50,000 recognized as revenue under the agreements entered into by the Company with Nugen Universe, LLC in July 2022 and October 2022 (see Note 9). During the years ended June 30, 2023 and 2022, all of the Company’s Mobile banking technology revenues were earned in the United States of America.

Other revenue, management fee - related party revenue was $216,000 and $263,000 for the years ended June 30, 2023 and 2022, 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.

Income Taxes

The Company accounts for income taxes using the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Loss per Common Share

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 stock outstanding plus the number of additional common stock that would have been outstanding if all dilutive potential common stock had been issued, using the treasury stock method.

For the years ended June 30, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect.

As of June 30, 2023 and 2022, we excluded the outstanding securities summarized below, which entitle the holders thereof to acquire shares of common stock, from our calculation of earnings per share, as their effect would have been anti-dilutive.


	June 30,
	2023		2022
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		27,901,581		25,677,568
Options		900,000		900,000
Total		28,811,581		26,587,568

F-9

Fair Value of Financial Instruments

The Company determines the fair 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:

•

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.

The carrying amounts of financial instruments such as cash, accounts receivable, and accounts payable and accrued liabilities, approximate the related fair values due to the short-term maturities of these instruments. The carrying values of convertible 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.

Concentrations

During the year ended June 30, 2023, the Company had three customers, that represented 61% (a related party), 14% and 13% of our revenues, respectively. During the year ended June 30, 2022, the Company had two customers, that represented 75% (a related party) and 15% of our revenues, respectively. No other customer represented more than 10% of our revenues.

Segments

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 consolidated financial statements.

Recently Issued Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. As small business filer, the standard will be effective for us for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.

In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” ASU 2020-06 reduces the number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion models. The diluted net income per share calculation for convertible instruments will require the Company to use the if-converted method. For contracts in an entity’s own equity, the type of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective January 1, 2024, for the Company and the provisions of this update can be adopted using either the modified retrospective method or a fully retrospective method. Early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.

F-10

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. An issuer measures the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange. ASU 2021-04 introduces a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 did not have a material impact on the Company’s financial statements or disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future financial statements.

NOTE 2 - GOING CONCERN

The accompanying 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 year ended June 30, 2023, the Company recorded a net loss of $1,234,000, used cash in operating activities of $499,000, and at June 30, 2023, the Company had a stockholders’ deficiency of $8,670,000. In addition, as of June 30, 2023, the Company is delinquent in payment of $767,000 of its convertible notes and 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. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty be necessary should we be unable to continue as a going concern.

The Company believes its cash and forecasted cash flow from operations will not be sufficient to continue operations through fiscal 2024 without continued external investment. Subsequent to June 30, 2023, the Company issued a $22,000 convertible promissory note to Van Tran, the Company’s CEO/Executive Chair and a director, as additional working capital (see Note 12). 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. The consolidated financial statements do not include any adjustments that may result from this uncertainty.

F-11

NOTE 3 –CONTINGENT EARNOUT LIABILITY

On September 30, 2014, the Company acquired certain assets and liabilities of the Tangible Payments LLC. A portion of the purchase price for Tangible Payments LLC was an earnout payment of $155,000. The earnout payment is payable on a monthly basis from the net profits derived from the acquired assets commencing three months after the closing. The earnout payment is accelerated and the balance of the earnout payment shall be due in full at such time as Veritec receives equity investments aggregating $1,300,000. For the years ended June 30, 2023 and 2022, there was no net profit derived from the acquired assets, and the Company had not yet received the required equity investments. Accordingly, no payments were made on the earnout.

NOTE 4 – CONVERTIBLE NOTES AND NOTES PAYABLE

Convertible notes and notes payable

Convertible and notes payable includes principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:


	June 30, 2023		June 30, 2022
(a) Unsecured convertible notes ($21,000 and $20,000 in default)	$	66,000	$	64,000
(b) Notes payable (in default)		475,000		458,000
(c) Notes payable (in default)		29,000		28,000
Total notes-third parties	$	570,000	$	550,000

(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.

Convertible notes and notes payable-related parties

Convertible and notes payable-related parties include principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:


	June 30, 2023		June 30, 2022
(a) Convertible notes-The Matthews Group	$	1,970,000	$	1,855,000
(b) Notes payable-The Matthews Group		4,988,000		4,177,000
(c)Convertible notes-other related parties ($242,000 and $233,000 in default)		364,000		321,000
Total notes-related parties	$	7,322,000	$	6,353,000

F-12

(a) The notes are unsecured, 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.

The Matthews Group is a related party (see Note 8) 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, 2021, convertible notes due to The Matthews Group totaled $1,741,000. During the year ended June 30, 2022, $114,000 of interest was added to principal, resulting in a balance payable of $1,855,000 at June 30, 2022. During the year ended June 30, 2023, $115,000 of interest was added to principal, resulting in a balance payable at June 30, 2023 of $1,970,000. At June 30, 2023, the notes are convertible at a conversion price of $0.08 per share into 24,621,824 shares of the Company’s common stock.

At June 30, 2021, convertible notes due to other related parties totaled $308,000. During the year ended June 30, 2022, interest of $13,000 was added to principal resulting in a balance owed of $321,000 at June 30, 2022. During the year ended June 30, 2023, $30,000 of notes payable were issued and interest of $13,000 was added to principal, resulting in a balance owed of $364,000 at June 30, 2023. At June 30, 2023, $242,000 of the notes were due in 2010 and are in default, and $122,000 is due on demand. At June 30, 2023, $242,000 of the notes are convertible at a conversion price of $0.30 per share into 807,081 shares of the Company’s common stock, $92,000 of the notes are convertible at a conversion price of $0.09 per share into 1,076,347 shares of the Company’s common stock, and $30,000 of the notes are convertible at a conversion price of $0.04 per share into 759,863 shares of the Company’s common stock .

NOTE 5 - STOCKHOLDERS’ DEFICIENCY

Preferred Stock

The articles of incorporation of Veritec authorize 10,000,000 shares of preferred stock with a par value of $1.00 per share. The Board of Directors is authorized to determine any number of series into which shares of preferred stock may be divided and to determine the rights, preferences, privileges, and restrictions granted to any series of the preferred stock.

In 1999, a new Series H convertible preferred stock was authorized. Each share of Series H convertible preferred stock is convertible into 10 shares of the Company’s common stock at the option of the holder. As of June 30, 2023 and 2022, there were 1,000 shares of Series H convertible preferred stock issued and outstanding.

Common Stock to be Issued

At June 30, 2023 and 2022, 145,000 shares of common stock to be issued with an aggregate value of $12,000 have not been issued and are reflected as common stock to be issued in the accompanying consolidated financial statements.

F-13

NOTE 6 – STOCK OPTIONS

A summary of stock options as of June 30, 2023 and for the two years then ended is as follows:

Schedule of stock options
	Number of Shares			Weighted - Average Exercise Price
Outstanding at June 30, 2021		3,400,000		$	0.08
Granted		—			—
Forfeited		(2,500,000	)	$	(0.08	)
Outstanding at June 30, 2022		900,000		$	0.03
Granted		—			—
Forfeited				$	—
Outstanding at June 30, 2023		900,000		$	0.03
Exercisable at June 30, 2023		900,000		$	0.03

As of June 30, 2023, the Company had no outstanding unvested options with future compensation costs. The outstanding and exercisable stock options had no intrinsic value on June 30, 2023, and June 30, 2022, respectively.

Additional information regarding options outstanding as of June 30, 2023, is as follows:


Options Outstanding and Exercisable at June 30, 2023
Range of Exercise Price		Number of Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	0.03		900,000		2.48	$	0.03

NOTE 7 - INCOME TAXES

For the year ended June 30, 2023, net loss was $1,234,000, as compared to a net loss of $506,000 for the year ended June 30, 2022. For the years ended June 30, 2023 and 2022, no provision for income taxes was recorded.

Reconciliation between the expected federal income tax rate and the actual tax rate is as follows:


	Year Ended June 30,
	2023			2022
Federal statutory tax rate		21	%		21	%
State tax, net of federal benefit		6	%		6	%
Total tax rate		27	%		27	%
Allowance		(27	)%		(27	)%
Effective tax rate		—	%		—	%

The following is a summary of the deferred tax assets:

Schedule of deferred tax assets
	Year Ended June 30,
	2023			2022
Net operating loss carryforwards	$	4,315,000		$	3,982,000
Deferred tax assets before valuation allowance		4,315,000			3,982,000
Valuation allowance		(4,315,000	)		(3,982,000	)
Net deferred tax asset	$	—		$	—

F-14

The Company has provided a valuation allowance on the deferred tax assets at June 30, 2023 and 2022 to reduce such asset to zero, since there is no assurance that the Company will generate future taxable income to utilize such asset. Management will review this valuation allowance requirement periodically and make adjustments as warranted. The net change in the valuation allowance for the year ended June 30, 2023, was an increase of $333,000.

Veritec has net operating loss carryforwards of approximately $15,983,000 as of June 30, 2023 for federal purposes available to offset future taxable income that expires in varying amounts through 2044. The ability to utilize the net operating loss carryforwards could be limited by Section 382 of the Internal Revenue Code which limits their use if there is a change in control (generally a greater than 50% change in ownership). The Company is subject to examination by tax authorities for all years for which a loss carryforward is utilized in subsequent periods.

The Company follows FASB guidelines that address the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on derecognition, classification, interest, and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of June 30, 2023 and 2022, the Company did not have a liability for unrecognized tax benefits, and no adjustment was required at adoption.

The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of June 30, 2023 and 2022, the Company has no accrued interest or penalties related to uncertain tax positions.

NOTE 8 – RELATED PARTY TRANSACTIONS

The Matthews Group is owned 50% by 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 4).

Management Services Agreement and Related Notes Payable with Related Party

The Company’s Barcode 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 June 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.

In consideration of the services provided by the Company to The Matthews Group, the Company earned a fee of 35% of all revenues up to June 30, 2024, from the barcode technology operations. During the years ended June 30, 2023 and 2022, the Company recorded management fee revenue related to this agreement of $216,000 and $263,000, respectively.

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 years ended June 30, 2023 and 2022, cash flow loans of $464,000 and $503,000, respectively, were made to the Company at 10% interest per annum and due on demand. At June 30, 2023, cash flow loans of $4,988,000 are due to The Matthews Group (see Note 4).

Advances from Related Parties

From time to time, Ms. Tran, the Company’s CEO/Executive Chair, provides advances to finance the Company’s working capital requirements. As of June 30, 2023 and 2022, total advances to Ms. Tran amounted to $119,000 and $102,000, 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.

F-15

Other Transactions with Related Parties

The Company leases its office facilities from Ms. Tran who owns the building, the Company’s CEO/Executive Chair. For both the years ended June 30, 2023 and 2022, lease payments to Ms. Tran totaled $51,000.

NOTE 9 – AGREEMENTS WITH NUGEN

On July 4, 2022, 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 year ended June 30, 2023, the Company completed its performance obligations, and recorded the $50,000 payment as Mobile banking technology revenue during the year ended June 30, 2023. 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 June 30, 2023, no royalties have been realized under 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 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 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 June 30, 2023, no royalty related revenues have been realized under the License Agreement.

NOTE 10 – 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 June 30, 2023, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On March 26, 2022, as amended on May 10, 2022, the Company and Es Solo Holdings Ltd (“Es Solo”), an England & Wales limited liability company, entered into a Prepaid Card Client Program Management Agreement (“Management Agreement”). Es Solo develops, markets, and operates prepaid card programs through its affiliations with issuing banks, and the Company desires to have Es Solo develop a prepaid card program to be marketed by the Company for card issuing purposes, pursuant to the terms of the Management Agreement. Es Solo agreed to pay the Company $10,000 as a program 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-ID, and debit card products. As of June 30, 2023, no revenues have been realized under the Management Agreement.

F-16

On November 1, 2021, the 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 June 30, 2023, the Marketer had not met any of its revenue targets and no commissions or equity compensation was due.

On December 5, 2008, the Company adopted an incentive compensation bonus plan to provide payments to key employees in the aggregated amount of 10% of pre-tax earnings in excess of $3,000,000 after the end of each fiscal year to be distributed annually to employees. As of June 30, 2023, the Company had not achieved annual pre-tax earnings in excess of $3,000,000.

On December 5, 2008, the Company entered into an employment agreement with Van Thuy Tran, its Chief Executive Officer, providing for an annual base salary of $150,000 and customary medical and other benefits. The agreement may be terminated by either party upon 30 days’ notice. In the event the Company terminates the agreement without cause, Ms. Tran will be entitled to $1,000,000 payable upon termination, and she will be entitled to severance equal to 12 months compensation and benefits. The Company has also agreed to indemnify Ms. Tran against any liability or damages incurred within the scope of her employment. During the years ended June 30, 2023 and 2022, salaries paid to Van Thuy Tran under this agreement totaled $150,000 and $150,000.

NOTE 12 – SUBSEQUENT EVENTS

On July 23, 2023, the Company issued a $22,000 convertible promissory note to Van Thuy Tran, its Chief Executive Officer. The convertible note is due upon demand, is unsecured, convertible into common stock at a per share amount of $0.04, and bears interest at a rate of 10% per annum.

F-17

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Based upon an evaluation of the effectiveness of our disclosure controls and procedures performed by our Chief Executive Officer as of the end of the period covered by this report, our Chief Executive Officer concluded that our disclosure controls and procedures have not been effective as a result of a weakness in the design of internal control over financial reporting identified below.

As used herein, “disclosure controls and procedures” mean controls and other procedures of our company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f) under the Securities Exchange Act of 1934. Our Chief Executive Officer/Chief Accounting Officer conducted an evaluation of the effectiveness of our control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on management’s evaluation under the framework, management has concluded that our internal control over financial reporting was not effective as of June 30, 2023.

We identified material weaknesses in our internal control over financial reporting primarily attributable to (i) lack of segregation of incompatible duties; and (ii) insufficient Board of Directors representation. These weaknesses are due to our inadequate staffing during the period covered by this report and our lack of working capital to hire additional staff. Management has retained an outside, independent financial consultant to record and review all financial data, as well as prepare our financial reports, in order to mitigate this weakness. Although management will periodically re-evaluate this situation, at this point it considers that the risk associated with such lack of segregation of duties and the potential benefits of adding employees to segregate such duties are not cost-justified. We intend to hire additional accounting personnel to assist with financial reporting as soon as our finances will allow.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting occurred during the year ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

As of June 30, 2023, the members of the present Board of Directors and Officers are:

Name	Office	Age
Van Thuy Tran	Chief Executive Officer, Chairman of the Board, Treasurer	77
Laird Powers	Director	74

Each director will serve until the next annual meeting of shareholders, or until their respective successors have been elected and duly qualified. Directors serve one-year terms. The Board of Directors appoints officers.

Ms. Van Thuy Tran is the Chief Executive Officer and Chairman of the Board. Ms. Tran controls a majority interest in the Company. She was President of Asia Consulting and Trading Company from 1979 to 1999, a company dealing with trade in the Pacific Rim countries. She is the co-founder of Circle of Love, providing mission work in Vietnam since 1993. She is the founder of Caring for Others, a non-profit organization with the vision of sharing what we have with others. She was the founder of Equal Partners, Inc., a construction and building company in Minnesota. Ms. Van Tran has a medical degree and worked in the medical field for over 17 years.

Laird E. Powers is a member of the Board and is a private investor in emerging technology companies. He has been involved with the Company since its early stages in 1986. In addition, for the past 32 years, he is the president and owner of a construction company in Northern California. He holds a Bachelor of Science degree in Psychology with a Mathematics minor from California State University - Hayward.

Section 16(a) Beneficial Ownership Reporting Compliance

Section16(a) of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and directors and persons owning more than ten percent of the Common Stock, to file initial reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-K under the 34 Act requires us to identify in our Form 10-K and proxy statement those individuals for whom one of the above referenced reports was not filed on a timely basis during the most recent year or prior years. To the best of our knowledge, all required reports were filed.

Committee and Board Meetings

No meetings of our Board of Directors was held in fiscal 2023. The Audit Committee is currently comprised of one independent director who does qualify as an “audit committee financial expert,” as defined by the rules of the Securities and Exchange Commission and the NASDAQ Capital Market.

Director Independence

Each of our current board of directors is independent under the revised listing standards of The NASDAQ Stock Market, Inc.

Code of Ethics

We have adopted a code of ethics, which is available on our website at https://www.veritecinc.com/management-team. Our code of ethics applies to all of our employees, including our officers and directors. If our Board grants any waivers of, or amendments to, the code of ethics to any of our executive officers or directors, we will disclose these matters through our website.

Family Relationships

No family relationship has ever existed between any director, executive officer of the Company, and any person contemplated to become such.

Involvement in Certain Legal Proceedings

Our directors, executive officers, and control persons have not been involved in any of the following events during the past five years:

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Corporate Governance

We are committed to having sound corporate governance principles. We believe that such principles are essential to running our business efficiently and to maintaining our integrity in the marketplace.

There have been no changes to the procedures by which stockholders may recommend nominees to our Board of Directors.

Director Qualifications

We believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business or banking. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to perform responsibly all director duties for us. Each director must represent the interests of all stockholders. When considering potential director candidates, the board of directors also considers the candidate’s character, judgment, diversity, age and skills, including financial literacy and experience in the context of our needs and the needs of the board of directors.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table summarizes all compensation for fiscal years 2023 and 2022 who was the only individual that served as a principal executive officer, and who was the only “Named Executive Officer” of the Company.

Name	Year		Salaries ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		All Other Compensation ($)		Total ($)
Van Thuy Tran Chief Executive Officer		2023	$	150,000		—		—		—		—	$	150,000
Van Thuy Tran Chief Executive Officer		2022	$	150,000		—		—		—		—	$	150,000

Employment Agreements

On December 5, 2008, the Company entered into an employment agreement with Van Thuy Tran providing for an annual base salary of $150,000 and customary medical and other benefits. The agreement may be terminated by either party upon 30 days’ notice. In the event the Company terminates the agreement without cause, Ms. Tran will be entitled to $1,000,000 payable upon termination and entitled to severance equal to 12 months compensation and benefits. The Company has also agreed to indemnify Ms. Tran against any liability or damages incurred within the scope of her employment.

Director Compensation

The following table summarizes the compensation paid to our directors for the year ended June 30, 2023:

Name	Year	Fees Earned or Paid in Cash ($)	Bonus ($)	Stock Awards ($) (3)	Option Awards ($)	All Other Compensation ($)	Total ($)
Van Tran Director and Chief Executive Officer (1)	2023	—	—	—	—	—	—
Laird Powers, Director (1)	2023	—	—	—	—	—	—

(1)

Directors who are employed by the Company do not receive separate compensation for services on the Board of Directors. Members of the Board of Directors who are not employees of the Company currently receive no fees. In addition, members of the Board of Directors are reimbursed for any expenses incurred in attending the meetings.

Outstanding Equity Awards at Fiscal Year End

None of our named executive officers has outstanding equity awards received as compensation, including unexercised options, stock that has not vested, or equity incentive plan awards, as of the end of the Company's last completed fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information as of June 30, 2023 with respect to the holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our Common Stock; (2) each of our directors, nominees for director and named executive officers; and (3) all directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated.

Except as otherwise indicated below, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by them. Unless otherwise indicated, the principal address of each listed executive officer and director is 2445 Winnetka Avenue North, Golden Valley, MN 55427.

Name	Number of Shares Beneficially Owned		Percent of Shares
Laird Powers		252,984		0.6	%
Van Thuy Tran		229,250		0.6	%
All Officers and Directors as a group (3 persons)		482,234		1.2	%
The Matthews Group LLC (1)		29,352,547		73.4	%

(1)

The above shares include 50% of the shares owned or issuable to The Matthews Group. Van Thuy Tran and Lawrence J. Johanns each own 50% of The Matthews Group.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company's transactions with its officers, directors, and affiliates have been, and such future transactions will be, on terms no less favorable to the Company than could have been realized by the Company in arms-length transactions with non-affiliated persons and will be approved by the board of directors.

The Matthews Group is owned 50% by Ms. Van 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.

Management Services Agreement and Related Notes Payable with Related Party

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’s Barcode Technology was originally 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. The Company has 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, 2023. The Matthews Group bears the risk of loss from the barcode operations and has the right to the residual benefits of the barcode operations. In consideration, the Company earns a fee of 20% of all revenues up to May 31, 2017, and 35% of all revenues up to June 30, 2024, from the barcode technology operations. During the years ended June 30, 2023 and 2022, the Company recorded management fee revenue related to this agreement of $216,000 and $263,000, respectively. 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 as proceeds from unsecured notes payable due The Matthews Group. During the years ended June 30, 2023 and 2022, cash flow loans of $464,000 and $503,000, respectively, were made to the Company at 10% interest per annum and due on demand. At June 30, 2023, cash flow loans of $4,988,000 are due to The Matthews Group.

Advances from Related Parties

As of both June 30, 2023 and 2022, $119,000 and $102,000 of advances due to Ms. Van Tran have been presented as accounts payable, related party on the accompanying Consolidated Balance Sheets, respectively. The advances are unsecured, non-interest bearing, and due on demand.

Other Transactions with Related Parties

The Company leases its office facilities from Ms. Tran, who owns the building. For both the years ended June 30, 2023 and 2022, lease payments to Ms. Van Tran totaled $51,000.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the fees billed to the Company for professional services rendered by the Company’s independent registered public accounting firm, for the years ended June 30, 2023 and 2022:

Fees	2023		2022
Weinberg & Company, CPAs
Audit fees	$	72,000	$	43,000
Audit Related fees		—		—
Tax fees		—		—
All other fees		—		—
Total Fees	$	72,000	$	43,000

Audit Fees: Consist of fees billed for professional services rendered for the audits of our financial statements and reviews of our interim consolidated financial statements included in quarterly reports.

PART IV

Item 15. EXHIBITS

Exhibit Number	Ref	Description of Document
3.1		Restated Articles of Incorporation of Veritec, Inc. dated May 3, 1997 (incorporated by reference to Exhibit 3(i) to Veritec’s Quarterly Report on Form 10QSB for the quarter ended March 31, 2007, as filed on May 15, 2007).
3.2		Bylaws of Veritec, Inc. (incorporated by reference to Exhibit 3(ii) to Veritec’s Quarterly Report on Form 10QSB for the quarter ended December 31, 2006, as filed on February 14, 2007).
31.1	*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	*	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	*	XBRL Instance Document
101.SCH	*	XBRL Taxonomy Extension Schema Document
101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.
		a Nevada corporation

October 13, 2023	By:	/s/ Van Thuy Tran
		Van Thuy Tran
		Chief Executive Officer
		(Principal Executive Officer)

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ VAN THUY TRAN	Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	October 13, 2023
Van Thuy Tran

/s/ LAIRD POWERS	Director	October 13, 2023
Laird Powers

EXHIBIT 31.1

CERTIFICATION

I, Van Tran, certify that:

	1.	I have reviewed this annual report on Form 10-K of Veritec, Inc.;

	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: October 13, 2023

/s/ VAN TRAN
Van Tran
Chief Executive Officer and Principal Financial Officer

EXHIBIT 32.1

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Van Tran, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Veritec, Inc. on Form 10-K for the fiscal year ended June 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this Annual Report on Form 10-K fairly presents in all material respects the financial condition and results of operations of Veritec, Inc.

	By:	/s/ VAN TRAN
Date: October 13, 2023	Name:	Van Tran
	Title:	Chief Executive Officer and Principal Financial Officer

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Jun. 30, 2023	Oct. 04, 2023	Dec. 31, 2022
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--06-30
Entity File Number	000-15113
Entity Registrant Name	VERITEC, INC.
Entity Central Index Key	0000773318
Entity Tax Identification Number	95-3954373
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	12445 Winnetka Avenue N.
Entity Address, City or Town	Golden Valley
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55427
City Area Code	763
Local Phone Number	253-2670
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	VRTC
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 305,000
Entity Common Stock, Shares Outstanding		39,988,007
Document Financial Statement Error Correction [Flag]	false
Auditor Name	Weinberg & Company, P.A.
Auditor Location	Los Angeles, California
Auditor Firm ID	572

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Current Assets:
Cash	$ 61,000	$ 66,000
Accounts receivable	7,000	7,000
Prepaid expenses	6,000	6,000
Total Assets	74,000	79,000
Current Liabilities:
Accounts payable	289,000	271,000
Accounts payable, related party	119,000	102,000
Accrued expenses	60,000	59,000
Customer deposits	29,000	25,000
Convertible notes and notes payable ($525,000 and $506,000 in default)	570,000	550,000
Convertible notes and notes payable, related parties ($242,000 and $233,000 in default)	7,322,000	6,353,000
Total Current Liabilities	8,389,000	7,360,000
Deferred revenues	200,000	0
Contingent earnout liability	155,000	155,000
Total Liabilities	8,744,000	7,515,000
Commitments and Contingencies
Stockholders' Deficiency:
Convertible preferred stock, par value $1.00; authorized 10,000,000 shares, 276,000 shares of Series H authorized, 1,000 shares issued and outstanding	1,000	1,000
Common stock, par value $.01; authorized 150,000,000 shares; 39,988,007 and 39,988,007 shares issued and outstanding, respectively	400,000	400,000
Common stock to be issued, 145,000 shares to be issued	12,000	12,000
Additional paid-in capital	18,143,000	18,143,000
Accumulated deficit	(27,226,000)	(25,992,000)
Total Stockholders' Deficiency	(8,670,000)	(7,436,000)
Total Liabilities and Stockholders’ Deficiency	$ 74,000	$ 79,000

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Convertible notes and notes payable, in default	$ 525,000	$ 506,000
Convertible notes and notes payable, related party, in default	$ 242,000	$ 233,000
Convertible preferred stock, par value	$ 1.00	$ 1.00
Convertible preferred stock, shares authorized	10,000,000	10,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	39,988,007	39,988,007
Common stock, shares outstanding	39,988,007	39,988,007
Common stock to be issued	145,000	145,000
Series H Convertible Preferred Stock [Member]
Convertible preferred stock, shares authorized	276,000	276,000
Convertible preferred stock, shares issued	1,000	1,000
Convertible preferred stock, shares outstanding	1,000	1,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Revenue:
Mobile banking technology revenue	$ 140,000	$ 90,000
Other revenue, management fee - related party	216,000	263,000
Total revenue	356,000	353,000
Cost and Expense:
Cost of revenue	211,000	199,000
Selling, general and administrative expenses (including $51,000 and $51,000, respectively, to a related party)	883,000	728,000
Total operating expenses	1,094,000	927,000
Loss from operations	(738,000)	(574,000)
Other Income (Expense):
Gain on extinguishment of accounts payable	0	397,000
Gain on forgiveness of SBA PPP loans	0	118,000
Interest expense (including $475,000 and $426,000, respectively, to related parties)	(496,000)	(447,000)
Total other income (expense), net	(496,000)	68,000
Net Loss	$ (1,234,000)	$ (506,000)

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
General and administrative to related party	$ 51,000	$ 51,000
Interest expense to related parties	$ 475,000	$ 426,000
Net Loss Per Common Share Basic	$ (0.03)	$ (0.01)
Net Loss Per Common Share Diluted	$ (0.03)	$ (0.01)
Weighted Average Number of Shares Outstanding Basic	39,988,007	39,988,007
Weighted Average Number of Shares Outstanding Diluted	39,988,007	39,988,007

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Common Stock To Be Issued [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Jun. 30, 2021	$ 1,000	$ 400,000	$ 12,000	$ 18,143,000	$ (25,486,000)	$ (6,930,000)
Beginning balance, Shares at Jun. 30, 2021	1,000	39,998,007
Net Loss					(506,000)	(506,000)
Ending balance, value at Jun. 30, 2022	$ 1,000	$ 400,000	12,000	18,143,000	(25,992,000)	(7,436,000)
Ending balance, Shares at Jun. 30, 2022	1,000	39,988,007
Net Loss					(1,234,000)	(1,234,000)
Ending balance, value at Jun. 30, 2023	$ 1,000	$ 400,000	$ 12,000	$ 18,143,000	$ (27,226,000)	$ (8,670,000)
Ending balance, Shares at Jun. 30, 2023	1,000	39,988,007

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (1,234,000)	$ (506,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest accrued on notes payable	495,000	447,000
Gain on extinguishment of accounts payable	0	(397,000)
Gain on forgiveness of SBA PPP loan	0	(118,000)
Changes in operating assets and liabilities:
Accounts receivable	0	1,000
Prepaid expenses	0	(1,000)
Customer deposits	4,000	(72,000)
Deferred revenue	200,000	0
Accounts payable	18,000	(23,000)
Accounts payable, related party	17,000	6,000
Accrued expenses	1,000	(12,000)
Net cash used in operating activities	(499,000)	(675,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable-related party	494,000	503,000
Net cash provided by financing activities	494,000	503,000
NET DECREASE IN CASH	(5,000)	(172,000)
CASH AT BEGINNING OF PERIOD	66,000	238,000
CASH AT END OF PERIOD	61,000	66,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$ 0	$ 0

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company

Veritec, Inc. (Veritec) 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.

Principles of Consolidation

Use of Estimates

Cash and cash equivalents

Investments with original maturities of three months or less are considered to be cash equivalents. The Company held no cash equivalents as of June 30, 2023 and 2022.

Accounts Receivable

Revenue Recognition

Revenues for the Company are classified into management fee revenue and mobile banking technology.

Mobile Banking Technology Revenue

Other Revenue, Management Fee - Related Party

Disaggregation of Net Sales

The following table shows the Company’s disaggregated net sales by product type:

Schedule of disaggregated net sales
	Fiscal years ended June 30,
	2023		2022
Mobile banking technology revenue	$	140,000	$	90,000
Other revenue, management fee - related party		216,000		263,000
Total revenue	$	356,000	$	353,000

The following table shows the Company’s disaggregated net sales by customer type:

	Fiscal years ended June 30,
	2023		2022
Medical	$	46,000	$	53,000
Associations		12,000		12,000
Education		12,000		12,000
Banking		50,000		—
Other		20,000		13,000
Other revenue, management fee related party		216,000		263,000
Total revenue	$	356,000	$	353,000

Income Taxes

Loss per Common Share

For the years ended June 30, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect.


	June 30,
	2023		2022
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		27,901,581		25,677,568
Options		900,000		900,000
Total		28,811,581		26,587,568

Fair Value of Financial Instruments

•

Level 1 — Quoted prices in active markets for identical 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.

Concentrations

Segments

Recently Issued Accounting Standards

GOING CONCERN

12 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN

NOTE 2 - GOING CONCERN

The accompanying 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 year ended June 30, 2023, the Company recorded a net loss of $1,234,000, used cash in operating activities of $499,000, and at June 30, 2023, the Company had a stockholders’ deficiency of $8,670,000. In addition, as of June 30, 2023, the Company is delinquent in payment of $767,000 of its convertible notes and 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. The Company’s financial statements do not include any adjustments that might result from the outcome of this uncertainty be necessary should we be unable to continue as a going concern.

The Company believes its cash and forecasted cash flow from operations will not be sufficient to continue operations through fiscal 2024 without continued external investment. Subsequent to June 30, 2023, the Company issued a $22,000 convertible promissory note to Van Tran, the Company’s CEO/Executive Chair and a director, as additional working capital (see Note 12). 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. The consolidated financial statements do not include any adjustments that may result from this uncertainty.

CONTINGENT EARNOUT LIABILITY

12 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

CONTINGENT EARNOUT LIABILITY

NOTE 3 –CONTINGENT EARNOUT LIABILITY

CONVERTIBLE NOTES AND NOTES PAYABLE

12 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

CONVERTIBLE NOTES AND NOTES PAYABLE

NOTE 4 – CONVERTIBLE NOTES AND NOTES PAYABLE

Convertible notes and notes payable

Convertible and notes payable includes principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:


	June 30, 2023		June 30, 2022
(a) Unsecured convertible notes ($21,000 and $20,000 in default)	$	66,000	$	64,000
(b) Notes payable (in default)		475,000		458,000
(c) Notes payable (in default)		29,000		28,000
Total notes-third parties	$	570,000	$	550,000

(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.

Convertible notes and notes payable-related parties

Convertible and notes payable-related parties include principal and accrued interest and consist of the following at June 30, 2023 and June 30, 2022:


	June 30, 2023		June 30, 2022
(a) Convertible notes-The Matthews Group	$	1,970,000	$	1,855,000
(b) Notes payable-The Matthews Group		4,988,000		4,177,000
(c)Convertible notes-other related parties ($242,000 and $233,000 in default)		364,000		321,000
Total notes-related parties	$	7,322,000	$	6,353,000

(a) The notes are unsecured, 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.

The Matthews Group is a related party (see Note 8) 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, 2021, convertible notes due to The Matthews Group totaled $1,741,000. During the year ended June 30, 2022, $114,000 of interest was added to principal, resulting in a balance payable of $1,855,000 at June 30, 2022. During the year ended June 30, 2023, $115,000 of interest was added to principal, resulting in a balance payable at June 30, 2023 of $1,970,000. At June 30, 2023, the notes are convertible at a conversion price of $0.08 per share into 24,621,824 shares of the Company’s common stock.

At June 30, 2021, convertible notes due to other related parties totaled $308,000. During the year ended June 30, 2022, interest of $13,000 was added to principal resulting in a balance owed of $321,000 at June 30, 2022. During the year ended June 30, 2023, $30,000 of notes payable were issued and interest of $13,000 was added to principal, resulting in a balance owed of $364,000 at June 30, 2023. At June 30, 2023, $242,000 of the notes were due in 2010 and are in default, and $122,000 is due on demand. At June 30, 2023, $242,000 of the notes are convertible at a conversion price of $0.30 per share into 807,081 shares of the Company’s common stock, $92,000 of the notes are convertible at a conversion price of $0.09 per share into 1,076,347 shares of the Company’s common stock, and $30,000 of the notes are convertible at a conversion price of $0.04 per share into 759,863 shares of the Company’s common stock .

STOCKHOLDERS’ DEFICIENCY

12 Months Ended

Jun. 30, 2023

Equity [Abstract]

STOCKHOLDERS’ DEFICIENCY

NOTE 5 - STOCKHOLDERS’ DEFICIENCY

Preferred Stock

Common Stock to be Issued

STOCK OPTIONS

12 Months Ended

Jun. 30, 2023

Stock Options

STOCK OPTIONS

NOTE 6 – STOCK OPTIONS

A summary of stock options as of June 30, 2023 and for the two years then ended is as follows:

Schedule of stock options
	Number of Shares			Weighted - Average Exercise Price
Outstanding at June 30, 2021		3,400,000		$	0.08
Granted		—			—
Forfeited		(2,500,000	)	$	(0.08	)
Outstanding at June 30, 2022		900,000		$	0.03
Granted		—			—
Forfeited				$	—
Outstanding at June 30, 2023		900,000		$	0.03
Exercisable at June 30, 2023		900,000		$	0.03

Additional information regarding options outstanding as of June 30, 2023, is as follows:


Options Outstanding and Exercisable at June 30, 2023
Range of Exercise Price		Number of Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	0.03		900,000		2.48	$	0.03

INCOME TAXES

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 7 - INCOME TAXES

Reconciliation between the expected federal income tax rate and the actual tax rate is as follows:


	Year Ended June 30,
	2023			2022
Federal statutory tax rate		21	%		21	%
State tax, net of federal benefit		6	%		6	%
Total tax rate		27	%		27	%
Allowance		(27	)%		(27	)%
Effective tax rate		—	%		—	%

The following is a summary of the deferred tax assets:

Schedule of deferred tax assets
	Year Ended June 30,
	2023			2022
Net operating loss carryforwards	$	4,315,000		$	3,982,000
Deferred tax assets before valuation allowance		4,315,000			3,982,000
Valuation allowance		(4,315,000	)		(3,982,000	)
Net deferred tax asset	$	—		$	—

RELATED PARTY TRANSACTIONS

12 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

Management Services Agreement and Related Notes Payable with Related Party

Advances from Related Parties

Other Transactions with Related Parties

AGREEMENTS WITH NUGEN

12 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

AGREEMENTS WITH NUGEN

NOTE 9 – AGREEMENTS WITH NUGEN

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 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 June 30, 2023, no royalty related revenues have been realized under the License Agreement.

LEGAL PROCEEDINGS

12 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

NOTE 10 – 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 June 30, 2023, the 500,000 shares have not been relinquished. When the Company receives the shares, it will record a cancellation of shares.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 11 – COMMITMENTS AND CONTINGENCIES

SUBSEQUENT EVENTS

12 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

The Company

The Company

Veritec, Inc. (Veritec) 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.

Principles of Consolidation

Principles of Consolidation

Use of Estimates

Use of Estimates

Cash and cash equivalents

Cash and cash equivalents

Investments with original maturities of three months or less are considered to be cash equivalents. The Company held no cash equivalents as of June 30, 2023 and 2022.

Accounts Receivable

Accounts Receivable

Revenue Recognition

Revenue Recognition

Revenues for the Company are classified into management fee revenue and mobile banking technology.

Mobile Banking Technology Revenue

Other Revenue, Management Fee - Related Party

Disaggregation of Net Sales

The following table shows the Company’s disaggregated net sales by product type:

Schedule of disaggregated net sales
	Fiscal years ended June 30,
	2023		2022
Mobile banking technology revenue	$	140,000	$	90,000
Other revenue, management fee - related party		216,000		263,000
Total revenue	$	356,000	$	353,000

The following table shows the Company’s disaggregated net sales by customer type:

	Fiscal years ended June 30,
	2023		2022
Medical	$	46,000	$	53,000
Associations		12,000		12,000
Education		12,000		12,000
Banking		50,000		—
Other		20,000		13,000
Other revenue, management fee related party		216,000		263,000
Total revenue	$	356,000	$	353,000

Income Taxes

Income Taxes

Loss per Common Share

Loss per Common Share

For the years ended June 30, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect.


	June 30,
	2023		2022
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		27,901,581		25,677,568
Options		900,000		900,000
Total		28,811,581		26,587,568

Fair Value of Financial Instruments

Fair Value of Financial Instruments

•

Level 1 — Quoted prices in active markets for identical 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.

Concentrations

Concentrations

Segments

Segments

Recently Issued Accounting Standards

Recently Issued Accounting Standards

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of disaggregated net sales

Schedule of disaggregated net sales
	Fiscal years ended June 30,
	2023		2022
Mobile banking technology revenue	$	140,000	$	90,000
Other revenue, management fee - related party		216,000		263,000
Total revenue	$	356,000	$	353,000

The following table shows the Company’s disaggregated net sales by customer type:

	Fiscal years ended June 30,
	2023		2022
Medical	$	46,000	$	53,000
Associations		12,000		12,000
Education		12,000		12,000
Banking		50,000		—
Other		20,000		13,000
Other revenue, management fee related party		216,000		263,000
Total revenue	$	356,000	$	353,000

Schedule of calculation of earnings per share


	June 30,
	2023		2022
Series H Preferred Stock		10,000		10,000
Convertible Notes Payable		27,901,581		25,677,568
Options		900,000		900,000
Total		28,811,581		26,587,568

CONVERTIBLE NOTES AND NOTES PAYABLE (Tables)

12 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of convertible and notes payable includes principal and accrued interest


	June 30, 2023		June 30, 2022
(a) Unsecured convertible notes ($21,000 and $20,000 in default)	$	66,000	$	64,000
(b) Notes payable (in default)		475,000		458,000
(c) Notes payable (in default)		29,000		28,000
Total notes-third parties	$	570,000	$	550,000

Schedule of convertible and notes payable related parties


	June 30, 2023		June 30, 2022
(a) Convertible notes-The Matthews Group	$	1,970,000	$	1,855,000
(b) Notes payable-The Matthews Group		4,988,000		4,177,000
(c)Convertible notes-other related parties ($242,000 and $233,000 in default)		364,000		321,000
Total notes-related parties	$	7,322,000	$	6,353,000

STOCK OPTIONS (Tables)

12 Months Ended

Jun. 30, 2023

Stock Options

Schedule of stock options

Schedule of stock options
	Number of Shares			Weighted - Average Exercise Price
Outstanding at June 30, 2021		3,400,000		$	0.08
Granted		—			—
Forfeited		(2,500,000	)	$	(0.08	)
Outstanding at June 30, 2022		900,000		$	0.03
Granted		—			—
Forfeited				$	—
Outstanding at June 30, 2023		900,000		$	0.03
Exercisable at June 30, 2023		900,000		$	0.03

Schedule of additional information regarding options outstanding


Options Outstanding and Exercisable at June 30, 2023
Range of Exercise Price		Number of Shares Outstanding		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price
$	0.03		900,000		2.48	$	0.03

INCOME TAXES (Tables)

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of reconciliation between the federal and actual tax rate


	Year Ended June 30,
	2023			2022
Federal statutory tax rate		21	%		21	%
State tax, net of federal benefit		6	%		6	%
Total tax rate		27	%		27	%
Allowance		(27	)%		(27	)%
Effective tax rate		—	%		—	%

Schedule of deferred tax assets

Schedule of deferred tax assets
	Year Ended June 30,
	2023			2022
Net operating loss carryforwards	$	4,315,000		$	3,982,000
Deferred tax assets before valuation allowance		4,315,000			3,982,000
Valuation allowance		(4,315,000	)		(3,982,000	)
Net deferred tax asset	$	—		$	—

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Revenue	$ 356,000	$ 353,000
Mobile Banking [Member]
Product Information [Line Items]
Revenue	140,000	90,000
Other Revenue [Member]
Product Information [Line Items]
Revenue	216,000	263,000
Medical [Member]
Product Information [Line Items]
Revenue	46,000	53,000
Associations [Member]
Product Information [Line Items]
Revenue	12,000	12,000
Education [Member]
Product Information [Line Items]
Revenue	12,000	12,000
Banking [Member]
Product Information [Line Items]
Revenue	50,000	0
Other [Member]
Product Information [Line Items]
Revenue	$ 20,000	$ 13,000

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Summarized outstanding securities (Details) - shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	28,811,581	26,587,568
Series H Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	10,000	10,000
Convertible Notes Payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	27,901,581	25,677,568
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	900,000	900,000

OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Cash and cash equivalents	$ 0	$ 0
Allowance for doubtful accounts	0	$ 0
Aggregate fees	$ 50,000
Customer One [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	61.00%	75.00%
Customer Two [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	14.00%	15.00%
Customer Three [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage	13.00%
Related Party [Member]
Product Information [Line Items]
Other revenue related party	$ 216,000	$ 263,000

GOING CONCERN (Details Narrative) - USD ($)	12 Months Ended
GOING CONCERN (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Net loss	$ 1,234,000	$ 506,000
Cash used in operating activities	499,000	675,000
Stockholders' deficiency	8,670,000	$ 7,436,000	$ 6,930,000
Notes payable in default	767,000
C E O Executive Chair And Director [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Convertible promissory note	$ 22,000

CONTINGENT EARNOUT LIABILITY (Details Narrative) - Acquisition Assets Liabilities [Member]	12 Months Ended
	Sep. 30, 2015 USD ($)
Finite-Lived Intangible Assets [Line Items]
Earnout Payment	$ 155,000
Equity investments	$ 1,300,000

CONVERTIBLE NOTES AND NOTES PAYABLE - Convertible notes and notes payable in default (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Debt Disclosure [Abstract]
(a) Unsecured convertible notes ($21,000 and $20,000 in default)	$ 66,000	$ 64,000
(b) Notes payable (in default)	475,000	458,000
(c) Notes payable (in default)	29,000	28,000
Total notes-third parties	$ 570,000	$ 550,000

CONVERTIBLE NOTES AND NOTES PAYABLE - Convertible notes and notes payable related party (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Total notes-related parties	$ 7,322,000	$ 6,353,000
Matthews Group [Member]
Defined Benefit Plan Disclosure [Line Items]
Convertible notes, related party	1,970,000	1,855,000
Total notes-related parties	4,988,000	4,177,000
Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Convertible notes, related party	$ 364,000	$ 321,000

CONVERTIBLE NOTES AND NOTES PAYABLE (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2020	Mar. 17, 2020
Debt Instrument [Line Items]
Notes Payable	$ 29,000	$ 28,000
Matthews Group [Member]
Debt Instrument [Line Items]
Notes Payable	$ 1,970,000	1,855,000
Minimum [Member] \| Matthews Group [Member]
Debt Instrument [Line Items]
Interest rate	8.00%
Maximum [Member] \| Matthews Group [Member]
Debt Instrument [Line Items]
Interest rate	10.00%
Unsecured Convertible Notes [Member]
Debt Instrument [Line Items]
Convertible debts	$ 66,000	64,000	$ 62,000
Accrued interest	2,000	2,000
Notes in default	21,000
Balance due on demand	$ 45,000
Shares issued upon conversion	567,180
Unsecured Convertible Notes [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.08
Interest rate	5.00%
Unsecured Convertible Notes [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.30
Interest rate	8.00%
Notes Payable Default [Member]
Debt Instrument [Line Items]
Accrued interest	$ 17,000	18,000
Notes payable	$ 475,000	458,000	440,000
Notes Payable Default [Member] \| Minimum [Member]
Debt Instrument [Line Items]
Interest rate	6.50%
Notes Payable Default [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Interest rate	10.00%
Secured Notes [Member]
Debt Instrument [Line Items]
Notes payable	$ 427,000
Unsecured Notes [Member]
Debt Instrument [Line Items]
Notes payable	48,000
Notes Payables Default [Member]
Debt Instrument [Line Items]
Interest rate					4.00%
Accrued interest	1,000	1,000
Notes payable	$ 29,000	28,000	27,000
Convertible Notes [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.08
Convertible Notes [Member] \| Matthews Group [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.08
Convertible debts				$ 1,741,000
Accrued interest	$ 115,000	114,000
Shares issued upon conversion	24,621,824
Convertible Notes [Member] \| Other [Member]
Debt Instrument [Line Items]
Convertible debts		321,000	308,000
Accrued interest	$ 13,000	13,000
Notes in default	242,000
Balance due on demand	122,000
Notes payable	364,000
Notes issued	$ 30,000
Convertible Notes [Member] \| Minimum [Member] \| Other [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.04
Interest rate	8.00%
Convertible Notes [Member] \| Maximum [Member] \| Other [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.30
Interest rate	10.00%
Notes Payable [Member] \| Matthews Group [Member]
Debt Instrument [Line Items]
Interest rate	10.00%
Accrued interest	$ 347,000	299,000
Notes payable	4,988,000	4,177,000	$ 3,375,000
Notes issued	$ 464,000	$ 503,000
Convertible Notes 1 [Member] \| Other [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.30
Shares issued upon conversion	807,081
Notes converted	$ 242,000
Convertible Note 2 [Member] \| Other [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.09
Shares issued upon conversion	1,076,347
Notes converted	$ 92,000
Convertible Note 3 [Member] \| Other [Member]
Debt Instrument [Line Items]
Conversion price	$ 0.04
Shares issued upon conversion	759,863
Notes converted	$ 30,000

STOCKHOLDERS’ DEFICIENCY (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Class of Stock [Line Items]
Convertible preferred stock, shares authorized	10,000,000	10,000,000
Convertible preferred stock, par value	$ 1.00	$ 1.00
Common stock to be issued shares	145,000	145,000
Common stock to be issued, value	$ 12,000	$ 12,000
Series H Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Convertible preferred stock, shares authorized	276,000	276,000
Convertible preferred stock, shares issued	1,000	1,000
Convertible preferred stock, shares outstanding	1,000	1,000

STOCK OPTIONS - Summary of Stock Options (Details) - $ / shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Stock Options
Number of Shares outstanding at beginning	900,000	3,400,000
Beginning weighted average exercise price, outstanding	$ 0.03	$ 0.08
Options granted	0	0
Options granted, weighted average exercise price	$ 0	$ 0
Options forfeited		(2,500,000)
Options forfeited, weighted average exercise price	$ 0	$ (0.08)
Number of Shares outstanding at end	900,000	900,000
Ending weighted average exercise price, outstanding	$ 0.03	$ 0.03
Exercisable at end	900,000
Weighted-average exercise price; exercisable	$ 0.03

STOCK OPTIONS - Additional information regarding outstanding options (Details) - $ / shares	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Stock Options
Options outstanding, shares	900,000	900,000	3,400,000
Weighted average remaining contractual life	2 years 5 months 23 days
Weighted average exercise price	$ 0.03	$ 0.03	$ 0.08

STOCK OPTIONS (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Stock Options
Outstanding unvested options	$ 0
Options exercisable intrinsic value	$ 0	$ 0

INCOME TAXES (Details)	12 Months Ended
INCOME TAXES (Details)	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Federal statutory tax rate	21.00%	21.00%
State tax, net of federal benefit	6.00%	6.00%
Total tax rate	27.00%	27.00%
Allowance	(27.00%)	(27.00%)
Effective tax rate	0.00%	0.00%

INCOME TAXES - Deferred tax assets (Details 1) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 4,315,000	$ 3,982,000
Deferred tax assets before valuation allowance	4,315,000	3,982,000
Valuation allowance	(4,315,000)	(3,982,000)
Net deferred tax asset	$ 0	$ 0

INCOME TAXES (Details Narrative) - USD ($)	12 Months Ended
INCOME TAXES (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Net Loss	$ 1,234,000	$ 506,000
Provision for income tax	0	0
Net change in the valuation allowance	333,000
Net operating loss carryforwards	15,983,000
Accrued interest or penalties	$ 0	$ 0

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Revenue	$ 356,000	$ 353,000
Notes payable related party	29,000	28,000
Matthews Group [Member]
Related Party Transaction [Line Items]
Notes payable related party	1,970,000	1,855,000
Chief Executive Officer [Member]
Related Party Transaction [Line Items]
Advances due to related party	119,000	102,000
Rental payment	$ 51,000	51,000
Related Party [Member] \| Matthews Group [Member]
Related Party Transaction [Line Items]
Managament fee percent of revenue	35.00%
Revenue	$ 216,000	263,000
Proceeds from notes payable - related party	$ 464,000	$ 503,000
Unsecured related party note, interest	10.00%
Notes payable related party	$ 4,988,000
Ms Tran [Member]
Related Party Transaction [Line Items]
Ownership percentage	50.00%
Larry Johanns [Member]
Related Party Transaction [Line Items]
Ownership percentage	50.00%

AGREEMENTS WITH NUGEN (Details Narrative) - USD ($)		1 Months Ended	12 Months Ended
AGREEMENTS WITH NUGEN (Details Narrative) - USD ($)	Jul. 04, 2022	Dec. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue			$ 356,000	$ 353,000
Domestic bank sponsor amount			100,000
Payments for software			350,000
Final stage testing installation and launch expenses			350,000
Nugen Universe [Member] \| License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Receipt on license		$ 200,000
Nugen Universe [Member] \| Memorandum of Understanding [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Agreement, description	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.
Received amount under the agreement	$ 50,000
Nugen Universe [Member] \| Memorandum of Understanding [Member] \| Mobile Banking Technology [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenue			50,000
Royalties			$ 0
Nugen Universe [Member] \| Memorandum of Understanding [Member] \| Blinx Pay Technologyand Bio I D Verification System [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty percentage			5.00%
Nugen Universe [Member] \| License And Distributor Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Agreement, description			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.
Royalty percentage			5.00%
Royalties			$ 0
Receipt on license		200,000
License payment		$ 1,000,000
Initial deferred revenue			200,000
Remaining balance paid			$ 800,000

LEGAL PROCEEDINGS (Details Narrative) - Former Officer [Member] - Settlement Agreement [Member] - USD ($)	Sep. 21, 2016	Jun. 30, 2023
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Number of shares issued	500,000
Relinquish convertible note payable and unpaid interest	$ 365,000
Shares to be returned	500,000
Shares have not relinquished		500,000

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)				12 Months Ended
	May 10, 2022	Nov. 01, 2021	Dec. 05, 2008	Jun. 30, 2023	Jun. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues				$ 356,000	$ 353,000
Chief Executive Officer [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual base salary			$ 150,000
Termination loans			$ 1,000,000
Salaries paid				150,000	150,000
Incentive Compensation Bonus Plan [Member] \| Key Employees [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Pre-tax earnings			10.00%
Incentive compensation bonus, minimum threshold			$ 3,000,000
Annual pre-tax earnings					$ 0
Management Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues				$ 0
Management Agreement [Member] \| Es Solo Holdings [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Program setup fee	$ 10,000
Agreement, description	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-ID, and debit card products.
Sales And Marketing Agreement [Member] \| Elite Web Technology [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Agreement, description		As of June 30, 2023, the Marketer had not met any of its revenue targets and no commissions or equity compensation was due.
Sales commission		15.00%
Number of shares issued		500,000
Stock recevied on transaction		$ 2,000,000
Sales And Marketing Agreement [Member] \| Elite Web Technology [Member] \| Equity Option [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Number of shares issued		25,000
Stock recevied on transaction		$ 1,000,000.0

SUBSEQUENT EVENTS (Details Narrative) - Chief Executive Officer [Member] - Convertible Promissory Note [Member] - Subsequent Event [Member]	Jul. 23, 2023 USD ($) $ / shares
Subsequent Event [Line Items]
Shares issued \| $	$ 22,000
Per share amount \| $ / shares	$ 0.04
Interest rate	10.00%

Veritec (PK) (USOTC:VRTC)
Historical Stock Chart
From Nov 2024 to Dec 2024

Click Here for more Veritec (PK) Charts.

Veritec (PK) (USOTC:VRTC)
Historical Stock Chart
From Dec 2023 to Dec 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

VRTC Veritec Inc (PK)

Latest VRTC Messages

Loading Messages....

Veritec Inc (PK) News

Loading Messages....

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

VRTC Veritec Inc (PK)

Latest VRTC Messages

Loading Messages....

Veritec Inc (PK) News

Loading Messages....

Your Recent History

Company

Business

Popular

Get The App