NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2017
NOTE
1: ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND BASIS OF PRESENTATION
Threat
Surface Solutions Group, LLC (“TSSG”)
,
or the Company, is a Virginia limited liability company that was incorporated
in May 2017. The Company was founded by a partnership of premier cybersecurity companies (Acquired Data Solutions [ADS], Eagle
Network Solutions [ENS], & Ramparts Security [Ramparts). The Company focuses on test and measurement (T&M), test and evaluation
(T&E), cybersecurity, software and hardware platforms, and risk mitigation. These capabilities allow us to offer unique comprehensive
solutions to protect connected devices such as Internet-of-things (IoT) products, and Industrial IoT (IIoT) systems from penetration;
mitigating manufacturer’s liability and protecting the consumer from possible catastrophic loss.
The
member companies of TSSG bring to the table a unique IoT test platform the “Cyber Physical Test Bench” (CPTB). The
CPTB is the only solution with the ability to analyze up to 500,000 IoT devices and/or flows simultaneously. The three primary
components of the CPTB are TSSG proprietary components:
|
1.)
|
Network
Application Test and Validation Engine, a PERL/Java/SQL based software suite designed to facilitate large-scale TCP/IP network
communications testing
|
|
2.)
|
LabVIEW
Dashboard Integration
|
|
3.)
|
NIST
Cyber Security Framework.
|
The
CPTB is currently utilized at the Missile Defense Agency (MDA) and is in the preliminary design phase for utilization by Defense
Advanced Research Projects Agency (DARPA).
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis. From May 11, 2017 (Inception) to September 30,
2017 we had a net loss of $17,534, had net cash used in operating activities of $11,551, and had negative working capital of $4,275.
These matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year
from the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due, to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for
the Company’s capital requirements by making additional member contributions. The outcome of these matters cannot be predicted
at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan
or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use
of Estimates
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 and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses
during the reported period. Actual results will differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased,
to be cash equivalents. The Company had no cash equivalents at September 30, 2017.
THREAT
SURFACE SOLUTIONS GROUP, LLC
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2017
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Concentration
of Credit Risks
The
Company is subject to a concentration of credit risk from cash held in banks.
The
Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or
FDIC, up to $250,000. As of September 30, 2017 the Company had not reached a bank balance exceeding the FDIC insurance limit.
Revenue
Recognition
We
follow the guidance of Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (formerly Staff Accounting
Bulletin (SAB) No. 104, “Revenue Recognition”) for revenue recognition. In general, we record revenue when persuasive
evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams:
Revenue
from services is recorded as it is earned. Commissions earned on third party sales are recorded in the month in which contracts
are awarded. Amounts billed in advance of services being provided are recorded as deferred revenues and recognized in the statement
of operations as services are provided.
Fair
Value of Financial Instruments
The
Company accounts for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair
Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing
generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring
fair value, and expands disclosure about such fair value measurements.
ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
|
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical assets or liabilities.
|
|
|
|
|
Level
2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market data.
|
|
|
|
|
Level
3:
|
Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
|
New
Accounting Standards Not Yet Adopted
In
May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
(ASU 2014-09), which amended revenue
recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an
entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration
to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures
relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally,
qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments
and assets recognized from the costs to obtain or fulfill a contract. In 2016, the FASB issued ASU 2016-08, ASU 2016-10, ASU 2016-11,
ASU 2016-12 and ASU 2016-20 to clarify, among other things, the implementation guidance related to principal versus agent considerations,
identifying performance obligations and accounting for licenses of intellectual property. This accounting guidance is effective
for the Company beginning October 1, 2019. The amendments in this update are to be applied on a retrospective basis, either to
each prior reporting period presented (full retrospective method) or by presenting the cumulative effect of applying the update
recognized at the date of initial application (modified retrospective method).
THREAT
SURFACE SOLUTIONS GROUP, LLC
NOTES
TO FINANCIAL STATEMENTS
SEPTEMBER
30, 2017
NOTE
3: MEMBERSHIP INTEREST
The
Company was founded by a partnership of premier cybersecurity companies (Acquired Data Solutions [ADS], Eagle Network Solutions
[ENS], & Ramparts Security [Ramparts], and Kevin Anderson, an individual. Members contributed capital to the LLC in the form
of cash. The 23.4% partnership interest of Eagle Network Solutions in the partnership was acquired by Kevin Anderson on September
4, 2018. The membership interest breakdown is as follows:
Acquired
Data Solutions, Inc.
|
|
|
33.3
|
%
|
Ramparts
Security, LLC
|
|
|
33.3
|
%
|
Kevin
Anderson
|
|
|
33.4
|
%
|
|
|
|
100.0
|
%
|
NOTE
4 – COMMITMENTS AND CONTINGENCIES
Contingencies
The
Company accounts for contingent liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 450,
Contingencies
. This guidance requires management to assess potential contingent liabilities that may exist as of the date
of the financial statements to determine the probability and amount of loss that may have occurred, which inherently involves
an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred
and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial
statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible,
or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible
losses, if determinable and material, would be disclosed. For loss contingencies considered remote, no accrual or disclosures
are generally made. Management has assessed potential contingent liabilities as of September 30, 2017, and based on the assessment
there are no probable loss contingencies requiring accrual or disclosures within its financial statements.
NOTE
5: SUBSEQUENT EVENTS
On
September 4, 2018 (the “
Closing Date
”), Visium Technologies, Inc., a Florida corporation (“
Purchaser
”)
entered into a definitive agreement to acquire Threat Surface Solutions Group, LLC, pursuant to the Membership Interest Purchase
Agreement (the “Purchase Agreement.). The closing is pending the issuance of the audit report on Threat Surface Solutions
Group, LLC.
As
of October 11, 2018 there is a commitment and contingent liability that has been created as a result of the terms of the acquisition
of Threat Surface Solutions Group, LLC.
The
total consideration for the transaction is approximately $5 million, with up to $3.5 million of that amount payable as earnout
consideration based on mutually agreed-to revenue milestones. At the closing of the Transaction, Purchaser will pay (i) $500,000
in common stock, and (ii) a Seller’s note in the amount of $1 million dollars.
On
September 4, 2018, Kevin Anderson acquired the member interest in Threat Surface Solutions Group, LLC previously owned by Eagle
Network Solutions, LLC.
On
October 10, 2018, the Company’s Board of Directors appointed Dr. Emanuel J. Esaka, MD as a member of the Board of Directors.
INDEX
TO UNAUDITED FINANCIAL STATEMENTS
Threat
Surface Solutions Group, LLC
BALANCE
SHEETS
|
|
June
30, 2018
|
|
|
September
30, 2017
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,818
|
|
|
$
|
1,708
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
4,818
|
|
|
|
1,708
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
4,818
|
|
|
$
|
1,708
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND MEMBERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
6,367
|
|
|
$
|
5,983
|
|
Due
to members
|
|
|
8,188
|
|
|
|
-
|
|
Total
current liabilities
|
|
|
14,555
|
|
|
|
5,983
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’
deficit:
|
|
|
|
|
|
|
|
|
Member
contribution
|
|
|
47,715
|
|
|
|
13,259
|
|
Accumulated
deficit
|
|
|
(57,452
|
)
|
|
|
(17,534
|
)
|
Total
members’ deficit
|
|
|
(9,737
|
)
|
|
|
(4,275
|
)
|
|
|
|
|
|
|
|
|
|
Total
liabilities and members’ deficit
|
|
$
|
4,818
|
|
|
$
|
1,708
|
|
See
accompanying notes to unaudited financial statements.
Threat
Surface Solutions Group, LLC
STATEMENT
OF OPERATIONS
JUNE
30, 2018
|
|
Nine-Months
Ended
|
|
|
|
June
30, 2018
|
|
|
|
|
(Unaudited)
|
|
Net
revenues
|
|
$
|
46,385
|
|
|
|
|
|
|
Cost
of sales
|
|
|
21,500
|
|
|
|
|
|
|
Gross
profit
|
|
|
24,885
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
|
|
64,342
|
|
Total
Operating Expenses
|
|
|
64,342
|
|
|
|
|
|
|
Loss
from Operations
|
|
|
(39,457
|
)
|
|
|
|
|
|
Other
expenses:
|
|
|
|
|
Interest
expense
|
|
|
(461
|
)
|
Total
other expense
|
|
|
(461
|
)
|
|
|
|
|
|
Net
loss
|
|
$
|
(39,918
|
)
|
See
accompanying notes to unaudited financial statements.
Threat
Surface Solutions Group, LLC
STATEMENTS
OF CHANGES IN MEMBERS’ DEFICIT
JUNE
30, 2018
|
|
|
|
|
|
|
|
Total
|
|
|
|
Member
|
|
|
Accumulated
|
|
|
Members’
|
|
|
|
Contributions
|
|
|
Deficit
|
|
|
Deficit
|
|
Members’
deficit at May 11, 2017
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member
contributions
|
|
|
13,259
|
|
|
|
-
|
|
|
|
13,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
(17,534
|
)
|
|
|
(17,534
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’
deficit at September 30, 2017
|
|
$
|
13,259
|
|
|
$
|
(17,534
|
)
|
|
|
(4,275
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Member
contributions
|
|
|
34,456
|
|
|
|
-
|
|
|
|
34,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
-
|
|
|
|
(39,918
|
)
|
|
|
(39,918
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’
deficit at June 30, 2018
|
|
$
|
47,715
|
|
|
$
|
(57,452
|
)
|
|
$
|
(9,737
|
)
|
See
accompanying notes to unaudited financial statements.
Threat
Surface Solutions Group, LLC
STATEMENT
OF CASH FLOWS
JUNE
30, 2018
|
|
Nine
Months
Ended
June 30,
|
|
|
|
2018
|
|
|
|
(Unaudited)
|
|
Cash
flows from operating activities:
|
|
|
|
|
Net
loss
|
|
$
|
(39,918
|
)
|
Adjustments
to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
Accounts
payable
|
|
|
3,884
|
|
Net
cash used in operating activities
|
|
|
(39,534
|
)
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
Advance
from officers
|
|
|
8,188
|
|
Member
contributions
|
|
|
34,456
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
42,644
|
|
|
|
|
|
|
Net
increase in cash
|
|
|
3,110
|
|
|
|
|
|
|
Cash, beginning
of period
|
|
|
1,708
|
|
|
|
|
|
|
Cash, end
of period
|
|
$
|
4,818
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
Cash
paid for interest
|
|
$
|
461
|
|
Cash
paid for income taxes
|
|
$
|
-
|
|
See
accompanying notes to unaudited financial statements.
THREAT
SURFACE SOLUTIONS GROUP, LLC
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2018
NOTE
1: ORGANIZATION, DESCRIPTION OF BUSINESS, GOING CONCERN AND BASIS OF PRESENTATION
Threat
Surface Solutions Group, LLC (“TSSG”)
,
or the Company, is a Virginia limited liability company that was incorporated
in May 2017. The Company was founded by a partnership of premier cybersecurity companies (Acquired Data Solutions [ADS], Eagle
Network Solutions [ENS], & Ramparts Security [Ramparts). The Company focuses on test and measurement (T&M), test and evaluation
(T&E), cybersecurity, software and hardware platforms, and risk mitigation. These capabilities allow us to offer unique comprehensive
solutions to protect connected devices such as Internet-of-things (IoT) products, and Industrial IoT (IIoT) systems from penetration;
mitigating manufacturer’s liability and protecting the consumer from possible catastrophic loss.
The
member companies of TSSG bring to the table a unique IoT test platform the “Cyber Physical Test Bench” (CPTB). The
CPTB is the only solution with the ability to analyze up to 500,000 IoT devices and/or flows simultaneously. The three primary
components of the CPTB are TSSG proprietary components:
1.)
Network Application Test and Validation Engine, a PERL/Java/SQL based software suite designed to facilitate large-scale TCP/IP
network communications testing
2.)
LabVIEW Dashboard Integration
3.)
NIST Cyber Security Framework.
The
CPTB is currently utilized at the Missile Defense Agency (MDA) and is in the preliminary design phase for utilization by Defense
Advanced Research Projects Agency (DARPA).
Going
Concern
The
accompanying financial statements have been prepared on a going concern basis. For the nine-month period ended June 30, 2018 we
had a net loss of $39,918, had net cash used in operating activities of $39,534, and had negative working capital of $9,737. These
matters raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from
the date of this filing. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the
necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due,
to fund possible future acquisitions, and to generate profitable operations in the future. Management plans to provide for the
Company’s capital requirements by making additional member contributions. The outcome of these matters cannot be predicted
at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its business plan
or generate positive operating results. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.
NOTE
2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use
of Estimates
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 and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reporting amounts of revenues and expenses
during the reported period. Actual results will differ from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid, temporary, cash equivalents with an original maturity of three months or less when purchased,
to be cash equivalents. The Company had no cash equivalents at June 30, 2018 and September 30, 2017.
THREAT
SURFACE SOLUTIONS GROUP, LLC
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2018
Concentration
of Credit Risks
The
Company is subject to a concentration of credit risk from cash.
The
Company’s cash account is held at a financial institution and is insured by the Federal Deposit Insurance Corporation, or
FDIC, up to $250,000. As of September 30, 2017 and June 30, 2018 the Company had not reached bank balances exceeding the FDIC
insurance limit.
Revenue
Recognition
We
follow the guidance of Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition” (formerly Staff Accounting
Bulletin (SAB) No. 104, “Revenue Recognition”) for revenue recognition. In general, we record revenue when persuasive
evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and
collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams:
Revenue
from services is recorded as it is earned. Commissions earned on third party sales are recorded in the month in which contracts
are awarded. Amounts billed in advance of services being provided are recorded as deferred revenues and recognized in the statement
of operations as services are provided.
Fair
Value of Financial Instruments
The
Company accounts for assets and liabilities measured at fair value on a recurring basis, in accordance with ASC Topic 820, Fair
Value Measurements and Disclosures, or ASC 820. ASC 820 establishes a common definition for fair value to be applied to existing
generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring
fair value, and expands disclosure about such fair value measurements.
ASC
820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
|
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical assets or liabilities.
|
|
|
|
|
Level
2:
|
Observable
market-based inputs or unobservable inputs that are corroborated by market data.
|
|
|
|
|
Level
3:
|
Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
|
New
Accounting Standards Not Yet Adopted
In
May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606)
(ASU 2014-09), which amended revenue
recognition guidance to clarify the principles for recognizing revenue from contracts with customers. The guidance requires an
entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration
to which an entity expects to be entitled in exchange for those goods or services. The guidance also requires expanded disclosures
relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally,
qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments
and assets recognized from the costs to obtain or fulfill a contract. In 2016, the FASB issued ASU 2016-08, ASU 2016-10, ASU 2016-11,
ASU 2016-12 and ASU 2016-20 to clarify, among other things, the implementation guidance related to principal versus agent considerations,
identifying performance obligations and accounting for licenses of intellectual property. This accounting guidance is effective
for the Company beginning October 1, 2019. The amendments in this update are to be applied on a retrospective basis, either to
each prior reporting period presented (full retrospective method) or by presenting the cumulative effect of applying the update
recognized at the date of initial application (modified retrospective method).
THREAT
SURFACE SOLUTIONS GROUP, LLC
NOTES
TO UNAUDITED FINANCIAL STATEMENTS
JUNE
30, 2018
NOTE
3: MEMBERSHIP INTEREST
The
Company was founded by a partnership of premier cybersecurity companies (Acquired Data Solutions [ADS], Eagle Network Solutions
[ENS], & Ramparts Security [Ramparts], and Kevin Anderson, an individual. Members contributed capital to the LLC in the form
of cash. The 23.4% partnership interest of Eagle Network Solutions in the partnership was acquired by Kevin Anderson on September
4, 2018. The membership interest breakdown is as follows:
Acquired
Data Solutions, Inc.
|
|
|
33.3
|
%
|
Ramparts
Security, LLC
|
|
|
33.3
|
%
|
Kevin
Anderson
|
|
|
33.4
|
%
|
|
|
|
100.0
|
%
|
Note
4 - CONCENTRATION
Approximately
95% of the Company’s total revenues are derived from one customer for whom they provide a variety of IT consulting work.
NOTE
5 – COMMITMENTS AND CONTINGENCIES
The
Company accounts for contingent liabilities in accordance with Accounting Standards Codification (“ASC”) Topic 450,
Contingencies
. This guidance requires management to assess potential contingent liabilities that may exist as of the date
of the financial statements to determine the probability and amount of loss that may have occurred, which inherently involves
an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been incurred
and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial
statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible,
or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible
losses, if determinable and material, would be disclosed. For loss contingencies considered remote, no accrual or disclosures
are generally made. Management has assessed potential contingent liabilities as of June 30, 2018, and based on the assessment
there are no probable loss contingencies requiring accrual or disclosures within its financial statements.
NOTE
6: SUBSEQUENT EVENTS
On
September 4, 2018 (the “
Closing Date
”), Visium Technologies, Inc., a Florida corporation (“
Purchaser
”)
entered into a definitive agreement to acquire Threat Surface Solutions Group, LLC, pursuant to the Membership Interest Purchase
Agreement (the “Purchase Agreement.). The closing is pending the issuance of the audit report on Threat Surface Solutions
Group, LLC.
As
of October 11, 2018 there is a commitment and contingent liability that has been created as a result of the terms of the acquisition
of Threat Surface Solutions Group, LLC.
The
total consideration for the transaction is approximately $5 million, with up to $3.5 million of that amount payable as earnout
consideration based on mutually agreed-to revenue milestones. At the closing of the Transaction, Purchaser will pay (i) $500,000
in common stock, and (ii) a Seller’s note in the amount of $1 million dollars.
On
September 10, 2018, Kevin Anderson acquired the member interest in Threat Surface Solutions Group, LLC previously owned by Eagle
Network Solutions, LLC.
On
October 10, 2018, the Company’s Board of Directors appointed Dr. Emanuel J. Esaka, MD as a member of the Board of Directors.
(b)
Pro Forma Financial Statements
VISIUM
TECHNOLOGIES, INC.
UNAUDITED
PRO FORMA COMBINED BALANCE SHEET
JUNE
30, 2018
|
|
|
|
|
|
|
|
Pro
Forma Adjustments
|
|
|
|
|
|
|
Visium
|
|
|
TSSG
|
|
|
Debit
|
|
|
Credit
|
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
11,412
|
|
|
$
|
4,818
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
16,230
|
|
|
|
|
11,412
|
|
|
|
4,818
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible assets
|
|
|
-
|
|
|
|
-
|
(a)
|
|
|
5,000,000
|
|
|
|
-
|
|
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
11,412
|
|
|
$
|
4,818
|
|
|
$
|
5,000,000
|
|
|
$
|
-
|
|
|
$
|
5,016,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AP and Accrued Liabilities
|
|
$
|
626,583
|
|
|
$
|
6,367
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
632,950
|
|
Accrued salaries
|
|
|
155,825
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
155,825
|
|
Accrued interest expense
|
|
|
1,686,054
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,686,054
|
|
Convertible notes payable - ASC Recap
|
|
|
147,965
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
147,965
|
|
Due to Officer
|
|
|
21,000
|
|
|
|
8,188
|
|
|
|
-
|
|
|
|
-
|
|
|
|
29,189
|
|
Earnout liability, current portion
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
(a)
|
|
|
1,166,667
|
|
|
|
1,166,667
|
|
Convertible notes payable
|
|
|
1,617,984
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,617,984
|
|
Notes payable,
current
|
|
|
270,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270,241
|
|
|
|
|
4,525,652
|
|
|
|
14,555
|
|
|
$
|
-
|
|
|
$
|
1,166,667
|
|
|
$
|
5,706,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnout liability, long term portion
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
2,333,333
|
|
|
|
2,333,333
|
|
Note payable
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
1,000,000
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
$
|
4,525,652
|
|
|
$
|
14,555
|
|
|
$
|
-
|
|
|
$
|
4,500,000
|
|
|
$
|
9,040,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Convertible Stock ($0.001 par value; 20,000,000 shares
authorized, 13,992,340 shares issued and outstanding as of June 30, 2018)
|
|
|
13,992
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
13,992
|
|
Series B Convertible Stock ($0.001 par value 30,000,000 shares
authorized, 1,327,640 shares issued and outstanding as of June 30, 2018)
|
|
|
1,328
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,328
|
|
Series AA Convertible Stock ($0.001
par value; 1 share authorized, 1 share issued and outstanding as of June 30, 2018 and no shares issued and outstanding)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.0001 par value, 10,000,000,000 shares authorized:
23,212,549 shares issued and 9,376,441 outstanding at June 30, 2018
|
|
|
937
|
|
|
|
-
|
|
|
|
-
|
(a)
|
|
|
156
|
|
|
|
1,093
|
|
Additional paid in capital
|
|
|
40,160,699
|
|
|
|
47,715
|
(b)
|
|
|
47,715
|
(a)
|
|
|
499,844
|
|
|
|
40,660,543
|
|
Accumulated deficit
|
|
|
(44,691,196
|
)
|
|
|
(57,452
|
)
|
|
|
-
|
(b)
|
|
|
47,715
|
|
|
|
(44,700,933
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders’
deficit
|
|
|
(4,514,240
|
)
|
|
|
(9,737
|
)
|
|
|
47,715
|
|
|
|
545,715
|
|
|
|
(4,023,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
& stockholders’ deficit
|
|
$
|
11,412
|
|
|
$
|
4,818
|
|
|
$
|
47,715
|
|
|
$
|
5,045,715
|
|
|
$
|
5,016,230
|
|
VISIUM
TECHNOLOGIES, INC.
UNAUDITED
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR
THE YEAR ENDED JUNE 30, 2018
|
|
|
|
|
|
|
|
Pro
Forma Adjustments
|
|
|
|
|
|
|
VISIUM
|
|
|
TSSG
|
|
|
Debit
|
|
|
Credit
|
|
|
Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
-
|
|
|
$
|
46,385
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
46,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of Sales
|
|
|
-
|
|
|
|
21,500
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
-
|
|
|
|
24,885
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
G & A
|
|
|
1,043,230
|
|
|
|
64,432
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,107,662
|
|
Total
Operating Expenses
|
|
|
1,043,230
|
|
|
|
64,432
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,107,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
From Operations
|
|
$
|
(1,043,230
|
)
|
|
$
|
(39,457
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,082,687
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/(expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(275,975
|
)
|
|
|
(461
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(276,436
|
)
|
Loss
on reconstruction of debt
|
|
|
(96,272
|
)
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(96,272
|
)
|
Gain
on settlement of debt
|
|
|
25,137
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
25,137
|
|
Total
other expenses
|
|
|
(347,110
|
)
|
|
|
(461
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(347,571
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,390,340
|
)
|
|
$
|
(39,918
|
)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(1,430,258
|
)
|
Pro
Forma Adjustments:
(a)
|
To
give effect to the acquisition of Threat Surface Solutions Group, LLC as of June 30, 2018 for $5,000,000 A summary of the
transaction is as follows:
|
Purchase
price
|
|
$
|
5,000,000
|
|
|
|
|
|
|
Earnout
liability
|
|
|
3,500,000
|
|
Note
payable to be issued at closing
|
|
|
1,000,000
|
|
Common
stock at $0.0001 par value to be issued at closing
|
|
|
156
|
|
Additional
paid in capital
|
|
|
499,844
|
|
|
|
$
|
5,000,000
|
|
(b)
|
To
give effect to the acquisition of Threat Surface Solutions Group, LLC as of June 30, 201, 2018 for elimination of LLC equity:
|
APIC
(Member contributions)
|
|
$
|
47,715
|
|
Accumulated
deficit
|
|
$
|
(47,715
|
)
|